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

1.5 	Section 1. Minnesota Statutes 2008, section 124D.10, is amended to read:
1.6 	124D.10 CHARTER SCHOOLS.
1.7 		Subdivision 1.Purposes. (a) The purpose of this section is to:
1.8 	(1) improve pupil learning and achievement;
1.9 	(2) increase learning opportunities for pupils;
1.10 	(3) encourage the use of different and innovative teaching methods;
1.11 	(4) require the measurement ofmeasure learning outcomes and create through the 
1.12 	creation and use of different and innovative forms of measuring outcomes;
1.13 	(5) establish new forms of accountability for schools; or
1.14 	(6) create new professional opportunities for teachers, including the opportunity to 
1.15 	be responsible for the learning program at the school site.
1.16 	(b) This section does not provide a means to keep open a school that otherwise 
1.17 	would be closed. Applicants in these circumstances bear the burden of proving that 
1.18 	conversion to a charter school fulfills a purpose specified in this subdivision, independent 
1.19 	of the school's closing.
1.20 		Subd. 2.Applicability. This section applies only to charter schools formed and 
1.21 	operated under this section.
1.22 		Subd. 2a.Charter School Advisory Council. (a) A Charter School Advisory 
1.23 	Council is established under section 15.059 except that the term for each council member 
1.24 	shall be three years. The advisory council is composed of seven nine members from 
2.1 	throughout the state who have demonstrated experience with or interest inwhich represent 
2.2 	authorizers, charter schools administrators, board members, teachers, parents, and 
2.3 	organizations that provide support to charter schools. The members of the council shall 
2.4 	be appointed by the commissioner. The advisory council shall bring to the attention of
2.5 	advise the commissioner any on matters related to charter schools that the council deems 
2.6 	necessary and shall and authorization of charter schools including: 
2.7 	(1) encourage school boards to make full use of charter school opportunities the 
2.8 	guidelines and policies for the approval, review, and discipline processes for authorizers;
2.9 	(2) encourage the creation of innovative schools;
2.10 	(3) provide leadership and support for charter school sponsors to increase the 
2.11 	innovation in and the (2) initiatives to support innovation, effectiveness, accountability, 
2.12 	and fiscal soundness of charter schools;
2.13 	(4) serve an ombudsman function in facilitating the operations of new and existing 
2.14 	charter schools;
2.15 	(5) promote timely (3) the financial management training program for newly elected 
2.16 	members of a charter school board of directors and ongoing training for other members 
2.17 	of a charter school board of directors; and
2.18 	(6) (4) facilitate compliance with auditing and other reporting requirements. The 
2.19 	advisory council shall refer all its proposals to the commissioner who shall provide time 
2.20 	for reports from the council.
2.21 	(b) The Charter School Advisory Council under this subdivision expires June 30, 
2.22 	2007 2015.
2.23 		Subd. 3.Sponsor Authorizers. (a) The following organizations are eligible to 
2.24 	authorize charter schools:
2.25 	(1) a school board; intermediate school district school board; education district 
2.26 	organized under sections 123A.15 to 123A.19;
2.27 	(2) a charitable organization under section 501(c)(3) of the Internal Revenue Code 
2.28 	of 1986, except those that have received church status under sections 170(b)(1)(A)(i) 
2.29 	and 509(a)(a) of the Internal Revenue Code of 1986, that is registered with the attorney 
2.30 	general's office,that is a member of the Minnesota Council of Nonprofits or the Minnesota 
2.31 	Council on Foundations, registered with the attorney general's office, and reports an 
2.32 	end-of-year fund balance of at least $2,000,000; 
2.33 	(3) Minnesota private college that grants two- or four-year degrees and is registered 
2.34 	with the Minnesota Office of Higher Education under chapter 136A; community college, 
2.35 	state university, or technical college, governed by the Board of Trustees of the Minnesota 
3.1 	State Colleges and Universities; or the University of Minnesota may sponsor authorize
3.2 	one or more charter schools.; or
3.3 	(b) (4) a nonprofit corporation subject to chapter 317A, described in section 
3.4 	317A.905, and exempt from federal income tax under section 501(c)(6) of the Internal 
3.5 	Revenue Code of 1986, may sponsor authorize one or more charter schools if the charter 
3.6 	school has operated for at least three years under a different sponsor authorizer and if the 
3.7 	nonprofit corporation has existed for at least 25 years. 
3.8 	(b) Upon demonstration of eligibility under paragraph (a), the potential authorizer 
3.9 	must make an application to the commissioner to be an approved authorizer prior to 
3.10 	submitting any affidavits to authorize schools. The application to authorize schools shall 
3.11 	demonstrate the organization's ability and capacity to perform the responsibilities of 
3.12 	an authorizer as demonstrated through standards developed by a national or Minnesota 
3.13 	nonprofit organization and approved by the commissioner. The commissioner may 
3.14 	approve standards of multiple organizations. The standards shall include:
3.15 	(1) the capacity and infrastructure of the authorizer;
3.16 	(2) the application criteria and process;
3.17 	(3) the contracting process;
3.18 	(4) ongoing oversight and evaluation processes; and 
3.19 	(5) renewal criteria and processes.
3.20 	(c) The commissioner shall have 30 business days to approve or disapprove the 
3.21 	application of a potential authorizer. Upon approval by the commissioner, the authorizer 
3.22 	shall be required to attend and participate in training approved by the department. 
3.23 	Authorizers that have been authorizing schools on or before June 30, 2009, shall have until 
3.24 	June 30, 2012, to apply as an authorizer under this subdivision.
3.25 	(d) The commissioner shall review an authorizer's capacity and performance every 
3.26 	five years in a manner and form prescribed by the commissioner. The commissioner shall 
3.27 	issue a report to the authorizer upon completion of the review. If the commissioner finds 
3.28 	that an authorizer has not maintained its capacity or has not demonstrated satisfactory 
3.29 	performance, the authorizer shall be subject to disciplinary action by the commissioner, 
3.30 	including the loss of authority to authorize schools. The commissioner shall notify the 
3.31 	authorizer of any disciplinary action in writing and the authorizer shall have 15 business 
3.32 	days to request a hearing subject to chapter 14, before the commissioner takes the 
3.33 	disciplinary action.
3.34 	(e) The authority of the department to authorize schools it authorized previous to 
3.35 	June 30, 2009, shall expire on June 30, 2012.
4.1 	(f) The commissioner shall have the authority to establish guidelines and policies to 
4.2 	implement the approval, review, and disciplinary processes for authorizers in consultation 
4.3 	with the Charter School Advisory Council.
4.4 		Subd. 4.Formation of school. (a) A sponsor may authorize one or more licensed 
4.5 	teachers under section 122A.18, subdivision 1, to operate a charter school subject to 
4.6 	approval by the commissioner. A board must vote on charter school application for 
4.7 	sponsorship no later than 90 days after receiving the application. The school must be 
4.8 	organized and operated as a cooperative under chapter 308A or nonprofit corporation 
4.9 	under chapter 317A and the provisions under the applicable chapter shall apply to 
4.10 	the school except as provided in this section. Notwithstanding sections 465.717 and 
4.11 	465.719, a school district may create a corporation for the purpose of creating a charter 
4.12 	school. An individual licensed teacher or a group of individuals may apply to establish 
4.13 	and operate a public charter school. The group must include at least one licensed teacher. 
4.14 	Notwithstanding sections 465.717 and 465.719, a school district may create a corporation 
4.15 	for the purpose of creating a charter school. The application for a charter is submitted to 
4.16 	the proposed authorizer for approval. The proposed authorizer has the responsibility for 
4.17 	reviewing and approving or disapproving the application for a charter.
4.18 	(b) Before the operators may form establish and operate a school, the sponsor
4.19 	authorizer must file submit an affidavit with to the commissioner stating its intent to 
4.20 	authorize a charter school. for the charter school it proposes to authorize. A separate 
4.21 	affidavit must be filed for every individual school. The school developers signed statement 
4.22 	of legal assurances prescribed by the commissioner shall be submitted with the affidavit. 
4.23 	The affidavit must state the terms and conditions under which the sponsor would authorize 
4.24 	a charter school and document:
4.25 	(1) the review process and due diligence the authorizer conducted of the application;
4.26 	(2) how the sponsor authorizer intends to oversee the fiscal and student performance 
4.27 	of the charter school; and to comply with
4.28 	(3) the proposed terms of the written contract between the sponsor authorizer and 
4.29 	the charter school board of directors under subdivision 6.
4.30 	(c) The commissioner must approve or disapprove the sponsor's authorizer's
4.31 	proposed authorization within 90 30 business days of receipt of the affidavit. If the 
4.32 	commissioner disapproves the affidavit, the commissioner shall notify the authorizer of 
4.33 	the deficiencies in the affidavit. The authorizer shall have 20 business days to address the 
4.34 	deficiencies. If the deficiencies are not addressed to the satisfaction of the commissioner, 
4.35 	the disapproval is final. Failure to obtain commissioner approval of the affidavit precludes 
4.36 	a sponsor an authorizer  from authorizing the charter school that was is the subject of the 
5.1 	affidavit. Upon approval of the affidavit, the proposed school must be organized and 
5.2 	operated as a cooperative under chapter 308A, or nonprofit corporation under chapter 
5.3 	317A, and the provisions under the applicable chapter shall apply to the school except as 
5.4 	provided in this section.
5.5 	(c) (d) The operators authorized to organize and operate a school, before entering 
5.6 	into a contract or other agreement for professional or other services, goods, or facilities, 
5.7 	must incorporate as a cooperative under chapter 308A or as a nonprofit corporation 
5.8 	under chapter 317A.and must establish a board of directors composed of at least five 
5.9 	members until a timely election for members of the charter school board of directors 
5.10 	is held according to If the first board is not named in the articles of incorporation, the 
5.11 	incorporators must within a reasonable time hold an organizational meeting to elect the 
5.12 	first board composed of at least five nonrelated members that includes at least one licensed 
5.13 	teacher under section 122A.18, subdivision 1, held in accordance with the school's articles 
5.14 	and bylaws. A
5.15 	(e) The ongoing charter school board of directors must be composed of at least five 
5.16 	nonrelated members. Any staff members who are employed at the school, including 
5.17 	teachers providing instruction under a contract with a cooperative, and all parents or legal 
5.18 	guardians of children enrolled in the school may are eligible to participate in the election 
5.19 	for members of the school's board of directors. Licensed teachers employed at the school, 
5.20 	including teachers providing instruction under a contract with a cooperative, must be a 
5.21 	majority of the members of the board of directors before the school completes its third 
5.22 	year of operation, unless the commissioner waives the requirement for a majority of 
5.23 	licensed teachers on the board. Eligible voters must be notified of the election dates and 
5.24 	voting procedures at least 30 days before the election.
5.25 	(f) The ongoing board must be elected before the school completes its third year 
5.26 	of operation. The board of directors shall be composed of one of the following: (1) a 
5.27 	teacher majority board, (2) a board composed of an equal number of teachers, parents, 
5.28 	and community members, or (3) a board with at least 20 percent of its members licensed 
5.29 	teachers. Licensed teachers employed by the school, or those providing instruction under 
5.30 	a contract with a cooperative are eligible to be members of the board of directors. The 
5.31 	chief financial officer and chief administrator may not be voting members of the board. 
5.32 	The bylaws of the board shall outline the internal process and procedures for changing the 
5.33 	model of governance. The model of governance may only be changed in conjunction with 
5.34 	the renewal of the charter contract and the majority votes of the board of directors and of 
5.35 	the licensed teachers employed or contracted with a cooperative.
6.1 	(g) Board of director meetings must comply with chapter 13D. Upon the request of 
6.2 	an individual, the charter school must make available in a timely fashion the minutes of 
6.3 	meetings of members, the board of directors, and committees having any of the authority 
6.4 	of the board of directors, and statements showing the financial result of all operations 
6.5 	and transactions affecting income and surplus during the school's last annual accounting 
6.6 	period and a balance sheet containing a summary of its assets and liabilities as of the 
6.7 	closing date of the accounting period.
6.8 	(h) Every charter school board member shall attend training on charter school 
6.9 	governance and the role and responsibilities of a charter school board, and training 
6.10 	on the basics of charter school finances and the board role and responsibilities in 
6.11 	financial management and oversight. A board member who does not complete these 
6.12 	basic requirements within 12 months of being seated on the board shall be ineligible for 
6.13 	continued service on the board.
6.14 	(d) (i) The granting or renewal of a charter by a sponsoring an authorizing entity 
6.15 	must not be conditioned upon the bargaining unit status of the employees of the school.
6.16 	(j) The granting or renewal of a charter school by an authorizer must not be 
6.17 	contingent on the charter school being required to contract, lease, or purchase services 
6.18 	from the authorizer. Any potential contract, lease, or purchase of service from an 
6.19 	authorizer must be done through an open bidding process and must be a separate contract 
6.20 	from the charter. The school must document the open bidding process. An authorizer is 
6.21 	prohibited from entering into a contract to provide management and financial services 
6.22 	for a school that it authorizes, unless the school has documented that it has received 
6.23 	at least two competitive bids and the proposed contract has been reviewed by the 
6.24 	commissioner prior to the board entering into the contract. A contract entered into prior 
6.25 	to the review and comment of the commissioner shall be void. The commissioner shall 
6.26 	have 20 business days from receipt of the proposed contract to review and comment 
6.27 	on the proposed contract.
6.28 	(e) A sponsor (k) An authorizer may authorize the operators of a charter school 
6.29 	board of directors to expand the operation of the charter school to additional sites or to 
6.30 	add additional grades at the school beyond those described in the sponsor's application 
6.31 	as approvedauthorizer's original affidavit. The authorizer shall submit a supplementary 
6.32 	affidavit for approval by the commissioner only after submitting a supplemental 
6.33 	application to the commissioner in a form and manner prescribed by the commissioner. 
6.34 	The supplemental application must provide evidence affidavit shall attest that:
7.1 	(1) the authorizer has reviewed the expansion plans of the charter school is 
7.2 	supported by and that there is sufficient supporting documentation of the need and 
7.3 	projected enrollment;
7.4 	(2) the authorizer has reviewed the financial plan of the school and the charter 
7.5 	school is fiscally sound;
7.6 	(3) the sponsor supports the expansion; and authorizer has reviewed the management 
7.7 	plan and that the charter has the management capacity to carry out the expansion plan.
7.8 	(4) the building of the additional site meets all health and safety requirements to 
7.9 	be eligible for lease aid.
7.10 	(l) The commissioner shall have 30 business days to review and comment the 
7.11 	supplementary affidavit. The commissioner shall notify the authorizer of any deficiencies 
7.12 	in the supplementary affidavit. The authorizer shall have 30 business days to address any 
7.13 	deficiencies in the supplementary affidavit to the satisfaction of the commissioner. The 
7.14 	school may not proceed to expand the grades or add additional sites until the commissioner 
7.15 	has reviewed and commented on the supplementary affidavit.
7.16 	(f) (m) The commissioner annually must provide timely financial management 
7.17 	training to newly elected members of a charter school board of directors and ongoing 
7.18 	training to other members of ashall approve or offer financial management, and public 
7.19 	record-keeping training for members of charter school board of directors boards. The 
7.20 	training must address ways for charter schools to:
7.21 	(1) proactively assess opportunities for a charter school to maximize and effectively 
7.22 	use all available public revenue sources;
7.23 	(2) establish and maintain complete, auditable financial records for the charter 
7.24 	school;
7.25 	(3) establish proper procedures for filing techniques and archiving state-required 
7.26 	reports and documents;
7.27 	(4) document formal actions of the charter school, including meetings of the charter 
7.28 	school board of directors;
7.29 	(5) properly manage and retain charter school and student records;
7.30 	(6) comply with state and federal payroll record-keeping requirements; and
7.31 	employment records.
7.32 	(7) address other similar factors that facilitate establishing and maintaining complete 
7.33 	records on the charter school's operations.
7.34 		Subd. 4a.Conflict of interest. (a) A member of a charter school board of directors
7.35 	An individual is prohibited from serving as a member of the charter school board of 
7.36 	directors or as if the individual, an immediate family member, or the individual's partner is
8.1 	an owner, employee, or agent of or a contractor with a for-profit or nonprofit entity with 
8.2 	whom the charter school contracts, directly or indirectly, for professional services, goods, 
8.3 	or facilities. A violation of this prohibition renders a contract voidable at the option of the 
8.4 	commissioner void. A member of a charter school board of directors who violates this 
8.5 	prohibition shall be individually liable to the charter school for any damage caused by the 
8.6 	violation. A violation of this requirement renders a contract void. The charter school's aid 
8.7 	may be reduced by the commissioner under section 127A.42 if the charter school fails to 
8.8 	correct violations under this subdivision in a timely manner.
8.9 	(b) No employee, officer, or agent of the charter school shall participate in the 
8.10 	selection, award, or administration of a contract if a conflict of interest would be involved. 
8.11 	A conflict exists when: (1) the employee, officer, or agent, (2) the immediate family of the 
8.12 	employee, officer, or agent, (3) the partner of the employee, officer, or agent, or (4) an 
8.13 	organization which employs, or is about to employ, any individual in clauses (1) to (3), 
8.14 	has a financial or other interest in the organization selected for the contract. A violation 
8.15 	of this prohibition renders the contract void. The charter school's aid may be reduced by 
8.16 	the commissioner under section 127A.42 if the charter school fails to correct violations 
8.17 	under this subdivision in a timely manner.
8.18 	(c) No employee, agent, or board member of the authorizer who is involved in 
8.19 	the initial review, approval, ongoing oversight, evaluation, or the charter renewal or 
8.20 	nonrenewal process or decision is eligible to serve on the board of directors of a school 
8.21 	authorized by that authorizer.
8.22 	(b) (d) An individual may serve as a member of the board of directors if no conflict 
8.23 	of interest under paragraph (a) exists.
8.24 	(c) A member of a charter school board of directors that serves as a member of the 
8.25 	board of directors or as an employee or agent of or a contractor with a nonprofit entity 
8.26 	with whom the charter school contracts, directly or indirectly, for professional services, 
8.27 	goods, or facilities, must disclose all potential conflicts to the commissioner.
8.28 	(d) (e) The conflict of interest provisions under this subdivision do not apply to 
8.29 	compensation paid to a teacher employed by the charter school who also serves as a 
8.30 	member of the board of directors.
8.31 	(e) (f) The conflict of interest provisions under this subdivision do not apply to a 
8.32 	teacher who provides services to a charter school through a cooperative formed under 
8.33 	chapter 308A when the teacher also serves on the charter school board of directors.
8.34 		Subd. 5.Conversion of existing schools. A board of an independent school district 
8.35 	may convert one or more of its existing schools to charter schools under this section if 
9.1 	60 percent of the full-time teachers at the school sign a petition seeking conversion. The 
9.2 	conversion must occur at the beginning of an academic year.
9.3 		Subd. 6.Charter contract. The sponsor's authorization for a charter school must 
9.4 	be in the form of a written contract signed by the sponsor authorizer and the board of 
9.5 	directors of the charter school. The contract must be completed within 90 45 business
9.6 	days of the commissioner's approval of the sponsor's proposed authorization authorizer's 
9.7 	affidavit. The authorizer shall submit a copy of the signed contract within ten business 
9.8 	days of its execution to the commissioner. The contract for a charter school must be in 
9.9 	writing and contain at least the following:
9.10 	(1) a description of a program that carries out one or more of the purposes
9.11 	declaration of the purposes in subdivision 1 which the school is going to carry out and the 
9.12 	way in which the school will report implementation of those purposes;
9.13 	(2) a clear description of the school program and the specific academic and 
9.14 	nonacademic outcomes pupils are to achieve under subdivision 10;
9.15 	(3) the statement of admission policies and procedures;
9.16 	(4) the governance, management, and administration of plan for the school;
9.17 	(5) signed assurances of charter school board members for compliance with all 
9.18 	federal and state laws for organizational, program, and financial requirements and 
9.19 	procedures for program and financial audits that apply to charter schools;
9.20 	(6) how the school will comply with subdivisions 8, 13, 16, and 23 the criteria, 
9.21 	processes, and procedures that the authorizer will use for ongoing oversight of academic, 
9.22 	operational, and academic performance;
9.23 	(7) assumption of liability by the charter school the performance evaluation for 
9.24 	charter renewal decisions under subdivision 15;
9.25 	(8) types and amounts of insurance liability coverage to be obtained by the charter 
9.26 	school;
9.27 	(9) the term of the contract, which may be up to three five years with an additional 
9.28 	preoperational planning year. Renewal contracts shall be based on the academic, financial, 
9.29 	and operational performance of the school; and
9.30 	(10) if how the board of directors or the operators of the charter school provide 
9.31 	special instruction and services for children with a disability under sections 125A.03
9.32 	to 125A.24, and 125A.65, a description of the financial parameters within which the 
9.33 	charter school will operate to provide the special instruction and services to children 
9.34 	with a disability; and.
9.35 	(11) the process and criteria the sponsor intends to use to monitor and evaluate the 
9.36 	fiscal and student performance of the charter school, consistent with subdivision 15.
10.1 		Subd. 6a.Audit report. The charter school must submit an audit report to the 
10.2 	commissioner by December 31 each year. The commissioner shall notify the authorizer 
10.3 	within ten business days if the school has not submitted the audit. The charter school's 
10.4 	state aid may be withheld by the commissioner if the audit is not submitted by January 31. 
10.5 	The charter school, with the assistance of the auditor conducting the audit, must include 
10.6 	with the report a copy of all charter school agreements for corporate management services. 
10.7 	If the entity that provides the professional services to the charter school is exempt from 
10.8 	taxation under section 501 of the Internal Revenue Code of 1986, that entity must file with 
10.9 	the commissioner by February 15 a copy of the annual return required under section 6033 
10.10 	of the Internal Revenue Code of 1986. If the commissioner receives as part of the an audit 
10.11 	report a management letter indicating that a material weakness exists in the financial 
10.12 	reporting systems of a charter school, the charter school must submit a written report to 
10.13 	the commissioner explaining how the material weakness will be resolved. Upon the 
10.14 	request of an individual, the charter school must make available in a timely fashion the 
10.15 	minutes of meetings of members, the board of directors, and committees having any of 
10.16 	the authority of the board of directors, and statements showing the financial result of all 
10.17 	operations and transactions affecting income and surplus during the school's last annual 
10.18 	accounting period and a balance sheet containing a summary of its assets and liabilities as 
10.19 	of the closing date of the accounting period.
10.20 		Subd. 7.Public status; exemption from statutes and rules. A charter school is a 
10.21 	public school and is part of the state's system of public education. Except as provided in 
10.22 	this section, A charter school is exempt from all statutes and rules applicable to a school, a
10.23 	school board, or a district, although it may elect to comply with one or more provisions
10.24 	unless required by this section or in another section of statutes or rules.
10.25 		Subd. 8.State and local requirements. (a) A charter school shall meet all 
10.26 	applicable federal, state, and local health and safety requirements.
10.27 	(b) A school sponsored by a school board may be located in any district, unless the 
10.28 	school board of the district of the proposed location disapproves by written resolution.
10.29 	(c) A charter school must be nonsectarian in its programs, admission policies, 
10.30 	employment practices, and all other operations. A sponsor may not authorize a charter 
10.31 	school or program that is affiliated with a nonpublic sectarian school or a religious 
10.32 	institution.
10.33 	(d) Charter schools must not be used as a method of providing education or 
10.34 	generating revenue for students who are being home-schooled.
10.35 	(e) The primary focus of a charter school must be to provide a comprehensive 
10.36 	program of instruction for at least one grade or age group from five through 18 years 
11.1 	of age. Instruction may be provided to people younger than five years and older than 
11.2 	18 years of age.
11.3 	(f) A charter school may not charge tuition to students who reside in Minnesota.
11.4 	(g) A charter school is subject to and must comply with chapter 363A and section 
11.5 	121A.04. 
11.6 	(h) A charter school is subject to and must comply with the Pupil Fair Dismissal 
11.7 	Act, sections 121A.40 to 121A.56, and the Minnesota Public School Fee Law, sections 
11.8 	123B.34 to 123B.39. 
11.9 	(i) A charter school is subject to the same financial audits, audit procedures, and 
11.10 	audit requirements as a district. Audits must be conducted in compliance with generally 
11.11 	accepted governmental auditing standards, the Federal Single Audit Act, if applicable, 
11.12 	and section 6.65. A charter school is subject to and must comply with sections 15.054; 
11.13 	118A.01; 118A.02; 118A.03; 118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 
11.14 	471.38; 471.391; 471.392; and 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 4, 5, 6, 12, 
11.15 	13, and 15; 471.881; and 471.89. The audit must comply with the requirements of sections 
11.16 	123B.75 to 123B.83, except to the extent deviations are necessary because of the program 
11.17 	at the school. Deviations must be approved by the commissioner. The Department 
11.18 	of Education, state auditor, or legislative auditor may conduct financial, program, or 
11.19 	compliance audits. A charter school determined to be in statutory operating debt under 
11.20 	sections 123B.81 to 123B.83 must submit a plan under section 123B.81, subdivision 4. 
11.21 	(j) A charter school is a district for the purposes of tort liability under chapter 466.
11.22 	(k) A charter school must comply with sections 13.32; 120A.22, subdivision 7; 
11.23 	121A.75; and 260B.171, subdivisions 3 and 5. 
11.24 	(l) A charter school is subject to the Pledge of Allegiance requirement under section 
11.25 	121A.11, subdivision 3. 
11.26 		Subd. 9.Admission requirements Pupil admissions. A charter school may limit 
11.27 	admission to:
11.28 	(1) pupils within an age group or grade level;
11.29 	(2) people who are eligible to participate in the graduation incentives program 
11.30 	under section 124D.68; or 
11.31 	(3) residents of a specific geographic area where the percentage of the population 
11.32 	of non-Caucasian people of that area is greater than the percentage of the non-Caucasian 
11.33 	population in the congressional district in which the geographic area is located, and as 
11.34 	long as the school reflects the racial and ethnic diversity of the specific area.
11.35 	A charter school shall enroll an eligible pupil who submits a timely application, 
11.36 	unless the number of applications exceeds the capacity of a program, class, grade level, 
12.1 	or building. In this case, pupils must be accepted by lot. If a charter school is the only 
12.2 	school located in a town serving pupils within a particular grade level, then pupils that 
12.3 	are residents of the town must be given preference for enrollment before accepting pupils 
12.4 	by lot. If a pupil lives within two miles of a charter school and the next closest public 
12.5 	school is more than five miles away, the charter school must give those pupils preference 
12.6 	for enrollment before accepting other pupils by lot. The charter school must develop 
12.7 	and publish its lottery policy and process.
12.8 	A charter school shall give preference for enrollment to a sibling of an enrolled pupil 
12.9 	and to a foster child of that pupil's parents and to children of school employee's before 
12.10 	accepting other pupils by lot.
12.11 	A charter school may not limit admission to pupils on the basis of intellectual ability, 
12.12 	measures of achievement or aptitude, or athletic ability and may not establish any criteria 
12.13 	or requirements for admission.
12.14 		Subd. 10.Pupil performance. A charter school must design its programs to at least 
12.15 	meet the outcomes adopted by the commissioner for public school students. In the absence 
12.16 	of the commissioner's requirements, the school must meet the outcomes contained in the 
12.17 	charter contract with the sponsor. The achievement levels of the outcomes contained in 
12.18 	the charter contract may exceed the achievement levels of any outcomes adopted by the 
12.19 	commissioner for public school students.
12.20 		Subd. 11.Employment and other operating matters. A charter school must 
12.21 	employ or contract with necessary teachers, as defined by section 122A.15, subdivision 
12.22 	1, who hold valid licenses to perform the particular service for which they are employed 
12.23 	in the school. The charter school's state aid may be reduced under section 127A.42
12.24 	if the school employs a teacher who is not appropriately licensed or approved by the 
12.25 	board of teaching. The school may employ necessary employees who are not required to 
12.26 	hold teaching licenses to perform duties other than teaching and may contract for other 
12.27 	services. The school may discharge teachers and nonlicensed employees. A person, 
12.28 	without holding a valid administrator's license, may perform administrative, supervisory, 
12.29 	or instructional leadership duties. 
12.30 	The board of directors also shall decide matters related to the operation of the school, 
12.31 	including budgeting, curriculum and operating procedures.
12.32 		Subd. 12.Pupils with a disability. A charter school must comply with sections 
12.33 	125A.02, 125A.03 to 125A.24, and 125A.65 and rules relating to the education of pupils 
12.34 	with a disability as though it were a district. 
13.1 		Subd. 13.Length of school year. A charter school must provide instruction 
13.2 	each year for at least the number of days required by section 120A.41. It may provide 
13.3 	instruction throughout the year according to sections 124D.12 to 124D.127 or 124D.128. 
13.4 		Subd. 14.Annual public reports. A charter school must publish an annual report at 
13.5 	least annually to its sponsor and the commissioner the information required by the sponsor 
13.6 	or the commissioner. approved by the board of directors. The annual report shall include 
13.7 	information on enrollment, governance and management, staffing, finances, academic 
13.8 	performance, operational performance, innovative practices and implementation, future 
13.9 	plans, and the authorizer. The annual report shall be distributed to the commissioner, 
13.10 	authorizer, school employees, and parents and legal guardians. The reports are public 
13.11 	data under chapter 13.
13.12 		Subd. 15.School review and comment. (a) The authorizer shall ensure that a 
13.13 	formal evaluation of the performance of a school is conducted prior to the renewal of 
13.14 	the charter contract.
13.15 	(b) The department must review and comment on the evaluation, by the sponsor, of 
13.16 	the performance of a charter school before the charter school's contract is renewed for 
13.17 	another contract term. The sponsor must submit to the commissioner timely information 
13.18 	for the review and comment. process at the time the authorizer submits its application and 
13.19 	when the authorizer is up for its five-year review.
13.20 	(b) (c)  A sponsor shall monitor and evaluate the fiscal, operational, and student 
13.21 	performance of the school, and may for this purpose annually assess a charter school: (1) 
13.22 	in its first, second, or third year of operation up to $30 per student up to a maximum of 
13.23 	$10,000; and (2) in its fourth or a subsequent year of operation up to $10 per student up 
13.24 	to a maximum of $3,500. an agreed upon fee that is stated in the charter contract of 1.0 
13.25 	percent of the formula allowance of one pupil unit per student up to a maximum of 1.25 
13.26 	pupil units in 2009-2010. The maximum shall rise to 1.5 pupil units in 2010-2011, 2.0 
13.27 	pupil units in 2011-2012, 3.0 pupil units in 2012-2013, and 4.0 pupil units in 2013-2014 
13.28 	and thereafter. The authorizer has the right to assess a minimum fee of the formula 
13.29 	allowance for one pupil unit in any one year.
13.30 	(d) For the preoperational planning period, the authorizer may assess a charter 
13.31 	school the formula allowance for one pupil unit.
13.32 	(e) Annually on or before September 30, an authorizer shall submit to the 
13.33 	commissioner a statement of expenditures related to authorization activities during the 
13.34 	previous school year ending on June 30. A copy of the statement shall be given to all 
13.35 	schools authorized by the authorizer.
14.1 		Subd. 16.Transportation. (a) A charter school after its first fiscal year of operation 
14.2 	by March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of 
14.3 	operation must notify the district in which the school is located and the Department of 
14.4 	Education if it will provide its own transportation or use the transportation services of the 
14.5 	district in which it is located for the fiscal year.
14.6 	(b) If a charter school elects to provide transportation for pupils, the transportation 
14.7 	must be provided by the charter school within the district in which the charter school is 
14.8 	located. The state must pay transportation aid to the charter school according to section 
14.9 	124D.11, subdivision 2. 
14.10 	For pupils who reside outside the district in which the charter school is located, the 
14.11 	charter school is not required to provide or pay for transportation between the pupil's 
14.12 	residence and the border of the district in which the charter school is located. A parent 
14.13 	may be reimbursed by the charter school for costs of transportation from the pupil's 
14.14 	residence to the border of the district in which the charter school is located if the pupil is 
14.15 	from a family whose income is at or below the poverty level, as determined by the federal 
14.16 	government. The reimbursement may not exceed the pupil's actual cost of transportation 
14.17 	or 15 cents per mile traveled, whichever is less. Reimbursement may not be paid for 
14.18 	more than 250 miles per week.
14.19 	At the time a pupil enrolls in a charter school, the charter school must provide the 
14.20 	parent or guardian with information regarding the transportation.
14.21 	(c) If a charter school does not elect to provide transportation, transportation for 
14.22 	pupils enrolled at the school must be provided by the district in which the school is 
14.23 	located, according to sections 123B.88, subdivision 6, and 124D.03, subdivision 8, for a 
14.24 	pupil residing in the same district in which the charter school is located. Transportation 
14.25 	may be provided by the district in which the school is located, according to sections 
14.26 	123B.88, subdivision 6, and 124D.03, subdivision 8, for a pupil residing in a different 
14.27 	district. If the district provides the transportation, the scheduling of routes, manner and 
14.28 	method of transportation, control and discipline of the pupils, and any other matter relating 
14.29 	to the transportation of pupils under this paragraph shall be within the sole discretion, 
14.30 	control, and management of the district. 
14.31 		Subd. 17.Leased space. A charter school may lease space from a an independent 
14.32 	school board eligible to be a sponsor or an authorizer, other public or organization, private,
14.33 	nonprofit nonsectarian organization, private property owner, or a sectarian organization 
14.34 	if the space to be leased from sectarian organization is constructed as a school facility. 
14.35 	Leases are to be reviewed and approved by the Department of Education in a timely 
14.36 	manner. If a charter school is unable to lease appropriate space from an eligible board or 
15.1 	other public or private nonprofit nonsectarian organization, the school may lease space 
15.2 	from another nonsectarian organization if the Department of Education, in consultation 
15.3 	with the Department of Administration, approves the lease. If the school is unable to lease 
15.4 	appropriate space from public or private nonsectarian organizations, the school may lease 
15.5 	space from a sectarian organization if the leased space is constructed as a school facility 
15.6 	and the Department of Education, in consultation with the Department of Administration, 
15.7 	approves the lease. Charter schools that have been in operation for more than five years 
15.8 	may form a separate nonprofit building company upon approval of the authorizer.
15.9 		Subd. 18.Authority to raise initial working capital. A sponsor may authorize 
15.10 	a charter school before the applicant has secured its space, equipment, facilities, and 
15.11 	personnel if the applicant indicates the authority is necessary for it to raise working 
15.12 	capital. A sponsor may not authorize a school before the commissioner has approved the 
15.13 	authorization.
15.14 		Subd. 19.Disseminate information. The sponsor, the operators, Authorizers and 
15.15 	the Department of Education must disseminate information to the public on how to form 
15.16 	and operate a charter school and. Charter schools must disseminate information about
15.17 	how to utilize the offerings of a charter school. Particular groups to be targeted include 
15.18 	low-income families and communities, and students of color, and students who are at-risk 
15.19 	of academic failure.
15.20 		Subd. 20.Leave to teach in a charter school. If a teacher employed by a district 
15.21 	makes a written request for an extended leave of absence to teach at a charter school, 
15.22 	the district must grant the leave. The district must grant a leave not to exceed a total of 
15.23 	five years. Any request to extend the leave shall be granted only at the discretion of the 
15.24 	school board. The district may require that the request for a leave or extension of leave be 
15.25 	made up to 90 days by February 1 before the teacher would otherwise have to report for 
15.26 	duty. Except as otherwise provided in this subdivision and except for section 122A.46, 
15.27 	subdivision 7, the leave is governed by section 122A.46, including, but not limited to, 
15.28 	reinstatement, notice of intention to return, seniority, salary, and insurance. 
15.29 	During a leave, the teacher may continue to aggregate benefits and credits in the 
15.30 	Teachers' Retirement Association account by paying both the employer and employee 
15.31 	contributions based upon the annual salary of the teacher for the last full pay period before 
15.32 	the leave began. The retirement association may impose reasonable requirements to 
15.33 	efficiently administer this subdivision under chapters 354 and 354A in accordance with 
15.34 	subdivision 22.
15.35 		Subd. 21.Collective bargaining. Employees of the board of directors of a charter 
15.36 	school may, if otherwise eligible, organize under chapter 179A and comply with its 
16.1 	provisions. The board of directors of a charter school is a public employer, for the 
16.2 	purposes of chapter 179A, upon formation of one or more bargaining units at the school. 
16.3 	Bargaining units at the school must be separate from any other units within the sponsoring 
16.4 	district, except that bargaining units may remain part of the appropriate unit within the 
16.5 	sponsoring district, if the employees of the school, the board of directors of the school, 
16.6 	the exclusive representative of the appropriate unit in the sponsoring district, and the 
16.7 	board of the sponsoring district agree to include the employees in the appropriate unit 
16.8 	of the sponsoring district.
16.9 		Subd. 22.Teacher and other employee retirement. (a) Teachers in a charter 
16.10 	school must be public school teachers for the purposes of chapters 354 and 354a.
16.11 	(b) Except for teachers under paragraph (a), employees in a charter school must be 
16.12 	public employees for the purposes of chapter 353.
16.13 		Subd. 23.Causes for Nonrenewal or termination of charter school contract. (a) 
16.14 	The duration of the contract with a sponsorauthorizer must be for the term contained in 
16.15 	the contract according to subdivision 6. The sponsorauthorizer may or may not renew 
16.16 	a contract at the end of the term for any ground listed in paragraph (b). A sponsor
16.17 	authorizer may unilaterally terminate a contract during the term of the contract for any 
16.18 	ground listed in paragraph (b). At least 60 days before not renewing or terminating a 
16.19 	contract, the sponsor authorizer  shall notify the board of directors of the charter school 
16.20 	of the proposed action in writing. The notice shall state the grounds for the proposed 
16.21 	action in reasonable detail and that the charter school's board of directors may request 
16.22 	in writing an informal hearing before the sponsorauthorizer within 14 15 business days 
16.23 	of receiving notice of nonrenewal or termination of the contract. Failure by the board of 
16.24 	directors to make a written request for a hearing within the 14-day 15-day period shall be 
16.25 	treated as acquiescence to the proposed action. Upon receiving a timely written request 
16.26 	for a hearing, the sponsorauthorizer shall give reasonable ten business days' notice to 
16.27 	the charter school's board of directors of the hearing date. The sponsorauthorizer shall 
16.28 	conduct an informal hearing before taking final action. The sponsor authorizer shall 
16.29 	take final action to renew or not renew a contract by the last day of classes in the school 
16.30 	year. If the sponsor is a local board, the school's board of directors may appeal the 
16.31 	sponsor's decision to the commissioner no later than 15 business days before the proposed 
16.32 	termination date or the end of the contract.
16.33 	(b) A contract may be terminated or not renewed upon any of the following grounds:
16.34 	(1) failure to meet the requirements for pupil performance contained in the contract;
16.35 	(2) failure to meet generally accepted standards of fiscal management;
16.36 	(3) violations of law; or
17.1 	(4) other good cause shown.
17.2 	If a contract is terminated or not renewed under this paragraph, the school must be 
17.3 	dissolved according to the applicable provisions of chapter 308A or 317A, except when 
17.4 	the commissioner approves the decision of a different eligible sponsor to authorize the 
17.5 	charter school.
17.6 	(c) If at the end of a contract term, either the sponsor authorizer or the charter school 
17.7 	board of directors wants mutually agree to voluntarily terminate the contract, a change 
17.8 	in sponsors authorizers is allowed if the commissioner approves the decision of transfer 
17.9 	to a different eligible sponsor approved authorizer to authorize the charter school. The 
17.10 	party intending to terminate the contract must notify the other party and the commissioner 
17.11 	of its intent at least 90 days before the date on which the contract ends. Both parties 
17.12 	must jointly submit in writing to the commissioner intent to mutually terminate the 
17.13 	contract. The sponsor authorizer that is a party to the existing contract at least must inform 
17.14 	the approved different eligible sponsor new authorizer about the fiscal and operational 
17.15 	status, and student performance of the school. If no different eligible sponsor transfer of 
17.16 	authorizer is approved, the school must be dissolved according to applicable law and 
17.17 	the terms of the contract.
17.18 	(d) The commissioner, after providing reasonable notice to the board of directors of 
17.19 	a charter school and the existing sponsor authorizer, and after providing an opportunity for 
17.20 	a public hearing under chapter 14, may terminate the an existing sponsorial relationship
17.21 	charter contract between a charter school and an authorizer if:
17.22 	(1) the charter school has a history of:
17.23 	(1)(i) failure to meet generally accepted standards of fiscal management or financial 
17.24 	mismanagement; or
17.25 	(2) (ii) repeated or major violations of the law.; or
17.26 	(2) the authorizer has:
17.27 	(i) failure to perform its duties and responsibilities as an approved authorizer; or
17.28 	(ii) violations of law.
17.29 	(e) If the commissioner terminates a charter contract as a result of the performance 
17.30 	or violation of the law on the part of the authorizer, the commissioner shall assist the 
17.31 	school in finding a new authorizer.
17.32 		Subd. 23a.Related party lease costs. (a) A charter school is prohibited from 
17.33 	entering a lease of real property with a related party as defined in subdivision 26, unless 
17.34 	the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter 
17.35 	308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1). 
18.1 	(b) A lease of real property to be used for a charter school, not excluded in paragraph 
18.2 	(a), must contain the following statement: "This lease is subject to Minnesota Statutes, 
18.3 	section 124D.10, subdivision 23a." 
18.4 	(c) If a charter school enters into as lessee a lease with a related party and the 
18.5 	charter school subsequently closes, the commissioner has the right to recover from the 
18.6 	lessor any lease payments in excess of those that are reasonable under section 124D.11, 
18.7 	subdivision 4, clause (1). 
18.8 		Subd. 24.Pupil enrollment upon nonrenewal or termination of charter school 
18.9 	contract. If a contract is not renewed or is terminated according to subdivision 23, a 
18.10 	pupil who attended the school, siblings of the pupil, or another pupil who resides in the 
18.11 	same place as the pupil may enroll in the resident district or may submit an application 
18.12 	to a nonresident district according to section 124D.03 at any time. Applications and 
18.13 	notices required by section 124D.03 must be processed and provided in a prompt manner. 
18.14 	The application and notice deadlines in section 124D.03 do not apply under these 
18.15 	circumstances. The closed charter school must transfer the student's educational records 
18.16 	within ten business days of closure to the student's school district of residence where the 
18.17 	records must be retained or transferred under section 120A.22, subdivision 7.
18.18 		Subd. 25.Extent of specific legal authority. (a) The board of directors of a charter 
18.19 	school may sue and be sued.
18.20 	(b) The board may not levy taxes or issue bonds.
18.21 	(c) The commissioner, a sponsor, members of the board of a sponsor in their official 
18.22 	capacity, and employees of a sponsor are immune from civil or criminal liability with 
18.23 	respect to all activities related to a charter school they approve or sponsor. The board 
18.24 	of directors shall obtain at least the amount of and types of insurance required by the 
18.25 	contract, according to subdivision 6 to cover tort liability limits under chapter 466.
18.26 		Subd. 26.Definitions. For purposes of this section and section 124D.11:
18.27 	(1) A "related party" is an affiliate or close immediate relative of the other party in 
18.28 	question, an affiliate of a close an immediate relative, or a close an immediate relative 
18.29 	of an affiliate.
18.30 	(2) "Affiliate" means a person that directly, or indirectly through one or more 
18.31 	intermediaries, controls, or is controlled by, or is under common control with, another 
18.32 	person.
18.33 	(3) "Close relative" "Immediate family" means an individual whose relationship 
18.34 	by blood, marriage, or adoption, or partneringto another individual is no more remote 
18.35 	than first cousin.
18.36 	(4) "Person" means an individual or entity of any kind.
19.1 	(5) "Control" includes the terms "controlling," "controlled by," and "under common 
19.2 	control with" and means the possession, direct or indirect, of the power to direct or cause 
19.3 	the direction of the management, operations, or policies of a person, whether through the 
19.4 	ownership of voting securities, by contract, or otherwise.
19.5 	(6) "Application" means the charter school business plan documents that school 
19.6 	developers submit to an authorizer for approval which includes, the mission, purposes, 
19.7 	program design, finances, governance and management structure, school developers 
19.8 	background and experience, and other information the authorizer may request. The 
19.9 	application shall also include a statement of assurances of legal compliance that the 
19.10 	commissioner may prescribe.
19.11 	(7) "Affidavit" means the written statement documenting the process and findings of 
19.12 	the review conducted by the authorizer that is submitted to the commissioner as described 
19.13 	in subdivision 4, paragraphs (b) and (i).

19.14 	Sec. 2. REVIVAL AND REENACTMENT.
 19.15 	Minnesota Statutes, section 124D.10, subdivision 2a, is revived and reenacted 
19.16 	effective retroactively and without interruption from June 30, 2007.

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

19.18 	Sec. 3. REVISOR'S INSTRUCTION.
 19.19 	The revisor of statutes shall renumber Minnesota Statutes, section 124D.10, 
19.20 	subdivision 26, as section 124D.10, subdivision 1a. The revisor shall also make necessary 
19.21 	cross-reference changes in Minnesota Statutes and Minnesota Rules consistent with the 
19.22 	renumbering.