STAND

STAND. COM. REP. NO. 1227

Honolulu, Hawaii

, 2005

RE: S.B. No. 1643

S.D. 2

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committees on Education and Labor & Public Employment, to which was referred S.B. No. 1643, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO EDUCATION,"

beg leave to report as follows:

The purpose of this bill is to improve public education through the operation of new century charter schools by clarifying and strengthening the laws that govern them. Specifically, this bill:

(1) Improves the new century charter school laws pertaining to their establishment, relationship with the Department of Education (DOE) and DOE schools, weighted student formula, personnel, and accountability;

(2) Ensures more equitable and stable funding for the basic operations of new century charter schools by establishing and appropriating funds for a per pupil allocation funding mechanism based on the consolidated annual financial report and on known, quantifiable, supplemental requirements;

(3) Allows new century charter school employees to participate in the State's worker' compensation system;

(4) Enables DOE charter schools to receive federal grant moneys under the Individuals with Disabilities Education Act (IDEA); and

(5) Clarifies the administrative hearing procedures relating to the education of handicapped children.

The Hawaii Charter Schools Network, Inc., Ho'okako'o Corporation, and many concerned individuals testified in support of this bill. The Kamehameha Schools, Hawaii State Teachers Association, and many concerned individuals supported the intent of this measure. Many concerned individuals supported this bill with amendments. The Governor's administration, DOE, Charter School Administrative Office (CSAO), Department of Human Resources Development, and Hawaii Government Employees Association offered comments.

Your Committees have amended this bill by:

(1) Deleting certain unnecessary language in the purpose section of Part I relating to the accountability of new century charter schools;

(2) Clarifying the purpose of Part II of the bill, relating to accountability, personnel, and the weighted student formula of new century charter schools, to reflect amendments to the bill;

(3) Clarifying that the plan to be developed by the local school board shall include the governance structure of the new century charter school that incorporates a conflict of interest policy, but not a conflict of interest policy specifically for school employees serving on the local school board;

(4) Requiring the State to afford administrative, support, and instructional staff in charter schools full participation in the State's retirement, workers' compensation, unemployment insurance, temporary disability insurance, and health benefits systems;

(5) Requiring DOE, to the extent possible, to provide its position listings to CSAO and any interested local school board of any new century charter school, rather than afford the local school board of any new century charter school full participation in the DOE and other departmental personnel position listings;

(6) Deleting the requirement that DOE provide credit for service to administrative, support, and instructional staff in charter schools equal to service in DOE schools;

(7) Specifying that the provisions relating to movement of personnel between DOE and new century charter schools pertain to instructional staff and not all employees;

(8) Allowing a charter school two years to bring student performance into compliance with statewide standards, and one year to improve the school's fiscal accountability and to conform with the components of the charter, after the school is placed on probationary status;

(9) Clarifying that a nonprofit organization may submit a letter of intent to the Board of Education to operate and manage the new century charter school;

(10) Providing that if, at any time, the board of directors of the nonprofit organization governing the new century conversion charter school votes to discontinue its relationship with the charter school, the charter school may submit an application to the board to continue as a conversion school without the participation of the nonprofit organization;

(11) Prohibiting a chief executive officer, chief administrative officer, executive director, or otherwise designated head of a school from serving as the chair, rather than an officer, of the local school board;

(12) Deleting the provisions establishing the working group to review the state Auditor's recommendations regarding the charter schools' exemptions from state laws;

(13) Creating and appropriating funds for the Task Force on Charter School Governance to identify and recommend to the Legislature revisions to the existing charter school law and to help create an effective framework for overseeing and supporting new and existing charter schools;

(14) Amending the provisions relating to the per pupil allocation of new century charter schools by:

(a) Requiring that the per pupil allocation to schools be based on figures reflected in the most recently enacted DOE budget;

(b) Requiring that the CSAO's request for general fund appropriations for each school also be based on fringe benefit costs that must be included in the Department of Budget and Finance's annual budget request;

(c) Removing the provision that prohibits deductions from the per pupil allocation without the written approval of the executive director of CSAO, and instead prohibiting fringe benefit costs from being charged directly to or deducted from the school's per pupil allocations;

(d) Allowing the Legislature to make additional appropriations for collective bargaining increases for charter school employee members of collective bargaining units;

(e) Allowing, rather than requiring, the Legislature to make additional appropriations for fringe, workers' compensation, and other employee benefits, facility costs, and other requested amounts;

(f) Requiring the Department of Budget and Finance to transfer additional funds to EDN 600 for schools in which student enrollment exceeds the schools' projected enrollment;

(g) Requiring CSAO to transfer from EDN 600 to the Department of Budget and Finance any excess per pupil allocations for schools in which verified student enrollment is lower than their projected student enrollment;

(h) Appropriating $39,500,200, for fiscal year 2005-2006, and $45,550,416 for fiscal year 2006-2007, for the per pupil allocations to new century charter schools; and

(i) Appropriating funds for charter school fringe benefits;

(15) Clarifying that the funds appropriated to allow new century charter school employees to participate in the State's worker' compensation system shall include payment of all previous unpaid workers' compensation claims incurred by new century charter schools;

(16) Clarifying that the purpose of Part V of the bill is to ensure compliance with federal regulations under IDEA, but not to enable DOE charter schools to receive federal grant moneys; and

(17) Making technical, nonsubstantive amendments for clarity, consistency, and style.

As affirmed by the records of votes of the members of your Committees on Education and Labor & Public Employment that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1643, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1643, S.D. 2, H.D. 1, and be referred to the Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Education and Labor & Public Employment,

____________________________ KIRK CALDWELL, Chair		____________________________ ROY TAKUMI, Chair