1.1 	A bill for an act
1.2 	relating to education; modifying charter school provisions;amending Minnesota 
1.3 	Statutes 2008, sections 124D.10; 124D.11, subdivision 9.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. Minnesota Statutes 2008, section 124D.10, is amended to read:
1.6 	124D.10 CHARTER SCHOOLS.
1.7 		Subdivision 1.Purposes. (a) The purpose of this section is to:
1.8 	(1) improve pupil learning;
1.9 	(2) increase learning opportunities for pupils;
1.10 	(3) encourage the use of different and innovative teaching methods;
1.11 	(4) require the measurement of learning outcomes and create different and 
1.12 	innovative forms of measuring outcomes;
1.13 	(5) establish new forms of accountability for schools; or
1.14 	(6) create new professional opportunities for teachers, including the opportunity to 
1.15 	be responsible for the learning program at the school site.
1.16 	(b) This section does not provide a means to keep open a school that otherwise 
1.17 	would be closed. Applicants in these circumstances bear the burden of proving that 
1.18 	conversion to a charter school fulfills a purpose specified in this subdivision, independent 
1.19 	of the school's closing.
1.20 		Subd. 2.Applicability. This section applies only to charter schools formed and 
1.21 	operated under this section.
1.22 		Subd. 2a.Charter School Advisory Council. (a) A Charter School Advisory 
1.23 	Council is established under section 15.059 except that. The term for each council 
1.24 	member shall be is three years. The advisory council is composed of seven nine members 
2.1 	from throughout the state who have demonstrated experience with or interest in charter 
2.2 	schools. The members of the council shall be appointed by the commissioner. The 
2.3 	advisory council shall bring to the attention of the commissioner any matters related to 
2.4 	charter schools that the council deems necessary and shall:. The members may include 
2.5 	charter school authorizers, charter school personnel, public kindergarten through grade 12 
2.6 	teachers, school board members, parents of currently enrolled kindergarten through grade 
2.7 	12 public school students, and school district representatives.
2.8 	(1) encourage school boards to make full use of charter school opportunities;
2.9 	(2) encourage the creation of innovative schools;
2.10 	(3) provide leadership and support for charter school sponsors to increase the 
2.11 	innovation in and the effectiveness, accountability, and fiscal soundness of charter schools;
2.12 	(4) serve an ombudsman function in facilitating the operations of new and existing 
2.13 	charter schools;
2.14 	(5) promote timely financial management training for newly elected members of 
2.15 	a charter school board of directors and ongoing training for other members of a charter 
2.16 	school board of directors; and
2.17 	(6) facilitate compliance with auditing and other reporting requirements. The 
2.18 	advisory council shall refer all its proposals to the commissioner who shall provide time 
2.19 	for reports from the council.
2.20 	The commissioner shall appoint the council members. The advisory council shall 
2.21 	advise and make recommendations to the commissioner on authorizing charter schools 
2.22 	and other charter school matters, including:
2.23 	(1) approving, reviewing, and disciplining authorizers consistent with this section;
2.24 	(2) supporting innovation, effectiveness, accountability, and fiscal soundness;
2.25 	(3) providing a management training program for administrators and board members;
2.26 	(4) complying with auditing and other financial reporting requirements; and
2.27 	(5) reviewing new applications and proposed grade and program expansions.
2.28 	(b) The Charter School Advisory Council under this subdivision expires June 30, 
2.29 	2007 2015.
2.30 		Subd. 3.Sponsor Authorizer. (a) The following organizations may authorize one 
2.31 	or more charter schools:
2.32 	(1) a school board; intermediate school district school board; education district 
2.33 	organized under sections 123A.15 to 123A.19;
2.34 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code 
2.35 	of 1986, excluding a house of worship and any person other than a natural person that 
3.1 	directly or indirectly, through one or more intermediaries, controls, is controlled by, or is 
3.2 	under common control with the house of worship, that:
3.3 	(i)  is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 
3.4 	Foundations,;
3.5 	(ii) is registered with the attorney general's office, and;
3.6 	(iii)  reports an end-of-year fund balance of at least $2,000,000; and 
3.7 	(iv) resides in the state of Minnesota;
3.8 	(3) a Minnesota private college that grants two- or four-year degrees and is registered 
3.9 	with the Minnesota Office of Higher Education under chapter 136A; community college, 
3.10 	state university, or technical college, governed by the Board of Trustees of the Minnesota 
3.11 	State Colleges and Universities; or the University of Minnesota may sponsor one or 
3.12 	more charter schools.; or
3.13 	(b) (4) a nonprofit corporation subject to chapter 317A, described in section 
3.14 	317A.905, and exempt from federal income tax under section 501(c)(6) of the Internal 
3.15 	Revenue Code of 1986, may sponsor authorize one or more charter schools if the charter 
3.16 	school has operated for at least three years under a different sponsor authorizer and if the 
3.17 	nonprofit corporation has existed for at least 25 years.
3.18 	(b) An eligible authorizer under this subdivision must apply to the commissioner for 
3.19 	approval as an authorizer before submitting an affidavit to the commissioner to charter 
3.20 	a school. The application for approval as a charter school authorizer must demonstrate 
3.21 	the applicant's ability to implement the procedures and satisfy the criteria for chartering a 
3.22 	school under this section. The commissioner must approve or disapprove an application 
3.23 	within 60 days of receiving the application. The commissioner, in establishing criteria for 
3.24 	approval, must consider the applicant's ability to:
3.25 	(1) establish an application process for a charter school board that includes timelines, 
3.26 	requirements, and expectations;
3.27 	(2) use precisely defined, rigorous criteria to evaluate the educational, organizational, 
3.28 	and fiscal plans of a charter school board;
3.29 	(3) define in the chartering agreement the rights and responsibilities of the charter 
3.30 	school board for governing the school's educational program, controlling funds, and 
3.31 	making school management decisions;
3.32 	(4) implement an accountability system that provides valid, reliable, timely, and 
3.33 	accessible data to the authorizer on the ability of the charter school board to satisfy its 
3.34 	academic, organizational, legal, and fiscal responsibilities;
4.1 	(5) follow a detailed process for renewing the chartering agreement that reflects the 
4.2 	agreed upon rights and responsibilities of the authorizer and the charter school board, and 
4.3 	is consistent with this section; and
4.4 	(6) base a decision to renew a chartering agreement on credible evidence that 
4.5 	demonstrates the academic, organizational, and financial competency of the charter school 
4.6 	and its board, including their success in increasing student achievement and meeting the 
4.7 	goals of the chartering agreement.
4.8 	(c) The authorizer must participate in ongoing department-approved training.
4.9 	(d) An authorizer that chartered a school before August 1, 2009, must apply by June 
4.10 	30, 2012, to the commissioner for approval to continue as an authorizer under this section. 
4.11 	An authorizer that fails to submit an application is unable to charter a school.
4.12 	(e) The commissioner shall review an authorizer's performance every five years in 
4.13 	a manner and form determined by the commissioner. The commissioner shall issue a 
4.14 	report to the authorizer upon completing the review. If, consistent with this section, the 
4.15 	commissioner finds that an authorizer has not performed satisfactorily, the commissioner 
4.16 	may subject the authorizer to corrective action, which may include terminating a 
4.17 	chartering agreement with the board of a school it authorized.
4.18 	(f) The commissioner may take corrective action against an authorizer or terminate 
4.19 	an authorizer's ability to charter a school for:
4.20 	(1) failing to satisfy the criteria under which the authorizer was approved;
4.21 	(2) failing to perform satisfactorily as an approved authorizer; or
4.22 	(3) violating an element of the chartering agreement between the authorizer and 
4.23 	charter school board.
4.24 		Subd. 4.Formation of school. (a) A sponsor An authorizer may authorize one or 
4.25 	more licensed teachers under section 122A.18, subdivision 1, to operate a charter school 
4.26 	subject to approval by the commissioner. A board must vote on charter school application 
4.27 	for sponsorship no later than 90 days after receiving the application. The school must be 
4.28 	organized and operated as a cooperative under chapter 308A or nonprofit corporation 
4.29 	under chapter 317A and the provisions under the applicable chapter shall apply to the 
4.30 	school except as provided in this section. Notwithstanding sections 465.717 and 465.719, 
4.31 	a school district may create a corporation for the purpose of creating a charter school.
4.32 	(b) Before the operators may form establish and operate a school, the sponsor
4.33 	authorizer must file an affidavit with the commissioner stating its intent to authorize a
4.34 	charter a school. The affidavit must state the terms and conditions under which the sponsor
4.35 	authorizer would authorize a charter a school and how the sponsor authorizer intends 
4.36 	to oversee the fiscal and student performance of the charter school and to comply with 
5.1 	the terms of the written contract between the sponsor authorizer and the charter school 
5.2 	board of directors under subdivision 6. The commissioner must approve or disapprove 
5.3 	the sponsor's proposed authorizationauthorizer's proposed affidavit within 9060 days of 
5.4 	receipt of the affidavit. Failure to obtain commissioner approval precludes a sponsor 
5.5 	an authorizer from authorizing chartering the charter school that was the subject of the 
5.6 	affidavit.
5.7 	(c) The operators authorized to organize and operate a school, before entering into a 
5.8 	contract or other agreement for professional or other services, goods, or facilities, must 
5.9 	incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 
5.10 	chapter 317A and must establish a board of directors composed of at least five members
5.11 	who are not related parties as defined in this section until a timely election for members of 
5.12 	the charter school board of directors is held according to the school's articles and bylaws. 
5.13 	A charter school board of directors must be composed of at least five members who are 
5.14 	not related parties as defined in this section. Any staff members who are employed at the 
5.15 	school, including teachers providing instruction under a contract with a cooperative, and 
5.16 	all parents or legal guardians of children enrolled in the school may participate in the 
5.17 	election for members of the school's board of directors. Licensed teachers employed at the 
5.18 	school, including teachers providing instruction under a contract with a cooperative, must 
5.19 	be a majority of the members of the board of directors before the school completes its 
5.20 	third year of operation, unless the commissioner waives the requirement for a majority of 
5.21 	licensed teachers on the board. Board of director meetings must comply with chapter 13D.
5.22 	(d) Every charter school board member shall attend department-approved training on 
5.23 	board governance, the board's role and responsibilities, financial management standards 
5.24 	and practices, and employment policies and practices. A board member who does not 
5.25 	complete the required training within one year of being appointed to the board is ineligible 
5.26 	to continue serving on the board.
5.27 	(e) The granting or renewal of a charter by a sponsoring entity an authorizer must 
5.28 	not be conditioned upon the bargaining unit status of the employees of the school.
5.29 	(e) A sponsor (f) The granting or renewing of a charter by an authorizer must 
5.30 	not be contingent on a requirement that the charter school board contract, lease, or 
5.31 	purchase goods or services from the authorizer. A party to such an arrangement between 
5.32 	an authorizer and a board must disclose the arrangement to the commissioner. The 
5.33 	commissioner may terminate a contract for goods or services under this section if the 
5.34 	commissioner determines that an arrangement exists.
6.1 	(g) The charter school shall not offer any services or goods of value to students, 
6.2 	parents, or guardians as an inducement, term, or condition of enrolling a student in a 
6.3 	charter school.
6.4 	(h) The authorizer may prevent an approved charter school from opening for 
6.5 	operation if, among other grounds, the charter school violates this section.
6.6 	(i) An authorizer may authorize permit the operators board of directors of a charter 
6.7 	school to expand the operation of the charter school to additional sites or to add additional 
6.8 	grades at the school beyond those described in the sponsor's application authorizer's 
6.9 	affidavit as approved by the commissioner only after submitting a supplemental 
6.10 	application to the commissioner in a form and manner prescribed by the commissioner. 
6.11 	The supplemental application must provide evidence that:
6.12 	(1) the expansion of proposed by the charter school is supported by need and 
6.13 	projected enrollment;
6.14 	(2) the expansion of the charter school is supported, at a minimum, by improved 
6.15 	academic performance and growth on statewide assessments under chapter 120B;
6.16 	(2) (3) the charter school is fiscally sound;
6.17 	(3) (4) the sponsor supports the charter school has the physical and financial capacity 
6.18 	to implement the proposed expansion; and
6.19 	(4) (5) the building of the additional site meets all health and safety requirements to 
6.20 	be eligible for lease aid.
6.21 	(f) The commissioner annually must provide timely financial management training 
6.22 	to newly elected members of a charter school board of directors and ongoing training to 
6.23 	other members of a charter school board of directors. Training must address ways to:
6.24 	(1) proactively assess opportunities for a charter school to maximize all available 
6.25 	revenue sources;
6.26 	(2) establish and maintain complete, auditable records for the charter school;
6.27 	(3) establish proper filing techniques;
6.28 	(4) document formal actions of the charter school, including meetings of the charter 
6.29 	school board of directors;
6.30 	(5) properly manage and retain charter school and student records;
6.31 	(6) comply with state and federal payroll record-keeping requirements; and
6.32 	(7) address other similar factors that facilitate establishing and maintaining complete 
6.33 	records on the charter school's operations.
6.34 		Subd. 4a.Conflict of interest. (a) A member of a charter school board of directors
6.35 	An individual is prohibited from serving as a member of the board of directors or as an 
6.36 	employee or agent of or a contractor with a for-profit entity with whom the charter school 
7.1 	contracts, directly or indirectly, for professional services, goods, or facilities. A violation 
7.2 	of this prohibition renders a contract voidable at the option of the commissioner void. 
7.3 	A member of a charter school board of directors who violates this prohibition shall be 
7.4 	individually liable to the charter school for any damage caused by the violation.
7.5 	(b) An individual may serve as a member of the board of directors if no conflict of 
7.6 	interest under paragraph (a) exists.
7.7 	(c) A member of a charter school board of directors that serves as a member of the 
7.8 	board of directors or as an employee or agent of or a contractor with a nonprofit entity 
7.9 	with whom the charter school contracts, directly or indirectly, for professional services, 
7.10 	goods, or facilities, must disclose all potential conflicts to the commissioner.
7.11 	(d) The conflict of interest provisions under this subdivision do not apply to 
7.12 	compensation paid to a teacher employed by the charter school who also serves as a 
7.13 	member of the board of directors.
7.14 	(e) (d) The conflict of interest provisions under this subdivision do not apply to a 
7.15 	teacher who provides services to a charter school through a cooperative formed under 
7.16 	chapter 308A when the teacher also serves on the charter school board of directors.
7.17 	(e) The commissioner may reduce a charter school's aid under section 127A.42 or 
7.18 	127A.43 if the charter school fails to correct a violation under this subdivision.
7.19 		Subd. 5.Conversion of existing schools. A board of an independent or special 
7.20 	school district may convert one or more of its existing schools to charter schools under 
7.21 	this section if 60 percent of the full-time teachers at the school sign a petition seeking 
7.22 	conversion. The conversion must occur at the beginning of an academic year.
7.23 		Subd. 6.Charter contract. The sponsor's authorization for authorizer's chartering 
7.24 	of a charter school must be in the form of a written contract signed by the sponsor
7.25 	authorizer and the board of directors of the charter school. The contract must be 
7.26 	completed signed within 90 days of the commissioner's approval of the sponsor's proposed 
7.27 	authorization authorizer's proposed affidavit. The authorizer shall submit a copy of the 
7.28 	signed contract within ten days of its execution to the commissioner. The contract for a 
7.29 	charter school must be in writing and contain at least the following:
7.30 	(1) a description of a program that carries out one or more of the purposes in 
7.31 	subdivision 1;
7.32 	(2) specific outcomes pupils are to achieve under subdivision 10;
7.33 	(3) admission policies and procedures;
7.34 	(4) management and administration of the school;
7.35 	(5) requirements and procedures for program and financial audits;
7.36 	(6) how the school will comply with subdivisions 8, 13, 16, and 23;
8.1 	(7) assumption of liability by the charter school;
8.2 	(8) types and amounts of insurance coverage to be obtained by the charter school;
8.3 	(9) the term of the contract, which may be up to three years for the initial contract, 
8.4 	and up to five years for a renewed contract based on a demonstration of the school met the 
8.5 	academic, financial, and operational terms of the contract;
8.6 	(10) if how the board of directors or the operators of the charter school will provide 
8.7 	special instruction and services for children with a disability under sections 125A.03
8.8 	to 125A.24, and 125A.65, a description of the financial parameters within which the 
8.9 	charter school will operate to provide the special instruction and services to children 
8.10 	with a disability; and
8.11 	(11) the process and criteria the sponsor authorizer intends to use to monitor 
8.12 	and evaluate the fiscal and student performance of the charter school, consistent with 
8.13 	subdivision 15.; and
8.14 	(12) the plan for an orderly closing of the school under chapter 308A or 317A, if the 
8.15 	closure is a termination for cause, voluntary termination, or nonrenewal of the contract, 
8.16 	including: establishing the respective responsibilities of the school board of directors and 
8.17 	the authorizer; and providing for notice to the commissioner, authorizer, and parents of 
8.18 	enrolled students of the closure, the transfer of student records to the students' resident 
8.19 	districts, and procedures for closing financial operations.
8.20 		Subd. 6a.Audit report. (a) The charter school must submit an audit report to the 
8.21 	commissioner and its authorizer by December 31 each year.
8.22 	(b) The charter school, with the assistance of the auditor conducting the audit, must 
8.23 	include with the report a copy of all charter school agreements for corporate management 
8.24 	services. If the entity that provides the professional services to the charter school is 
8.25 	exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 
8.26 	must file with the commissioner by February 15 a copy of the annual return required under 
8.27 	section 6033 of the Internal Revenue Code of 1986.
8.28 	(c) If the commissioner receives as part of the an audit report a management letter
8.29 	indicating that a material weakness exists in the financial reporting systems of a charter 
8.30 	school, the charter school must submit a written report to the commissioner explaining 
8.31 	how the material weakness will be resolved.
8.32 	(d) Upon the request of an individual, the charter school must make available in a 
8.33 	timely fashion the minutes of meetings of members, the board of directors, and committees 
8.34 	having any of the authority of the board of directors, and statements showing the financial 
8.35 	result of all operations and transactions affecting income and surplus during the school's 
9.1 	last annual accounting period and a balance sheet containing a summary of its assets and 
9.2 	liabilities as of the closing date of the accounting period.
9.3 		Subd. 7.Public status; exemption from statutes and rules. A charter school is a 
9.4 	public school and is part of the state's system of public education. Except as provided in 
9.5 	this section, a charter school is exempt from all statutes and rules applicable to a school, a 
9.6 	board, or a district, although it may elect to comply with one or more provisions of statutes 
9.7 	or rules. A charter school is exempt from all statutes and rules applicable to a school, 
9.8 	school board, or school district unless a statute or rule is made specifically applicable to a 
9.9 	charter school or is included in this section.
9.10 		Subd. 8.State and local requirements. (a) A charter school shall meet all 
9.11 	applicable federal, state, and local health and safety requirements applicable to school 
9.12 	districts.
9.13 	(b) A school must comply with statewide education accountability requirements 
9.14 	governing standards and assessments in chapter 120B.
9.15 	(c) A school sponsored authorized by a school board may be located in any district, 
9.16 	unless the school board of the district of the proposed location disapproves by written 
9.17 	resolution.
9.18 	(c) (d) A charter school must be nonsectarian in its programs, admission policies, 
9.19 	employment practices, and all other operations. A sponsor An authorizer may not 
9.20 	authorize a charter a school or program that is affiliated with a nonpublic sectarian 
9.21 	school or a religious institution. A charter school student must be released for religious 
9.22 	instruction, consistent with section 120A.22, subdivision 12, clause (3).
9.23 	(d) (e) Charter schools must not be used as a method of providing education or 
9.24 	generating revenue for students who are being home-schooled.
9.25 	(e) (f) The primary focus of a charter school must be to provide a comprehensive 
9.26 	program of instruction for at least one grade or age group from five through 18 years 
9.27 	of age. Instruction may be provided to people younger than five years and older than 
9.28 	18 years of age.
9.29 	(f) (g) A charter school may not charge tuition.
9.30 	(g) (h) A charter school is subject to and must comply with chapter 363A and 
9.31 	section 121A.04.
9.32 	(h) (i) A charter school is subject to and must comply with the Pupil Fair Dismissal 
9.33 	Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections 
9.34 	123B.34 to 123B.39.
9.35 	(i) (j) A charter school is subject to the same financial audits, audit procedures, and 
9.36 	audit requirements as a district. Audits must be conducted in compliance with generally 
10.1 	accepted governmental auditing standards, the Federal Single Audit Act, if applicable, 
10.2 	and section 6.65. A charter school is subject to and must comply with sections 15.054; 
10.3 	118A.01; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 
10.4 	471.38; 471.391; 471.392; 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6, 12, 13, 
10.5 	and 15; 471.881; and 471.89. The audit must comply with the requirements of sections 
10.6 	123B.75 to 123B.83, except to the extent deviations are necessary because of the program 
10.7 	at the school. Deviations must be approved by the commissioner and authorizer. The 
10.8 	Department of Education, state auditor, or legislative auditor, or authorizer may conduct 
10.9 	financial, program, or compliance audits. A charter school determined to be in statutory 
10.10 	operating debt under sections 123B.81 to 123B.83 must submit a plan under section 
10.11 	123B.81, subdivision 4.
10.12 	(j) (k) A charter school is a district for the purposes of tort liability under chapter 466.
10.13 	(k) (l) A charter school must comply with chapters 13 and 13D; and sections 13.32;
10.14 	120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3 and 5.
10.15 	(l) (m) A charter school is subject to the Pledge of Allegiance requirement under 
10.16 	section 121A.11, subdivision 3.
10.17 	(n) A school offering online courses or programs must comply with section 
10.18 	124D.095.
10.19 	(o) The commissioner may reduce a charter school's state aid under section 127A.42 
10.20 	or 127A.43 if the charter school board fails to correct a violation under this section.
10.21 		Subd. 9.Admission requirements. A charter school may limit admission to:
10.22 	(1) pupils within an age group or grade level;
10.23 	(2) people who are eligible to participate in the graduation incentives program 
10.24 	under section 124D.68; or
10.25 	(3) residents of a specific geographic area where the percentage of the population 
10.26 	of non-Caucasian people of that area is greater than the percentage of the non-Caucasian 
10.27 	population in the congressional district in which the geographic area is located, and as 
10.28 	long as the school reflects the racial and ethnic diversity of the specific area.
10.29 	A charter school shall enroll an eligible pupil who submits a timely application, 
10.30 	unless the number of applications exceeds the capacity of a program, class, grade level, 
10.31 	or building. In this case, pupils must be accepted by lot. If a charter school is the only 
10.32 	school located in a town municipality serving pupils within a particular grade level, then 
10.33 	pupils that are residents of the town municipality must be given preference for enrollment 
10.34 	before accepting pupils by lot. If a pupil lives within two miles of a charter school and 
10.35 	the next closest public school is more than five miles away, the charter school must give 
10.36 	those pupils preference for enrollment before accepting other pupils by lot. The charter 
11.1 	school must develop and publish a lottery policy and process that it must use when 
11.2 	accepting pupils by lot.
11.3 	A charter school shall give preference for enrollment to a sibling of an enrolled pupil 
11.4 	and to a foster child of that pupil's parents and may give preference for enrollment to 
11.5 	children of the school's employees before accepting other pupils by lot.
11.6 	A charter school may not limit admission to pupils on the basis of intellectual ability, 
11.7 	measures of achievement or aptitude, or athletic ability.
11.8 		Subd. 10.Pupil performance. A charter school must design its programs to at 
11.9 	least meet the outcomes adopted by the commissioner for public school students. In the 
11.10 	absence of the commissioner's requirements, the school must meet the outcomes contained 
11.11 	in the contract with the sponsor authorizer. The achievement levels of the outcomes 
11.12 	contained in the contract may exceed the achievement levels of any outcomes adopted by 
11.13 	the commissioner for public school students.
11.14 		Subd. 11.Employment and other operating matters. A charter school must 
11.15 	employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1, 
11.16 	who hold valid licenses to perform the particular service for which they are employed in 
11.17 	the school. The charter school's state aid may be reduced under section 127A.42 127A.43
11.18 	if the school employs a teacher who is not appropriately licensed or approved by the 
11.19 	board of teaching. The school may employ necessary employees who are not required to 
11.20 	hold teaching licenses to perform duties other than teaching and may contract for other 
11.21 	services. The school may discharge teachers and nonlicensed employees. The charter 
11.22 	school board must comply with section 181.932. The charter school board must enter into 
11.23 	a written contract with each teacher that outlines the terms and conditions of employment. 
11.24 	A person, without holding a valid administrator's license, may perform administrative, 
11.25 	supervisory, or instructional leadership duties.
11.26 	The board of directors also shall decide matters related to the operation of the school, 
11.27 	including budgeting, curriculum and operating procedures.
11.28 		Subd. 12.Pupils with a disability. A charter school must comply with sections 
11.29 	125A.02, 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils 
11.30 	with a disability as though it were a district.
11.31 		Subd. 13.Length of school year. A charter school must provide instruction 
11.32 	each year for at least the number of days required by section 120A.41. It may provide 
11.33 	instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128.
11.34 		Subd. 14.Annual public reports. A charter school must report at least annually 
11.35 	to its sponsor authorizer and the commissioner the information required by the sponsor
11.36 	authorizer or the commissioner. The reports are public data under chapter 13.
12.1 		Subd. 15.Review and comment. (a) The department must review and comment on 
12.2 	the evaluation, by the sponsor, of the performance of a charter school before the charter 
12.3 	school's contract is renewed for another contract term. The sponsor must submit to the 
12.4 	commissioner timely information for the review and comment. The authorizer shall 
12.5 	provide a formal, written evaluation of the school's performance before the authorizer 
12.6 	renews the charter contract. The department must review and comment on the authorizer's 
12.7 	evaluation process at the time the authorizer submits its application for approval and each 
12.8 	time the authorizer undergoes its five-year review under subdivision 3.
12.9 	(b) A sponsor An authorizer shall monitor and evaluate the fiscal and student 
12.10 	performance of the school, and may for this purpose annually assess a charter school:(1) 
12.11 	in its first, second, or third year of operation up to $30 per student up to a maximum of 
12.12 	$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up to 
12.13 	a maximum of $3,500 the greater of (1) $5,000, or (2) the lesser of (i) $25,000 or (ii) the 
12.14 	product of 1.0 percent of the basic formula allowance for that year and the charter school's 
12.15 	pupil units for that year in fiscal years 2010 through 2014. The authorizer may assess a 
12.16 	charter school the greater of (1) $5,000, or (2) the lesser of (i) $25,000 or (ii) the product 
12.17 	of 1.5 percent of the basic formula allowance for that year and the charter school's pupil 
12.18 	units for that year beginning in fiscal year 2015.
12.19 		Subd. 16.Transportation. (a) A charter school after its first fiscal year of operation 
12.20 	by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of 
12.21 	operation must notify the district in which the school is located and the Department of 
12.22 	Education if it will provide its own transportation or use the transportation services of the 
12.23 	district in which it is located for the fiscal year.
12.24 	(b) If a charter school elects to provide transportation for pupils, the transportation 
12.25 	must be provided by the charter school within the district in which the charter school is 
12.26 	located. The state must pay transportation aid to the charter school according to section 
12.27 	124D.11, subdivision 2.
12.28 	For pupils who reside outside the district in which the charter school is located, the 
12.29 	charter school is not required to provide or pay for transportation between the pupil's 
12.30 	residence and the border of the district in which the charter school is located. A parent 
12.31 	may be reimbursed by the charter school for costs of transportation from the pupil's 
12.32 	residence to the border of the district in which the charter school is located if the pupil is 
12.33 	from a family whose income is at or below the poverty level, as determined by the federal 
12.34 	government. The reimbursement may not exceed the pupil's actual cost of transportation 
12.35 	or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for 
12.36 	more than 250 miles per week.
13.1 	At the time a pupil enrolls in a charter school, the charter school must provide the 
13.2 	parent or guardian with information regarding the transportation.
13.3 	(c) If a charter school does not elect to provide transportation, transportation for 
13.4 	pupils enrolled at the school must be provided by the district in which the school is 
13.5 	located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a 
13.6 	pupil residing in the same district in which the charter school is located. Transportation 
13.7 	may be provided by the district in which the school is located, according to sections 
13.8 	123B.88, subdivision 6, and 124D.03, subdivision 8, for a pupil residing in a different 
13.9 	district. If the district provides the transportation, the scheduling of routes, manner and 
13.10 	method of transportation, control and discipline of the pupils, and any other matter relating 
13.11 	to the transportation of pupils under this paragraph shall be within the sole discretion, 
13.12 	control, and management of the district.
13.13 		Subd. 17.Leased space. A charter school may lease space from a board eligible to 
13.14 	be a sponsor an authorizer or other public or private nonprofit nonsectarian organization. 
13.15 	If a charter school is unable to lease appropriate space from an eligible board or other 
13.16 	public or private nonprofit nonsectarian organization, the school may lease space from 
13.17 	another nonsectarian organization if the Department of Education, in consultation with 
13.18 	the Department of Administration, approves the lease. If the school is unable to lease 
13.19 	appropriate space from public or private nonsectarian organizations, the school may lease 
13.20 	space from a sectarian organization if the leased space is constructed as a school facility 
13.21 	and the Department of Education, in consultation with the Department of Administration, 
13.22 	approves the lease.
13.23 		Subd. 18.Authority to raise initial working capital. A sponsor An authorizer
13.24 	may authorize a charter a school before the applicant has secured its space, equipment, 
13.25 	facilities, and personnel if the applicant indicates the authority is necessary for it to raise 
13.26 	working capital. A sponsor An authorizer may not authorize charter a school before the 
13.27 	commissioner has approved the authorization.
13.28 		Subd. 19.Disseminate information. The sponsor authorizer, the operators, and the 
13.29 	Department of Education must disseminate information to the public on how to form and 
13.30 	operate a charter school and how to utilize the offerings of a charter school. Particular 
13.31 	groups to be targeted include low-income families and communities, and students of color.
13.32 		Subd. 20.Leave to teach in a charter school. If a teacher employed by a district 
13.33 	makes a written request for an extended leave of absence to teach at a charter school, 
13.34 	the district must grant the leave. The district must grant a leave not to exceed a total of 
13.35 	five years. Any request to extend the leave shall be granted only at the discretion of the 
13.36 	school board. The district may require that the request for a leave or extension of leave 
14.1 	be made up to 90 days before the teacher would otherwise have to report for duty before 
14.2 	February 1 in the school year preceding the school year in which the teacher intends 
14.3 	to return, or February 1 of the calendar year in which the teacher's leave is scheduled 
14.4 	to terminate. Except as otherwise provided in this subdivision and except for section 
14.5 	122A.46, subdivision 7, the leave is governed by section 122A.46, including, but not 
14.6 	limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
14.7 	During a leave, the teacher may continue to aggregate benefits and credits in the 
14.8 	Teachers' Retirement Association account by paying both the employer and employee 
14.9 	contributions based upon the annual salary of the teacher for the last full pay period before 
14.10 	the leave began. The retirement association may impose reasonable requirements to 
14.11 	efficiently administer this subdivision.
14.12 		Subd. 21.Collective bargaining. Employees of the board of directors of a charter 
14.13 	school may, if otherwise eligible, organize under chapter 179A and comply with its 
14.14 	provisions. The board of directors of a charter school is a public employer, for the 
14.15 	purposes of chapter 179A, upon formation of one or more bargaining units at the school. 
14.16 	Bargaining units at the school must be separate from any other units within the sponsoring
14.17 	an authorizing district, except that bargaining units may remain part of the appropriate 
14.18 	unit within the sponsoring an authorizing district, if the employees of the school, the 
14.19 	board of directors of the school, the exclusive representative of the appropriate unit in the 
14.20 	sponsoring authorizing district, and the board of the sponsoring authorizing district agree 
14.21 	to include the employees in the appropriate unit of the sponsoring authorizing district.
14.22 		Subd. 22.Teacher and other employee retirement. (a) Teachers in a charter 
14.23 	school must be public school teachers for the purposes of chapters 354 and 354a.
14.24 	(b) Except for teachers under paragraph (a), employees in a charter school must be 
14.25 	public employees for the purposes of chapter 353.
14.26 		Subd. 23.Causes for nonrenewal or termination of charter school contract. (a) 
14.27 	The duration of the contract with a sponsor an authorizer must be for the term contained in 
14.28 	the contract according to subdivision 6. The sponsor authorizer may or may not renew a 
14.29 	contract at the end of the term for any ground listed in paragraph (b). A sponsor An 
14.30 	authorizer may unilaterally terminate a contract during the term of the contract for any 
14.31 	ground listed in paragraph (b). At least 60 days before not renewing or terminating a 
14.32 	contract, the sponsor authorizer shall notify the board of directors of the charter school 
14.33 	of the proposed action in writing. The notice shall state the grounds for the proposed 
14.34 	action in reasonable detail and that the charter school's board of directors may request 
14.35 	in writing an informal hearing before the sponsor within 14 days of receiving notice of 
14.36 	nonrenewal or termination of the contract. Failure by the board of directors to make a 
15.1 	written request for a hearing within the 14-day period shall be treated as acquiescence to 
15.2 	the proposed action. Upon receiving a timely written request for a hearing, the sponsor 
15.3 	shall give reasonable notice to the charter school's board of directors of the hearing date. 
15.4 	The sponsor authorizer shall conduct an informal hearing before taking final action. The 
15.5 	sponsor authorizer shall take final action to renew or not renew a contract by the last day 
15.6 	of classes in the school year. If the sponsor is a local board, the school's board of directors 
15.7 	may appeal the sponsor's decision to the commissioner no later than 30 days before the 
15.8 	proposed date for terminating the contract or the end date of the contract.
15.9 	(b) A contract may be terminated or not renewed upon any of the following grounds:
15.10 	(1) failure to meet the requirements for pupil performance contained in the contract;
15.11 	(2) failure to meet generally accepted standards of fiscal management;
15.12 	(3) violations of law; or
15.13 	(4) other good cause shown.
15.14 	If a contract is terminated or not renewed under this paragraph, the school must 
15.15 	be dissolved according to the applicable provisions of chapter 308A or 317A, except 
15.16 	when the commissioner approves the decision of a different eligible sponsor authorizer to 
15.17 	authorize the charter the school.
15.18 	(c) If at the end of a contract term, either the sponsor or authorizer and the charter 
15.19 	school board of directors wants mutually agree to voluntarily terminate not renew the 
15.20 	contract, a change in sponsors authorizers is allowed if the commissioner approves the 
15.21 	decision of a different eligible sponsor authorizer to authorize the charter the school. The 
15.22 	party intending to terminate the contract must notify the other party and the commissioner 
15.23 	of its intent at least 90 days before the date on which the contract ends. The sponsor
15.24 	authorizer that is a party to the existing contract at least must inform the approved any
15.25 	different eligible sponsor authorizer about the fiscal and student performance of the 
15.26 	school. The parties seeking to not renew the contract jointly must submit their intent in 
15.27 	writing to the commissioner at least 90 days before the end date of the contract. Before the 
15.28 	commissioner determines whether to grant a change of authorizer, the commissioner must 
15.29 	first determine whether the charter school and prospective new authorizer can identify and 
15.30 	effectively resolve any circumstances that caused the current authorizer and the charter 
15.31 	school to not renew the contract. If no different eligible sponsor authorizer is approved, 
15.32 	the school must be dissolved according to applicable law and the terms of the contract.
15.33 	(d) The commissioner, after providing reasonable notice to the board of directors of 
15.34 	a charter school and the existing sponsor authorizer, and after providing an opportunity for 
15.35 	a public hearing, may terminate the existing sponsorial relationship contract between the 
15.36 	authorizer and the charter school board if the charter school has a history of:
16.1 	(1) failure to meet pupil performance requirements contained in the contract;
16.2 	(2) financial mismanagement; or
16.3 	(2) repeated (3) violations of the law.
16.4 		Subd. 23a.Related party lease costs. (a) A charter school is prohibited from 
16.5 	entering a lease of real property with a related party as defined in subdivision 26, unless 
16.6 	the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter 
16.7 	308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1).
16.8 	(b) For purposes of this section and section 124D.11:
16.9 	(1) "related party" means an affiliate or close relative of the other party in question, 
16.10 	an affiliate of a close relative, or a close relative of an affiliate;
16.11 	(2) "affiliate" means a person that directly or indirectly, through one or more 
16.12 	intermediaries, controls, is controlled by, or is under common control with another person;
16.13 	(3) "close relative" means an individual whose relationship by blood, marriage, or 
16.14 	adoption to another individual is no more remote than first cousin;
16.15 	(4) "person" means an individual or entity of any kind; and
16.16 	(5) "control" means the ability to affect the management, operations, or policy 
16.17 	actions or decisions of a person, whether through ownership of voting securities, by 
16.18 	contract, or otherwise.
16.19 	(c) A lease of real property to be used for a charter school, not excluded in paragraph 
16.20 	(a), must contain the following statement: "This lease is subject to Minnesota Statutes, 
16.21 	section 124D.10, subdivision 23a."
16.22 	(c) (d) If a charter school enters into as lessee a lease with a related party and the 
16.23 	charter school subsequently closes, the commissioner has the right to recover from the 
16.24 	lessor any lease payments in excess of those that are reasonable under section 124D.11, 
16.25 	subdivision 4, clause (1).
16.26 		Subd. 24.Pupil enrollment upon nonrenewal or termination of charter school 
16.27 	contract. If a contract is not renewed or is terminated according to subdivision 23, a 
16.28 	pupil who attended the school, siblings of the pupil, or another pupil who resides in the 
16.29 	same place as the pupil may enroll in the resident district or may submit an application 
16.30 	to a nonresident district according to section 124D.03 at any time. Applications and 
16.31 	notices required by section 124D.03 must be processed and provided in a prompt manner. 
16.32 	The application and notice deadlines in section 124D.03 do not apply under these 
16.33 	circumstances. The closed charter school must transfer the student's educational records 
16.34 	within ten business days of closure to the student's school district of residence where the 
16.35 	records must be retained or transferred under section 120A.22, subdivision 7.
17.1 		Subd. 25.Extent of specific legal authority. (a) The board of directors of a charter 
17.2 	school may sue and be sued.
17.3 	(b) The board may not levy taxes or issue bonds.
17.4 	(c) The commissioner, a sponsor an authorizer, members of the board of a sponsor
17.5 	an authorizer in their official capacity, and employees of a sponsor are immune from civil 
17.6 	or criminal liability with respect to all activities related to a charter school they approve or 
17.7 	sponsor authorize. The board of directors shall obtain at least the amount of and types of 
17.8 	insurance required by the contract, according to subdivision 6. up to the applicable tort 
17.9 	liability limits under chapter 466. The charter school board must submit a copy of the 
17.10 	insurance policy to its authorizer and the commissioner before starting operations. The 
17.11 	charter school board must submit changes in its insurance carrier or policy to its authorizer 
17.12 	and the commissioner within 30 days of the change.
17.13 		Subd. 26.Definitions. For purposes of this section and section 124D.11:
17.14 	(1) A "Related party" is an affiliate or close relative of the other party in question, an 
17.15 	affiliate of a close relative, or a close relative of an affiliate.
17.16 	(2) "Affiliate" means a person that directly, or indirectly through one or more 
17.17 	intermediaries, controls, or is controlled by, or is under common control with, another 
17.18 	person.
17.19 	(3) "Close relative" means an individual whose relationship by blood, marriage, or 
17.20 	adoption to another individual is no more remote than first cousin.
17.21 	(4) "Person" means an individual or entity of any kind.
17.22 	(5) "Control" includes the terms "controlling," "controlled by," and "under common 
17.23 	control with" and means the possession, direct or indirect, of the power to direct or cause 
17.24 	the direction of the management, operations, or policies of a person, whether through the 
17.25 	ownership of voting securities, by contract, or otherwise.

17.26 	Sec. 2. Minnesota Statutes 2008, section 124D.11, subdivision 9, is amended to read:
17.27 		Subd. 9.Payment of aids to charter schools. (a) Notwithstanding section 
17.28 	127A.45, subdivision 3, aid payments for the current fiscal year to a charter school not in 
17.29 	its first year of operation shall be of an equal amount on each of the 23 24 payment dates. 
17.30 	A charter school in its first year of operation shall receive, on its first payment date, ten 
17.31 	percent of its cumulative amount guaranteed for the year and 22 payments of an equal 
17.32 	amount thereafter the sum of which shall equal the current year aid payment percentage 
17.33 	multiplied by the cumulative amount guaranteed.
17.34 	(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing 
17.35 	operation on or prior to the end of a school year, the current year aid payment percentage 
18.1 	multiplied by the amount due for the school year may be paid to the school after audit 
18.2 	of prior fiscal year and current fiscal year pupil counts. June 30 of a school year, for the 
18.3 	payment periods occurring after the school has ceased serving students, the commissioner 
18.4 	shall withhold state aid due to the school based on estimated state aid entitlements. The 
18.5 	charter school board of directors and authorizer must provide the commissioner with 
18.6 	a closure plan under chapter 308A or 317A, and financial information that details the 
18.7 	school's liabilities and assets. After receiving the closure plan, financial information, an 
18.8 	audit of pupil counts, documentation of lease expenditures, and monitoring of special 
18.9 	education expenditures, the commissioner may release cash withheld and may continue 
18.10 	regular payments up to the current year payment percentages if further amounts are 
18.11 	owed. If, based on audits and monitoring, the school received state aid in excess of the 
18.12 	amount owed, the commissioner shall retain cash withheld sufficient to eliminate the aid 
18.13 	overpayment. For a charter school ceasing operations prior to, or at the end of, a school 
18.14 	year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may 
18.15 	be made after receiving the closure plan, audit of pupil counts, monitoring of special 
18.16 	education expenditures, and documentation of lease expenditures, and school submission 
18.17 	of Uniform Financial Accounting and Reporting Standards (UFARS) financial data for 
18.18 	the final year of operation. Final payment may be made upon receipt of audited financial 
18.19 	statements under section 123B.77, subdivision 3.
18.20 	(c) If a charter school fails to comply with the commissioner's directive to return, for 
18.21 	cause, federal grant funds administered by the department or, within the timeline under 
18.22 	section 471.425, fails to pay a school district or service cooperative after receiving an 
18.23 	undisputed invoice for goods and services, the commissioner may withhold an amount 
18.24 	of state aid sufficient to satisfy the claim and shall distribute the withheld aid to the 
18.25 	school district, intermediate school district, or service cooperative. A school district, 
18.26 	intermediate school district, or education cooperative shall notify the commissioner when 
18.27 	a charter school fails to pay an undisputed invoice within 90 days of when it received 
18.28 	the original invoice.
18.29 	(d) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent 
18.30 	of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day 
18.31 	of student attendance for that school year. 
18.32 	(d) (e) In order to receive state aid payments under this subdivision, a charter school 
18.33 	in its first three years of operation must submit a school calendar in the form and manner 
18.34 	requested by the department and a quarterly report to the Department of Education. The 
18.35 	report must list each student by grade, show the student's start and end dates, if any, 
18.36 	with the charter school, and for any student participating in a learning year program, 
19.1 	the report must list the hours and times of learning year activities. The report must be 
19.2 	submitted not more than two weeks after the end of the calendar quarter to the department. 
19.3 	The department must develop a Web-based reporting form for charter schools to use 
19.4 	when submitting enrollment reports. A charter school in its fourth and subsequent year of 
19.5 	operation must submit a school calendar and enrollment information to the department in 
19.6 	the form and manner requested by the department.
19.7 	(e) (f) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter 
19.8 	school and satisfaction of creditors, cash and investment balances remaining shall be 
19.9 	returned to the state.

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