SB2719 SD2

Report Title:

Education; Charter Schools; Recodification

Description:

Omnibus public charter schools recodification. Creates a new chapter on charter school governance. (SD2)

THE SENATE	S.B. NO.	2719
TWENTY-THIRD LEGISLATURE, 2006		S.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO EDUCATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
PART I

SECTION 1. The purpose of this Act is to adopt numerous priority proposals developed by the task force on charter school governance established by Act 87, Session Laws of Hawaii 2005, by:

(1) Repealing part IV, subpart D, of chapter 302A, Hawaii Revised Statutes, relating to new century charter schools and establishing a new chapter in the Hawaii Revised Statutes for the administration and governance of public charter schools, designated as chapter 302B, Hawaii Revised Statutes;

(2) Reorganizing sections of the law to create clarity, including separating sections for the establishment of start-up and conversion charter schools;

(3) Enhancing and clarifying the powers and duties of the charter school administrative office;

(4) Renaming the charter school review panel as the charter school authorization panel, expanding its membership, and assigning this panel the role of authorizer;

(5) Setting an annual limit to new charter schools based in part on the existing charter schools accredited by the Western Association of Schools and Colleges;

(6) Empowering the local school boards to negotiate supplemental collective bargaining agreements with the exclusive representatives of their employees; and

(7) Making various other amendments to the Hawaii Revised Statutes consistent with the new charter schools law.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to read as follows:

"CHAPTER 302B

PUBLIC CHARTER SCHOOLS

§302B-1 Purpose. The purpose of this chapter is to authorize the establishment of a charter school system and set forth standards for the governance, administration, support, financing, autonomy, and accountability for charter schools, including start-up charter schools and conversion charter schools.

The charter school system is an important complement to the department of education's school system, one that empowers local school boards and their charter schools by allowing more autonomy and flexibility and placing greater responsibility at the school level. The charter school system is made up of the charter school administrative office, the charter school authorization panel, and individual charter schools with differing visions, missions, and approaches meeting the various needs and desires of Hawaii's communities.

The purposes of the charter school system include but are not limited to:

(1) Providing administrators, parents, students, and teachers with expanded alternative public school choices in the types of schools, educational programs, opportunities, and settings, including services to underserved populations, geographical areas, or communities; and

(2) Encouraging and, when resources and support are provided, serving as a research venue for the development, use, and dissemination of alternative and innovative approaches to educational governance, financing, administration, curriculum, technology, and teaching strategies.

§302B-2 Definitions. Whenever used in this chapter, unless the context otherwise requires:

"Authorizer" means a board, panel, or agency designated by the legislature with the powers and duties to:

(1) Review applications for new charter schools;

(2) Issue or deny new charters;

(3) Ensure that detailed implementation plans and performance contracts are designed to maximize school financial and academic success;

(4) Review periodically existing charter school operations;

(5) Review and monitor the organizational viability of charter schools;

(6) Monitor and hold charter schools accountable. Be responsible not for success or failure of individual schools, but for holding schools accountable for their performance;

(7) Renew charters; and

(8) Revoke a charter.

"Charter school" refers to those public schools holding charters to operate as charter schools, including start-up and conversion charter schools, under this chapter, with the flexibility to implement alternative frameworks with regard to curriculum, facilities management, instructional approach, length of the school day, week, or year, and personnel management.

"Charter school authorization panel" means the panel established in section 302B-4, with the powers and duties of a charter school authorizer.

"Conversion charter school" means:

(1) Any department of education school that has converted to a charter school and is managed and operated in accordance with section 302B-7; or

(2) Any department of education school that has converted to a charter school and is managed and operated by a nonprofit organization in accordance with section 302B-7.

"Department" means the department of education.

"Detailed implementation plan" means a performance contract between the authorizer of a charter school and the charter school in which the rights, duties, responsibilities, collective bargaining role, support, resources, and expectations of the authorizer, other state agencies, and the charter school are identified.

"Executive director" means the executive director of the charter school administrative office.

"Local school board" means the autonomous governing body of a charter school that receives the charter and is responsible for the financial and academic viability of the charter school, implementation of the charter, the organization and management of the school, the curriculum, and compliance with applicable federal and state laws. The local school board shall have the power to negotiate supplemental collective bargaining agreements with exclusive representatives of their employees.

"Nonprofit organization" means a private, nonprofit, tax-exempt entity that:

(1) Is recognized as a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and

(2) Is domiciled in this State.

"Office" means the charter school administrative office.

"Start-up charter school" means a new charter school that was created under section 302B-6 by any community, group of teachers and administrators, or entity recognized as a nonprofit organization.

§302B-3 Existing charter schools. Any charter school holding a charter to operate under part IV, subpart D, of chapter 302A as that subpart existed before the effective date of this Act shall be considered a charter school for the purposes of this chapter.

§302B-4 Charter school authorization panel; establishment; powers and duties. (a) There is established a charter school authorization panel within the charter school administrative office. The authorization panel shall be composed of nine members as follows:

(1) Two members shall be board of education members or their designees appointed by the chairperson of the board of education;

(2) Two members shall be members of the charter school community appointed by the chairperson of the board of education from a list submitted by existing charter schools;

(3) Two members shall be current or former members of a charter school local school board appointed by the executive director;

(4) One member shall be appointed by the dean of the University of Hawaii's college of education;

(5) One member shall be a representative of the business community with comprehensive experience in budgeting and finance appointed by chairperson of the board of education;

(6) One member shall be the executive director or the executive director's designee; and

(7) Among the appointees, at least two shall have educational experience.

(b) The charter school authorization panel shall serve as the charter school authorizer.

§302B-5 Limit on charter schools. (a) Beginning in July 2007, up to a total of four new start-up charter schools, in addition to those in existence on the effective date of this Act, may be established during each fiscal year.

The charter school authorization panel may authorize new charter schools under the following conditions:

(1) Beginning in July 2007, for each existing charter school that has received Western Association of Schools and Colleges accreditation for three years or more, or has been accredited through equivalent alternative national criteria or standards, a new charter school may be authorized; and

(2) The executive director determines that the charter school administrative office has the capacity to assist the existing charter schools as well as accommodate the support needs of any newly chartered schools.

(b) There may be up to twenty-five conversion charter schools; provided that this limit shall not apply to department of education schools in restructuring that are seeking to convert to charter schools in accordance with the federal No Child Left Behind Act of 2001 (Public Law 107-110).

§302B-6 Start-up charter schools; establishment. (a) New start-up charter schools may be established by the creation of a new school pursuant to this section.

(b) Any community, group of teachers, group of teachers and administrators, or entity recognized as a nonprofit organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, may submit a letter of intent to the charter school authorization panel to form a charter school, establish a local school board as its governing body, and develop a detailed implementation plan pursuant to subsection (c).

(c) The local school board, with the support and guidance of the executive director, shall formulate and develop a detailed implementation plan that meets the requirements of this subsection and section 302B-10. The plan shall include the following:

(1) A description of employee rights and management issues and a framework for addressing those issues that protects the rights of employees;

(2) A plan for identifying, recruiting, and retaining highly-qualified instructional faculty;

(3) A plan for identifying, recruiting, and selecting students that is not exclusive, elitist, or segregationist;

(4) The curriculum and instructional framework to be used to achieve student outcomes, including an assessment plan;

(5) A comprehensive plan for the assessment of student, administrative support, and teaching personnel performance that:

(A) Recognizes the interests of the general public;

(B) Incorporates or exceeds the educational content and performance standards developed by the department of education for the public school system;

(C) Includes a system of faculty and staff accountability that holds faculty and staff both individually and collectively accountable for their performance and that is at least equivalent to the average system of accountability in public schools throughout the State; and

(D) Provides for program audits and annual financial audits;

(6) A governance structure for the school that incorporates a conflict of interest policy and a plan for periodic training to carry out the duties of local school board members;

(7) A financial plan based on the most recent fiscal year's per-pupil charter school allocation that demonstrates the ability to meet the financial obligations of one-time start-up costs and ongoing costs such as monthly payrolls, faculty recruitment, professional development, and facilities costs; and

(8) A plan for any necessary design, construction, renovation, and management of facilities that is consistent with the state facilities plan; provided that:

(A) If the facilities management plan includes use of existing school facilities, the charter school shall receive authorization from the administrator responsible for the facilities; and

(B) The final determination of use shall fall within the board of education's discretion.

(d) The detailed implementation plan shall be submitted to the charter school authorization panel. The charter school authorization panel shall have sixty working days to review the completed implementation plan for a proposed charter school to ensure that it meets the requirements of subsection (c) and section 302B-10; provided that the panel shall issue a report of its preliminary findings, within forty-five working days, to the board of education and the local school board to permit time for the applicant to clarify or withdraw the application, if necessary.

If the panel determines that the implementation plan:

(1) Meets the requirements of subsection (c) and section 302B-10, the panel, by the sixtieth working day, may issue a charter to the proposed charter school. The implementation plan shall be converted to a written performance contract between the school and the panel; provided that if the panel does not issue a charter, the panel shall:

(A) Clearly identify its reasons for not issuing the charter; and

(B) Allow the local school board to revise its plan, in accordance with the panel's reasons for rejecting the plan, and resubmit the amended plan; or

(2) Fails to meet the requirements of subsection (c) and section 302B-10, the panel:

(A) Shall notify the local school board of the finding in writing to enable the local school board to appropriately amend the plan to address the findings; and

(B) May issue a provisional approval for a charter if the panel determines that the applicant may reasonably be expected to expeditiously resolve any remaining findings impeding the issuance of a charter. The provisional approval shall be effective for one year. The panel may extend the provisional approval beyond a period of one year.

(e) An amended implementation plan shall be submitted within thirty working days of notification pursuant to subsection (d)(2)(A). The charter school authorization panel shall deny the issuance of a charter if the local school board does not submit an amended implementation plan within the thirty working day period. The panel shall have thirty working days to review the amended implementation plan. If the amended implementation plan:

(1) Meets the requirements of subsection (c) and section 302B-10, the panel, by the thirtieth working day, shall issue a charter to the proposed charter school. If a charter is issued, the amended implementation plan shall be converted to a written performance contract between the school and the panel; or

(2) Fails to address the findings to the panel's satisfaction, the panel shall deny issuance of a charter.

(f) A local school board may file an appeal of the denial of an application for a charter with the board of education. Upon filing an appeal, the panel shall forward the implementation plan and appropriate documentation of the appeal to the board of education. Within thirty working days, the board of education shall issue a report of its findings and final determination to the local school board. If the implementation plan is approved by the board of education, the charter school authorization panel shall issue a charter and the implementation plan shall be converted to a written performance contract between the school and the authorization panel.

(g) The authorization panel shall adopt rules pursuant to chapter 91 to further guide the panel's review process.

§302B-7 Conversion charter schools; establishment. (a) Conversion charter schools may be established by the charter school authorization panel pursuant to this section.

(b) Any group of teachers, group of teachers and administrators, or entity recognized as a nonprofit organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, may submit a letter of intent to the charter school authorization panel to convert a departmental school to a charter school, establish a local school board as its governing body, and develop a detailed implementation plan pursuant to subsection (c).

(1) A description of employee rights and management issues and a framework for addressing those issues that protects the rights of employees;

(2) A plan for identifying, recruiting, and retaining highly-qualified instructional faculty;

(3) A plan for identifying, recruiting, and selecting students that is not exclusive, elitist, or segregationist;

(4) The curriculum and instructional framework to be used to achieve student outcomes, including an assessment plan;

(5) A comprehensive plan for the assessment of student, administrative support, and teaching personnel performance that:

(A) Recognizes the interests of the general public;

(B) Incorporates or exceeds the educational content and performance standards developed by the department of education for the public school system;

(D) Provides for program audits and annual financial audits;

(6) A governance structure for the school that incorporates a conflict of interest policy and a plan for periodic training of local school board members;

(8) A plan for any necessary design, construction, renovation, and management of facilities that is consistent with the state facilities plan; provided that:

(A) If the facilities management plan includes use of existing school facilities, the conversion charter school shall receive authorization from the administrator responsible for the facilities; and

(B) The final determination of use shall fall within the board of education's discretion.

(d) The detailed implementation plan shall be submitted to the charter school authorization panel. The charter school authorization panel shall have sixty working days to review the completed implementation plan for a proposed conversion charter school to ensure that it meets the requirements of subsection (c) and section 302B-10; provided that the panel shall issue a report of its preliminary findings, within forty-five working days, to the board of education and the local school board to permit time for the applicant to clarify or withdraw the application, if necessary.

If the panel determines that the implementation plan:

(1) Meets the requirements of subsection (c) and section 302B-10, the panel, by the sixtieth working day, may issue a charter to the proposed conversion charter school. The implementation plan shall be converted to a written performance contract between the school and the panel; provided that if the panel does not issue a charter, the panel shall:

(A) Clearly identify its reasons for not issuing the charter; and

(B) Allow the local school board to revise its plan, in accordance with the panel's reasons for rejecting the plan, and resubmit the amended plan; or

(2) Fails to meet the requirements of subsection (c) and section 302B-10, the panel:

(A) Shall notify the local school board of the finding in writing to enable the local school board to appropriately amend the plan to address the findings; and

(1) Meets the requirements of subsection (c) and section 302B-10, the panel, by the thirtieth working day, shall issue a charter to the proposed conversion charter school. If a charter is issued, the amended implementation plan shall be converted to a written performance contract between the school and the panel; or

(2) Fails to address the findings to the panel's satisfaction, the panel shall deny issuance of a charter.

(g) The authorization panel shall adopt rules pursuant to chapter 91 to further guide the panel's review process.

(h) A nonprofit organization may submit a letter of intent to the charter school administrative office to convert a department of education school to a charter school, operate and manage the school, establish a local school board as its governing body, and develop a detailed implementation plan pursuant to subsection (c); provided that:

(1) The local school board as the governing body of the conversion charter school shall be composed of the board of directors of the nonprofit organization and not the participants specified in section 302B-8. The nonprofit organization may also appoint advisory panels of community representatives for each school managed by the organization, with whom the organization may consult; provided that these panels shall not have governing authority over the school and shall serve only in an advisory capacity to the nonprofit organization;

(2) The detailed implementation plan for each conversion charter school to be operated by the nonprofit organization shall be formulated, developed, and submitted by the nonprofit organization and shall be approved by a majority of the votes cast by existing administrative, support, and teaching personnel, and parents of the students of the proposed conversion charter school; provided that the school personnel may request their collective bargaining unit representative to certify and conduct the elections for their respective bargaining units;

(3) After the detailed implementation plan for a conversion charter school operated and managed by the nonprofit organization has been approved by the charter school authorization panel as provided in subsection (d) or (e), the charter school authorization panel shall issue a charter, and the implementation plan shall be converted to a written performance contract between the nonprofit organization and the panel, under which the conversion charter school shall be managed and operated as a division of the nonprofit organization and shall have the same relationship with the charter school administrative office as any other local school board for a charter school;

(4) The board of directors of the nonprofit organization, as the governing body for the conversion charter school that it operates and manages, shall have the same protections that are afforded to the state board of education;

(5) Any conversion charter school that is managed and operated by a nonprofit organization shall be eligible for the same federal and state funding as other public schools; provided that the nonprofit organization may allocate federal and state funds among two or more of the conversion charter schools that it operates and manages to the extent permitted by law; and provided further that the nonprofit organization makes a minimum annual contribution of $1 per pupil toward the operation of a conversion charter school for every $4 per pupil allocated by the charter school administrative office for the operation of the conversion charter school;

(6) If, at any time, the board of directors of the nonprofit organization governing the conversion charter school votes to discontinue its relationship with the charter school, the charter school may submit an application to the charter school authorization panel to continue as a conversion school without the participation of the nonprofit organization; and

(7) If, at any time, the conversion charter school dissolves or the charter is revoked, the State shall have first right, at no cost to the State, to all the assets and facilities of the conversion charter school.

(i) Any nonprofit organization that seeks to manage or operate a conversion charter school as provided in subsection (h) shall comply with the following at the time of application:

(1) Have bylaws or policies that describe the manner in which business is conducted and policies that relate to the management of potential conflict of interest situations;

(2) Have experience in the management and operation of public or private schools, or, to the extent necessary, agree to obtain appropriate services from another entity or entities possessing such experience;

(3) Comply with all applicable federal, state, and county laws, including licensure or accreditation, as applicable; and

(4) Comply with any other requirements prescribed by the department of education to ensure adherence with applicable federal, state, and county laws and the purposes of this chapter.

(j) Any public school or schools may submit a letter of intent to the charter school authorization panel to form a conversion charter school, establish a local school board as its governing body, and develop a detailed implementation plan pursuant to subsection (c). The detailed implementation plan shall be approved by a majority of the votes cast by existing administrative, support, and teaching personnel, and parents of students at the proposed conversion charter school; provided that the school personnel may request their collective bargaining unit representative to certify and conduct the elections for their respective bargaining units.

(k) Unless otherwise provided in this section, the provisions in this chapter, as they relate to charter schools, shall apply to conversion charter schools. In the event of a conflict between the provisions in this section and other provisions in this chapter, this section shall control.

§302B-8 Local school boards; powers and duties. (a) All local school boards, with the exception of those of conversion charter schools that are established, managed, and operated by a nonprofit organization pursuant to section 302B-7(h), shall be composed of, at a minimum, one representative from each of the following participant groups:

(1) Principals;

(2) Instructional staff members selected by the school instructional staff;

(3) Support staff selected by the support staff of the school;

(4) Parents of students attending the school selected by the parents of the school;

(5) Student body representatives selected by the students of the school; and

(6) The community at large.

(b) No chief executive officer, chief administrative officer, executive director, or otherwise designated head of a school may serve as the chair of the local school board.

(c) The local school board shall be the autonomous governing body of a charter school that receives the charter and shall be responsible for the financial and academic viability of the charter school, implementation of the charter, the organization and management of the school, the curriculum, and compliance with applicable federal and state laws. The local school board shall have the power to negotiate supplemental collective bargaining agreements with exclusive representatives of their employees.

(d) The State shall afford the local school board of any charter school the same protections as the State affords to the board of education.

§302B-9 Charter school administrative office. (a) There is established a charter school administrative office, which shall be attached to the department for administrative purposes only. The office shall be administered by an executive director, who shall be appointed without regard to chapters 76 and 89 by the board of education based upon the recommendations of an organization of charter schools operating within the State or from a list of nominees submitted by the charter schools. The board of education may hire the executive director on a multi-year contract. The executive director may hire necessary staff without regard to chapters 76 and 89 to assist in the administration of the office.

(b) The executive director, under the direction of the charter schools and in consultation with the board of education, shall be responsible for the internal organization, operation, and management of the charter school system, including:

(1) Preparation and execution of the budget for the charter schools, including submission of the budget request to the board of education, the governor, and the legislature;

(2) Allocation of annual appropriations to the charter schools and distribution of federal funds to charter schools;

(3) Compliance with applicable state laws related to the administration of the charter schools;

(4) Preparation of contracts between the charter schools and the department of education for centralized services to be provided by the department;

(5) Preparation of contracts between the charter schools and other state agencies for financial or personnel services to be provided by the state agencies to the charter schools;

(6) Representation of charter schools in communications with the board of education, the governor, and the legislature;

(7) Assist and support the development, growth, and progress of charter schools;

(8) Facilitate training and oversee administrative support for the charter school authorization panel;

(9) Establishing a dispute resolution and mediation panel; and

(10) Upon request by one or more charter schools, assisting in the negotiation of a collective bargaining agreement with the exclusive representative of its employees.

(c) The executive director shall be evaluated annually through a process jointly agreed upon by the charter schools and the board of education.

(d) The salary of the executive director and staff shall be set by the board of education based upon the recommendations of charter schools within the State; provided that the salaries and operational expenses of the charter school administrative office shall be paid from the annual charter school appropriation and shall not exceed two per cent of the total allocation in any fiscal year.

(e) The charter school administrative office shall include in its annual budget request additional funds to cover the estimated costs of:

(1) Vacation and sick leave accrued by employees transferring to a charter school from another state agency or department;

(2) The cost of substitute teachers needed when a teacher is out on vacation or sick leave;

(3) Adjustments to enrollments; and

(4) Costs associated with arbitration in the grievance process.

(f) The charter school administrative office may withhold funds for unauthorized charter school enrollments that are inconsistent with approved detailed implementation plans.

(g) The charter school administrative office may carry over funds from previous year allocations. Funds distributed to charter schools shall be considered expended.

§302B-10 Exemptions from state laws. (a) Charter schools shall be exempt from chapter 92 and all applicable state laws in conflict with this chapter, except those regarding:

(1) Collective bargaining under chapter 89; provided that:

(A) The exclusive representatives defined in chapter 89 and the local school board of the charter school may enter into supplemental agreements that contain cost and noncost items to facilitate decentralized decisionmaking;

(B) The agreements shall be funded from the current allocation or other sources of revenue received by the charter school; provided that collective bargaining increases for employees shall be allocated by the department of budget and finance to the charter school administrative office for distribution to charter schools; and

(2) Discriminatory practices under section 378-2; and

(3) Health and safety requirements.

(b) Charter schools and the charter school administrative office shall be exempt from chapter 103D, but shall develop internal policies and procedures for the procurement of goods, services, and construction, consistent with the goals of public accountability and public procurement practices. Charter schools are encouraged to use the provisions of chapter 103D where possible; provided that the use of one or more provisions of chapter 103D shall not constitute a waiver of the exemption from chapter 103D and shall not subject the charter school to any other provision of chapter 103D. Charter schools shall account for funds expended for the procurement of goods and services, and this accounting shall be available to the public.

(c) Any charter school, prior to the beginning of the school year, may enter into an annual contract with any department for centralized services to be provided by that department.

(d) Notwithstanding any law to the contrary, as public schools and entities of the State, charter schools shall not bring suit against any other entity or agency of the State.

§302B-11 Civil service status; employee rights. (a) Civil service employees of department of education schools shall retain their civil service status upon the conversion of their school to a conversion charter school. Positions in a conversion charter school that would be civil service in a department of education public school, shall be civil service positions and subject to chapter 76. An employee with civil service status at a conversion charter school who transfers to another civil service position shall be entitled to all of the rights, privileges, and benefits of continuous, uninterrupted civil service. Civil service employees of a new century conversion charter school shall retain their civil service status in the department of education human resources civil service system and shall be entitled to all rights and benefits as other civil service employees employed by the department of education.

(b) The State shall afford administrative, support, and instructional employees in charter schools full participation in the State's systems for retirement, workers' compensation, unemployment insurance, temporary disability insurance, and health benefits in accordance with the qualification requirements for each.

(c) The department, to the extent possible, shall provide its position listings to the charter school administrative office and any interested local school board of any charter school.

(d) The department, in conjunction with the charter school administrative office, shall facilitate the movement of instructional personnel between the department and charter schools; provided that:

(1) Comparable and verifiable professional development and employee evaluation standards and practices, as determined and certified by the charter school administrative office, are in place in charter schools for instructional staff;

(2) Licensed charter school teachers or highly qualified individuals, as determined by the department, who are not yet tenured in the department and are entering or returning to the department after full-time employment of no less than one full school year at a charter school, shall be subject to no more than one year of probationary status; and

(3) Tenured department licensed teachers or highly qualified individuals, as determined by the department, who transfer to charter schools shall not be required to serve a probationary period.

§302B-12 Administration of workers' compensation. The department of human resources development shall administer workers' compensation claims for employees of charter schools, who shall be covered by the same workers' compensation system as other public employees. The department of human resources development shall process, investigate, and make payments on claims; provided that:

(1) Charter schools shall compile the preliminary claim form and forward it to the department of human resources development; and

(2) The department of human resources development shall receive no more than 0.07 per cent of the charter schools' total operating budget (EDN 600) appropriation to process these workers' compensation claims.

§302B-13 Funding and finance. (a) Beginning with fiscal year 2006-2007, and each fiscal year thereafter, the charter school administrative office shall submit a request for general fund appropriations for each charter school based upon:

(1) The actual and projected enrollment figures in the current school year for each charter school;

(2) A per-pupil amount for each regular education and special education student, which shall be equivalent to the total per-pupil cost based upon average enrollment in all regular school cost categories, including comprehensive school support services but excluding special education services, and for all means of financing except federal funds, as reported in the most recently published department of education consolidated annual financial report; provided that the legislature may make an adjustment to the per-pupil allocation for the purposes of this section; and

(3) Those fringe benefit costs requested shall be included in the department of budget and finance's annual budget request. No fringe benefit costs shall be charged directly to or deducted from the charter school per-pupil allocations, unless they are already included in funds distributed to charter schools.

The legislature shall make an appropriation based upon the budget request; provided that the legislature may make additional appropriations for fringe, workers' compensation, and other employee benefits, facility costs, and 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) Charter schools shall be eligible for all federal financial support to the same extent as all other public schools. 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. 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.

Any charter school shall be eligible to receive any supplemental federal grant or award for which any other public school may submit a proposal, or any supplemental federal grants limited to charter schools; provided that if department administrative services, including funds management, budgetary, fiscal accounting, or other related services, are provided with respect to these supplemental 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 supplemental grant for which the services are used.

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

(c) To enable charter schools to access state funding prior to the start of each school year, foster their fiscal planning, and enhance their accountability, the charter school administrative office shall:

(1) Provide fifty per cent of a charter school's per-pupil allocation based on the charter school's projected student enrollment no later than July 20 of each fiscal year; provided that the charter school shall submit to the charter school administrative office a projected student enrollment no later than May 15 of each year;

(2) Provide an additional forty per cent of a charter school's per-pupil allocation no later than November 15 of each year; provided that the charter school shall submit to the charter school administrative office:

(A) Student enrollment as verified on October 15 of each year, provided that the student enrollment shall be verified on the last business day immediately prior to October 15 should that date fall on a weekend;

(B) An accounting of the percentage of student enrollment who transferred from public schools established and maintained by the department, provided that these accountings shall also be submitted by the charter school administrative office to the legislature no later than twenty days prior to the start of each regular session; and

(3) The remaining ten per cent per-pupil allocation of a charter school no later than January 1 of each year as a contingency balance to ensure fiscal accountability.

(d) The department shall provide appropriate transitional resources to a conversion charter school for its first year of operation as a charter school based upon the department's allocation to the school for the year prior to the charter school's conversion.

(e) No start-up charter school or conversion charter school may assess tuition.

§302B-14 Weighted student formula. (a) Notwithstanding section 302B-13 and beginning on September 1, 2006, charter schools shall elect whether to receive allocations according to the department's weighted student formula adopted pursuant to section 302A-1303.6; provided that:

(1) All charter schools, as a group, with each local school board being accorded one vote, shall elect, by greater than two-thirds agreement among the local school boards, whether to receive allocations through the department's weighted student formula;

(2) Any election by charter schools and conversion charter schools to receive department allocations, or not to receive allocations, through the department's weighted student formula shall be made by September 1 of each even-numbered year, and the election shall apply to the fiscal biennium beginning July 1 of the following year; and

(3) The election to receive allocations, or not to receive allocations, through the department's weighted student formula shall be communicated to the department through the charter school administrative office.

(b) The charter schools, through the charter school administrative office, may propose to the board of education an alternative weighted student formula, approved of by more than two-thirds of the local school boards, with each local school board being accorded one vote, to be administered by the charter school administrative office and to apply to the per-pupil allocation for charter schools.

§302B-15 Accountability; probationary status; revocation of charter. (a) Every charter school shall conduct annual self-evaluations that shall be submitted to the charter school administrative office within sixty working days after the completion of the school year. The self-evaluation process shall include but not be limited to:

(1) The identification and adoption of benchmarks to measure and evaluate administrative and instructional programs;

(2) The identification of any administrative and legal barriers to meeting the adopted benchmarks, and recommendations for improvements and modifications to address the barriers;

(3) An evaluation of student achievement within the charter school; and

(4) A profile of the charter school's enrollment and the community it serves, including a breakdown of regular education and special education students.

(b) The charter school authorization panel shall conduct multi-year evaluations of charter schools that have been chartered for four or more years and may conduct special evaluations at any time. The charter school authorization panel shall adopt rules pursuant to chapter 91 for its evaluations, including a schedule for the evaluations.

(c) The charter school authorization panel may place a charter school on probationary status based upon the findings of its evaluation, provided that:

(1) The charter school and the charter school administrative office are involved in substantive discussions with the panel regarding the evaluation;

(2) The notice of probation is delivered to the charter school and specifies the deficiencies requiring corrections, the probation period, and monitoring and reporting requirements;

(3) For deficiencies related to student performance, a charter school shall be allowed two years to improve student performance; and

(4) For deficiencies related to financial plans, a charter school shall be allowed one year to develop a sound financial plan.

The charter school shall remain on probationary status until the panel votes to either remove the charter school from probationary status or revoke its charter.

The panel shall adopt administrative rules pursuant to chapter 91 for placing charter schools on probation.

(d) If a charter school fails to resolve deficiencies by the end of the probation period, the charter school authorization panel, by two-thirds vote, may revoke the charter. The panel may revoke the charter for serious student or employee health or safety deficiencies in accordance with rules adopted by the panel, provided that:

(1) The charter school is given notice of specific health or safety deficiencies and is afforded an opportunity to present its case to the panel;

(2) The chairperson of the charter school authorization panel appoints a task group to visit the charter school and conduct meetings with its local school board and its school community to gather input;

(3) Two-thirds of the panel vote to revoke the charter;

(4) The best interest of the school's students guide all decisions; and

(5) After a decision to revoke a charter, the charter school shall be allowed to remain open until a plan for an orderly shut-down or transfer of students and assets is developed and executed.

(e) If there is an immediate concern for student or employee health or safety at a charter school, the panel, in consultation with the charter school administrative office, may adopt an interim restructuring plan that may include appointment of an interim local school board, an interim local school board chairperson, or a principal to temporarily assume operations of the school.

(f) The executive director shall adopt administrative rules to supplement accountability measures incorporated in the written performance contracts required under sections 302B-6 and 302B-7.

(g) If, at any time, a charter school dissolves or the charter is revoked, the State of Hawaii shall have first right, at no cost to the State, to all the assets and facilities of the charter school, except as otherwise provided by law.

§302B-16 Responsibilities of department of education; special education services. (a) The department shall collaborate with the charter school administrative office to develop a system of technical assistance related to compliance with federal and state laws and access to federal and state funds. The department and the charter school administrative office shall collaborate to develop a list of central services that the department of education may offer for purchase by a charter school at an annual cost to be negotiated between an individual charter school and the department. The department shall enter into a contract with a charter school to provide these services, which shall be re-negotiated on an annual basis.

(b) The department shall be responsible for the provision of a free, appropriate public education. Any charter school that enrolls special education students or identifies one of its students as eligible for special education shall be responsible for providing the educational and related services required by a student's individualized education program. The programs and services for the student shall be determined collaboratively by the student's individualized education program team and the student's parents or legal guardians.

If the charter school is unable to provide all of the required services, then services to the student shall be provided by the department, according to services determined by the student's individualized educational program team. The department shall collaborate with the charter school administrative office to develop guidelines related to the provision of special education services and resources to each charter school. The department shall review all of the current individualized education programs of special education students enrolled in a charter school and may offer staff or funding, or both, to the charter school based upon a per-pupil weighted formula implemented by the department and used to allocate resources for special education students in the public schools.

§302B-17 Sports. The department of education shall provide students at charter schools with the same opportunity to participate in athletics provided to students at other public schools. If a student at a charter school wishes to participate in a sport for which there is no program at the charter school, the department shall allow that student to participate in a comparable program of any public school in the complex in which the charter school is located."

SECTION 3. Part IV, subpart D, of chapter 302A, Hawaii Revised Statutes, is repealed.

PART II

SECTION 4. The purpose of this part is to make conforming amendments to various sections of the Hawaii Revised Statutes in accordance with the provisions of part I of this Act.

SECTION 5. Section 26-35.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) For purposes of this section, "member" means any person who is appointed, in accordance with the law, to serve on a temporary or permanent state board, including members of the local school board of any [~~new century~~] charter school [~~established under section 302A-1182 or new century conversion charter school~~] established under [~~section 302A-1191,~~] chapter 302B, council, authority, committee, or commission, established by law or elected to the board of education or the board of trustees of the employees' retirement system under section 88-24; provided that "member" shall not include any person elected to serve on a board or commission in accordance with chapter 11 other than a person elected to serve on the board of education."

SECTION 6. Section 302A-411, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department shall establish and maintain junior kindergartens and kindergartens with a program of instruction as a part of the public school system; provided that:

(1) Attendance shall not be mandatory; and

(2) [~~New century charter~~] Charter schools [~~and new century conversion charter schools~~] established under chapter 302B shall be excluded from mandatory participation in the program."

SECTION 7. Section 302A-1124, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The department, through the board and its superintendent, shall establish a school community council system under which each public school, excluding [~~new century~~] charter schools [~~and new century conversion charter schools,~~] established under chapter 302B, shall create and maintain a school community council. Each school community council shall:

(1) Review and evaluate the school's academic plan and financial plan, and either recommend revisions of the plans to the principal, or recommend the plans for approval by the complex area superintendent;

(2) Ensure that the school's academic and financial plans are consistent with the educational accountability system under section 302A-1004;

(3) Participate in principal selection and evaluation, and transmit any such evaluations to the complex area superintendent; and

(4) Provide collaborative opportunities for input and consultation."

SECTION 8. Section 302A-1302, Hawaii Revised Statutes, is amended to read as follows:

"§302A-1302 School-based budget flexibility. (a) [~~Beginning with the 1995-1997 fiscal biennium, the~~] The department shall implement school-based budget flexibility for schools, complexes, and learning support centers. The flexibility shall be limited to the school-based budgeting program [~~EDN 100~~] (EDN100) of the department for all schools except [~~new century~~] charter schools [~~defined in section 302A-101 and new century conversion charter schools defined in section 302A-1191.~~] established under chapter 302B.

(b) Beginning in fiscal year [~~2004-2005,~~] 2006-2007, and every year thereafter, the charter school administrative office shall distribute the allocations due to a [~~new century~~] charter school [~~or new century conversion charter school pursuant to sections 302A-1185 and 302A-1191,~~] established under chapter 302B directly to the [~~new century charter school or new century conversion~~] charter school."

SECTION 9. Section 302A-1303.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1303.6[]] Weighted student formula. Based upon recommendations from the committee on weights, the board of education, not less than annually, shall adopt a weighted student formula for the allocation of moneys to public schools [~~which~~] that takes into account the educational needs of each student. The department, upon the receipt of appropriated moneys, shall use the weighted student formula to allocate funds to public schools. Principals shall expend moneys provided to [~~the principals' schools.~~] each principal's respective school. This section shall only apply to [~~new century charter schools and new century conversion~~] charter schools for fiscal years in which the [~~new century charter schools and new century conversion~~] charter schools elect pursuant to section [~~302A-1182.5~~] 302B-14 to receive allocations according to the weighted student formula."

SECTION 10. Section 302A-1505, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) Prior to informing the department about the school's repair and maintenance needs, the school's principal shall consider the recommendations made by the school community council or the local school board, if the school is a [~~new century conversion~~] charter school[.] located in any department of education facility and is established under chapter 302B."

SECTION 11. Section 302A-1507, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established a classroom cleaning project in all public schools, excluding [~~new century~~] charter schools [~~and new century conversion charter schools.~~] established under chapter 302B. Each school, through its school community council, may develop mechanisms to provide for classroom cleaning, including but not limited to having parent, student, or other community groups clean the classrooms on a regular, continuing basis."

SECTION 12. Section 302A-101, Hawaii Revised Statutes, is amended by deleting the definition of "new century charter schools".

[""New century charter schools" means public schools chartered by the board of education with the flexibility to implement alternative frameworks with regard to curriculum, facilities management, instructional approach, length of the school day, week, or year, and personnel management."]

PART III

SECTION 13. The purpose of this part is to amend various sections of the Hawaii Revised Statutes relating to education and the department of education to further the ability of the State's public charter schools to act independently of the department of education and the public schools that the department establishes and maintains.

SECTION 14. Section 302A-1402, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1402[]] Custodian of federal funds. The director of finance is designated as custodian of all funds received as the state apportionment under any federal appropriations for public educational purposes and the director shall disburse the funds, pursuant to the requirements, restrictions, and regulations of the federal acts under which the funds may be provided, on vouchers approved by the board, or by any subordinate [~~thereunto~~] duly authorized by the board[.], or as appropriate, by the charter school administrative office established under chapter 302B."

SECTION 15. Section 302A-1403, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1403[]] Authority to secure federal funds. The department, the charter school administrative office, the director of finance, and the governor may take [~~such~~] steps and perform [~~such~~] acts as may be necessary or proper in order to secure any [~~such~~] federal funds for the purposes specified in sections 302A-1401 and 302A-1402."

PART IV

SECTION 16. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 17. This Act shall take effect on July 1, 2050.