1.1 	A bill for an act
1.2 	relating to education; providing for policy for prekindergarten through grade 12 
1.3 	education, including general education, education excellence, special programs, 
1.4 	facilities and technology, early childhood education, and student transportation;
1.5 	amending Minnesota Statutes 2010, sections 11A.16, subdivision 5; 119A.50, 
1.6 	subdivision 3; 120B.15; 120B.30, subdivisions 1, 3, 4; 120B.31, subdivision 
1.7 	4; 120B.36, subdivisions 1, 2; 122A.16, as amended; 122A.60, subdivision 
1.8 	4; 123B.41, subdivisions 2, 5; 123B.57; 123B.63, subdivision 3; 123B.71, 
1.9 	subdivision 5; 123B.72, subdivision 3; 123B.75, subdivision 5; 123B.92, 
1.10 	subdivision 5; 124D.091, subdivision 2; 124D.10, subdivisions 3, 4, 6, 6a, 
1.11 	23; 124D.11, subdivision 9; 124D.86, subdivisions 1, 3; 124D.871; 125A.02, 
1.12 	subdivision 1; 125A.51; 125A.79, subdivision 1; 126C.10, subdivision 8a; 
1.13 	126C.15, subdivision 2; 126C.41, subdivision 2; 126C.44; 127A.42, subdivision 
1.14 	2; 127A.43; 127A.45, by adding a subdivision; proposing coding for new law in 
1.15 	Minnesota Statutes, chapter 124D; repealing Minnesota Statutes 2010, sections 
1.16 	125A.54; 126C.457.
1.17 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.18 	ARTICLE 1
1.19 	GENERAL EDUCATION

1.20 	Section 1. Minnesota Statutes 2010, section 11A.16, subdivision 5, is amended to read:
1.21 		Subd. 5.Calculation of income. As of the end of each fiscal year, the state 
1.22 	board shall calculate the investment income earned by the permanent school fund. The 
1.23 	investment income earned by the fund shall equal the amount of interest on debt securities 
1.24 	~~and~~, dividends on equity securities, and interest earned on certified monthly earnings prior 
1.25 	to the transfer to the Department of Education. Gains and losses arising from the sale of 
1.26 	securities shall be apportioned as follows:
1.27 	(a) If the sale of securities results in a net gain during a fiscal year, the gain shall 
1.28 	be apportioned in equal installments over the next ten fiscal years to offset net losses in 
2.1 	those years. If any portion of an installment is not needed to recover subsequent losses 
2.2 	identified in paragraph (b) it shall be added to the principal of the fund.
2.3 	(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall 
2.4 	be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these 
2.5 	gains are insufficient, any remaining net loss shall be recovered from interest and dividend 
2.6 	income in equal installments over the following ten fiscal years.

2.7 	Sec. 2. Minnesota Statutes 2010, section 123B.41, subdivision 2, is amended to read:
2.8 		Subd. 2.Textbook. "Textbook" means any book or book substitute, including 
2.9 	electronic books as well as other printed materials delivered electronically, which a 
2.10 	pupil uses as a text or text substitute in a particular class or program in the school 
2.11 	regularly attended and a copy of which is expected to be available for the individual use 
2.12 	of each pupil in this class or program. The term shall be limited to books, workbooks, 
2.13 	or manuals, whether bound or in loose-leaf form, as well as electronic books and other 
2.14 	printed materials delivered electronically, intended for use as a principal source of study 
2.15 	material for a given class or a group of students. The term includes only such secular, 
2.16 	neutral and nonideological textbooks as are available, used by, or of benefit to Minnesota 
2.17 	public school pupils.

2.18 	Sec. 3. Minnesota Statutes 2010, section 123B.41, subdivision 5, is amended to read:
2.19 		Subd. 5.Individualized instructional or cooperative learning materials.
 2.20 	"Individualized instructional or cooperative learning materials" means educational 
2.21 	materials which:
2.22 	(a) are designed primarily for individual pupil use or use by pupils in a cooperative 
2.23 	learning group in a particular class or program in the school the pupil regularly attends;
2.24 	(b) are secular, neutral, nonideological and not capable of diversion for religious 
2.25 	use; and
2.26 	(c) are available, used by, or of benefit to Minnesota public school pupils.
2.27 	Subject to the requirements in clauses (a), (b), and (c), "individualized instructional 
2.28 	or cooperative learning materials" include, but are not limited to, the following if they 
2.29 	do not fall within the definition of "textbook" in subdivision 2: published materials; 
2.30 	periodicals; documents; pamphlets; photographs; reproductions; pictorial or graphic 
2.31 	works; prerecorded video programs; prerecorded tapes, cassettes and other sound 
2.32 	recordings; manipulative materials; desk charts; games; study prints and pictures; desk 
2.33 	maps; models; learning kits; blocks or cubes; flash cards; individualized multimedia 
3.1 	systems; prepared instructional computer software programs; choral and band sheet music; 
3.2 	electronic books and other printed materials delivered electronically; and CD-Rom.
3.3 	"Individualized instructional or cooperative learning materials" do not include 
3.4 	instructional equipment, instructional hardware, or ordinary daily consumable classroom 
3.5 	supplies.

3.6 	Sec. 4. Minnesota Statutes 2010, section 123B.63, subdivision 3, is amended to read:
3.7 		Subd. 3.Capital project levy referendum. A district may levy the local tax 
3.8 	rate approved by a majority of the electors voting on the question to provide funds for 
3.9 	an approved project. The election must take place no more than five years before the 
3.10 	estimated date of commencement of the project. The referendum must be held on a date 
3.11 	set by the board. A district must meet the requirements of section 123B.71 for projects 
3.12 	funded under this section. If a review and comment is required under section 123B.71, 
3.13 	subdivision 8, a referendum for a project not receiving a positive review and comment by 
3.14 	the commissioner ~~under section 123B.71~~ must be approved by at least 60 percent of the 
3.15 	voters at the election. The referendum may be called by the school board and may be held:
3.16 	(1) separately, before an election for the issuance of obligations for the project 
3.17 	under chapter 475; or
3.18 	(2) in conjunction with an election for the issuance of obligations for the project 
3.19 	under chapter 475; or
3.20 	(3) notwithstanding section 475.59, as a conjunctive question authorizing both the 
3.21 	capital project levy and the issuance of obligations for the project under chapter 475. Any 
3.22 	obligations authorized for a project may be issued within five years of the date of the 
3.23 	election.
3.24 	The ballot must provide a general description of the proposed project, state the 
3.25 	estimated total cost of the project, state whether the project has received a positive or 
3.26 	negative review and comment from the commissioner, state the maximum amount of the 
3.27 	capital project levy as a percentage of net tax capacity, state the amount that will be raised 
3.28 	by that local tax rate in the first year it is to be levied, and state the maximum number of 
3.29 	years that the levy authorization will apply.
3.30 	The ballot must contain a textual portion with the information required in this 
3.31 	section and a question stating substantially the following:
3.32 	"Shall the capital project levy proposed by the board of .......... School District 
3.33 	No. .......... be approved?"
4.1 	If approved, the amount provided by the approved local tax rate applied to the net 
4.2 	tax capacity for the year preceding the year the levy is certified may be certified for the 
4.3 	number of years, not to exceed ten, approved.
4.4 	In the event a conjunctive question proposes to authorize both the capital project 
4.5 	levy and the issuance of obligations for the project, appropriate language authorizing the 
4.6 	issuance of obligations must also be included in the question.
4.7 	The district must notify the commissioner of the results of the referendum.

4.8 	Sec. 5. Minnesota Statutes 2010, section 123B.75, subdivision 5, is amended to read:
4.9 		Subd. 5.Levy recognition. (a) For fiscal years 2009 and 2010, in June of each 
4.10 	year, the school district must recognize as revenue, in the fund for which the levy was 
4.11 	made, the lesser of:
4.12 	(1) the sum of May, June, and July school district tax settlement revenue received in 
4.13 	that calendar year, plus general education aid according to section 126C.13, subdivision 
4.14 	4, received in July and August of that calendar year; or
4.15 	(2) the sum of:
4.16 	(i) 31 percent of the referendum levy certified according to section 126C.17, in 
4.17 	calendar year 2000; and
4.18 	(ii) the entire amount of the levy certified in the prior calendar year according to 
4.19 	section 124D.86, subdivision 4, for school districts receiving revenue under sections 
4.20 	124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, paragraph 
4.21 	(a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457; and 126C.48, 
4.22 	subdivision 6; plus
4.23 	(iii) zero percent of the amount of the levy certified in the prior calendar year for the 
4.24 	school district's general and community service funds, plus or minus auditor's adjustments, 
4.25 	not including the levy portions that are assumed by the state, that remains after subtracting 
4.26 	the referendum levy certified according to section 126C.17 and the amount recognized 
4.27 	according to item (ii).
4.28 	(b) For fiscal year 2011 and later years, in June of each year, the school district must 
4.29 	recognize as revenue, in the fund for which the levy was made, the lesser of:
4.30 	(1) the sum of May, June, and July school district tax settlement revenue received in 
4.31 	that calendar year, plus general education aid according to section 126C.13, subdivision 
4.32 	4, received in July and August of that calendar year; or
4.33 	(2) the sum of:
5.1 	(i) the greater of 48.6 percent of the referendum levy certified according to section 
5.2 	126C.17 in the prior calendar year, or 31 percent of the referendum levy certified 
5.3 	according to section 126C.17 in calendar year 2000; plus
5.4 	(ii) the entire amount of the levy certified in the prior calendar year according to 
5.5 	section 124D.4531, 124D.86, subdivision 4, for school districts receiving revenue under 
5.6 	sections 124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, 
5.7 	paragraph (a), and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; ~~126C.457;~~
5.8 	and 126C.48, subdivision 6; plus
5.9 	(iii) 48.6 percent of the amount of the levy certified in the prior calendar year for the 
5.10 	school district's general and community service funds, plus or minus auditor's adjustments, 
5.11 	not including the levy portions that are assumed by the state, that remains after subtracting 
5.12 	the referendum levy certified according to section 126C.17 and the amount recognized 
5.13 	according to item (ii).

5.14 	Sec. 6. Minnesota Statutes 2010, section 125A.79, subdivision 1, is amended to read:
5.15 		Subdivision 1.Definitions. For the purposes of this section, the definitions in this 
5.16 	subdivision apply.
5.17 	(a) "Unreimbursed special education cost" means the sum of the following:
5.18 	(1) expenditures for teachers' salaries, contracted services, supplies, equipment, and 
5.19 	transportation services eligible for revenue under section 125A.76; plus
5.20 	(2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and 
5.21 	125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus
5.22 	(3) revenue for teachers' salaries, contracted services, supplies, equipment, and 
5.23 	transportation services under section 125A.76; minus
5.24 	(4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services 
5.25 	eligible for revenue under section 125A.76, subdivision 2.
5.26 	(b) "General revenue" for a school district means the sum of the general education 
5.27 	revenue according to section 126C.10, subdivision 1, excluding alternative teacher 
5.28 	compensation revenue, ~~plus the total qualifying referendum revenue specified in paragraph~~ 
5.29 	~~(e)~~ minus transportation sparsity revenue minus total operating capital revenue. "General 
5.30 	revenue" for a charter school means the sum of the general education revenue according to 
5.31 	section 124D.11, subdivision 1, and transportation revenue according to section 124D.11, 
5.32 	subdivision 2, excluding alternative teacher compensation revenue, minus referendum 
5.33 	equalization aid minus transportation sparsity revenue minus operating capital revenue.
5.34 	(c) "Average daily membership" has the meaning given it in section 126C.05.
5.35 	(d) "Program growth factor" means 1.02 for fiscal year 2012 and later.
6.1 	~~(e) "Total qualifying referendum revenue" means two-thirds of the district's total~~ 
6.2 	~~referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs~~ 
6.3 	~~(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal~~ 
6.4 	~~year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.~~

6.5 	EFFECTIVE DATE. This section is effective the day following final enactment.

6.6 	Sec. 7. Minnesota Statutes 2010, section 126C.10, subdivision 8a, is amended to read:
6.7 		Subd. 8a.Sparsity revenue for school districts that close facilities. A school 
6.8 	district that closes a school facility is eligible for elementary and secondary sparsity 
6.9 	revenue equal to the greater of the amounts calculated under subdivisions 6, 7, and 8 or 
6.10 	the total amount of sparsity revenue for the previous fiscal year if the school board of the 
6.11 	district has adopted a written resolution stating that the district intends to close the school 
6.12 	facility, but cannot proceed with the closure without the adjustment to sparsity revenue 
6.13 	authorized by this subdivision. The written resolution must be approved by the school 
6.14 	board and filed with the commissioner of education ~~at least 60 days~~ prior to the start of the 
6.15 	fiscal year for which aid under this subdivision is first requested.

6.16 	EFFECTIVE DATE. This section is effective for board resolutions approved by 
6.17 	the school board in fiscal year 2011 and later for sparsity revenue calculations in fiscal 
6.18 	year 2012 and later.

6.19 	Sec. 8. Minnesota Statutes 2010, section 126C.15, subdivision 2, is amended to read:
6.20 		Subd. 2.Building allocation. (a) A district or cooperative must allocate its 
6.21 	compensatory revenue to each school building in the district or cooperative where 
6.22 	the children who have generated the revenue are served unless the school district or 
6.23 	cooperative has received permission under Laws 2005, First Special Session chapter 5, 
6.24 	article 1, section 50, to allocate compensatory revenue according to student performance 
6.25 	measures developed by the school board.
6.26 	(b) Notwithstanding paragraph (a), a district or cooperative may allocate up to 
6.27 	five percent of the amount of compensatory revenue that the district receives to school 
6.28 	sites according to a plan adopted by the school board. The money reallocated under 
6.29 	this paragraph must be spent for the purposes listed in subdivision 1, but may be 
6.30 	spent on students in any grade, including students attending school readiness or other 
6.31 	prekindergarten programs.
6.32 	(c) For the purposes of this section and section 126C.05, subdivision 3, "building" 
6.33 	means education site as defined in section 123B.04, subdivision 1.
7.1 	(d) Notwithstanding section 123A.26, subdivision 1, compensatory revenue 
7.2 	generated by students served at a cooperative unit shall be paid to the cooperative unit.
7.3 	(e) A district or cooperative with school building openings, school building 
7.4 	closings, changes in attendance area boundaries, or other changes in programs or student 
7.5 	demographics between the prior year and the current year may reallocate compensatory 
7.6 	revenue among sites to reflect these changes. A district or cooperative must report to the 
7.7 	department any adjustments it makes according to this paragraph and the department must 
7.8 	use the adjusted compensatory revenue allocations in preparing the report required under 
7.9 	section 123B.76, subdivision 3, paragraph (c).

7.10 	Sec. 9. Minnesota Statutes 2010, section 126C.41, subdivision 2, is amended to read:
7.11 		Subd. 2.Retired employee health benefits. (a) A district may levy an amount up 
7.12 	to the amount the district is required by the collective bargaining agreement in effect 
7.13 	on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for 
7.14 	licensed and nonlicensed employees who have terminated services in the employing 
7.15 	district and withdrawn from active teaching service or other active service, as applicable, 
7.16 	before July 1, 1992, and to pay for health insurance or unreimbursed medical expenses 
7.17 	for licensed and nonlicensed employees who have terminated services in the employing 
7.18 	district and withdrawn from active teaching service or other active service, as applicable 
7.19 	before July 1, 1998, only if a sunset clause is in effect for the current collective bargaining 
7.20 	agreement. The total amount of the levy each year may not exceed $600,000.
7.21 	(b) In addition to the levy authority granted under paragraph (a), a school district 
7.22 	may levy for other postemployment benefits expenses actually paid during the previous 
7.23 	fiscal year. For purposes of this subdivision, "postemployment benefits" means benefits 
7.24 	giving rise to a liability under Statement No. 45 of the Government Accounting Standards 
7.25 	Board. A district seeking levy authority under this subdivision must:
7.26 	(1) create or have created an actuarial liability to pay postemployment benefits to 
7.27 	employees or officers after their termination of service;
7.28 	(2) have a sunset clause in effect for the current collective bargaining agreement as 
7.29 	required by paragraph (a); and
7.30 	(3) apply for the authority in the form and manner required by the commissioner 
7.31 	of education.
7.32 	If the total levy authority requested under this paragraph exceeds the amount established 
7.33 	in paragraph (c), the commissioner must proportionately reduce each district's maximum 
7.34 	levy authority under this subdivision. The commissioner may subsequently adjust each 
8.1 	district's levy authority under this subdivision so long as the total levy authority does not 
8.2 	exceed the maximum levy authority for that year.
8.3 	(c) The maximum levy authority under paragraph (b) must not exceed the following 
8.4 	amounts:
8.5 	(1) $9,242,000 for taxes payable in 2010;
8.6 	(2) $29,863,000 for taxes payable in 2011; and
8.7 	(3) for taxes payable in 2012 and later, the maximum levy authority must not exceed 
8.8 	the sum of the previous year's authority and $14,000,000.

8.9 	Sec. 10. Minnesota Statutes 2010, section 126C.44, is amended to read:
8.10 	126C.44 SAFE SCHOOLS LEVY.
8.11 	(a) Each district may make a levy on all taxable property located within the district 
8.12 	for the purposes specified in this section. The maximum amount which may be levied 
8.13 	for all costs under this section shall be equal to $30 multiplied by the district's adjusted 
8.14 	marginal cost pupil units for the school year. The proceeds of the levy must be reserved and 
8.15 	used for directly funding the following purposes or for reimbursing the cities and counties 
8.16 	who contract with the district for the following purposes: (1) to pay the costs incurred for 
8.17 	the salaries, benefits, and transportation costs of peace officers and sheriffs for liaison in 
8.18 	services in the district's schools; (2) to pay the costs for a drug abuse prevention program 
8.19 	as defined in section 609.101, subdivision 3, paragraph (e), in the elementary schools; 
8.20 	(3) to pay the costs for a gang resistance education training curriculum in the district's 
8.21 	schools; (4) to pay the costs for security in the district's schools and on school property; (5) 
8.22 	to pay the costs for other crime prevention, drug abuse, student and staff safety, voluntary 
8.23 	opt-in suicide prevention tools, and violence prevention measures taken by the school 
8.24 	district; or (6) to pay costs for licensed school counselors, licensed school nurses, licensed 
8.25 	school social workers, licensed school psychologists, and licensed alcohol and chemical 
8.26 	dependency counselors to help provide early responses to problems. For expenditures 
8.27 	under clause (1), the district must initially attempt to contract for services to be provided 
8.28 	by peace officers or sheriffs with the police department of each city or the sheriff's 
8.29 	department of the county within the district containing the school receiving the services. If 
8.30 	a local police department or a county sheriff's department does not wish to provide the 
8.31 	necessary services, the district may contract for these services with any other police or 
8.32 	sheriff's department located entirely or partially within the school district's boundaries.
8.33 	(b) A school district that is a member of an intermediate school district may 
8.34 	include in its authority under this section the costs associated with safe schools activities 
8.35 	authorized under paragraph (a) for intermediate school district programs. This authority 
9.1 	must not exceed $10 times the adjusted marginal cost pupil units of the member districts. 
9.2 	This authority is in addition to any other authority authorized under this section. Revenue 
9.3 	raised under this paragraph must be transferred to the intermediate school district.
9.4 	(c) A school district must set aside at least $3 per adjusted marginal cost pupil unit 
9.5 	of the safe schools levy proceeds for the purposes authorized under paragraph (a), clause 
9.6 	(6). The district must annually certify either that: (1) its total spending, excluding federal 
9.7 	funds, on services provided by the employees listed in paragraph (a), clause (6), is not less 
9.8 	than the sum of its expenditures for these purposes, excluding ~~amounts spent under this~~ 
9.9 	~~section~~ federal funds, in the previous year ~~plus the amount spent under this section~~; or (2) 
9.10 	that the district's full-time equivalent number of employees listed in paragraph (a), clause 
9.11 	(6), excluding federally funded employees is not less than the number for the previous year.
9.12 	The district may calculate its maintenance of effort using total expenditures, expenditures 
9.13 	per adjusted pupil unit, total employees, or employees per adjusted pupil unit. A district 
9.14 	may include in the calculations its proportionate share of expenditures or full-time 
9.15 	equivalents of cooperative units or other districts from which it purchases services. A 
9.16 	district, including a district serving as the fiscal host for a cooperative, may exclude from 
9.17 	the calculations expenditures of full-time equivalents for employees contracted out to 
9.18 	other districts or cooperative members. A district with a decline in a nonfederal grant may 
9.19 	exclude from the calculations expenditures or full-time equivalents funded with the grant.

9.20 	EFFECTIVE DATE. This section is effective for certification of data for the 2012 
9.21 	fiscal year and later.

9.22 	Sec. 11.  REPEALER.
 9.23 	Minnesota Statutes 2010, section 126C.457, is repealed.

9.24 	ARTICLE 2
9.25 	EDUCATION EXCELLENCE

9.26 	Section 1. Minnesota Statutes 2010, section 120B.15, is amended to read:
9.27 	120B.15 GIFTED AND TALENTED STUDENTS PROGRAMS.
9.28 	(a) School districts and charter schools may identify students, locally develop 
9.29 	programs addressing instructional and affective needs, provide staff development, and 
9.30 	evaluate programs to provide gifted and talented students with challenging and appropriate
9.31 	educational programs.
10.1 	(b) School districts and charter schools may adopt guidelines for assessing and 
10.2 	identifying students for participation in gifted and talented programs. The guidelines 
10.3 	should include the use of:
10.4 	(1) multiple and objective criteria; and
10.5 	(2) assessments and procedures that are valid and reliable, fair, and based on 
10.6 	current theory and research addressing the use of tools and methods that are sensitive to 
10.7 	underrepresented groups, including, but not limited to, students who are low income, 
10.8 	minority, gifted and learning disabled, and English language learners.
10.9 	(c) School districts and charter schools must adopt procedures for the academic 
10.10 	acceleration of gifted and talented students. These procedures must include how the 
10.11 	district will:
10.12 	(1) assess a student's readiness and motivation for acceleration; and
10.13 	(2) match the level, complexity, and pace of the curriculum to a student to achieve 
10.14 	the best type of academic acceleration for that student.

10.15 	Sec. 2. Minnesota Statutes 2010, section 120B.30, subdivision 1, is amended to read:
10.16 		Subdivision 1.Statewide testing.  (a) The commissioner, with advice from experts 
10.17 	with appropriate technical qualifications and experience and stakeholders, consistent with 
10.18 	subdivision 1a, shall include in the comprehensive assessment system, for each grade 
10.19 	level to be tested, state-constructed tests developed from and aligned with the state's 
10.20 	required academic standards under section 120B.021, include multiple choice questions, 
10.21 	and be administered annually to all students in grades 3 through 8. State-developed 
10.22 	high school tests aligned with the state's required academic standards under section 
10.23 	120B.021 and administered to all high school students in a subject other than writing 
10.24 	must include multiple choice questions. The commissioner shall establish one or more 
10.25 	months during which schools shall administer the tests to students each school year. 
10.26 	Schools that the commissioner identifies for stand-alone field testing or other national 
10.27 	sampling must participate as directed. Superintendents or charter school directors may 
10.28 	appeal in writing to the commissioner for an exemption from a field test based on undue 
10.29 	hardship. The commissioner's decision regarding the appeal is final. For students enrolled 
10.30 	in grade 8 before the 2005-2006 school year, Minnesota basic skills tests in reading, 
10.31 	mathematics, and writing shall fulfill students' basic skills testing requirements for a 
10.32 	passing state notation. The passing scores of basic skills tests in reading and mathematics 
10.33 	are the equivalent of 75 percent correct for students entering grade 9 based on the first 
10.34 	uniform test administered in February 1998. Students who have not successfully passed 
11.1 	a Minnesota basic skills test by the end of the 2011-2012 school year must pass the 
11.2 	graduation-required assessments for diploma under paragraph (c).
11.3 	(b) The state assessment system must be aligned to the most recent revision of 
11.4 	academic standards as described in section 120B.023 in the following manner:
11.5 	(1) mathematics;
11.6 	(i) grades 3 through 8 beginning in the 2010-2011 school year; and
11.7 	(ii) high school level beginning in the 2013-2014 school year;
11.8 	(2) science; grades 5 and 8 and at the high school level beginning in the 2011-2012 
11.9 	school year; and
11.10 	(3) language arts and reading; grades 3 through 8 and high school level beginning in 
11.11 	the 2012-2013 school year.
11.12 	(c) For students enrolled in grade 8 in the 2005-2006 school year and later, only the 
11.13 	following options shall fulfill students' state graduation test requirements:
11.14 	(1) for reading and mathematics:
11.15 	(i) obtaining an achievement level equivalent to or greater than proficient as 
11.16 	determined through a standard setting process on the Minnesota comprehensive 
11.17 	assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing 
11.18 	score as determined through a standard setting process on the graduation-required 
11.19 	assessment for diploma in grade 10 for reading and grade 11 for mathematics or 
11.20 	subsequent retests;
11.21 	(ii) achieving a passing score as determined through a standard setting process on the 
11.22 	state-identified language proficiency test in reading and the mathematics test for English 
11.23 	language learners or the graduation-required assessment for diploma equivalent of those 
11.24 	assessments for students designated as English language learners;
11.25 	(iii) achieving an individual passing score on the graduation-required assessment 
11.26 	for diploma as determined by appropriate state guidelines for students with an individual 
11.27 	education plan or 504 plan;
11.28 	(iv) obtaining achievement level equivalent to or greater than proficient as 
11.29 	determined through a standard setting process on the state-identified alternate assessment 
11.30 	or assessments in grade 10 for reading and grade 11 for mathematics for students with 
11.31 	an individual education plan; or
11.32 	(v) achieving an individual passing score on the state-identified alternate assessment 
11.33 	or assessments as determined by appropriate state guidelines for students with an 
11.34 	individual education plan; and
11.35 	(2) for writing:
11.36 	(i) achieving a passing score on the graduation-required assessment for diploma;
12.1 	(ii) achieving a passing score as determined through a standard setting process on 
12.2 	the state-identified language proficiency test in writing for students designated as English 
12.3 	language learners;
12.4 	(iii) achieving an individual passing score on the graduation-required assessment 
12.5 	for diploma as determined by appropriate state guidelines for students with an individual 
12.6 	education plan or 504 plan; or
12.7 	(iv) achieving an individual passing score on the state-identified alternate assessment 
12.8 	or assessments as determined by appropriate state guidelines for students with an 
12.9 	individual education plan.
12.10 	(d) Students enrolled in grade 8 in any school year from the 2005-2006 school 
12.11 	year to the 2009-2010 school year who do not pass the mathematics graduation-required 
12.12 	assessment for diploma under paragraph (c) are eligible to receive a high school diploma 
12.13 	if they:
12.14 	(1) complete with a passing score or grade all state and local coursework and credits 
12.15 	required for graduation by the school board granting the students their diploma;
12.16 	(2) participate in district-prescribed academic remediation in mathematics; and
12.17 	(3) fully participate in at least two retests of the mathematics GRAD test or until 
12.18 	they pass the mathematics GRAD test, whichever comes first. A school, district, or 
12.19 	charter school must place on the high school transcript a student's ~~highest~~ current pass 
12.20 	status for each subject that has a required graduation assessment ~~score for each of the~~ 
12.21 	~~following assessments on the student's high school transcript: the mathematics Minnesota~~ 
12.22 	~~Comprehensive Assessment, reading Minnesota Comprehensive Assessment, and writing~~ 
12.23 	~~Graduation-Required Assessment for Diploma, and when applicable, the mathematics~~ 
12.24 	~~Graduation-Required Assessment for Diploma and reading Graduation-Required~~ 
12.25 	~~Assessment for Diploma~~.
12.26 	In addition, the school board granting the students their diplomas may formally 
12.27 	decide to include a notation of high achievement on the high school diplomas of those 
12.28 	graduating seniors who, according to established school board criteria, demonstrate 
12.29 	exemplary academic achievement during high school.
12.30 	(e) The 3rd through 8th grade and high school test results shall be available to 
12.31 	districts for diagnostic purposes affecting student learning and district instruction and 
12.32 	curriculum, and for establishing educational accountability. The commissioner must 
12.33 	disseminate to the public the high school test results upon receiving those results.
12.34 	(f) The 3rd through 8th grade and high school tests must be aligned with state 
12.35 	academic standards. The commissioner shall determine the testing process and the order 
13.1 	of administration. The statewide results shall be aggregated at the site and district level, 
13.2 	consistent with subdivision 1a.
13.3 	(g) In addition to the testing and reporting requirements under this section, the 
13.4 	commissioner shall include the following components in the statewide public reporting 
13.5 	system:
13.6 	(1) uniform statewide testing of all students in grades 3 through 8 and at the high 
13.7 	school level that provides appropriate, technically sound accommodations or alternate 
13.8 	assessments;
13.9 	(2) educational indicators that can be aggregated and compared across school 
13.10 	districts and across time on a statewide basis, including average daily attendance, high 
13.11 	school graduation rates, and high school drop-out rates by age and grade level;
13.12 	(3) state results on the American College Test; and
13.13 	(4) state results from participation in the National Assessment of Educational 
13.14 	Progress so that the state can benchmark its performance against the nation and other 
13.15 	states, and, where possible, against other countries, and contribute to the national effort 
13.16 	to monitor achievement.

13.17 	Sec. 3. Minnesota Statutes 2010, section 120B.30, subdivision 3, is amended to read:
13.18 		Subd. 3.Reporting. The commissioner shall report test ~~data~~ results publicly and 
13.19 	to stakeholders, including the performance achievement levels developed from students' 
13.20 	unweighted test scores in each tested subject and a listing of demographic factors that 
13.21 	strongly correlate with student performance. The test results must not include personally 
13.22 	identifiable information as defined in Code of Federal Regulations, title 34, section 99.3.
13.23 	The commissioner shall also report data that compares performance results among school 
13.24 	sites, school districts, Minnesota and other states, and Minnesota and other nations. The 
13.25 	commissioner shall disseminate to schools and school districts a more comprehensive 
13.26 	report containing testing information that meets local needs for evaluating instruction 
13.27 	and curriculum.

13.28 	Sec. 4. Minnesota Statutes 2010, section 120B.30, subdivision 4, is amended to read:
13.29 		Subd. 4.Access to tests. Consistent with section 13.34, the commissioner must 
13.30 	adopt and publish a policy to provide public and parental access for review of basic skills 
13.31 	tests, Minnesota Comprehensive Assessments, or any other such statewide test and 
13.32 	assessment which would not compromise the objectivity or fairness of the testing or 
13.33 	examination process. Upon receiving a written request, the commissioner must make 
14.1 	available to parents or guardians a copy of their student's actual responses to the test 
14.2 	questions for their review.

14.3 	Sec. 5. Minnesota Statutes 2010, section 120B.31, subdivision 4, is amended to read:
14.4 		Subd. 4.~~Statistical adjustments;~~ Student performance data. In developing 
14.5 	policies and assessment processes to hold schools and districts accountable for high levels 
14.6 	of academic standards under section 120B.021, the commissioner shall aggregate student 
14.7 	data over time to report student performance and growth levels measured at the school, 
14.8 	school district, and statewide level. When collecting and reporting the performance data, 
14.9 	the commissioner shall~~: (1) acknowledge the impact of significant demographic factors~~ 
14.10 	~~such as residential instability, the number of single parent families, parents' level of~~ 
14.11 	~~education, and parents' income level on school outcomes; and (2)~~ organize and report the 
14.12 	data so that state and local policy makers can understand the educational implications 
14.13 	of changes in districts' demographic profiles over time. Any report the commissioner 
14.14 	disseminates containing summary data on student performance must integrate student 
14.15 	performance and the demographic factors that strongly correlate with that performance.

14.16 	Sec. 6. Minnesota Statutes 2010, section 120B.36, subdivision 1, is amended to read:
14.17 		Subdivision 1.School performance report cards. (a) The commissioner 
14.18 	shall report student academic performance under section 120B.35, subdivision 2; the 
14.19 	percentages of students showing low, medium, and high growth under section 120B.35, 
14.20 	subdivision 3, paragraph (b); school safety and student engagement and connection 
14.21 	under section 120B.35, subdivision 3, paragraph (d); rigorous coursework under section 
14.22 	120B.35, subdivision 3, paragraph (c); two separate student-to-teacher ratios that clearly 
14.23 	indicate the definition of teacher consistent with sections 122A.06 and 122A.15 for 
14.24 	purposes of determining these ratios; staff characteristics excluding salaries; student 
14.25 	enrollment demographics; district mobility; and extracurricular activities. The report also 
14.26 	must indicate a school's adequate yearly progress status, and must not set any designations 
14.27 	applicable to high- and low-performing schools due solely to adequate yearly progress 
14.28 	status.
14.29 	(b) The commissioner shall develop, annually update, and post on the department 
14.30 	Web site school performance report cards.
14.31 	(c) The commissioner must make available performance report cards by the 
14.32 	beginning of each school year.
15.1 	(d) A school or district may appeal its adequate yearly progress status in writing to 
15.2 	the commissioner within 30 days of receiving the notice of its status. The commissioner's 
15.3 	decision to uphold or deny an appeal is final.
15.4 	(e) School performance report card data are nonpublic data under section 13.02, 
15.5 	subdivision 9, until ~~not later than ten days after the appeal procedure described in~~ 
15.6 	~~paragraph (d) concludes~~ the commissioner publicly releases the data. The ~~department~~
15.7 	commissioner shall annually post school performance report cards to ~~its~~ the department's
15.8 	public web site no later than September 1, except that in years when the report card 
15.9 	reflects new performance standards, the commissioner shall post the school performance 
15.10 	report cards no later than October 1.

15.11 	Sec. 7. Minnesota Statutes 2010, section 120B.36, subdivision 2, is amended to read:
15.12 		Subd. 2.Adequate yearly progress and other data. All data the department 
15.13 	receives, collects, or creates to determine adequate yearly progress status under Public 
15.14 	Law 107-110, section 1116, set state growth targets, and determine student growth are 
15.15 	nonpublic data under section 13.02, subdivision 9, until ~~not later than ten days after the~~ 
15.16 	~~appeal procedure described in subdivision 1, paragraph (d), concludes~~ the commissioner 
15.17 	publicly releases the data. Districts must provide parents sufficiently detailed summary 
15.18 	data to permit parents to appeal under Public Law 107-110, section 1116(b)(2). The 
15.19 	~~department~~ commissioner shall annually post federal adequate yearly progress data and 
15.20 	state student growth data to ~~its~~ the department's public Web site no later than September 
15.21 	1, except that in years when adequate yearly progress reflects new performance standards, 
15.22 	the commissioner shall post federal adequate yearly progress data and state student growth 
15.23 	data no later than October 1.

15.24 	Sec. 8. Minnesota Statutes 2010, section 122A.16, as amended by Laws 2011, chapter 
15.25 	5, section 2, is amended to read:
15.26 	122A.16 HIGHLY QUALIFIED TEACHER DEFINED.
15.27 	(a) A qualified teacher is one holding a valid license, under this chapter, to perform 
15.28 	the particular service for which the teacher is employed in a public school.
15.29 	(b) For the purposes of the federal No Child Left Behind Act, a highly qualified 
15.30 	teacher is one who holds a valid license under this chapter, including under section 
15.31 	122A.245, among other sections~~, to perform the particular service for which the teacher is~~ 
15.32 	~~employed in a public school or who meets the requirements of a highly objective uniform~~ 
15.33 	~~state standard of evaluation (HOUSSE)~~ and is determined by local administrators as 
15.34 	having highly qualified status in accordance with the approved Minnesota highly qualified 
16.1 	plan. Teachers delivering core content instruction must be deemed highly qualified at the 
16.2 	local level and reported to the state via the staff automated reporting system.
16.3 	~~All Minnesota teachers teaching in a core academic subject area, as defined by the~~ 
16.4 	~~federal No Child Left Behind Act, in which they are not fully licensed may complete the~~ 
16.5 	~~following HOUSSE process in the core subject area for which the teacher is requesting~~ 
16.6 	~~highly qualified status by completing an application, in the form and manner described by~~ 
16.7 	~~the commissioner, that includes:~~
16.8 	~~(1) documentation of student achievement as evidenced by norm-referenced test~~ 
16.9 	~~results that are objective and psychometrically valid and reliable;~~
16.10 	~~(2) evidence of local, state, or national activities, recognition, or awards for~~ 
16.11 	~~professional contribution to achievement;~~
16.12 	~~(3) description of teaching experience in the teachers' core subject area in a public~~ 
16.13 	~~school under a waiver, variance, limited license or other exception; nonpublic school; and~~ 
16.14 	~~postsecondary institution;~~
16.15 	~~(4) test results from the Praxis II content test;~~
16.16 	~~(5) evidence of advanced certification from the National Board for Professional~~ 
16.17 	~~Teaching Standards;~~
16.18 	~~(6) evidence of the successful completion of course work or pedagogy courses; and~~
16.19 	~~(7) evidence of the successful completion of high quality professional development~~ 
16.20 	~~activities.~~
16.21 	~~Districts must assign a school administrator to serve as a HOUSSE reviewer to~~ 
16.22 	~~meet with teachers under this paragraph and, where appropriate, certify the teachers'~~ 
16.23 	~~applications. Teachers satisfy the definition of highly qualified when the teachers receive~~ 
16.24 	~~at least 100 of the total number of points used to measure the teachers' content expertise~~ 
16.25 	~~under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1)~~ 
16.26 	~~to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified~~ 
16.27 	~~for more than one subject area.~~
16.28 	~~(c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher~~ 
16.29 	~~must obtain permission from the Board of Teaching in order to teach in a public school.~~

16.30 	EFFECTIVE DATE. This section is effective for the 2011-2012 school year and 
16.31 	later.

16.32 	Sec. 9. Minnesota Statutes 2010, section 122A.60, subdivision 4, is amended to read:
16.33 		Subd. 4.Staff development report. (a) By October 15 of each year, the district and 
16.34 	site staff development committees shall write and submit a report of staff development 
16.35 	activities and expenditures for the previous year, in the form and manner determined by 
17.1 	the commissioner. The report, signed by the district superintendent and staff development 
17.2 	chair, must include assessment and evaluation data indicating progress toward district and 
17.3 	site staff development goals based on teaching and learning outcomes, including the 
17.4 	percentage of teachers and other staff involved in instruction who participate in effective 
17.5 	staff development activities under subdivision 3.
17.6 	(b) The report must break down expenditures for:
17.7 	(1) curriculum development and curriculum training programs; and
17.8 	(2) staff development training models, workshops, and conferences, and the cost of 
17.9 	releasing teachers or providing substitute teachers for staff development purposes.
17.10 	The report also must indicate whether the expenditures were incurred at the district 
17.11 	level or the school site level, and whether the school site expenditures were made possible 
17.12 	by grants to school sites that demonstrate exemplary use of allocated staff development 
17.13 	revenue. These expenditures must be reported using the uniform financial and accounting 
17.14 	and reporting standards.
17.15 	(c) The commissioner shall report the staff development progress and expenditure 
17.16 	data to the house of representatives and senate committees having jurisdiction over 
17.17 	education by February 15 each odd-numbered year.

17.18 	Sec. 10. Minnesota Statutes 2010, section 124D.091, subdivision 2, is amended to read:
17.19 		Subd. 2.Eligibility. A district that offers a concurrent enrollment course according 
17.20 	to an agreement under section 124D.09, subdivision 10, is eligible to receive aid for the 
17.21 	costs of providing postsecondary courses at the high school. Beginning in fiscal year 2011, 
17.22 	districts only are eligible for aid if the college or university concurrent enrollment courses 
17.23 	offered by the district are accredited by the National Alliance of Concurrent Enrollment 
17.24 	Partnership, in the process of being accredited, or are shown by clear evidence to be of 
17.25 	comparable standard to accredited courses, or are technical courses within a recognized 
17.26 	career and technical education program of study approved by the commissioner of 
17.27 	education and the chancellor of the Minnesota State Colleges and Universities.

17.28 	Sec. 11. Minnesota Statutes 2010, section 124D.10, subdivision 3, is amended to read:
17.29 		Subd. 3.Authorizer. (a) For purposes of this section, the terms defined in this 
17.30 	subdivision have the meanings given them.
17.31 	"Application" to receive approval as an authorizer means the proposal an eligible 
17.32 	authorizer submits to the commissioner under paragraph (c) before that authorizer is able 
17.33 	to submit any affidavit to charter to a school.
18.1 	"Application" under subdivision 4 means the charter school business plan a 
18.2 	school developer submits to an authorizer for approval to establish a charter school that 
18.3 	documents the school developer's mission statement, school purposes, program design, 
18.4 	financial plan, governance and management structure, and background and experience, 
18.5 	plus any other information the authorizer requests. The application also shall include a 
18.6 	"statement of assurances" of legal compliance prescribed by the commissioner.
18.7 	"Affidavit" means a written statement the authorizer submits to the commissioner 
18.8 	for approval to establish a charter school under subdivision 4 attesting to its review and 
18.9 	approval process before chartering a school.
18.10 	"Affidavit" means the form an authorizer submits to the commissioner that is a 
18.11 	precondition to a charter school organizing an affiliated nonprofit building corporation 
18.12 	under subdivision 17a.
18.13 	(b) The following organizations may authorize one or more charter schools:
18.14 	(1) a school board; intermediate school district school board; education district 
18.15 	organized under sections 123A.15 to 123A.19;
18.16 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code of 
18.17 	1986, excluding a nonpublic sectarian or religious institution without an approved affidavit 
18.18 	by the commissioner prior to July 1, 2009, and any person other than a natural person that 
18.19 	directly or indirectly, through one or more intermediaries, controls, is controlled by, or 
18.20 	is under common control with the nonpublic sectarian or religious institution, and any 
18.21 	other charitable organization under this clause that in the federal IRS Form 1023, Part 
18.22 	IV, describes activities indicating a religious purpose, that:
18.23 	(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 
18.24 	Foundations;
18.25 	(ii) is registered with the attorney general's office;
18.26 	(iii) reports an end-of-year fund balance of at least $2,000,000; and
18.27 	(iv) is incorporated in the state of Minnesota;
18.28 	(3) a Minnesota private college, notwithstanding clause (2), that grants two- or 
18.29 	four-year degrees and is registered with the Minnesota Office of Higher Education under 
18.30 	chapter 136A; community college, state university, or technical college governed by the 
18.31 	Board of Trustees of the Minnesota State Colleges and Universities; or the University of 
18.32 	Minnesota; or
18.33 	(4) a nonprofit corporation subject to chapter 317A, described in section 317A.905, 
18.34 	and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 
18.35 	of 1986, may authorize one or more charter schools if the charter school has operated 
19.1 	for at least three years under a different authorizer and if the nonprofit corporation has 
19.2 	existed for at least 25 years.
19.3 	(5) no more than three single-purpose authorizers that are charitable, nonsectarian 
19.4 	organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and 
19.5 	incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible 
19.6 	organizations interested in being approved as an authorizer under this paragraph must 
19.7 	submit a proposal to the commissioner that includes the provisions of paragraph (c) and 
19.8 	a five-year financial plan. Such authorizers shall consider and approve applications 
19.9 	using the criteria provided in subdivision 4 and shall not limit the applications it solicits, 
19.10 	considers, or approves to any single curriculum, learning program, or method.
19.11 	(c) An eligible authorizer under this subdivision must apply to the commissioner for 
19.12 	approval as an authorizer before submitting any affidavit to the commissioner to charter 
19.13 	a school. The application for approval as a charter school authorizer must demonstrate 
19.14 	the applicant's ability to implement the procedures and satisfy the criteria for chartering a 
19.15 	school under this section. The commissioner must approve or disapprove an application 
19.16 	within 60 business days of the application deadline. If the commissioner disapproves 
19.17 	the application, the commissioner must notify the applicant of the deficiencies and the 
19.18 	applicant then has 20 business days to address the deficiencies to the commissioner's 
19.19 	satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes 
19.20 	an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for 
19.21 	approval, must consider the applicant's:
19.22 	(1) capacity and infrastructure;
19.23 	(2) application criteria and process;
19.24 	(3) contracting process;
19.25 	(4) ongoing oversight and evaluation processes; and
19.26 	(5) renewal criteria and processes.
19.27 	(d) The ~~affidavit~~ application for approval to be submitted to and evaluated by the 
19.28 	commissioner must include at least the following:
19.29 	(1) how chartering schools is a way for the organization to carry out its mission;
19.30 	(2) a description of the capacity of the organization to serve as an authorizer, 
19.31 	including the personnel who will perform the authorizing duties, their qualifications, the 
19.32 	amount of time they will be assigned to this responsibility, and the financial resources 
19.33 	allocated by the organization to this responsibility;
19.34 	(3) a description of the application and review process the authorizer will use to make 
19.35 	decisions regarding the granting of charters, which will include at least the following:
19.36 	(i) how the statutory purposes defined in subdivision 1 are addressed;
20.1 	(ii) the mission, goals, program model, and student performance expectations;
20.2 	(iii) an evaluation plan for the school that includes criteria for evaluating educational, 
20.3 	organizational, and fiscal plans;
20.4 	(iv) the school's governance plan;
20.5 	(v) the financial management plan; and
20.6 	(vi) the administration and operations plan;
20.7 	(4) a description of the type of contract it will arrange with the schools it charters 
20.8 	that meets the provisions of subdivision 6 and defines the rights and responsibilities of the 
20.9 	charter school for governing its educational program, controlling its funds, and making 
20.10 	school management decisions;
20.11 	(5) the process to be used for providing ongoing oversight of the school consistent 
20.12 	with the contract expectations specified in clause (4) that assures that the schools chartered 
20.13 	are complying with both the provisions of applicable law and rules, and with the contract;
20.14 	(6) the process for making decisions regarding the renewal or termination of 
20.15 	the school's charter based on evidence that demonstrates the academic, organizational, 
20.16 	and financial competency of the school, including its success in increasing student 
20.17 	achievement and meeting the goals of the charter school agreement; and
20.18 	(7) an assurance specifying that the organization is committed to serving as an 
20.19 	authorizer for the full five-year term.
20.20 	A disapproved applicant under this paragraph may resubmit an application during a 
20.21 	future application period.
20.22 	(e) The authorizer must participate in department-approved training.
20.23 	(f) An authorizer that chartered a school before August 1, 2009, must apply by ~~June~~ 
20.24 	~~30~~ August 3, 2011, to the commissioner for approval, under paragraph (c), to continue as 
20.25 	an authorizer under this section. For purposes of this paragraph, an authorizer that fails to 
20.26 	submit a timely application for commissioner approval is ineligible to ~~charter~~authorize 
20.27 	a school. An authorizer ineligible to authorize a charter school under this paragraph or 
20.28 	paragraph (c) may continue to authorize a charter school until June 30, 2012. On July 
20.29 	1, 2011, a charter school operating under a contract with an ineligible authorizer that 
20.30 	expires after June 30, 2012, commits a major violation under this section. A charter 
20.31 	school operating under a contract with an ineligible authorizer that expires after June 30, 
20.32 	2012, may renegotiate the contract with that authorizer.
20.33 	(g) The commissioner shall review an authorizer's performance every five years in 
20.34 	a manner and form determined by the commissioner and may review an authorizer's 
20.35 	performance more frequently at the commissioner's own initiative or at the request of a 
20.36 	charter school operator, charter school board member, or other interested party. The 
21.1 	commissioner, after completing the review, shall transmit a report with findings to the 
21.2 	authorizer. If, consistent with this section, the commissioner finds that an authorizer 
21.3 	has not fulfilled the requirements of this section, the commissioner may subject the 
21.4 	authorizer to corrective action, which may include terminating the contract with the 
21.5 	charter school board of directors of a school it chartered. The commissioner must notify 
21.6 	the authorizer in writing of any findings that may subject the authorizer to corrective 
21.7 	action and the authorizer then has 15 business days to request an informal hearing before 
21.8 	the commissioner takes corrective action.
21.9 	(h) The commissioner may at any time take corrective action against an authorizer, 
21.10 	including terminating an authorizer's ability to charter a school for:
21.11 	(1) failing to demonstrate the criteria under paragraph (c) under which the 
21.12 	commissioner approved the authorizer;
21.13 	(2) violating a term of the chartering contract between the authorizer and the charter 
21.14 	school board of directors; ~~or~~
21.15 	(3) unsatisfactory performance as an approved authorizer; or
21.16 	(4) any good cause shown.

21.17 	EFFECTIVE DATE. This section is effective the day following final enactment.

21.18 	Sec. 12. Minnesota Statutes 2010, section 124D.10, subdivision 4, is amended to read:
21.19 		Subd. 4.Formation of school. (a) An authorizer, after receiving an application from 
21.20 	a school developer, may charter a licensed teacher under section 122A.18, subdivision 
21.21 	1, or a group of individuals that includes one or more licensed teachers under section 
21.22 	122A.18, subdivision 1, to operate a school subject to the commissioner's approval of the 
21.23 	authorizer's affidavit under paragraph (b). The school must be organized and operated 
21.24 	as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and 
21.25 	the provisions under the applicable chapter shall apply to the school except as provided 
21.26 	in this section.
21.27 	Notwithstanding sections 465.717 and 465.719, a school district, subject to this 
21.28 	section and section 124D.11, may create a corporation for the purpose of establishing a 
21.29 	charter school.
21.30 	(b) Before the operators may establish and operate a school, the authorizer must file 
21.31 	an affidavit with the commissioner stating its intent to charter a school. An authorizer 
21.32 	must file a separate affidavit for each school it intends to charter. The affidavit must 
21.33 	state the terms and conditions under which the authorizer would charter a school and 
21.34 	how the authorizer intends to oversee the fiscal and student performance of the charter 
21.35 	school and to comply with the terms of the written contract between the authorizer 
22.1 	and the charter school board of directors under subdivision 6. The commissioner must 
22.2 	approve or disapprove the authorizer's affidavit within 60 business days of receipt of the 
22.3 	affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify 
22.4 	the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business 
22.5 	days to address the deficiencies. If the authorizer does not address deficiencies to the 
22.6 	commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain 
22.7 	commissioner approval precludes an authorizer from chartering the school that is the 
22.8 	subject of this affidavit.
22.9 	(c) The authorizer may prevent an approved charter school from opening for 
22.10 	operation if, among other grounds, the charter school violates this section or does not meet 
22.11 	the ready-to-open standards that are part of the authorizer's oversight and evaluation 
22.12 	process or are stipulated in the charter school contract.
22.13 	(d) The operators authorized to organize and operate a school, before entering into a 
22.14 	contract or other agreement for professional or other services, goods, or facilities, must 
22.15 	incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 
22.16 	chapter 317A and must establish a board of directors composed of at least five members 
22.17 	who are not related parties until a timely election for members of the ongoing charter 
22.18 	school board of directors is held according to the school's articles and bylaws under 
22.19 	paragraph (f). A charter school board of directors must be composed of at least five 
22.20 	members who are not related parties. Staff members employed at the school, including 
22.21 	teachers providing instruction under a contract with a cooperative, and all parents or legal 
22.22 	guardians of children enrolled in the school are the voters eligible to elect the members 
22.23 	of the school's board of directors. A charter school must notify eligible voters of the 
22.24 	school board election dates at least 30 days before the election. Board of director meetings 
22.25 	must comply with chapter 13D.
22.26 	(e) Upon the request of an individual, the charter school must make available in 
22.27 	a timely fashion the minutes of meetings of the board of directors, and of members 
22.28 	and committees having any board-delegated authority; financial statements showing all 
22.29 	operations and transactions affecting income, surplus, and deficit during the school's last 
22.30 	annual accounting period; and a balance sheet summarizing assets and liabilities on the 
22.31 	closing date of the accounting period. A charter school also must post on its official Web 
22.32 	site information identifying its authorizer and indicate how to contact that authorizer and 
22.33 	include that same information about its authorizer in other school materials that it makes 
22.34 	available to the public.
22.35 	(f) Every charter school board member shall attend department-approved training 
22.36 	on board governance, the board's role and responsibilities, employment policies and 
23.1 	practices, and financial management. A board member who does not begin the required 
23.2 	training within six months of being seated and complete the required training within 12 
23.3 	months of being seated on the board is ineligible to continue to serve as a board member.
23.4 	(g) The ongoing board must be elected before the school completes its third year 
23.5 	of operation. Board elections must be held during a time when school is in session. The 
23.6 	charter school board of directors shall be composed of at least five nonrelated members 
23.7 	and include: (i) at least one licensed teacher employed and serving as a teacher at the 
23.8 	school or a licensed teacher providing instruction under a ~~contact~~ contract between the 
23.9 	charter school and a cooperative; (ii) the parent or legal guardian of a student enrolled 
23.10 	in the charter school who is not employed by the charter school; and (iii) an interested 
23.11 	community member who is not employed by the charter school and does not have a child 
23.12 	enrolled in the school. The board may be a teacher majority board composed of teachers 
23.13 	described in this paragraph. The chief financial officer and the chief administrator ~~are~~ may 
23.14 	only serve as ex-officio nonvoting board members and shall not serve as a voting member 
23.15 	of the board. Charter school employees shall not serve on the board unless item (i) applies. 
23.16 	Contractors providing facilities, goods, or services to a charter school shall not serve on 
23.17 	the board of directors of the charter school. Board bylaws shall outline the process and 
23.18 	procedures for changing the board's governance model, consistent with chapter 317A. A 
23.19 	board may change its governance model only:
23.20 	(1) by a majority vote of the board of directors and the licensed teachers employed 
23.21 	by the school, including licensed teachers providing instruction under a contract between 
23.22 	the school and a cooperative; and
23.23 	(2) with the authorizer's approval.
23.24 	Any change in board governance must conform with the board structure established 
23.25 	under this paragraph.
23.26 	(h) The granting or renewal of a charter by an authorizer must not be conditioned 
23.27 	upon the bargaining unit status of the employees of the school.
23.28 	(i) The granting or renewal of a charter school by an authorizer must not be 
23.29 	contingent on the charter school being required to contract, lease, or purchase services 
23.30 	from the authorizer. Any potential contract, lease, or purchase of service from an 
23.31 	authorizer must be disclosed to the commissioner, accepted through an open bidding 
23.32 	process, and be a separate contract from the charter contract. The school must document 
23.33 	the open bidding process. An authorizer must not enter into a contract to provide 
23.34 	management and financial services for a school that it authorizes, unless the school 
23.35 	documents that it received at least two competitive bids.
24.1 	(j) An authorizer may permit the board of directors of a charter school to expand 
24.2 	the operation of the charter school to additional sites or to add additional grades at the 
24.3 	school beyond those described in the authorizer's original affidavit as approved by 
24.4 	the commissioner only after submitting a supplemental affidavit for approval to the 
24.5 	commissioner in a form and manner prescribed by the commissioner. The supplemental 
24.6 	affidavit must show that:
24.7 	(1) the expansion proposed by the charter school is supported by need and projected 
24.8 	enrollment;
24.9 	(2) the charter school expansion is warranted, at a minimum, by longitudinal data 
24.10 	demonstrating students' improved academic performance and growth on statewide 
24.11 	assessments under chapter 120B;
24.12 	(3) the charter school is fiscally sound and has the financial capacity to implement 
24.13 	the proposed expansion; and
24.14 	(4) the authorizer finds that the charter school has the management capacity to 
24.15 	carry out its expansion.
24.16 	(k) The commissioner shall have 30 business days to review and comment on the 
24.17 	supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in 
24.18 	the supplemental affidavit and the authorizer then has 30 business days to address, to the 
24.19 	commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school 
24.20 	may not expand grades or add sites until the commissioner has approved the supplemental 
24.21 	affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.

24.22 	Sec. 13. Minnesota Statutes 2010, section 124D.10, subdivision 6, is amended to read:
24.23 		Subd. 6.Charter contract. The authorization for a charter school must be in the 
24.24 	form of a written contract signed by the authorizer and the board of directors of the charter 
24.25 	school. The contract must be completed within 45 business days of the commissioner's 
24.26 	approval of the authorizer's affidavit. The authorizer shall submit to the commissioner a 
24.27 	copy of the signed charter contract within ten business days of its execution. The contract 
24.28 	for a charter school must be in writing and contain at least the following:
24.29 	(1) a declaration of the purposes in subdivision 1 that the school intends to carry out 
24.30 	and how the school will report its implementation of those purposes;
24.31 	(2) a description of the school program and the specific academic and nonacademic 
24.32 	outcomes that pupils must achieve;
24.33 	(3) a statement of admission policies and procedures;
24.34 	(4) a governance, management, and administration plan for the school;
25.1 	(5) signed agreements from charter school board members to comply with all 
25.2 	federal and state laws governing organizational, programmatic, and financial requirements 
25.3 	applicable to charter schools;
25.4 	(6) the criteria, processes, and procedures that the authorizer will use for ongoing 
25.5 	oversight of operational, financial, and academic performance;
25.6 	(7) the performance evaluation that is a prerequisite for reviewing a charter contract 
25.7 	under subdivision 15;
25.8 	(8) types and amounts of insurance liability coverage to be obtained by the charter 
25.9 	school;
25.10 	(9) the term of the contract, which may be up to three years for an initial contract 
25.11 	plus an additional preoperational planning year, and up to five years for a renewed contract 
25.12 	if warranted by the school's academic, financial, and operational performance;
25.13 	(10) how the board of directors or the operators of the charter school will provide 
25.14 	special instruction and services for children with a disability under sections 125A.03 
25.15 	to 125A.24, and 125A.65, a description of the financial parameters within which the 
25.16 	charter school will operate to provide the special instruction and services to children 
25.17 	with a disability;
25.18 	(11) the process and criteria the authorizer intends to use to monitor and evaluate the 
25.19 	fiscal and student performance of the charter school, consistent with subdivision 15; ~~and~~
25.20 	(12) the plan for an orderly closing of the school under chapter 308A or 317A, if the 
25.21 	closure is a termination for cause, a voluntary termination, or a nonrenewal of the contract, 
25.22 	and that includes establishing the responsibilities of the school board of directors and the 
25.23 	authorizer and notifying the commissioner, authorizer, school district in which the charter 
25.24 	school is located, and parents of enrolled students about the closure, the transfer of student 
25.25 	records to students' resident districts, and procedures for closing financial operations; and
25.26 	(13) provisions indemnifying and holding the commissioner and the authorizer, its 
25.27 	officers, and their agents and employees harmless from any suit, claims, or liability arising 
25.28 	under the contract or arising from the operation of the charter school.

25.29 	Sec. 14. Minnesota Statutes 2010, section 124D.10, subdivision 6a, is amended to read:
25.30 		Subd. 6a.Audit report. (a) The charter school must submit an audit report to the 
25.31 	commissioner and its authorizer by December 31 each year.
25.32 	(b) The charter school, with the assistance of the auditor conducting the audit, must 
25.33 	include with the report a copy of all charter school agreements for corporate management 
25.34 	services. If the entity that provides the professional services to the charter school is 
25.35 	exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 
26.1 	must file with the commissioner by February 15 a copy of the annual return required under 
26.2 	section 6033 of the Internal Revenue Code of 1986.
26.3 	(c) If the commissioner receives an audit report indicating that a material weakness 
26.4 	exists in the financial reporting systems of a charter school, the charter school must 
26.5 	submit a written report to the commissioner explaining how the material weakness will 
26.6 	be resolved. An entity, as a condition of providing financial services to a charter school, 
26.7 	must agree to make available information about a charter school's financial audit to the 
26.8 	commissioner upon request.

26.9 	Sec. 15. Minnesota Statutes 2010, section 124D.10, subdivision 23, is amended to read:
26.10 		Subd. 23.Causes for nonrenewal or termination of charter school contract. (a) 
26.11 	The duration of the contract with an authorizer must be for the term contained in the 
26.12 	contract according to subdivision 6. The authorizer may or may not renew a contract at 
26.13 	the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally 
26.14 	terminate a contract during the term of the contract for any ground listed in paragraph 
26.15 	(b). At least 60 days before not renewing or terminating a contract, the authorizer shall 
26.16 	notify the board of directors of the charter school of the proposed action in writing. The 
26.17 	notice shall state the grounds for the proposed action in reasonable detail and that the 
26.18 	charter school's board of directors may request in writing an informal hearing before the 
26.19 	authorizer within 15 business days of receiving notice of nonrenewal or termination of the 
26.20 	contract. Failure by the board of directors to make a written request for a hearing within 
26.21 	the 15-business-day period shall be treated as acquiescence to the proposed action. Upon 
26.22 	receiving a timely written request for a hearing, the authorizer shall give ten business days' 
26.23 	notice to the charter school's board of directors of the hearing date. The authorizer shall 
26.24 	conduct an informal hearing before taking final action. The authorizer shall take final 
26.25 	action to renew or not renew a contract no later than 20 business days before the proposed 
26.26 	date for terminating the contract or the end date of the contract.
26.27 	(b) A contract may be terminated or not renewed upon any of the following grounds:
26.28 	(1) failure to meet the requirements for pupil performance contained in the contract;
26.29 	(2) failure to meet generally accepted standards of fiscal management;
26.30 	(3) violations of law; or
26.31 	(4) other good cause shown.
26.32 	If a contract is terminated or not renewed under this paragraph, the school must be 
26.33 	dissolved according to the applicable provisions of chapter 308A or 317A.
26.34 	(c) If the authorizer and the charter school board of directors mutually agree to 
26.35 	terminate or not renew the contract, a change in authorizers is allowed if the commissioner 
27.1 	approves the transfer to a different eligible authorizer to authorize the charter school. 
27.2 	Both parties must jointly submit their intent in writing to the commissioner to mutually 
27.3 	terminate the contract. The authorizer that is a party to the existing contract at least must 
27.4 	inform the approved different eligible authorizer about the fiscal and operational status 
27.5 	and student performance of the school. Before the commissioner determines whether 
27.6 	to approve a transfer of authorizer, the commissioner first must determine whether the 
27.7 	charter school and prospective new authorizer can identify and effectively resolve those 
27.8 	circumstances causing the previous authorizer and the charter school to mutually agree 
27.9 	to terminate the contract. If no transfer of authorizer is approved, the school must be 
27.10 	dissolved according to applicable law and the terms of the contract.
27.11 	(d) The commissioner, after providing reasonable notice to the board of directors of 
27.12 	a charter school and the existing authorizer, and after providing an opportunity for a public 
27.13 	hearing, may terminate the existing contract between the authorizer and the charter school 
27.14 	board if the charter school has ~~a history of~~:
27.15 	(1) ~~failure~~ failed to meet pupil performance requirements ~~contained in the contract~~
27.16 	consistent with state law;
27.17 	(2) issued diplomas to students who have not satisfied graduation requirements 
27.18 	under sections 120B.024 and 120B.30;
27.19 	(3) displayed financial mismanagement or failure to meet generally accepted 
27.20 	standards of fiscal management; ~~or~~
27.21 	~~(3) repeated or major~~(4) committed multiple violations of the law; or
27.22 	(5) committed a major violation of the law, including a violation of the Minnesota or 
27.23 	federal constitution.
27.24 	(e) The decision of the commissioner under this section is final.
27.25 	(f) If the commissioner terminates a charter school contract under subdivision 3, 
27.26 	paragraph (g), the commissioner shall provide the charter school with information about 
27.27 	other eligible authorizers.

27.28 	Sec. 16. Minnesota Statutes 2010, section 124D.11, subdivision 9, is amended to read:
27.29 		Subd. 9.Payment of aids to charter schools. (a) Notwithstanding section 127A.45, 
27.30 	subdivision 3, aid payments for the current fiscal year to a charter school shall be of an 
27.31 	equal amount on each of the 24 payment dates.
27.32 	(b) Notwithstanding paragraph (a) and section 127A.45, for a charter school ceasing 
27.33 	operation on or prior to June 30 of a school year, for the payment periods occurring after 
27.34 	the school ceases serving students, the commissioner shall withhold the estimated state aid 
27.35 	owed the school. The charter school board of directors and authorizer must submit to the 
28.1 	commissioner a closure plan under chapter 308A or 317A, and financial information about 
28.2 	the school's liabilities and assets. After receiving the closure plan, financial information, 
28.3 	an audit of pupil counts, documentation of lease expenditures, and monitoring of special 
28.4 	education expenditures, the commissioner may release cash withheld and may continue 
28.5 	regular payments up to the current year payment percentages if further amounts are 
28.6 	owed. If, based on audits and monitoring, the school received state aid in excess of the 
28.7 	amount owed, the commissioner shall retain aid withheld sufficient to eliminate the aid 
28.8 	overpayment. For a charter school ceasing operations prior to, or at the end of, a school 
28.9 	year, notwithstanding section 127A.45, subdivision 3, preliminary final payments may 
28.10 	be made after receiving the closure plan, audit of pupil counts, monitoring of special 
28.11 	education expenditures, documentation of lease expenditures, and school submission of 
28.12 	Uniform Financial Accounting and Reporting Standards (UFARS) financial data for the 
28.13 	final year of operation. Final payment may be made upon receipt of audited financial 
28.14 	statements under section 123B.77, subdivision 3.
28.15 	(c) If a charter school fails to comply with the commissioner's directive to return, 
28.16 	for cause, federal or state funds administered by the department, the commissioner may 
28.17 	withhold an amount of state aid sufficient to satisfy the directive.
28.18 	(d) If, within the timeline under section 471.425, a charter school fails to pay the state 
28.19 	of Minnesota, a school district, intermediate school district, or service cooperative after 
28.20 	receiving an undisputed invoice for goods and services, the commissioner may withhold 
28.21 	an amount of state aid sufficient to satisfy the claim and shall distribute the withheld 
28.22 	aid to the interested state agency, school district, intermediate school district, or service 
28.23 	cooperative. An interested state agency, school district, intermediate school district, or 
28.24 	education cooperative shall notify the commissioner when a charter school fails to pay an 
28.25 	undisputed invoice within 75 business days of when it received the original invoice.
28.26 	(e) Notwithstanding section 127A.45, subdivision 3, and paragraph (a), 80 percent 
28.27 	of the start-up cost aid under subdivision 8 shall be paid within 45 days after the first day 
28.28 	of student attendance for that school year.
28.29 	(f) In order to receive state aid payments under this subdivision, a charter school in 
28.30 	its first three years of operation must submit a school calendar in the form and manner 
28.31 	requested by the department and a quarterly report to the Department of Education. The 
28.32 	report must list each student by grade, show the student's start and end dates, if any, 
28.33 	with the charter school, and for any student participating in a learning year program, 
28.34 	the report must list the hours and times of learning year activities. The report must be 
28.35 	submitted not more than two weeks after the end of the calendar quarter to the department. 
28.36 	The department must develop a Web-based reporting form for charter schools to use 
29.1 	when submitting enrollment reports. A charter school in its fourth and subsequent year of 
29.2 	operation must submit a school calendar and enrollment information to the department in 
29.3 	the form and manner requested by the department.
29.4 	(g) Notwithstanding sections 317A.701 to 317A.791, upon closure of a charter 
29.5 	school and satisfaction of creditors, cash and investment balances remaining shall be 
29.6 	returned to the state.
29.7 	(h) A charter school must have a valid, signed contract under section 124D.10, 
29.8 	subdivision 6, on file at the Department of Education at least 15 days prior to the date of 
29.9 	first payment of state aid for the fiscal year.
29.10 	(i) State aid entitlements shall be computed for a charter school only for the 
29.11 	portion of a school year for which it has a valid, signed contract under section 124D.10, 
29.12 	subdivision 6.

29.13 	Sec. 17. Minnesota Statutes 2010, section 124D.86, subdivision 1, is amended to read:
29.14 		Subdivision 1.Use of revenue. Districts must use integration revenue under this 
29.15 	section for programs established under a desegregation plan filed with the Department 
29.16 	of Education according to Minnesota Rules, parts 3535.0100 to 3535.0180, or under 
29.17 	court order. The revenue must be used for students enrolled in public schools or 
29.18 	preschool children age three or four to have increased and sustained interracial contacts 
29.19 	and improved educational opportunities and outcomes designed to close the academic 
29.20 	achievement gap between white students and protected students as defined in Minnesota 
29.21 	Rules, part 3535.0110, subpart 4, through classroom experiences, staff initiatives, and 
29.22 	other educationally related programs, consistent with subdivision 1b.

29.23 	Sec. 18. Minnesota Statutes 2010, section 124D.86, subdivision 3, is amended to read:
29.24 		Subd. 3.Integration revenue. Integration revenue equals the following amounts:
29.25 	(1) for Independent School District No. 709, Duluth, $206 times the adjusted pupil 
29.26 	units for the school year;
29.27 	(2) for Independent School District No. 625, St. Paul, $445 times the adjusted 
29.28 	pupil units for the school year;
29.29 	(3) for Special School District No. 1, Minneapolis, the sum of $445 times the 
29.30 	adjusted pupil units for the school year and an additional $35 times the adjusted pupil units 
29.31 	for the school year that is provided entirely through a local levy;
29.32 	(4) for a district not listed in clause (1), (2), or (3), that must implement a plan 
29.33 	under Minnesota Rules, parts 3535.0100 to 3535.0180, where the district's enrollment of 
29.34 	protected students, as defined under Minnesota Rules, part 3535.0110, exceeds 15 percent, 
30.1 	the lesser of (i) the actual cost of implementing the plan during the fiscal year minus the aid 
30.2 	received under subdivision 6, or (ii) $129 times the adjusted pupil units for the school year;
30.3 	(5) for a district not listed in clause (1), (2), (3), or (4), that is required to implement 
30.4 	a plan according to the requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
30.5 	the lesser of
30.6 	(i) the actual cost of implementing the plan during the fiscal year minus the aid 
30.7 	received under subdivision 6, or
30.8 	(ii) $92 times the adjusted pupil units for the school year~~.~~; and
30.9 	~~Any money received by districts in clauses (1) to (3) which exceeds the amount~~ 
30.10 	~~received in fiscal year 2000 shall be subject to the budget requirements in subdivision~~ 
30.11 	~~1a; and~~
30.12 	(6) for a member district of a multidistrict integration collaborative that files a plan 
30.13 	with the commissioner, but is not contiguous to a racially isolated district, integration 
30.14 	revenue equals the amount defined in clause (5).

30.15 	EFFECTIVE DATE. This section is effective the day following final enactment 
30.16 	and applies to revenue for the 2011-2012 school year and later.

30.17 	Sec. 19. Minnesota Statutes 2010, section 124D.871, is amended to read:
30.18 	124D.871 MAGNET SCHOOL AND PROGRAM GRANTS.
30.19 	(a) The commissioner of education, in consultation with the desegregation/integration 
30.20 	office under section 124D.892, shall award grants to school districts and chartered public 
30.21 	schools for planning and developing magnet schools and magnet programs. 
30.22 	(b) Grant recipients must use the grant money under paragraph (a) to establish 
30.23 	or operate a magnet school or a magnet program and provide all students with equal 
30.24 	educational opportunities. Grant recipients may expend grant money on:
30.25 	(1) teachers who provide instruction or services to students in a magnet school 
30.26 	or magnet program;
30.27 	(2) educational paraprofessionals who assist teachers in providing instruction or 
30.28 	services to students in a magnet school or magnet program;
30.29 	(3) clerical support needed to operate a magnet school or magnet program;
30.30 	(4) equipment, equipment maintenance contracts, materials, supplies, and other 
30.31 	property needed to operate a magnet school or magnet program;
30.32 	(5) minor remodeling needed to operate a magnet school or magnet program;
30.33 	(6) transportation for field trips that are part of a magnet school or magnet program 
30.34 	curriculum;
31.1 	(7) program planning and staff and curriculum development for a magnet school 
31.2 	or magnet program; and
31.3 	(8) disseminating information on magnet schools and magnet programs~~; and~~.
31.4 	~~(9) indirect costs calculated according to the state's statutory formula governing~~ 
31.5 	~~indirect costs.~~

31.6 	Sec. 20. ENGLISH LANGUAGE PROFICIENCY STANDARDS.
 31.7 		Subdivision 1.Standards. The Department of Education shall adopt, as statewide 
31.8 	standards, English language proficiency standards for instruction of students identified as 
31.9 	limited English proficient under Minnesota Statutes, sections 124D.58 to 124D.64.
31.10 		Subd. 2.Adoption. Notwithstanding Minnesota Statutes, chapter 14, and sections 
31.11 	14.386, 120B.02, 120B.021, and 120B.023, the commissioner of education shall adopt 
31.12 	the most recent English language proficiency standards for English learners developed 
31.13 	by World-Class Instructional Design and Assessment in kindergarten through grade 12. 
31.14 	These standards shall be adopted as permanent rules when:
31.15 	(1) the revisor of statutes approves the form of the rule by certificate;
31.16 	(2) the commissioner signs an order adopting the rule; and
31.17 	(3) a copy of the rule is published by the department in the State Register.

31.18 	Sec. 21. CHANGE FROM INELIGIBLE AUTHORIZER.
 31.19 	Notwithstanding any law to the contrary, a charter school authorized by an 
31.20 	authorizer that has been determined ineligible under Minnesota Statutes, section 124D.10, 
31.21 	subdivision 3, paragraph (c) or (f), during the 2011-2012 school year shall be closed at the 
31.22 	end of that school year if, by February 1, 2012, no eligible authorizer has submitted to the 
31.23 	commissioner of education a request to become the school's authorizer under Minnesota 
31.24 	Statutes, section 124D.10, subdivision 23.

31.25 	ARTICLE 3
31.26 	SPECIAL PROGRAMS

31.27 	Section 1. Minnesota Statutes 2010, section 125A.02, subdivision 1, is amended to 
31.28 	read:
31.29 		Subdivision 1.Child with a disability. "Child with a disability" means a child 
31.30 	identified under federal and state special education law as ~~having a hearing impairment,~~ 
31.31 	~~blindness, visual disability,~~ deaf or hard-of-hearing, blind or visually impaired, deafblind, 
31.32 	or having a speech or language impairment, a physical ~~disability~~ impairment, other health 
31.33 	~~impairment~~ disability, ~~mental~~ developmental cognitive disability, ~~emotional/behavioral~~ an 
32.1 	emotional or behavioral disorder, specific learning disability, autism spectrum disorder, 
32.2 	traumatic brain injury, or severe multiple ~~disabilities~~ impairments, ~~or deafblind disability~~
32.3 	and who needs special education and related services, as determined by the rules of the 
32.4 	commissioner~~, is a child with a disability~~. A licensed physician, an advanced practice 
32.5 	nurse, or a licensed psychologist is qualified to make a diagnosis and determination 
32.6 	of attention deficit disorder or attention deficit hyperactivity disorder for purposes of 
32.7 	identifying a child with a disability.

32.8 	EFFECTIVE DATE. This section is effective July 1, 2011.

32.9 	Sec. 2. Minnesota Statutes 2010, section 125A.51, is amended to read:
32.10 	125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES; 
32.11 	EDUCATION AND TRANSPORTATION.
32.12 	The responsibility for providing instruction and transportation for a pupil without a 
32.13 	disability who has a short-term or temporary physical or emotional illness or disability, as 
32.14 	determined by the standards of the commissioner, and who is temporarily placed for care 
32.15 	and treatment for that illness or disability, must be determined as provided in this section.
32.16 	(a) The school district of residence of the pupil is the district in which the pupil's 
32.17 	parent or guardian resides, if living within the state, or the district designated by the 
32.18 	commissioner if neither parent nor guardian is living within the state.
32.19 	(b) When parental rights have been terminated by court order, the legal residence 
32.20 	of a child placed in a residential or foster facility for care and treatment is the district in 
32.21 	which the child resides.
32.22 	(c) Before the placement of a pupil for care and treatment, the district of residence 
32.23 	must be notified and provided an opportunity to participate in the placement decision. 
32.24 	When an immediate emergency placement is necessary and time does not permit 
32.25 	resident district participation in the placement decision, the district in which the pupil is 
32.26 	temporarily placed, if different from the district of residence, must notify the district 
32.27 	of residence of the emergency placement within 15 days of the placement. When a 
32.28 	nonresident district makes an emergency placement without first consulting with the 
32.29 	resident district, the resident district has up to five business days after receiving notice 
32.30 	of the emergency placement to request an opportunity to participate in the placement 
32.31 	decision, which the placing district must then provide.
32.32 	(d) When a pupil without a disability is temporarily placed for care and treatment 
32.33 	in a day program and the pupil continues to live within the district of residence during 
32.34 	the care and treatment, the district of residence must provide instruction and necessary 
33.1 	transportation to and from the care and treatment program for the pupil. The resident 
33.2 	district may establish reasonable restrictions on transportation, except if a Minnesota court 
33.3 	or agency orders the child placed at a day care and treatment program and the resident 
33.4 	district receives a copy of the order, then the resident district must provide transportation 
33.5 	to and from the program unless the court or agency orders otherwise. Transportation shall 
33.6 	only be provided by the resident district during regular operating hours of the resident 
33.7 	district. The resident district may provide the instruction at a school within the district of 
33.8 	residence, at the pupil's residence, or in the case of a placement outside of the resident 
33.9 	district, in the district in which the day treatment program is located by paying tuition to 
33.10 	that district. The district of placement may contract with a facility to provide instruction 
33.11 	by teachers licensed by the state Board of Teaching.
33.12 	(e) When a pupil without a disability is temporarily placed in a residential program 
33.13 	for care and treatment, the district in which the pupil is placed must provide instruction 
33.14 	for the pupil and necessary transportation while the pupil is receiving instruction, and in 
33.15 	the case of a placement outside of the district of residence, the nonresident district must 
33.16 	bill the district of residence for the actual cost of providing the instruction for the regular 
33.17 	school year and for summer school, excluding transportation costs.
33.18 	(f) Notwithstanding paragraph (e), if the pupil is homeless and placed in a public or 
33.19 	private homeless shelter, then the district that enrolls the pupil under section 127A.47, 
33.20 	subdivision 2, shall provide the transportation, unless the district that enrolls the pupil 
33.21 	and the district in which the pupil is temporarily placed agree that the district in which 
33.22 	the pupil is temporarily placed shall provide transportation. When a pupil without a 
33.23 	disability is temporarily placed in a residential program outside the district of residence, 
33.24 	the administrator of the court placing the pupil must send timely written notice of the 
33.25 	placement to the district of residence. The district of placement may contract with a 
33.26 	residential facility to provide instruction by teachers licensed by the state Board of 
33.27 	Teaching. For purposes of this section, the state correctional facilities operated on a 
33.28 	fee-for-service basis are considered to be residential programs for care and treatment.
33.29 	(g) The district of residence must include the pupil in its residence count of pupil 
33.30 	units and pay tuition as provided in section 123A.488 to the district providing the 
33.31 	instruction. Transportation costs must be paid by the district providing the transportation 
33.32 	and the state must pay transportation aid to that district. For purposes of computing state 
33.33 	transportation aid, pupils governed by this subdivision must be included in the disabled 
33.34 	transportation category if the pupils cannot be transported on a regular school bus route 
33.35 	without special accommodations.

34.1 	Sec. 3.  REPEALER.
 34.2 	Minnesota Statutes 2010, section 125A.54, is repealed.

34.3 	ARTICLE 4
34.4 	FACILITIES AND TECHNOLOGY

34.5 	Section 1. Minnesota Statutes 2010, section 123B.57, is amended to read:
34.6 	123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.
34.7 		Subdivision 1.Health and safety ~~program~~ revenue application. (a) To receive 
34.8 	health and safety revenue for any fiscal year a district must submit to the commissioner 
34.9 	~~an~~ a capital expenditure health and safety revenue application ~~for aid and levy~~ by the 
34.10 	date determined by the commissioner. ~~The application may be for hazardous substance~~ 
34.11 	~~removal, fire and life safety code repairs, labor and industry regulated facility and~~ 
34.12 	~~equipment violations, and health, safety, and environmental management, including~~ 
34.13 	~~indoor air quality management.~~ The application must include a health and safety ~~program~~
34.14 	budget adopted and confirmed by the school district board as being consistent with the 
34.15 	district's health and safety policy under subdivision 2. The ~~program~~ budget must include 
34.16 	the estimated cost~~, per building,~~ of the program per Uniform Financial Accounting and 
34.17 	Reporting Standards (UFARS) finance code, by fiscal year. Upon approval through the 
34.18 	adoption of a resolution by each of an intermediate district's member school district 
34.19 	boards and the approval of the Department of Education, a school district may include 
34.20 	its proportionate share of the costs of health and safety projects for an intermediate 
34.21 	district in its application.
34.22 	(b) Health and safety projects with an estimated cost of $500,000 or more per 
34.23 	site are not eligible for health and safety revenue. Health and safety projects with an 
34.24 	estimated cost of $500,000 or more per site that meet all other requirements for health and 
34.25 	safety funding, are eligible for alternative facilities bonding and levy revenue according 
34.26 	to section 123B.59. A school board shall not separate portions of a single project into 
34.27 	components to qualify for health and safety revenue, and shall not combine unrelated 
34.28 	projects into a single project to qualify for alternative facilities bonding and levy revenue.
34.29 	(c) The commissioner of education shall not make eligibility for health and safety 
34.30 	revenue contingent on a district's compliance status, level of program development, or 
34.31 	training. The commissioner shall not mandate additional performance criteria such as 
34.32 	training, certifications, or compliance evaluations as a prerequisite for levy approval.
34.33 		Subd. 2.~~Contents of program~~ Health and safety policy. To qualify for health 
34.34 	and safety revenue, a ~~district~~ school board must adopt a health and safety ~~program~~ policy. 
35.1 	The ~~program~~ policy must include ~~plans, where applicable, for hazardous substance~~ 
35.2 	~~removal, fire and life safety code repairs, regulated facility and equipment violations,~~ 
35.3 	~~and~~ provisions for implementing a health and safety program that complies with health, 
35.4 	safety, and environmental ~~management,~~ regulations and best practices including indoor 
35.5 	air quality management.
35.6 	~~(a) A hazardous substance plan must contain provisions for the removal or~~ 
35.7 	~~encapsulation of asbestos from school buildings or property, asbestos-related repairs,~~ 
35.8 	~~cleanup and disposal of polychlorinated biphenyls found in school buildings or property,~~ 
35.9 	~~and cleanup, removal, disposal, and repairs related to storing heating fuel or transportation~~ 
35.10 	~~fuels such as alcohol, gasoline, fuel, oil, and special fuel, as defined in section 296A.01.~~ 
35.11 	~~If a district has already developed a plan for the removal or encapsulation of asbestos as~~ 
35.12 	~~required by the federal Asbestos Hazard Emergency Response Act of 1986, the district~~ 
35.13 	~~may use a summary of that plan, which includes a description and schedule of response~~ 
35.14 	~~actions, for purposes of this section. The plan must also contain provisions to make~~ 
35.15 	~~modifications to existing facilities and equipment necessary to limit personal exposure~~ 
35.16 	~~to hazardous substances, as regulated by the federal Occupational Safety and Health~~ 
35.17 	~~Administration under Code of Federal Regulations, title 29, part 1910, subpart Z; or is~~ 
35.18 	~~determined by the commissioner to present a significant risk to district staff or student~~ 
35.19 	~~health and safety as a result of foreseeable use, handling, accidental spill, exposure, or~~ 
35.20 	~~contamination.~~
35.21 	~~(b) A fire and life safety plan must contain a description of the current fire and life~~ 
35.22 	~~safety code violations, a plan for the removal or repair of the fire and life safety hazard,~~ 
35.23 	~~and a description of safety preparation and awareness procedures to be followed until the~~ 
35.24 	~~hazard is fully corrected.~~
35.25 	~~(c) A facilities and equipment violation plan must contain provisions to correct~~ 
35.26 	~~health and safety hazards as provided in Department of Labor and Industry standards~~ 
35.27 	~~pursuant to section 182.655.~~
35.28 	~~(d) A health, safety, and environmental management plan must contain a description~~ 
35.29 	~~of training, record keeping, hazard assessment, and program management as defined~~ 
35.30 	~~in section 123B.56.~~
35.31 	~~(e) A plan to test for and mitigate radon produced hazards.~~
35.32 	~~(f) A plan to monitor and improve indoor air quality.~~
35.33 		Subd. 3.Health and safety revenue. A district's health and safety revenue 
35.34 	for a fiscal year equals the district's alternative facilities levy under section 123B.59, 
35.35 	subdivision 5, paragraph (b), plus the greater of zero or:
36.1 	(1) the sum of (a) the total approved cost of the district's hazardous substance 
36.2 	plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's 
36.3 	health and safety program for fiscal year 1990 through the fiscal year to which the levy 
36.4 	is attributable, excluding expenditures funded with bonds issued under section 123B.59 
36.5 	or 123B.62, or chapter 475; certificates of indebtedness or capital notes under section 
36.6 	123B.61; levies under section 123B.58, 123B.59, 123B.63, or 126C.40, subdivision 1 or 
36.7 	6; and other federal, state, or local revenues, minus
36.8 	(2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years 
36.9 	1985 through 1989 under sections 124.245 and 275.125, subdivision 11c, plus (b) the 
36.10 	district's health and safety revenue under this subdivision, for years before the fiscal year 
36.11 	to which the levy is attributable.
36.12 		Subd. 4.Health and safety levy. To receive health and safety revenue, a district 
36.13 	may levy an amount equal to the district's health and safety revenue as defined in 
36.14 	subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by 
36.15 	dividing the adjusted net tax capacity of the district for the year preceding the year the 
36.16 	levy is certified by the adjusted marginal cost pupil units in the district for the school year 
36.17 	to which the levy is attributable, to $2,935.
36.18 		Subd. 5.Health and safety aid. A district's health and safety aid is the difference 
36.19 	between its health and safety revenue and its health and safety levy. If a district does not 
36.20 	levy the entire amount permitted, health and safety aid must be reduced in proportion to 
36.21 	the actual amount levied. Health and safety aid may not be reduced as a result of reducing 
36.22 	a district's health and safety levy according to section 123B.79.
36.23 		Subd. 6.Uses of health and safety revenue. ~~(a)~~ Health and safety revenue may 
36.24 	be used only for approved expenditures necessary to correct fire and life safety hazards~~,~~ 
36.25 	~~or for the~~; design, purchase, installation, maintenance, and inspection of fire protection 
36.26 	and alarm equipment; purchase or construction of appropriate facilities for the storage of 
36.27 	combustible and flammable materials; inventories and facility modifications not related 
36.28 	to a remodeling project to comply with lab safety requirements under section 121A.31; 
36.29 	inspection, testing, repair, removal or encapsulation, and disposal of ~~asbestos from school~~ 
36.30 	~~buildings or property owned or being acquired by the district, asbestos-related repairs,~~
36.31 	asbestos-containing building materials; cleanup and disposal of polychlorinated biphenyls 
36.32 	~~found in school buildings or property owned or being acquired by the district, or the~~; 
36.33 	cleanup and disposal of hazardous and infectious wastes; cleanup, removal, disposal, and 
36.34 	repairs related to storing heating fuel or transportation fuels such as alcohol, gasoline, fuel 
36.35 	oil, and special fuel, as defined in section 296A.01~~, Minnesota~~; correction of occupational 
36.36 	safety and health administration regulated ~~facility and equipment~~ hazards~~,~~; indoor air 
37.1 	quality inspections, investigations, and testing; mold abatement~~,~~; upgrades or replacement 
37.2 	of mechanical ventilation systems to meet American Society of Heating, Refrigerating 
37.3 	and Air Conditioning Engineers standards and State Mechanical Code~~,~~; design, materials, 
37.4 	and installation of local exhaust ventilation systems, including required make-up air for 
37.5 	controlling regulated hazardous substances; correction of Department of Health Food 
37.6 	Code ~~and~~ violations; correction of swimming pool hazards excluding depth correction~~,~~; 
37.7 	playground safety inspections and the installation of impact surfacing materials; bleacher 
37.8 	repair or rebuilding to comply with the order of a building code inspector under section 
37.9 	326B.112; testing and mitigation of elevated radon hazards; lead testing; copper in water 
37.10 	testing; cleanup after major weather-related disasters or flooding; reduction of excessive 
37.11 	organic and inorganic levels in wells and capping of abandoned wells; installation and 
37.12 	testing of boiler backflow valves to prevent contamination of potable water; vaccinations, 
37.13 	titers, and preventative supplies for bloodborne pathogen compliance; costs to comply 
37.14 	with the Janet B. Johnson Parents' Right to Know Act; automatic external defibrillators 
37.15 	and other emergency plan equipment and supplies specific to the district's emergency 
37.16 	action plan; and health, safety, and environmental management costs associated with 
37.17 	implementing the district's health and safety program including costs to establish and 
37.18 	operate safety committees, in school buildings or property owned or being acquired 
37.19 	by the district. Testing and calibration activities are permitted for existing mechanical 
37.20 	ventilation systems at intervals no less than every five years. ~~Health and safety revenue~~ 
37.21 	~~must not be used to finance a lease purchase agreement, installment purchase agreement,~~ 
37.22 	~~or other deferred payments agreement. Health and safety revenue must not be used for~~ 
37.23 	~~the construction of new facilities or the purchase of portable classrooms, for interest or~~ 
37.24 	~~other financing expenses, or for energy efficiency projects under section 123B.65. The~~ 
37.25 	~~revenue may not be used for a building or property or part of a building or property used~~ 
37.26 	~~for postsecondary instruction or administration or for a purpose unrelated to elementary~~ 
37.27 	~~and secondary education.~~
37.28 		Subd. 6a.Restrictions on health and safety revenue. ~~(b)~~ Notwithstanding 
37.29 	~~paragraph (a)~~ subdivision 6, health and safety revenue must not be used to finance a 
37.30 	lease purchase agreement, installment purchase agreement, or other deferred payments 
37.31 	agreement, for the construction of new facilities, remodeling of existing facilities, or 
37.32 	the purchase of portable classrooms, for interest or other financing expenses, or for 
37.33 	energy efficiency projects under section 123B.65, for a building or property or part of a 
37.34 	building or property used for postsecondary instruction or administration or for a purpose 
37.35 	unrelated to elementary and secondary education, for replacement of building materials 
37.36 	or facilities including roof, walls, windows, internal fixtures and flooring, nonhealth and 
38.1 	safety costs associated with demolition of facilities, structural repair or replacement of 
38.2 	facilities due to unsafe conditions, violence prevention and facility security, ergonomics,
38.3 	public announcement systems and emergency communication devices, or for building and 
38.4 	heating, ventilating and air conditioning supplies, maintenance, and cleaning activities. 
38.5 	All assessments, investigations, inventories, and support equipment not leading to the 
38.6 	engineering or construction of a project shall be included in the health, safety, and 
38.7 	environmental management costs in subdivision 8, paragraph (a).
38.8 		Subd. 6b.Health and safety projects. (a) Health and safety revenue applications 
38.9 	defined in subdivision 1 must be accompanied by a description of each project for which 
38.10 	funding is being requested. Project descriptions must provide enough detail for an auditor 
38.11 	to determine if the work qualifies for revenue. For projects other than fire and life 
38.12 	safety projects, playground projects, and health, safety, and environmental management 
38.13 	activities, a project description does not need to include itemized details such as material 
38.14 	types, room locations, square feet, names, or license numbers. The commissioner 
38.15 	may request supporting information and shall approve only projects that comply with 
38.16 	subdivisions 6 and 8, as defined by the Department of Education.
38.17 	(b) Districts may request funding for allowable projects based on self-assessments, 
38.18 	safety committee recommendations, insurance inspections, management assistance 
38.19 	reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph 
38.20 	(b), and subdivision 8, paragraph (b), for projects under $500,000, individual project 
38.21 	size for projects authorized by this subdivision is not limited and may include related 
38.22 	work in multiple facilities. Health and safety management costs from subdivision 8 may 
38.23 	be reported as a single project.
38.24 	(c) All costs directly related to a project shall be reported in the appropriate Uniform 
38.25 	Financial Accounting and Reporting Standards (UFARS) finance code.
38.26 	(d) For fire and life safety egress and all other projects exceeding $20,000, cited 
38.27 	under Minnesota Fire Code, a fire marshal plan review is required.
38.28 	(e) Districts shall update project estimates with actual expenditures for each 
38.29 	fiscal year. If a project's final cost is significantly higher than originally approved, the 
38.30 	commissioner may request additional supporting information.
38.31 		Subd. 6c.Appeals process. In the event a district is denied funding approval for 
38.32 	a project the district believes complies with subdivisions 6 and 8, and is not otherwise 
38.33 	excluded, a district may appeal the decision. All such requests must be in writing. The 
38.34 	commissioner shall respond in writing. A written request must contain the following: 
38.35 	project number; description and amount; reason for denial; unresolved questions for 
39.1 	consideration; reasons for reconsideration; and a specific statement of what action the 
39.2 	district is requesting.
39.3 		Subd. 7.Proration. In the event that the health and safety aid available for any year 
39.4 	is prorated, a district having its aid prorated may levy an additional amount equal to the 
39.5 	amount not paid by the state due to proration.
39.6 		Subd. 8.Health, safety, and environmental management cost. (a) "Health, safety, 
39.7 	and environmental management" is defined in section 123B.56.
39.8 	(b) A district's cost for health, safety, and environmental management is limited to 
39.9 	the lesser of:
39.10 	(1) actual cost to implement their plan; or
39.11 	(2) an amount determined by the commissioner, based on enrollment, building 
39.12 	age, and size.
39.13 	~~(b)~~ (c) The department may contract with regional service organizations, private 
39.14 	contractors, Minnesota Safety Council, or state agencies to provide management 
39.15 	assistance to school districts for health and safety capital projects. Management assistance 
39.16 	is the development of written programs for the identification, recognition and control of 
39.17 	hazards, and prioritization and scheduling of district health and safety capital projects. 
39.18 	The ~~department~~ commissioner shall not mandate management assistance or exclude 
39.19 	private contractors from the opportunity to provide any health and safety services to 
39.20 	school districts.
39.21 	~~(c) Notwithstanding paragraph (b), the department may approve revenue, up to~~ 
39.22 	~~the limit defined in paragraph (a) for districts having an approved health, safety, and~~ 
39.23 	~~environmental management plan that uses district staff to accomplish coordination and~~ 
39.24 	~~provided services.~~

39.25 	EFFECTIVE DATE. This section is effective July 1, 2011.

39.26 	Sec. 2. Minnesota Statutes 2010, section 123B.71, subdivision 5, is amended to read:
39.27 		Subd. 5.Final plans. If a construction contract has not been awarded within two 
39.28 	years of approval, the approval shall not be valid. After approval, final plans and the 
39.29 	approval shall be ~~filed with~~ made available, if requested, to the commissioner of education. 
39.30 	If substantial changes are made to the initial approved plans, documents reflecting 
39.31 	the changes shall be submitted to the commissioner for approval. Upon completing a 
39.32 	project, the school board shall certify to the commissioner that the project was completed 
39.33 	according to the approved plans.

39.34 	Sec. 3. Minnesota Statutes 2010, section 123B.72, subdivision 3, is amended to read:
40.1 		Subd. 3.Certification. Prior to occupying or reoccupying a school facility affected 
40.2 	by this section, a school board or its designee shall submit a document prepared by a 
40.3 	system inspector to the building official or to the commissioner, verifying that the facility's 
40.4 	heating, ventilation, and air conditioning system has been installed and operates according 
40.5 	to design specifications and code, according to section 123B.71, subdivision 9, clause 
40.6 	~~(11)~~ (12). A systems inspector shall also verify that the facility's design will provide 
40.7 	the ability for monitoring of outdoor airflow and total airflow of ventilation systems in 
40.8 	new school facilities and that any heating, ventilation, or air conditioning system that is 
40.9 	installed or modified for a project subject to this section must provide a filtration system 
40.10 	with a current ASHRAE standard. 

40.11 	Sec. 4. HEALTH AND SAFETY POLICY.
 40.12 	Notwithstanding Minnesota Statutes, section 123B.57, subdivision 2, a school board 
40.13 	that has not yet adopted a health and safety policy by September 30, 2011, may submit an 
40.14 	application for health and safety revenue for taxes payable in 2012 in the form and manner 
40.15 	specified by the commissioner of education.

40.16 	EFFECTIVE DATE. This section is effective the day following final enactment.

40.17 	ARTICLE 5
40.18 	ACCOUNTING

40.19 	Section 1. Minnesota Statutes 2010, section 127A.42, subdivision 2, is amended to 
40.20 	read:
40.21 		Subd. 2.Violations of law. The commissioner may reduce or withhold the district's 
40.22 	state aid for any school year whenever the board of the district authorizes or permits 
40.23 	violations of law within the district by:
40.24 	(1) employing a teacher who does not hold a valid teaching license or permit in a 
40.25 	public school;
40.26 	(2) noncompliance with a mandatory rule of general application promulgated by the 
40.27 	commissioner in accordance with statute, unless special circumstances make enforcement 
40.28 	inequitable, impose an extraordinary hardship on the district, or the rule is contrary to 
40.29 	the district's best interests;
40.30 	(3) the district's continued performance of a contract made for the rental of rooms 
40.31 	or buildings for school purposes or for the rental of any facility owned or operated by or 
40.32 	under the direction of any private organization, if the contract has been disapproved, the 
41.1 	time for review of the determination of disapproval has expired, and no proceeding for 
41.2 	review is pending;
41.3 	(4) any practice which is a violation of sections 1 and 2 of article 13 of the 
41.4 	Constitution of the state of Minnesota;
41.5 	(5) failure to reasonably provide for a resident pupil's school attendance under 
41.6 	Minnesota Statutes;
41.7 	(6) noncompliance with state laws prohibiting discrimination because of race, 
41.8 	color, creed, religion, national origin, sex, age, marital status, status with regard to 
41.9 	public assistance or disability, as defined in sections 363A.08 to 363A.19 and 363A.28, 
41.10 	subdivision 10; or
41.11 	(7) using funds contrary to the statutory purpose of the funds.
41.12 	The reduction or withholding must be made in the amount and upon the procedure 
41.13 	provided in this section, or, in the case of the violation stated in clause (1), upon the 
41.14 	procedure provided in section 127A.43.

41.15 	EFFECTIVE DATE. This section is effective July 1, 2011.

41.16 	Sec. 2. Minnesota Statutes 2010, section 127A.43, is amended to read:
41.17 	127A.43 DISTRICT EMPLOYMENT OF UNLICENSED TEACHERS; AID 
41.18 	REDUCTION.
41.19 	When a district employs one or more teachers who do not hold a valid teaching 
41.20 	license, state aid shall be ~~withheld~~ reduced in the proportion that the number of such 
41.21 	teachers is to the total number of teachers employed by the district, multiplied by 60 
41.22 	percent of the basic revenue, as defined in section 126C.10, subdivision 2, of the district 
41.23 	for the year in which the employment occurred. 

41.24 	EFFECTIVE DATE. This section is effective July 1, 2011.

41.25 	Sec. 3. Minnesota Statutes 2010, section 127A.45, is amended by adding a subdivision 
41.26 	to read:
41.27 		Subd. 17.Payment to creditors. Except where otherwise specifically authorized, 
41.28 	state education aid payments shall be made only to the school district, charter school, or 
41.29 	other education organization earning state aid revenues as a result of providing education 
41.30 	services.

42.1 	ARTICLE 6
42.2 	EARLY CHILDHOOD EDUCATION

42.3 	Section 1. Minnesota Statutes 2010, section 119A.50, subdivision 3, is amended to read:
42.4 		Subd. 3.Early childhood literacy programs. (a) A research-based early childhood 
42.5 	literacy program premised on actively involved parents, ongoing professional staff 
42.6 	development, and high quality early literacy program standards is established to increase 
42.7 	the literacy skills of children participating in Head Start to prepare them to be successful 
42.8 	readers and to increase families' participation in providing early literacy experiences to 
42.9 	their children. Program providers must:
42.10 	(1) work to prepare children to be successful learners;
42.11 	(2) work to close the achievement gap for at-risk children;
42.12 	(3) use an integrated approach to early literacy that daily offers a literacy-rich 
42.13 	classroom learning environment composed of books, writing materials, writing centers, 
42.14 	labels, rhyming, and other related literacy materials and opportunities;
42.15 	(4) support children's home language while helping the children master English and 
42.16 	use multiple literacy strategies to provide a cultural bridge between home and school;
42.17 	(5) use literacy mentors, ongoing literacy groups, and other teachers and staff to 
42.18 	provide appropriate, extensive professional development opportunities in early literacy 
42.19 	and classroom strategies for preschool teachers and other preschool staff;
42.20 	(6) use ongoing data-based assessments that enable preschool teachers to understand, 
42.21 	plan, and implement literacy strategies, activities, and curriculum that meet children's 
42.22 	literacy needs and continuously improve children's literacy; and
42.23 	(7) foster participation by parents, community stakeholders, literacy advisors, and 
42.24 	evaluation specialists.
42.25 	Program providers are encouraged to collaborate with qualified, community-based 
42.26 	early childhood providers in implementing this program and to seek nonstate funds to 
42.27 	supplement the program.
42.28 	(b) Program providers under paragraph (a) interested in extending literacy programs 
42.29 	to children in kindergarten through grade 3 may elect to form a partnership with an 
42.30 	eligible organization under section 124D.38, subdivision 2, or 124D.42, subdivision 6, 
42.31 	clause (3), schools enrolling children in kindergarten through grade 3, and other interested 
42.32 	and qualified community-based entities to provide ongoing literacy programs that offer 
42.33 	seamless literacy instruction focused on closing the literacy achievement gap. To close the 
42.34 	literacy achievement gap by the end of third grade, partnership members must agree to use 
42.35 	best efforts and practices and to work collaboratively to implement a seamless literacy 
43.1 	model from age three to grade 3, consistent with paragraph (a). Literacy programs under 
43.2 	this paragraph must collect and use literacy data to:
43.3 	(1) evaluate children's literacy skills; and
43.4 	(2) formulate specific intervention strategies to provide reading instruction to 
43.5 	children premised on the outcomes of formative and summative assessments and 
43.6 	research-based indicators of literacy development.
43.7 	The literacy programs under this paragraph also must train teachers and other 
43.8 	providers working with children to use the assessment outcomes under clause (2) to 
43.9 	develop and use effective, long-term literacy coaching models that are specific to the 
43.10 	program providers.
43.11 	~~(c) The commissioner must collect and evaluate literacy data on children from age~~ 
43.12 	~~three to grade 3 who participate in literacy programs under this section to determine the~~ 
43.13 	~~efficacy of early literacy programs on children's success in developing the literacy skills~~ 
43.14 	~~that they need for long-term academic success and the programs' success in closing the~~ 
43.15 	~~literacy achievement gap. Annually by February 1, the commissioner must report to~~ 
43.16 	~~the education policy and finance committees of the legislature on the ongoing impact~~ 
43.17 	~~of these programs.~~

43.18 	Sec. 2. [124D.145] SCHOOL READINESS DEFINITION.
43.19 	"School readiness" means the skills, knowledge, behaviors, and accomplishments 
43.20 	that children should know and should be able to do as they enter kindergarten in the 
43.21 	following areas of child development: personal and social development; approaches to 
43.22 	learning, language development, creativity, and the arts; cognitive development; and 
43.23 	physical development.

43.24 	ARTICLE 7
43.25 	STUDENT TRANSPORTATION

43.26 	Section 1. Minnesota Statutes 2010, section 123B.92, subdivision 5, is amended to read:
43.27 		Subd. 5.District reports. (a) Each district must report data to the department as 
43.28 	required by the department to account for transportation expenditures.
43.29 	(b) Salaries and fringe benefits of district employees whose primary duties are 
43.30 	other than transportation, including central office administrators and staff, building 
43.31 	administrators and staff, teachers, social workers, school nurses, and instructional aides, 
43.32 	must not be included in a district's transportation expenditures, except that a district may 
43.33 	include salaries and benefits according to paragraph (c) for (1) an employee designated 
43.34 	as the district transportation director, (2) an employee providing direct support to the 
44.1 	transportation director, or (3) an employee providing direct transportation services such as 
44.2 	a bus driver or bus aide.
44.3 	(c) Salaries and fringe benefits of the district employees listed in paragraph (b), 
44.4 	clauses (1), (2), and (3), who work part time in transportation and part time in other areas 
44.5 	must not be included in a district's transportation expenditures unless the district maintains 
44.6 	documentation of the employee's time spent on pupil transportation matters in the form 
44.7 	and manner prescribed by the department.
44.8 	(d) Pupil transportation expenditures, excluding expenditures for capital outlay, 
44.9 	leased buses, student board and lodging, crossing guards, and aides on buses, must be 
44.10 	allocated among transportation categories based on cost-per-mile~~,~~ or cost-per-student~~,~~ 
44.11 	~~cost-per-hour, or cost-per-route,~~ regardless of whether the transportation services are 
44.12 	provided on district-owned or contractor-owned school buses. Expenditures for school 
44.13 	bus driver salaries and fringe benefits may either be directly charged to the appropriate 
44.14 	transportation category or may be allocated among transportation categories based 
44.15 	on cost-per-mile~~,~~ or cost-per-student~~, cost-per-hour, or cost-per-route~~. Expenditures 
44.16 	by private contractors or individuals who provide transportation exclusively in one 
44.17 	transportation category must be charged directly to the appropriate transportation category. 
44.18 	Transportation services provided by contractor-owned school bus companies incorporated 
44.19 	under different names but owned by the same individual or group of individuals must be 
44.20 	treated as the same company for cost allocation purposes.
44.21 	(e) Notwithstanding paragraph (d), districts contracting for transportation services 
44.22 	are exempt from the standard cost allocation method for authorized and nonauthorized 
44.23 	transportation categories if the district: (1) bids its contracts separately for authorized 
44.24 	and nonauthorized transportation categories and for special transportation separate from 
44.25 	regular and excess transportation; (2) receives bids or quotes from more than one vendor 
44.26 	for these transportation categories; and (3) the district's cost-per-mile does not vary 
44.27 	more than ten percent among categories, excluding salaries and fringe benefits of bus 
44.28 	aides. If the costs reported by the district for contractor-owned operations vary by more 
44.29 	than ten percent among categories, the department shall require the district to reallocate 
44.30 	its transportation costs, excluding salaries and fringe benefits of bus aides, among all 
44.31 	categories.