Establishes the Task Force on Charter School Governance. Establishes a per pupil allocation funding mechanism based on a global total of all enacted department of education budget appropriations minus supplemental requirements. Appropriates funds. (HB1136 HD1)

A BILL FOR AN ACT

SECTION 1. The legislature supported the concept of new century charter schools as "a new approach to education that is free of bureaucratic red tape and accommodating of the individual needs of students to allow the State to dramatically improve its educational standards for the twenty-first century" (Act 62, Session Laws of Hawaii 1999).

However, the legislature recognizes that the existing charter school law must be improved. The auditor recently audited the Na Wai Ola Waters of Life Charter School and found that "The charter school law lacks clear authority and responsibility assignments, resulting in conflicting roles and uncertainty. It also provides little basis for ensuring accountability and school viability, and does not address issues that may expose the State to unintended liabilities and entanglements."

The legislature also finds a need for more equitable and stable funding for the basic operations of new century charter schools. Hawaii's twenty-seven new century charter schools employ about five hundred public employees and educate about five thousand students. These schools receive funding for their operations and facilities through a per pupil allocation, according to a statutory formula that is based on an outdated expenditure report. Thus, while the needs of regular public schools are reflected in new budgets, charter school funding is frozen in the past, unable to accommodate new costs.

In 2004, charter schools received $4,600 per pupil, rather than $5,700 per pupil according to the statutory formula. The department of education's (DOE's) most recent consolidated expenditure report (2003-2004) indicated that regular public school students were financially supported with over $8,000 for every student.

The purpose of this Act is to:

SECTION 2. Section 302A-1185, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) Beginning with the fiscal year [2004-2005 supplemental] 2005-2006 budget request, and each budget request thereafter, the charter school administrative office shall submit a request for general fund appropriations for each new century charter school based upon:

[The legislature shall make an appropriation based upon the budget request; provided that the legislature may make additional appropriations for collective bargaining increases for charter school employee members of collective bargaining units, fringe and other employee benefits, facility costs, and for other requested amounts.] The governor, pursuant to chapter 37, may impose restrictions or reductions on charter school appropriations similar to those imposed on other public schools.

(b) All federal financial support for new century charter schools shall be no less than all other public schools; provided that if administrative services related to federal grants and subsidies are provided to the charter school by the department, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the charter school's federal grants and subsidies. The department shall provide the charter school administrative office with all federal grant proposals that include charter schools as potential recipients and timely reports on federal grants received for which charter schools may apply. Federal funds received by the department for charter schools shall be transferred to the charter school administrative office for distribution to charter schools in accordance with the federal requirements.

Any new century charter school shall be eligible to receive any supplementary financial grant or award for which any other public school may submit a proposal, or any supplemental federal grants limited to new century charter schools; provided that if department administrative services, including funds management, budgetary, fiscal accounting, or other related services, are provided with respect to these supplementary grants, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the supplementary grant for which the services are used.

All additional funds that are generated by the local school boards, not from a supplementary grant, shall be separate and apart from allotted funds and may be expended at the discretion of the local school boards."

2. By amending subsection (f) to read:

"(f) The department shall transfer, no later than November 15, additional funds from EDN 100 to EDN 600 for new century charter schools whose student enrollment, verified on or immediately prior to October 15 as provided for by subsection (c), exceeds the new century charter schools' projected student enrollment, in an amount corresponding to the number of additional students and the per pupil allocation. The charter school administrative office shall transfer from EDN 600 to EDN 100 any excess per pupil allocations for new century charter schools whose verified student enrollment is lower than their projected student enrollment in an amount corresponding to the lower number of students and the per pupil allocation."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $           or so much thereof as may be necessary for fiscal year 2005-2006 and the sum of $          or so much thereof as may be necessary for fiscal year 2006-2007 for per pupil allocations to new century charter schools.

The sums appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 4. (a) There is established the task force on charter school governance to identify and recommend to the legislature revisions to the existing charter school law, to help create an effective framework for overseeing and supporting new and existing charter schools. The recommendations of the task force shall, at a minimum, address:

(b) The task force shall consist of fourteen members as follows:

(2) The state auditor or the auditor's designee;

The charter school administrative office shall staff the task force.

(c) The task force on charter school governance may form advisory subcommittees to obtain input from key stakeholders as determined necessary by the task force.

(d) Members of the task force on charter school governance shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

(e) The charter school administrative office shall submit a report to the legislature, of the task force's progress, findings, and recommendations, no later than twenty days prior to the convening of the regular session of 2006.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $       or so much thereof as may be necessary for fiscal year 2005-2006 to support the operations of the task force on charter school governance.

The sum appropriated shall be expended by the charter schools administrative office for the purposes of this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval; provided that sections 3 and 5 shall take effect on July 1, 2005.