relating to BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.3    Section 1. Minnesota Statutes 2012, section 124D.10, subdivision 23a, is amended to
1.4read:
1.5    Subd. 23a. Related party lease costs. (a) A charter school is prohibited from
1.6entering a lease of real property with a related party unless the lessor is a school district, a
1.7nonprofit corporation under chapter 317A or a cooperative under chapter 308A, and the
1.8lease cost is reasonable under section 124D.11, subdivision 4, clause (1).
1.9    (b) For purposes of this section and section 124D.11:
1.10    (1) "related party" means an affiliate or immediate relative of the other party in
1.11question, an affiliate of an immediate relative, or an immediate relative of an affiliate;
1.12    (2) "affiliate" means a person that directly or indirectly, through one or more
1.13intermediaries, controls, is controlled by, or is under common control with another person;
1.14    (3) "immediate family" means an individual whose relationship by blood, marriage,
1.15adoption, or partnering is no more remote than first cousin;
1.16    (4) "person" means an individual or entity of any kind; and
1.17    (5) "control" means the ability to affect the management, operations, or policy
1.18actions or decisions of a person, whether through ownership of voting securities, by
1.19contract, or otherwise.
1.20    (c) A lease of real property to be used for a charter school, not excluded in paragraph
1.21(a), must contain the following statement: "This lease is subject to Minnesota Statutes,
1.22section 124D.10, subdivision 23a."
1.23    (d) If a charter school enters into as lessee a lease with a related party and the
1.24charter school subsequently closes, the commissioner has the right to recover from the
1.25lessor any lease payments in excess of those that are reasonable under section 124D.11,
1.26subdivision 4 , clause (1).
1.27EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014
1.28and later.

1.29    Sec. 2. Minnesota Statutes 2012, section 124D.11, subdivision 1, is amended to read:
1.30    Subdivision 1. General education revenue. (a) General education revenue must
1.31be paid to a charter school as though it were a district. The general education revenue
1.32for each adjusted marginal cost pupil unit is the state average general education revenue
1.33per pupil unit, plus the referendum equalization aid allowance in the pupil's district of
1.34residence, minus an amount equal to the product of the formula allowance according to
2.1section 126C.10, subdivision 2, times .0485 .0465, calculated without basic skills revenue,
2.2extended time revenue, alternative teacher compensation revenue, equity revenue, teacher
2.3development and evaluation revenue, pension adjustment revenue, transition revenue, and
2.4transportation sparsity revenue, plus basic skills revenue, extended time revenue, basic
2.5alternative teacher compensation aid according to section 126C.10, subdivision 34, equity
2.6revenue, teacher development and evaluation revenue, pension adjustment revenue, and
2.7transition revenue as though the school were a school district. The general education
2.8revenue for each extended time marginal cost pupil unit equals $4,378 $4,722.
2.9(b) Notwithstanding paragraph (a), for charter schools in the first year of operation,
2.10general education revenue shall be computed using the number of adjusted pupil units
2.11in the current fiscal year.
2.12EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
2.13and later.

2.14    Sec. 3. Minnesota Statutes 2012, section 124D.11, subdivision 2, is amended to read:
2.15    Subd. 2. Transportation revenue. Transportation revenue must be paid to a charter
2.16school that provides transportation services according to section 124D.10, subdivision 16,
2.17according to this subdivision. Transportation aid shall equal transportation revenue.
2.18In addition to the revenue under subdivision 1, a charter school providing
2.19transportation services must receive general education aid equal to the sum of the product
2.20of (i) an amount equal to the product of the formula allowance according to section
2.21126C.10, subdivision 2 , times .0485 .0465, plus the transportation sparsity allowance for
2.22the school district in which the charter school is located times (ii) the adjusted marginal
2.23cost pupil units, plus the product of $223 times the extended time marginal cost pupil units.
2.24EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
2.25and later.

2.26    Sec. 4. Minnesota Statutes 2012, section 124D.11, subdivision 4, is amended to read:
2.27    Subd. 4. Building lease aid. (a) When a charter school finds it economically
2.28advantageous to rent or lease a building or land for any instructional purposes and it
2.29determines that the total operating capital revenue under section 126C.10, subdivision
2.3013 , is insufficient for this purpose, it may apply to the commissioner for building lease
2.31aid for this purpose. The commissioner must review the lease as provided in section
2.32124D.10, subdivision 17, and either approve or deny a lease aid application using the
2.33following criteria:
3.1(1) the reasonableness of the price based on current market values;
3.2(2) the extent to which the lease conforms to applicable state laws and rules; and
3.3(3) the appropriateness of the proposed lease in the context of the space needs and
3.4financial circumstances of the charter school.
3.5A charter school must not use the building lease aid it receives for custodial, maintenance
3.6service, utility, or other operating costs.
3.7    (b) The amount of annual building lease aid per pupil unit served for a charter school
3.8for any year leasing a building from any private, nonprofit, nonsectarian organization, any
3.9private property owner, or any sectarian organization, or an affiliated building corporation,
3.10school district, or other governmental entity on which debt or capital lease obligations
3.11remain based on original issuance for building purchase, construction, or renovation shall
3.12not exceed the lesser of (a) (1) 90 percent of the approved cost or (b) (2) the product of the
3.13pupil units served for the current school year times $1,200 $1,314.
3.14(c) The amount of annual building lease aid for a charter school leasing from a
3.15related nonprofit organization or parent company, an affiliated building corporation, school
3.16district, or other governmental entity on which the original debt or capital lease obligations
3.17related to the original purchase have been retired shall be based on the lesser of (1) $3 per
3.18square foot; or (2) the product of pupil units served for the current school year times $200.
3.19EFFECTIVE DATE.This section is effective July 1, 2013, except that the
3.20amendment changing "$1,200" to "$1,314" is effective for fiscal year 2015 and later.

3.21    Sec. 5. APPROPRIATIONS.
3.22    Subdivision 1. Department of Education. The sums indicated in this section are
3.23appropriated from the general fund to the Department of Education for the fiscal years
3.24designated.
3.25    Subd. 2. Charter school building lease aid. For building lease aid under Minnesota
3.26Statutes, section 124D.11, subdivision 4:

3.27		$	,000	.....	2014
3.28		$	,000	.....	2015

3.29The 2014 appropriation includes $...,000 for 2013 and $...,000 for 2014.
3.30The 2015 appropriation includes $...,000 for 2014 and $...,000 for 2015.