JOINT POWERS ACT: CHARTER SCHOOLS: Charter schools formed as contemplated by
Minn. Stat. § 120.064 (1992 and Supp. 1993) are not "governrnental unirs" as the term is
defined in the Joint Powers Act, Minn. Stat. §471.59, subd. 1 (_1992); consequently, such
charter schools may not be a party to a joint powers agreement.

1007

ware-n ll, 19% (cr. Ref. co lanham 160¢)

Thomas S. Deans. Esq.

Knutson, Flynn, I-Ietland. Deans & Olsen
Suite 1900

Minnesota World Trade Center

30 East Seventh Street

St. Paul, Minnesota 55101

Dear Mr. Deans:

In your letter to Attorney General Hubert H. Hurnphrey lII you present substantially

the following:
FACTS

Independent Schooi District No. 834 (Stillwater) is the spc.'isor of a
charter school formed pursuant to Minn. Stat. § 120.064 (Supp. 1993). The
charter school. referred to as New Heights School, is organized and operated as
a nonprofit corporation under Minn. Stat. ch. 317A and provides an educational
program as an outcome-based school as contemplated by section 120.064.

District No. 834 is a member of the Minnesota School District Liquid
Asset Fund Plus (MSDLAF+). a Minnesota joint powers entity formed
; pursuant to Minn. Stat. § 471.59. New Height.s School; would;like to become a
-'" .=.-”~"== member of the MSDLAF+.

You then ask substantially the following:
QUESTION

Whether New Heights School is authorized under the provisions of Minn.
Stat. § 471.59 to become a member of MSDLAF+?

 

Thomas S. Deans. Esq.
Page 2

lerch 11, ngu

OPINION

In our opinion. New Heights Schooi. as a charter school. is not authorized under Minn.
Stat. § 471.59 (1992l, the loint Powers Act. to become a member ot` a joint powers
organization because it is not a governmental unit as the term is used in the Act.

Uuder the loint Powers Act_ only governmental units may enter into agreements for the
joint exercise of their powers. in pertinent part. subdivision l of section 471.59 provides that:

The term " governmental unit" as used in this section includes every city,
countyt town. school district other political subdivision of this or another state,
another state. and any agency ot the State ot` Minnesota or the United States,
and includes any instrumentality or` a governmental unit. For the purpose of
this section. an instrumentality ot` a governmental unit means an instrumentality
having independent policy making and appropriating authority.

To qualify as a "governmental miit" under subdivision l, we conclude that such a unit must be
a public entity. Except for the last term. "any instrumentality ot` a governmental unit," all of
the preceding examples listed in subdivision l are clearly public entities. Although there may
be instances in which an instrumentality of a governmental unit need not necessarily be a

public entity, that is not the case under:section 471.59.
Ejusdem generis. a rule ot` statutory construction provides that "[a]s a general rule the
‘-_-_”= _~;~vords of a statute are to be construed with reference to tire words with which they are
associated. and when those used in a particular sense and having a specific meaning are
followed by others of a general meaning, the latter are to be construed as applicable only to
things of a like nature to those designated by the former." M…M
Di . No , 151 Minn. 52, 56~7, 185 N.W. 961, 963 (1921). “The principal
‘ n underlying rule of ejusdem generis is that the legislature had in mind things of the same kind
and was speaking of them as a class." State v. §nd, 232 Minn. 266. 272. 45 N.W.2d 378,
381 (1950). Since all of the preceding examples listed in subdivision l are public entities, it is

'- _ reasonable to conclude that the term "any instrumentality of a governmental unit" includes

 

Thomas S. Deans. Esq.
Page 3
March ll, ;99a

only public entities. 'I'hus. although the term " governmental unit" as used in subdivision l is

broad in its scope, it encompasses only public entities and does not include private entities

Compare Minn. Stat. §471.16, subd. 1 (1992) which allows various public entities to

"cooperate among themselves or with any nonprofit organization" to jointly operate
recreational programs (Emphasis added.)

A charter school is not a "governmental unit." Minn. Stat. § 120.064, subd. 4(a)
(Supp. 1993} provides that a charter school "shall be organized and operated as a cooperative
under chapter 308A or nonprofit corporation under chapter 317A." Minn. Stat. chs. 308A md
317A are two of the traditional options t`or the creation of private organizations and
companies1 Nothing in either chapter suggests that organizing as either a cooperative or a
nonprofit corporation would result in the formation of a governmental unit.

Similarly, nothing in Minn. Stat. § 120.064 establishes a charter school as a public
entity or a governmental unit. Although a school district or, in some cases. the State Board of
Education acts as the "sponsor" of a charter school, the charter school is thereafter generally
organized. governed and operated aia a private eittity. Minn. Stat. § 120.064. subd. 4(a)
(Supp. 1993). The relationship between the sponsor and the charter school is essentially

-=_ contractual and the contract may be terminated. Minn. Stat. § 120..064 subds. 5 and 21
(Supp. 1993).

Chartcr schools are not generally subject to state laws affecting public education
Except as otherwise provided in section 120.064. a charter school is "exempt from glme
grid grigg app|j§gble tt_) a school board ;ir a sghgol district . . . ." Minn. Stat. § 120.064,
subd. 7 (1992) (emphasis added). While subdivision 7 enables a charter school to “Qe§_t_§g

ggmply with one or more provisions of statutes or rules." that language only allows a charter

 

1. A school district. by contrast. is statutorily classified as a public corporation Minn.
Stat. § 122.02 (1992).

 

‘li{!~

 

Thomas S. Deans. Esq.
Page 4

llar'ch ll , 19914

school to assume obligations: it does not empower a charter school to assume the authority of a
school district nor does it alter the legal status of a charter school as a private enrity. l_g_,_
(emphasis added). Subdivisions 8, 9 and 12 of section 120.064 ( 1992 and Supp. 1993}
establish minimal stanitory requirements which a charter school must meet to be eli't"-'¢le for
public funding. Although the standards are similar or identical to some of those mem of
public schools.:“l nothing in these subdivisions transforms a charter school formed as a private.
nonprofit corporation into a public or governmental body. Sirnilarly, the eligibility for public
funding does not alter the private nature of a charter school. Minn. Stat. § 124.248 (1992 and
Supp. 1993) allows a charter school to qualify for certain state education aids "as though it
were a school district." 'I`his language certainly suggests that a charter school is not a school
district Moreover, receipt of public funding for education is not limited to public schools
§_t;e;_, g_=_gg, Minn. Stat. § 123.3514 (1992 and Supp. 1993) (Private, post-secondary institutions
eligible to receive public education funding under the Post-Secondary Enrollment Options
Act); Minn. Stat. §§ 123.931-.947 (1992 and Supp. 1993) (Public education aids for nonpublic
school children); and Minn. Stat. § 125.23 (1992} (public education aid for private alternative
education programsl. The statutory language requiring that a charter school "must be
nonsectarian" is language generally applied to private entities to be eligible for public
education starting mg g._g_, Minn. stat §123.3514, subd. 4 (1992)3 and Minn. stat
§ 126.23 (1992).4

 

z " . 2. For example, a charter school may not charge tuition and is required to comply with the

Pupil Fair Dismissal Act.

`3. The Post-Secondary Enrollment Options Act permits enrollment only in nonseetarian

CC\.II,'SCS .

4. Among other prerequisites an alternative program must be nonsectarian to qualify for

public education aid.

Thomas S. Deaiis. Esq.
Page 5
March ll, 199u

Foi;`some other purposes. section 120.064 treats a charter school like a school district.
For example, subdivision S(h) (Supp. 1993) subjects a charter school to the same audit
requirements as a school district and subdivision S(i) (Supp. 1993) treats it as a school district
for purposes of tort liability. These provisions, however. recognize the State’s interest in
promoting the public funding resources used to operate a charter school; they do not change
the private namre of the nonprofit corporation Subdivision 20 of section 120.064 makes a
charter school’s board of directors a public employer "for the purposes of chapter 179A."
Su`bdivision 20 thereby establishes a procedure for the charter school and its employees to use
to address labor relations issues: it does not transform the private nonprofit corporation into a
governmental unit.

According to section 120.064, subdivision ll (Supp. 1993), a charter school must
employ teachers "who hold valid licenses to perform the particular service for which they are
employed in the [charter] schooi." The requirement to employ licensed teachers does not,
however, make a charter school a governmental unit. Part of Minnesota’s Compulsory

Attendance Law. Minn. Stat. § 120.201. subd. 7(1) (1992), includes the use of licensed

    
  
  
  
  
  
   
  

teachers as an acceptable alternative for private schools to meet compulsory attendance

standards. More irnportantly, nothing in section 120.064 provides charter school teachers With

‘l\lr‘~

_ the statutory tenure and seniority protection generally afforded public school teachers in
_ Minncsota. §e§, e_.g,,, Minn. Stat. § 125.12 (Supp. 1993) (the continuing coth law); and
" ._ __§ 125. 17 (Supp. 1993) (the teacher tenure act for school districts in cities of the first class). In
-addition, unlike public school teachers generally, charter school teachers are not members of
the Teachers Retirenient Association (TRA). A charter school teacher. if on leave from a
n .`piiblic school district to teach at the charter school. may elect to condone TRA membership

deer the procedures established in Mnm. side § 120.064. subd 19 (1992) which provide

 

 

 

Thomas S. Deans. Esq.
Page o`
March ll, lggu

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 subdivision

Note that the teacher’s TRA contribution is based upon the salary when employed by the
school district. not the salary received from the charter school.

In conclusion. charter schools are organized and operated as private cooperatives or
private nonprofit corporations Nothing contained iri section 120.064 alters the private nature
of charter schools or makes them governmental units for purposes ot` the loint Powers Act.

Very truly yours.

HUBERT H. HUMPHREY in ~
Attorney General

CHARLES '1`. MO'I'I'L
Assistant Attorney General