When charter schools were created in Minnesota during the early 1990s, they were not allowed to own buildings. Because the programs were new and experimental, the thinking was that it was unwise for them to take on long-term mortgage debt.

But as the number of programs grew and space was sometimes tough to finance, the Legislature agreed in 1997 to give charters building lease aid of up to $1,200 per pupil.

Since then, several charter boards have found a legal way around the no-ownership rule by setting up separate, nonprofit building corporations. A legislative auditor's report said the practice circumvents the law and recommended it be reviewed by the state. Legislative working groups have conducted that review and are offering several smart changes to existing charter school facilities law.

A Senate suggestion would require charters to receive approval from the state education commissioner before creating a nonprofit, properly giving the state more oversight. Both the House and Senate recommend that a charter operate successfully for a period of time — five to eight years — before it can set up a building company, ensuring that the program is well-established before pursuing property ownership.

And one proposal would adopt federal nonprofit conflict of interest rules for charter boards and their affiliated groups. That would give the state more authority to void charter contracts when clear conflicts occur.

Two recent examples illustrate the underlying issues. Tarek Ibn Ziyad (TIZA) Academy, a charter school attended by mostly Muslim immigrants, set up a nonprofit to purchase its two buildings in Inver Grove Heights and Blaine. Questions were raised about how long lease aid should be paid when a building is already paid for.

In the Stillwater area, St. Croix Preparatory Academy's nonprofit is building a $19 million, 144,000-square-foot building in Baytown Township. That has community members asking whether a new school that size should be approved by voters like traditional public schools.

Though charter schools are tax-supported public schools, they have independent boards and are not subject to some state regulations. The idea is to give them freedom to try innovative educational approaches.

A more direct way to resolve the charter school buy-or-lease question would be to eliminate the nonprofit middlemen and let charters buy buildings directly. But because more than 20 schools are using that arrangement, policymakers are choosing to better regulate them. The initiatives clarify the terms, including criteria for avoiding conflicts of interest among members of the nonprofit and charter boards. Current law is silent about the affiliated nonprofits.

Still, even with the current proposals, additional work remains to be done on state rules as more charter programs move into building ownership. Some of the affiliated building groups rely on bond brokers to raise money for schools, then pay for the bonds with state lease aid. Because taxpayer dollars were used to buy or construct the buildings, at some point the state should determine how the public can benefit should the properties be sold.

For now, legislators have put forward a series of ideas that would strengthen rules on charter school leasing and purchasing agreements. In upcoming conference committees, lawmakers should combine the best of the proposals to set clearer rules for charter school facilities.