124D.10 CHARTER SCHOOLS.
Subdivision 1. Purposes.
(a) The purpose of this section is to:
(1) improve pupil learning;
(2) increase learning opportunities for pupils;
(3) encourage the use of different and innovative teaching methods;
(4) require the measurement of learning outcomes and create different and innovative forms
of measuring outcomes;
(5) establish new forms of accountability for schools; or
(6) create new professional opportunities for teachers, including the opportunity to be
responsible for the learning program at the school site.
(b) This section does not provide a means to keep open a school that otherwise would be
closed. Applicants in these circumstances bear the burden of proving that conversion to a charter
school fulfills a purpose specified in this subdivision, independent of the school's closing.
Subd. 2. Applicability.
This section applies only to charter schools formed and operated
under this section.
Subd. 2a. Charter School Advisory Council.
(a) A Charter School Advisory Council is
established under section
except that the term for each council member shall be three
years. The advisory council is composed of seven members from throughout the state who have
demonstrated experience with or interest in charter schools. The members of the council shall
be appointed by the commissioner. The advisory council shall bring to the attention of the
commissioner any matters related to charter schools that the council deems necessary and shall:
(1) encourage school boards to make full use of charter school opportunities;
(2) encourage the creation of innovative schools;
(3) provide leadership and support for charter school sponsors to increase the innovation in
and the effectiveness, accountability, and fiscal soundness of charter schools;
(4) serve an ombudsman function in facilitating the operations of new and existing charter
(5) promote timely financial management training for newly elected members of a charter
school board of directors and ongoing training for other members of a charter school board
of directors; and
(6) facilitate compliance with auditing and other reporting requirements. The advisory
council shall refer all its proposals to the commissioner who shall provide time for reports from
(b) The Charter School Advisory Council under this subdivision expires June 30, 2007.
Subd. 3. Sponsor.
(a) A school board; intermediate school district school board; education
district organized under sections
; charitable organization under section
501(c)(3) of the Internal Revenue Code of 1986 that is a member of the Minnesota Council of
Nonprofits or the Minnesota Council on Foundations, registered with the attorney general's office,
and reports an end-of-year fund balance of at least $2,000,000; Minnesota private college that
grants two- or four-year degrees and is registered with the Minnesota Office of Higher Education
under chapter 136A; community college, state university, or technical college, governed by
the Board of Trustees of the Minnesota State Colleges and Universities; or the University of
Minnesota may sponsor one or more charter schools.
(b) A nonprofit corporation subject to chapter 317A, described in section
exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code of 1986,
may sponsor one or more charter schools if the charter school has operated for at least three years
under a different sponsor and if the nonprofit corporation has existed for at least 25 years.
Subd. 4. Formation of school.
(a) A sponsor may authorize one or more licensed teachers
122A.18, subdivision 1
, to operate a charter school subject to approval by the
commissioner. A board must vote on charter school application for sponsorship no later than 90
days after receiving the application. The school must be organized and operated as a cooperative
under chapter 308A or nonprofit corporation under chapter 317A and the provisions under the
applicable chapter shall apply to the school except as provided in this section. Notwithstanding
, a school district may create a corporation for the purpose of
creating a charter school.
(b) Before the operators may form and operate a school, the sponsor must file an affidavit
with the commissioner stating its intent to authorize a charter school. The affidavit must state
the terms and conditions under which the sponsor would authorize a charter school and how the
sponsor intends to oversee the fiscal and student performance of the charter school and to comply
with the terms of the written contract between the sponsor and the charter school board of directors
under subdivision 6. The commissioner must approve or disapprove the sponsor's proposed
authorization within 90 days of receipt of the affidavit. Failure to obtain commissioner approval
precludes a sponsor from authorizing the charter school that was the subject of the affidavit.
(c) The operators authorized to organize and operate a school, before entering into a contract
or other agreement for professional or other services, goods, or facilities, must incorporate as
a cooperative under chapter 308A or as a nonprofit corporation under chapter 317A and must
establish a board of directors composed of at least five members until a timely election for
members of the charter school board of directors is held according to the school's articles and
bylaws. A charter school board of directors must be composed of at least five members. Any
staff members who are employed at the school, including teachers providing instruction under a
contract with a cooperative, and all parents of children enrolled in the school may participate in
the election for members of the school's board of directors. Licensed teachers employed at the
school, including teachers providing instruction under a contract with a cooperative, must be a
majority of the members of the board of directors before the school completes its third year of
operation, unless the commissioner waives the requirement for a majority of licensed teachers on
the board. Board of director meetings must comply with chapter 13D.
(d) The granting or renewal of a charter by a sponsoring entity must not be conditioned upon
the bargaining unit status of the employees of the school.
(e) A sponsor may authorize the operators of a charter school to expand the operation of the
charter school to additional sites or to add additional grades at the school beyond those described
in the sponsor's application as approved by the commissioner only after submitting a supplemental
application to the commissioner in a form and manner prescribed by the commissioner. The
supplemental application must provide evidence that:
(1) the expansion of the charter school is supported by need and projected enrollment;
(2) the charter school is fiscally sound;
(3) the sponsor supports the expansion; and
(4) the building of the additional site meets all health and safety requirements to be eligible
for lease aid.
(f) The commissioner annually must provide timely financial management training to newly
elected members of a charter school board of directors and ongoing training to other members of
a charter school board of directors. Training must address ways to:
(1) proactively assess opportunities for a charter school to maximize all available revenue
(2) establish and maintain complete, auditable records for the charter school;
(3) establish proper filing techniques;
(4) document formal actions of the charter school, including meetings of the charter school
board of directors;
(5) properly manage and retain charter school and student records;
(6) comply with state and federal payroll record-keeping requirements; and
(7) address other similar factors that facilitate establishing and maintaining complete records
on the charter school's operations.
Subd. 4a. Conflict of interest.
(a) A member of a charter school board of directors is
prohibited from serving as a member of the board of directors or as an employee or agent of or a
contractor with a for-profit entity with whom the charter school contracts, directly or indirectly,
for professional services, goods, or facilities. A violation of this prohibition renders a contract
voidable at the option of the commissioner. A member of a charter school board of directors
who violates this prohibition shall be individually liable to the charter school for any damage
caused by the violation.
(b) An individual may serve as a member of the board of directors if no conflict of interest
under paragraph (a) exists.
(c) A member of a charter school board of directors that serves as a member of the board
of directors or as an employee or agent of or a contractor with a nonprofit entity with whom the
charter school contracts, directly or indirectly, for professional services, goods, or facilities, must
disclose all potential conflicts to the commissioner.
(d) The conflict of interest provisions under this subdivision do not apply to compensation
paid to a teacher employed by the charter school who also serves as a member of the board of
(e) The conflict of interest provisions under this subdivision do not apply to a teacher who
provides services to a charter school through a cooperative formed under chapter 308A when
the teacher also serves on the charter school board of directors.
Subd. 5. Conversion of existing schools.
A board may convert one or more of its existing
schools to charter schools under this section if 60 percent of the full-time teachers at the school
sign a petition seeking conversion. The conversion must occur at the beginning of an academic
Subd. 6. Contract.
The sponsor's authorization for a charter school must be in the form of a
written contract signed by the sponsor and the board of directors of the charter school. The
contract must be completed within 90 days of the commissioner's approval of the sponsor's
proposed authorization. The contract for a charter school must be in writing and contain at least
(1) a description of a program that carries out one or more of the purposes in subdivision 1;
(2) specific outcomes pupils are to achieve under subdivision 10;
(3) admission policies and procedures;
(4) management and administration of the school;
(5) requirements and procedures for program and financial audits;
(6) how the school will comply with subdivisions 8, 13, 16, and 23;
(7) assumption of liability by the charter school;
(8) types and amounts of insurance coverage to be obtained by the charter school;
(9) the term of the contract, which may be up to three years;
(10) if the board of directors or the operators of the charter school provide special instruction
and services for children with a disability under sections
description of the financial parameters within which the charter school will operate to provide the
special instruction and services to children with a disability; and
(11) the process and criteria the sponsor intends to use to monitor and evaluate the fiscal and
student performance of the charter school, consistent with subdivision 15.
Subd. 6a. Audit report.
The charter school must submit an audit report to the commissioner
by December 31 each year. The charter school, with the assistance of the auditor conducting
the audit, must include with the report a copy of all charter school agreements for corporate
management services. If the entity that provides the professional services to the charter school is
exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity must
file with the commissioner by February 15 a copy of the annual return required under section
6033 of the Internal Revenue Code of 1986. If the commissioner receives as part of the audit
report a management letter indicating that a material weakness exists in the financial reporting
systems of a charter school, the charter school must submit a written report to the commissioner
explaining how the material weakness will be resolved. Upon the request of an individual, the
charter school must make available in a timely fashion the minutes of meetings of members,
the board of directors, and committees having any of the authority of the board of directors,
and statements showing the financial result of all operations and transactions affecting income
and surplus during the school's last annual accounting period and a balance sheet containing a
summary of its assets and liabilities as of the closing date of the accounting period.
Subd. 7. Public status; exemption from statutes and rules.
A charter school is a public
school and is part of the state's system of public education. Except as provided in this section, a
charter school is exempt from all statutes and rules applicable to a school, a board, or a district,
although it may elect to comply with one or more provisions of statutes or rules.
Subd. 8. State and local requirements.
(a) A charter school shall meet all applicable state
and local health and safety requirements.
(b) A school sponsored by a school board may be located in any district, unless the school
board of the district of the proposed location disapproves by written resolution.
(c) A charter school must be nonsectarian in its programs, admission policies, employment
practices, and all other operations. A sponsor may not authorize a charter school or program that
is affiliated with a nonpublic sectarian school or a religious institution.
(d) Charter schools must not be used as a method of providing education or generating
revenue for students who are being home-schooled.
(e) The primary focus of a charter school must be to provide a comprehensive program of
instruction for at least one grade or age group from five through 18 years of age. Instruction may
be provided to people younger than five years and older than 18 years of age.
(f) A charter school may not charge tuition.
(g) A charter school is subject to and must comply with chapter 363A and section
(h) A charter school is subject to and must comply with the Pupil Fair Dismissal Act, sections
, and the Minnesota Public School Fee Law, sections
(i) A charter school is subject to the same financial audits, audit procedures, and audit
requirements as a district. Audits must be conducted in compliance with generally accepted
governmental auditing standards, the Federal Single Audit Act, if applicable, and section
A charter school is subject to and must comply with sections
123B.52, subdivision 5
471.88, subdivisions 1, 2, 3, 4, 5, 6, 12, 13, and 15
audit must comply with the requirements of sections
, except to the extent
deviations are necessary because of the program at the school. Deviations must be approved by
the commissioner. The Department of Education, state auditor, or legislative auditor may conduct
financial, program, or compliance audits. A charter school determined to be in statutory operating
debt under sections
must submit a plan under section
123B.81, subdivision 4
(j) A charter school is a district for the purposes of tort liability under chapter 466.
(k) A charter school must comply with sections
120A.22, subdivision 7
260B.171, subdivisions 3 and 5
(l) A charter school is subject to the Pledge of Allegiance requirement under section
121A.11, subdivision 3
Subd. 9. Admission requirements.
A charter school may limit admission to:
(1) pupils within an age group or grade level;
(2) people who are eligible to participate in the graduation incentives program under section
(3) residents of a specific geographic area where the percentage of the population of
non-Caucasian people of that area is greater than the percentage of the non-Caucasian population
in the congressional district in which the geographic area is located, and as long as the school
reflects the racial and ethnic diversity of the specific area.
A charter school shall enroll an eligible pupil who submits a timely application, unless the
number of applications exceeds the capacity of a program, class, grade level, or building. In this
case, pupils must be accepted by lot. If a charter school is the only school located in a town
serving pupils within a particular grade level, then pupils that are residents of the town must be
given preference for enrollment before accepting pupils by lot. If a pupil lives within two miles of
a charter school and the next closest public school is more than five miles away, the charter school
must give those pupils preference for enrollment before accepting other pupils by lot.
A charter school shall give preference for enrollment to a sibling of an enrolled pupil and to
a foster child of that pupil's parents before accepting other pupils by lot.
A charter school may not limit admission to pupils on the basis of intellectual ability,
measures of achievement or aptitude, or athletic ability.
Subd. 10. Pupil performance.
A charter school must design its programs to at least meet
the outcomes adopted by the commissioner for public school students. In the absence of the
commissioner's requirements, the school must meet the outcomes contained in the contract with
the sponsor. The achievement levels of the outcomes contained in the contract may exceed the
achievement levels of any outcomes adopted by the commissioner for public school students.
Subd. 11. Employment and other operating matters.
A charter school must employ or
contract with necessary teachers, as defined by section
122A.15, subdivision 1
, who hold valid
licenses to perform the particular service for which they are employed in the school. The charter
school's state aid may be reduced under section
if the school employs a teacher who
is not appropriately licensed or approved by the board of teaching. The school may employ
necessary employees who are not required to hold teaching licenses to perform duties other than
teaching and may contract for other services. The school may discharge teachers and nonlicensed
employees. A person, without holding a valid administrator's license, may perform administrative,
supervisory, or instructional leadership duties.
The board of directors also shall decide matters related to the operation of the school,
including budgeting, curriculum and operating procedures.
Subd. 12. Pupils with a disability.
A charter school must comply with sections
and rules relating to the education of pupils with a disability
as though it were a district.
Subd. 13. Length of school year.
A charter school must provide instruction each year for at
least the number of days required by section
. It may provide instruction throughout the
year according to sections
Subd. 14. Annual public reports.
A charter school must report at least annually to its
sponsor and the commissioner the information required by the sponsor or the commissioner.
The reports are public data under chapter 13.
Subd. 15. Review and comment.
(a) The department must review and comment on the
evaluation, by the sponsor, of the performance of a charter school before the charter school's
contract is renewed for another contract term. The sponsor must submit to the commissioner
timely information for the review and comment.
(b) A sponsor shall monitor and evaluate the fiscal and student performance of the school,
and may for this purpose annually assess a charter school: (1) in its first, second, or third year of
operation up to $30 per student up to a maximum of $10,000; and (2) in its fourth or a subsequent
year of operation up to $10 per student up to a maximum of $3,500.
Subd. 16. Transportation.
(a) A charter school after its first fiscal year of operation by
March 1 of each fiscal year and a charter school by July 1 of its first fiscal year of operation
must notify the district in which the school is located and the Department of Education if it will
provide its own transportation or use the transportation services of the district in which it is
located for the fiscal year.
(b) If a charter school elects to provide transportation for pupils, the transportation must be
provided by the charter school within the district in which the charter school is located. The state
must pay transportation aid to the charter school according to section
124D.11, subdivision 2
For pupils who reside outside the district in which the charter school is located, the charter
school is not required to provide or pay for transportation between the pupil's residence and
the border of the district in which the charter school is located. A parent may be reimbursed
by the charter school for costs of transportation from the pupil's residence to the border of the
district in which the charter school is located if the pupil is from a family whose income is at or
below the poverty level, as determined by the federal government. The reimbursement may not
exceed the pupil's actual cost of transportation or 15 cents per mile traveled, whichever is less.
Reimbursement may not be paid for more than 250 miles per week.
At the time a pupil enrolls in a charter school, the charter school must provide the parent or
guardian with information regarding the transportation.
(c) If a charter school does not elect to provide transportation, transportation for pupils
enrolled at the school must be provided by the district in which the school is located, according to
123B.88, subdivision 6
124D.03, subdivision 8
, for a pupil residing in the same
district in which the charter school is located. Transportation may be provided by the district
in which the school is located, according to sections
123B.88, subdivision 6
, for a pupil residing in a different district. If the district provides the transportation,
the scheduling of routes, manner and method of transportation, control and discipline of the
pupils, and any other matter relating to the transportation of pupils under this paragraph shall be
within the sole discretion, control, and management of the district.
Subd. 17. Leased space.
A charter school may lease space from a board eligible to be
a sponsor or other public or private nonprofit nonsectarian organization. If a charter school is
unable to lease appropriate space from an eligible board or other public or private nonprofit
nonsectarian organization, the school may lease space from another nonsectarian organization if
the Department of Education, in consultation with the Department of Administration, approves
the lease. If the school is unable to lease appropriate space from public or private nonsectarian
organizations, the school may lease space from a sectarian organization if the leased space
is constructed as a school facility and the Department of Education, in consultation with the
Department of Administration, approves the lease.
Subd. 18. Authority to raise initial working capital.
A sponsor may authorize a charter
school before the applicant has secured its space, equipment, facilities, and personnel if the
applicant indicates the authority is necessary for it to raise working capital. A sponsor may not
authorize a school before the commissioner has approved the authorization.
Subd. 19. Disseminate information.
The sponsor, the operators, and the Department of
Education must disseminate information to the public on how to form and operate a charter school
and how to utilize the offerings of a charter school. Particular groups to be targeted include
low-income families and communities, and students of color.
Subd. 20. Leave to teach in a charter school.
If a teacher employed by a district makes a
written request for an extended leave of absence to teach at a charter school, the district must
grant the leave. The district must grant a leave not to exceed a total of five years. Any request
to extend the leave shall be granted only at the discretion of the school board. The district may
require that the request for a leave or extension of leave be made up to 90 days before the teacher
would otherwise have to report for duty. Except as otherwise provided in this subdivision and
except for section
122A.46, subdivision 7
, the leave is governed by section
but not limited to, reinstatement, notice of intention to return, seniority, salary, and insurance.
During a leave, the teacher may continue to aggregate benefits and credits in the Teachers'
Retirement Association account by paying both the employer and employee contributions
based upon the annual salary of the teacher for the last full pay period before the leave began.
The retirement association may impose reasonable requirements to efficiently administer this
Subd. 21. Collective bargaining.
Employees of the board of directors of a charter school
may, if otherwise eligible, organize under chapter 179A and comply with its provisions. The
board of directors of a charter school is a public employer, for the purposes of chapter 179A, upon
formation of one or more bargaining units at the school. Bargaining units at the school must be
separate from any other units within the sponsoring district, except that bargaining units may
remain part of the appropriate unit within the sponsoring district, if the employees of the school,
the board of directors of the school, the exclusive representative of the appropriate unit in the
sponsoring district, and the board of the sponsoring district agree to include the employees in
the appropriate unit of the sponsoring district.
Subd. 22. Teacher and other employee retirement.
(a) Teachers in a charter school must be
public school teachers for the purposes of chapters 354 and 354a.
(b) Except for teachers under paragraph (a), employees in a charter school must be public
employees for the purposes of chapter 353.
Subd. 23. Causes for nonrenewal or termination of charter school contract.
duration of the contract with a sponsor must be for the term contained in the contract according
to subdivision 6. The sponsor may or may not renew a contract at the end of the term for any
ground listed in paragraph (b). A sponsor may unilaterally terminate a contract during the term
of the contract for any ground listed in paragraph (b). At least 60 days before not renewing or
terminating a contract, the sponsor shall notify the board of directors of the charter school of the
proposed action in writing. The notice shall state the grounds for the proposed action in reasonable
detail and that the charter school's board of directors may request in writing an informal hearing
before the sponsor within 14 days of receiving notice of nonrenewal or termination of the
contract. Failure by the board of directors to make a written request for a hearing within the
14-day period shall be treated as acquiescence to the proposed action. Upon receiving a timely
written request for a hearing, the sponsor shall give reasonable notice to the charter school's board
of directors of the hearing date. The sponsor shall conduct an informal hearing before taking
final action. The sponsor shall take final action to renew or not renew a contract by the last day
of classes in the school year. If the sponsor is a local board, the school's board of directors may
appeal the sponsor's decision to the commissioner.
(b) A contract may be terminated or not renewed upon any of the following grounds:
(1) failure to meet the requirements for pupil performance contained in the contract;
(2) failure to meet generally accepted standards of fiscal management;
(3) violations of law; or
(4) other good cause shown.
If a contract is terminated or not renewed under this paragraph, the school must be dissolved
according to the applicable provisions of chapter 308A or 317A, except when the commissioner
approves the decision of a different eligible sponsor to authorize the charter school.
(c) If at the end of a contract term, either the sponsor or the charter school board of directors
wants to voluntarily terminate the contract, a change in sponsors is allowed if the commissioner
approves the decision of a different eligible sponsor to authorize the charter school. The party
intending to terminate the contract must notify the other party and the commissioner of its intent
at least 90 days before the date on which the contract ends. The sponsor that is a party to the
existing contract at least must inform the approved different eligible sponsor about the fiscal and
student performance of the school. If no different eligible sponsor is approved, the school must be
dissolved according to applicable law and the terms of the contract.
(d) The commissioner, after providing reasonable notice to the board of directors of a charter
school and the existing sponsor, and after providing an opportunity for a public hearing, may
terminate the existing sponsorial relationship if the charter school has a history of:
(1) financial mismanagement; or
(2) repeated violations of the law.
Subd. 23a. Related party lease costs.
(a) A charter school is prohibited from entering
a lease of real property with a related party as defined in subdivision 26, unless the lessor is a
nonprofit corporation under chapter 317A or a cooperative under chapter 308A, and the lease cost
is reasonable under section
124D.11, subdivision 4
, clause (1).
(b) A lease of real property to be used for a charter school, not excluded in paragraph (a),
must contain the following statement: "This lease is subject to Minnesota Statutes, section
124D.10, subdivision 23a
(c) If a charter school enters into as lessee a lease with a related party and the charter school
subsequently closes, the commissioner has the right to recover from the lessor any lease payments
in excess of those that are reasonable under section
124D.11, subdivision 4
, clause (1).
Subd. 24. Pupil enrollment upon nonrenewal or termination of charter school contract.
If a contract is not renewed or is terminated according to subdivision 23, a pupil who attended the
school, siblings of the pupil, or another pupil who resides in the same place as the pupil may enroll
in the resident district or may submit an application to a nonresident district according to section
at any time. Applications and notices required by section
must be processed
and provided in a prompt manner. The application and notice deadlines in section
apply under these circumstances. The closed charter school must transfer the student's educational
records within ten business days of closure to the student's school district of residence where the
records must be retained or transferred under section
120A.22, subdivision 7
Subd. 25. Extent of specific legal authority.
(a) The board of directors of a charter school
may sue and be sued.
(b) The board may not levy taxes or issue bonds.
(c) The commissioner, a sponsor, members of the board of a sponsor in their official capacity,
and employees of a sponsor are immune from civil or criminal liability with respect to all
activities related to a charter school they approve or sponsor. The board of directors shall obtain at
least the amount of and types of insurance required by the contract, according to subdivision 6.
Subd. 26. Definitions.
For purposes of this section and section
(1) A "related party" is an affiliate or close relative of the other party in question, an affiliate
of a close relative, or a close relative of an affiliate.
(2) "Affiliate" means a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, another person.
(3) "Close relative" means an individual whose relationship by blood, marriage, or adoption
to another individual is no more remote than first cousin.
(4) "Person" means an individual or entity of any kind.
(5) "Control" includes the terms "controlling," "controlled by," and "under common control
with" and means the possession, direct or indirect, of the power to direct or cause the direction of
the management, operations, or policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
History: 1991 c 265 art 3 s 38; art 9 s 3; 1992 c 499 art 12 s 1; 1993 c 224 art 9 s 2-12; art
14 s 16; 1994 c 465 art 2 s 1; 1994 c 647 art 9 s 1,2; 1Sp1995 c 3 art 9 s 2; art 16 s 13; 1996 c
412 art 4 s 2; 1Sp1997 c 4 art 5 s 5-9; 1998 c 397 art 2 s 2-21,164; art 11 s 3; 1998 c 398 art 2 s
4; art 5 s 3,55; 1999 c 241 art 5 s 7-11; 2000 c 489 art 6 s 18-23; 1Sp2001 c 6 art 2 s 20-26,66;
2002 c 352 s 10; 2003 c 120 s 3; 2003 c 130 s 12; 1Sp2003 c 9 art 2 s 21-25; art 12 s 10,11; 2005
c 107 art 2 s 60; 1Sp2005 c 5 art 2 s 59-62; 2006 c 263 art 2 s 15; 2007 c 146 art 2 s 23-25,47