1.1                          A bill for an act 
  1.2             relating to education; providing for expanded charter 
  1.3             school law; providing for expanded interdistrict open 
  1.4             enrollment; appropriating money; amending Minnesota 
  1.5             Statutes 1996, sections 120.062, subdivisions 3, 6, 7, 
  1.6             and 11; 120.064, subdivisions 3, 4, 4a, 5, 8, 20a, 21, 
  1.7             and by adding a subdivision; 121.611; and 124.248, 
  1.8             subdivisions 1, 4, and by adding subdivisions. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10                             ARTICLE 1 
  1.11                    EXPANDED CHARTER SCHOOL LAW 
  1.12     Section 1.  Minnesota Statutes 1996, section 120.064, 
  1.13  subdivision 3, is amended to read: 
  1.14     Subd. 3.  [SPONSOR.] A school board, community college, 
  1.15  state university, technical college, the state board of 
  1.16  education, or the University of Minnesota may sponsor one or 
  1.17  more charter schools. 
  1.18     No more than a total of 40 charter schools may be 
  1.19  authorized not more than three of which may be sponsored by 
  1.20  public post-secondary institutions.  The state board of 
  1.21  education shall advise potential sponsors when the maximum 
  1.22  number of charter schools has been authorized. 
  1.23     Sec. 2.  Minnesota Statutes 1996, section 120.064, 
  1.24  subdivision 4, is amended to read: 
  1.25     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
  1.26  authorize any of the following types of applicants to operate a 
  1.27  charter school: 
  2.1      (1) one or more licensed teachers under section 125.05, 
  2.2   subdivision 1, to operate a charter school subject to approval 
  2.3   by the state board of education.; or 
  2.4      (2) an individual, parent or group of parents, business, 
  2.5   governmental body, or nonprofit organization, when that entity 
  2.6   contracts for its instructional programs with an organization 
  2.7   owned by teachers. 
  2.8      (b) When the sponsor is not the state board of education, 
  2.9   the authorization is subject to the approval of the state board. 
  2.10     (c) When an applicant under clause (2) seeks sponsorship 
  2.11  directly from an entity other than a school board under 
  2.12  subdivision 3, the applicant must submit a copy of its proposal 
  2.13  for sponsorship for review and comment to the school board of 
  2.14  the district of the proposed location of the charter school.  
  2.15  The application may proceed simultaneously with the board's 
  2.16  review and comment. 
  2.17     (d) If an applicant has sought sponsorship from a school 
  2.18  board and the school board elects not to sponsor a the charter 
  2.19  school, the applicant may appeal the school board's decision to 
  2.20  the state board of education if two members of the school board 
  2.21  voted to sponsor the school.  If the state board authorizes the 
  2.22  school, the state board shall sponsor the school according to 
  2.23  this section.  The school shall be organized and operated as 
  2.24  a cooperative under chapter 308A or nonprofit corporation under 
  2.25  chapter 317A.  
  2.26     (b) (e) Before the operators may form and operate as a 
  2.27  school, the a sponsor, other than the state board, must file an 
  2.28  affidavit with the state board of education stating its intent 
  2.29  to authorize a charter school.  The affidavit must state the 
  2.30  terms and conditions under which the sponsor would authorize a 
  2.31  charter school.  The state board must approve or disapprove the 
  2.32  sponsor's proposed authorization within 60 days of receipt of 
  2.33  the affidavit.  Failure to obtain state board approval precludes 
  2.34  a sponsor from authorizing the charter school that was the 
  2.35  subject of the affidavit.  
  2.36     (c) (f) The operators authorized to organize and operate a 
  3.1   school shall hold an election for members of the school's board 
  3.2   of directors in a timely manner after the school is operating.  
  3.3   Any staff members who are employed at the school, including 
  3.4   teachers providing instruction under a contract with a 
  3.5   cooperative, and all parents of children enrolled in the school 
  3.6   may participate in the election.  Licensed teachers employed at 
  3.7   the school, including teachers providing instruction under a 
  3.8   contract with a cooperative, must be a majority of the members 
  3.9   of the board of directors., except when an alternative 
  3.10  governance arrangement is approved by the state board.  When an 
  3.11  individual, parent or group of parents, business, governmental 
  3.12  body, or nonprofit organization that contracts for its 
  3.13  instructional programs with an organization owned by teachers 
  3.14  operates the school, teachers are not required to be a majority 
  3.15  of the members of the board of directors.  A provisional board 
  3.16  may operate before the election of the school's board of 
  3.17  directors.  Board of director meetings must comply with section 
  3.18  471.705. 
  3.19     (d) (g) The granting or renewal of a charter by a 
  3.20  sponsoring entity shall not be conditioned upon the bargaining 
  3.21  unit status of the employees of the school. 
  3.22     Sec. 3.  Minnesota Statutes 1996, section 120.064, is 
  3.23  amended by adding a subdivision to read: 
  3.24     Subd. 4b.  [LOANS FOR START-UP COSTS; REVOLVING ACCOUNT.] 
  3.25  (a) The charter school start-up costs revolving account is 
  3.26  established in the state treasury.  The account is for loan 
  3.27  repayments under this paragraph or section 12 and loans under 
  3.28  paragraph (b).  Any amounts repaid by a charter school that 
  3.29  received a loan for start-up costs under paragraph (b) or 
  3.30  section 12 from the commissioner shall be deposited in the 
  3.31  account.  All money in the account is annually appropriated to 
  3.32  the commissioner and shall be used for loans to charter schools 
  3.33  under paragraph (b). 
  3.34     (b) In addition to section 12, the commissioner may make 
  3.35  loans to charter schools with proceeds from the charter school 
  3.36  start-up costs revolving account for charter school start-up 
  4.1   costs.  The commissioner shall administer the loans.  Each 
  4.2   dollar of state money must be matched by the charter school with 
  4.3   at least 50 cents of nonstate money. 
  4.4      Sec. 4.  Minnesota Statutes 1996, section 120.064, 
  4.5   subdivision 5, is amended to read: 
  4.6      Subd. 5.  [CONTRACT.] The sponsor's authorization for a 
  4.7   charter school shall be in the form of a written contract signed 
  4.8   by the sponsor and the board of directors of the charter 
  4.9   school.  The contract is binding on both parties during its 
  4.10  entire term except if the parties to the contract mutually agree 
  4.11  to modify or terminate or the contract is terminated under 
  4.12  subdivision 21.  The contract for a charter school shall be in 
  4.13  writing and contain at least the following: 
  4.14     (1) a description of a program that carries out one or more 
  4.15  of the purposes in subdivision 1; 
  4.16     (2) specific outcomes pupils are to achieve under 
  4.17  subdivision 10; 
  4.18     (3) admission policies and procedures; 
  4.19     (4) management and administration of the school; 
  4.20     (5) requirements and procedures for program and financial 
  4.21  audits; 
  4.22     (6) how the school will comply with subdivisions 8, 13, 15, 
  4.23  and 21; 
  4.24     (7) assumption of liability by the charter school; 
  4.25     (8) types and amounts of insurance coverage to be obtained 
  4.26  by the charter school; and 
  4.27     (9) the term of the contract, which may be up to shall be 
  4.28  three school years. 
  4.29     Sec. 5.  Minnesota Statutes 1996, section 120.064, 
  4.30  subdivision 8, is amended to read: 
  4.31     Subd. 8.  [REQUIREMENTS.] (a) A charter school shall meet 
  4.32  all applicable state and local health and safety requirements. 
  4.33     (b) The A school must sponsored by a school board may be 
  4.34  located in the sponsoring any district, unless another the 
  4.35  school board agrees to locate a charter school sponsored by 
  4.36  another district in its boundaries of the district of the 
  5.1   proposed location disapproves and has not adopted a resolution 
  5.2   under section 120.062, subdivision 2.  If such a school board 
  5.3   denies a request to locate within its boundaries a charter 
  5.4   school sponsored by another district school board, the 
  5.5   sponsoring district school board may appeal to the state board 
  5.6   of education.  If the state board authorizes the school, the 
  5.7   state board shall sponsor the school.  A school sponsored by a 
  5.8   post-secondary institution may be located at any place the 
  5.9   institution considers convenient. 
  5.10     (c) A charter school must be nonsectarian in its programs, 
  5.11  admission policies, employment practices, and all other 
  5.12  operations.  A sponsor may not authorize a charter school or 
  5.13  program that is affiliated with a nonpublic sectarian school or 
  5.14  a religious institution. 
  5.15     (d) Charter schools shall not be used as a method of 
  5.16  providing education or generating revenue for students who are 
  5.17  being home-schooled. 
  5.18     (e) The primary focus of a charter school must be to 
  5.19  provide a comprehensive program of instruction for at least one 
  5.20  grade or age group from five through 18 years of age.  
  5.21  Instruction may be provided to people younger than five years 
  5.22  and older than 18 years of age. 
  5.23     (f) A charter school may not charge tuition. 
  5.24     (g) A charter school is subject to and shall comply with 
  5.25  chapter 363 and section 126.21. 
  5.26     (h) A charter school is subject to and shall comply with 
  5.27  the pupil fair dismissal act, sections 127.26 to 127.39, and the 
  5.28  Minnesota public school fee law, sections 120.71 to 120.76. 
  5.29     (i) A charter school is subject to the same financial 
  5.30  audits, audit procedures, and audit requirements as a school 
  5.31  district.  The audit must be consistent with the requirements of 
  5.32  sections 121.904 to 121.917, except to the extent deviations are 
  5.33  necessary because of the program at the school.  The department 
  5.34  of children, families, and learning, state auditor, or 
  5.35  legislative auditor may conduct financial, program, or 
  5.36  compliance audits. 
  6.1      (j) A charter school is a school district for the purposes 
  6.2   of tort liability under chapter 466. 
  6.3      Sec. 6.  Minnesota Statutes 1996, section 120.064, 
  6.4   subdivision 20a, is amended to read: 
  6.5      Subd. 20a.  [TEACHERS TEACHER AND OTHER EMPLOYEE 
  6.6   RETIREMENT.] (a) Teachers in a charter school shall be public 
  6.7   school teachers for the purposes of chapters 354 and 354a. 
  6.8      (b) Except for teachers under paragraph (a), employees in a 
  6.9   charter school shall be public employees for the purposes of 
  6.10  chapter 353. 
  6.11     Sec. 7.  Minnesota Statutes 1996, section 120.064, 
  6.12  subdivision 21, is amended to read: 
  6.13     Subd. 21.  [CAUSES FOR NONRENEWAL OR TERMINATION.] (a) The 
  6.14  duration of the contract with a sponsor shall be for the term 
  6.15  contained in the contract according to subdivision 5.  The 
  6.16  sponsor may or may not renew a contract at the end of the term 
  6.17  for any ground listed in paragraph (b).  A sponsor may 
  6.18  unilaterally terminate a contract during the term of the 
  6.19  contract for any ground listed in paragraph (b).  At least 60 
  6.20  180 days before not renewing or terminating a contract, the 
  6.21  sponsor shall notify the board of directors of the charter 
  6.22  school of the proposed action in writing.  The notice shall 
  6.23  state the grounds for the proposed action in reasonable detail 
  6.24  and that the charter school's board of directors may request in 
  6.25  writing an informal hearing before the sponsor within 14 days of 
  6.26  receiving notice of nonrenewal or termination of the contract.  
  6.27  Failure by the board of directors to make a written request for 
  6.28  a hearing within the 14-day period shall be treated as 
  6.29  acquiescence to the proposed action.  Upon receiving a timely 
  6.30  written request for a hearing, the sponsor shall give reasonable 
  6.31  notice to the charter school's board of directors of the hearing 
  6.32  date.  The sponsor shall conduct an informal hearing before 
  6.33  taking final action.  The sponsor shall take final action to 
  6.34  renew or not renew a contract by the last day of classes in the 
  6.35  school year.  If the sponsor is a local school board, the 
  6.36  school's board of directors may appeal the sponsor's decision to 
  7.1   the state board of education.  
  7.2      (b) A contract may be terminated or not renewed upon any of 
  7.3   the following grounds: 
  7.4      (1) failure to meet the requirements for pupil performance 
  7.5   contained in the contract; 
  7.6      (2) failure to meet generally accepted standards of fiscal 
  7.7   management; 
  7.8      (3) for violations of law; or 
  7.9      (4) other good cause shown. 
  7.10     If a contract is terminated or not renewed, the school 
  7.11  shall be dissolved according to the applicable provisions of 
  7.12  chapter 308A or 317A. 
  7.13     Sec. 8.  Minnesota Statutes 1996, section 121.611, is 
  7.14  amended to read: 
  7.15     121.611 [NONLICENSED COMMUNITY EXPERTS; VARIANCE.] 
  7.16     Subdivision 1.  [AUTHORIZATION.] Notwithstanding any law or 
  7.17  state board of education rule to the contrary, the board of 
  7.18  teaching may allow school districts or charter schools to hire 
  7.19  nonlicensed community experts to teach in the public schools or 
  7.20  charter schools on a limited basis according to this section. 
  7.21     Subd. 2.  [APPLICATIONS; CRITERIA.] The school district or 
  7.22  charter school shall apply to the board of teaching for approval 
  7.23  to hire nonlicensed teaching personnel from the community.  In 
  7.24  approving or disapproving the district's application for each 
  7.25  community expert, the board shall consider: 
  7.26     (1) the qualifications of the community person whom the 
  7.27  district or charter school proposes to employ; 
  7.28     (2) the reasons for the district's need for a variance from 
  7.29  the teacher licensure requirements; 
  7.30     (3) the district's efforts to obtain licensed teachers, who 
  7.31  are acceptable to the school board, for the particular course or 
  7.32  subject area or the charter school's efforts to obtain licensed 
  7.33  teachers for the particular course or subject area; 
  7.34     (4) the amount of teaching time for which the community 
  7.35  expert would be hired; 
  7.36     (5) the extent to which the district or charter school is 
  8.1   utilizing other nonlicensed community experts under this 
  8.2   section; 
  8.3      (6) the nature of the community expert's proposed teaching 
  8.4   responsibility; and 
  8.5      (7) the proposed level of compensation to the community 
  8.6   expert. 
  8.7      Subd. 3.  [APPROVAL OF PLAN.] The board of teaching shall 
  8.8   approve or disapprove an application within 60 days of receiving 
  8.9   it from a school district or charter school. 
  8.10     Sec. 9.  Minnesota Statutes 1996, section 124.248, 
  8.11  subdivision 1, is amended to read: 
  8.12     Subdivision 1.  [GENERAL EDUCATION AND REFERENDUM 
  8.13  REVENUE.] (a) General education revenue and referendum revenue 
  8.14  shall be paid to a charter school as though it were a school 
  8.15  district.  
  8.16     (b) The general education revenue for each pupil unit is 
  8.17  the state average general education revenue per pupil unit minus 
  8.18  $170, calculated without compensatory revenue, transportation 
  8.19  sparsity revenue, and the transportation portion of the 
  8.20  transition revenue adjustment, plus compensatory revenue as 
  8.21  though the school were a school district. 
  8.22     (c) The referendum revenue for each pupil unit is the 
  8.23  referendum revenue per pupil unit in each pupil's resident 
  8.24  district. 
  8.25     Sec. 10.  Minnesota Statutes 1996, section 124.248, is 
  8.26  amended by adding a subdivision to read: 
  8.27     Subd. 1b.  [SCHOOL DISTRICT COOPERATION REVENUE.] (a) 
  8.28  School district cooperation aid shall be paid to a charter 
  8.29  school according to section 124.2727 as though it were a school 
  8.30  district.  School district cooperation aid shall equal school 
  8.31  district cooperation revenue. 
  8.32     (b) A charter school must place its district cooperation 
  8.33  revenue in a reserved account and may only use the revenue to 
  8.34  purchase goods and services from entities formed for cooperative 
  8.35  purposes or to otherwise provide educational services in a 
  8.36  cooperative manner.  Notwithstanding section 124.2727, 
  9.1   subdivision 6d, a charter school is not required to spend at 
  9.2   least $9 per pupil unit of its district cooperation revenue on 
  9.3   secondary vocational programs. 
  9.4      Sec. 11.  Minnesota Statutes 1996, section 124.248, is 
  9.5   amended by adding a subdivision to read: 
  9.6      Subd. 2a.  [BUILDING LEASE AID.] When a charter school 
  9.7   finds it economically advantageous to rent or lease a building 
  9.8   or land for any instructional purposes and it determines that 
  9.9   the total operating capital revenue under section 124A.22, 
  9.10  subdivision 10, is insufficient for this purpose, it may apply 
  9.11  to the commissioner for building lease aid for this purpose.  
  9.12  Criteria for aid approval and revenue uses shall be as defined 
  9.13  for the building lease levy in section 124.91, subdivision 1.  
  9.14  The amount of building lease aid per pupil unit for a charter 
  9.15  school for any year shall not exceed the state average debt 
  9.16  redemption revenue per pupil unit for the second preceding year. 
  9.17     Sec. 12.  Minnesota Statutes 1996, section 124.248, 
  9.18  subdivision 4, is amended to read: 
  9.19     Subd. 4.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
  9.20  school is eligible to receive other aids, grants, and revenue 
  9.21  according to chapters 120 to 129, as though it were a school 
  9.22  district except that, notwithstanding section 124.195, 
  9.23  subdivision 3, the payments shall be of an equal amount on each 
  9.24  of the 23 payment dates unless a charter school is in its first 
  9.25  year of operation in which case it shall receive on its first 
  9.26  payment date 15 percent of its cumulative amount guaranteed for 
  9.27  the year and 22 payments of an equal amount thereafter the sum 
  9.28  of which shall be 85 percent of the cumulative amount 
  9.29  guaranteed.  However, it may not receive aid, a grant, or 
  9.30  revenue if a levy is required to obtain the money, except as 
  9.31  otherwise provided in this section.  Federal aid received by the 
  9.32  state must be paid to the school, if it qualifies for the aid as 
  9.33  though it were a school district. 
  9.34     (b) Any revenue received from any source, other than 
  9.35  revenue that is specifically allowed for operational, 
  9.36  maintenance, capital facilities revenue under paragraph (c), and 
 10.1   capital expenditure equipment costs under this section, may be 
 10.2   used only for the planning and operational start-up costs of a 
 10.3   charter school.  Any unexpended revenue from any source under 
 10.4   this paragraph must be returned to that revenue source or 
 10.5   conveyed to the sponsoring school district, at the discretion of 
 10.6   the revenue source. 
 10.7      (c) A charter school may receive money from any source for 
 10.8   capital facilities needs.  Any unexpended capital facilities 
 10.9   revenue must be reserved and shall be expended only for future 
 10.10  capital facilities purposes. 
 10.11     Sec. 13.  [APPROPRIATION.] 
 10.12     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 10.13  LEARNING.] The sums indicated in this section are appropriated 
 10.14  from the general fund to the department of children, families, 
 10.15  and learning for the fiscal years designated. 
 10.16     Subd. 2.  [CHARTER SCHOOL START-UP LOANS.] For loans to 
 10.17  charter schools for start-up costs according to Minnesota 
 10.18  Statutes, section 120.064, subdivision 4b: 
 10.19       $5,000,000     .....     1998 
 10.20     The commissioner shall administer the loan.  Each dollar of 
 10.21  state money must be matched with at least 50 cents of nonstate 
 10.22  money.  The loans shall be repaid according to terms set by the 
 10.23  commissioner and shall be paid and deposited in the charter 
 10.24  school start-up costs revolving account in the state treasury 
 10.25  under Minnesota Statutes, section 120.064, subdivision 4b. 
 10.26     Subd. 3.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 10.27  lease aid according to section 11: 
 10.28       $.,...,...     .....     1998 
 10.29       $.,...,...     .....     1999 
 10.30     Subd. 4.  [TECHNICAL ASSISTANCE.] For a technical 
 10.31  assistance program for charter schools: 
 10.32         $100,000     .....     1998 
 10.33         $100,000     .....     1999 
 10.34     The commissioner shall use the appropriation to contract 
 10.35  with a qualifying nonprofit organization for the provision of 
 10.36  technical assistance to charter school applicants and charter 
 11.1   schools.  Each dollar awarded to the qualifying nonprofit 
 11.2   organization shall be matched with at least 50 cents of nonstate 
 11.3   funds.  In awarding the contract, the commissioner shall follow 
 11.4   competitive contracting requirements provided for in state law 
 11.5   or as established by the commissioner of administration.  The 
 11.6   commissioner shall set criteria for qualifying nonprofit 
 11.7   organizations and for technical assistance provided under the 
 11.8   contract. 
 11.9                              ARTICLE 2 
 11.10               EXPANDED INTERDISTRICT OPEN ENROLLMENT 
 11.11     Section 1.  Minnesota Statutes 1996, section 120.062, 
 11.12  subdivision 3, is amended to read: 
 11.13     Subd. 3.  [CLOSED DISTRICTS.] A school board may, by 
 11.14  resolution, determine that limit the enrollment of nonresident 
 11.15  pupils may not attend any of in its schools or programs 
 11.16  according to this section to a number not less than the greater 
 11.17  of: 
 11.18     (1) one percent of the total enrollment at each grade level 
 11.19  in the district; or 
 11.20     (2) the number of district residents at that grade level 
 11.21  enrolled in a nonresident district according to this section.  
 11.22     Sec. 2.  Minnesota Statutes 1996, section 120.062, 
 11.23  subdivision 6, is amended to read: 
 11.24     Subd. 6.  [NONRESIDENT DISTRICT PROCEDURES.] A district 
 11.25  that does not exclude nonresident pupils, according to 
 11.26  subdivision 3, shall notify the parent or guardian in writing by 
 11.27  February 15 whether the application has been accepted or 
 11.28  rejected.  If an application is rejected, the district must 
 11.29  state in the notification the reason for rejection.  The parent 
 11.30  or guardian shall notify the nonresident district by March 1 
 11.31  whether the pupil intends to enroll in the nonresident 
 11.32  district.  Notice of intent to enroll in the nonresident 
 11.33  district obligates the pupil to attend the nonresident district 
 11.34  during the following school year, unless the school boards of 
 11.35  the resident and the nonresident districts agree in writing to 
 11.36  allow the pupil to transfer back to the resident district, or 
 12.1   the pupil's parents or guardians change residence to another 
 12.2   district.  If a parent or guardian does not notify the 
 12.3   nonresident district, the pupil may not enroll in that 
 12.4   nonresident district during the following school year, unless 
 12.5   the school boards of the resident and nonresident district agree 
 12.6   otherwise.  The nonresident district shall notify the resident 
 12.7   district by March 15 of the pupil's intent to enroll in the 
 12.8   nonresident district.  The same procedures apply to a pupil who 
 12.9   applies to transfer from one participating nonresident district 
 12.10  to another participating nonresident district. 
 12.11     Sec. 3.  Minnesota Statutes 1996, section 120.062, 
 12.12  subdivision 7, is amended to read: 
 12.13     Subd. 7.  [BASIS FOR DECISIONS.] The school board must 
 12.14  adopt, by resolution, specific standards for acceptance and 
 12.15  rejection of applications.  Standards may include the capacity 
 12.16  of a program, class, grade level, or school building.  The 
 12.17  school board may not reject applications for enrollment in a 
 12.18  particular grade level if the nonresident enrollment at that 
 12.19  grade level does not exceed the limit set by the board under 
 12.20  subdivision 3.  Standards may not include previous academic 
 12.21  achievement, athletic or other extracurricular ability, 
 12.22  disabling conditions, proficiency in the English language, or 
 12.23  previous disciplinary proceedings, or the student's district of 
 12.24  residence.  
 12.25     Sec. 4.  Minnesota Statutes 1996, section 120.062, 
 12.26  subdivision 11, is amended to read: 
 12.27     Subd. 11.  [INFORMATION.] A district that does not exclude 
 12.28  nonresident pupils according to subdivision 3 shall make 
 12.29  information about the district, schools, programs, policies, and 
 12.30  procedures available to all interested people.  
 12.31                             ARTICLE 3 
 12.32                     CHARTER SCHOOL CONVERSION 
 12.33     Section 1.  Minnesota Statutes 1996, section 120.064, 
 12.34  subdivision 4a, is amended to read: 
 12.35     Subd. 4a.  [CONVERSION OF EXISTING SCHOOLS SCHOOL 
 12.36  DISTRICTS.] A school board may convert one or more of its 
 13.1   existing schools its school district to a charter schools 
 13.2   district under this section if 90 55 percent of the full-time 
 13.3   teachers at in the school district sign a petition seeking 
 13.4   conversion.  The conversion must occur at the beginning of an 
 13.5   academic year.