SB 527 - This act modifies provisions relating to charter schools. CHARTER SCHOOL SPONSORS Under current law, the school board of any district in any district which is sponsoring a charter school as of August 27, 2012, and the special administrative board in a metropolitan school district, is eligible to sponsor a charter school. Under this act, the school board in any district in which a charter school may be operated shall be eligible to sponsor a charter school, however a special administrative board in a metropolitan school district may not. (Section 160.400.3) Current law outlines the process to be used when changes in a school district's accreditation status affect a charter school. Under this act, changes in a school district's accreditation status shall not affect the operation or sponsorship of charter schools. (Section 160.400.4) Sponsors are prohibited, under current law, from receiving from an applicant, any fee for the consideration of a charter and from conditioning its consideration of a charter on the promise of future payment of any kind. Under this act, applicants are also prohibited from such actions. (Section 160.400.5) Charter schools are permitted to affiliate with a four-year college or university, including a private college or university, a community college, or, under this act, vocational or technical schools. (160.400.9) Under this act, the Department of Elementary and Secondary Education is required to remit funds for each charter school to the school's sponsor provided the sponsor fulfills its sponsorship obligations with regard to each charter school it sponsors and expends its charter school sponsorship funds in a manner that avoids conflicts of interest, inducements, or incentives that might compromise the sponsor's judgment in charter approval and accountability.(Section 160.400.10) Current law prohibits a university, college or community college from granting a charter to a nonprofit corporation if an employee of the university, college or community college is a member of the corporation's board of directors. Under this act, no employee, trustee, agent, or representative of a sponsor shall simultaneously serve as an employee, trustee, agency representative, vendor, or contractor of a charter school sponsored by such entity. Members of such governing boards holding office prior to the effective date of the act are exempt from such provision. (160.400.12) Sponsors of charter schools are required, under current law, to develop policies relating to a performance contract that the sponsor will use to evaluate the performance of the charter school. Under this act, such performance framework is required to set forth the academic and operational performance indicators, measures, and metrics that shall guide the sponsor's evaluation. The framework must meet, but shall not be limited to, the current state academic performance standards. This act also requires a sponsor to develop policies and procedures relating to sponsor conflicts of interest and ethics. (Section 160.400.15) Current law grants the State Board of Education the authority to ensure the charter school sponsor is in compliance with the requirements set forth in statute, and to evaluate sponsors every three years. This act transfers such authority to the Department. The Department is also authorized to recommend corrective action, which under this act may include terminating the sponsor's authority to sponsor any charter schools. Final corrective action shall be determined by the Department, rather than by the State Board. (Section 160.400.16) Under this act, if a charter school fails to receive a renewal of its charter contract after a three-year term, the sponsor shall be prohibited from sponsoring any new charter schools until the Department has completed an evaluation and the sponsor has received notice that it is in compliance. (Section 160.400.18) No charter school, under this act, shall be required to purchase services from its sponsor as a condition of charter approval, or of executing a charter contract, nor may any such condition be implied. However, a charter school may, at its discretion, chose to purchase services from its sponsor. If a charter school does choose to purchase services from the sponsor, the parties are required to execute an annual service contract, separate from the charter contract, stating the parties' mutual agreement concerning any services to be provided by the sponsor and any service fees to be charged to the charter school. The act prohibits a sponsor from charging more than the market rates for services provided to a charter school. Within 30 days of the end of the fiscal year, a charter school sponsor is required to provide to each school it oversees, an itemized accounting of the actual costs of services purchased from the sponsor. Any difference between the amount initially charged and the actual cost shall be reconciled and paid to the owed party. If either party disputes the accounting or charges, such party may request that the Department conduct a review. (Section 160.401) CLOSURE, TRANSFER, AND MERGING OF CHARTER SCHOOLS If a charter school closes, the sponsor of the charter school is required to oversee and work with the school to ensure a smooth, orderly, and complete closure and transition for students and parents. Such closure, dissolution of the charter school, and disposition of its property shall be governed by the charter contract. Transfer of a charter contract and oversight of a charter school, from one sponsor to another, along with merging of one or more charter schools or a charter school and a local education agency into a single charter school is prohibited unless a special petition is filed with the Department by a charter school or its sponsor. The Department shall review such petitions on a case by case basis and may grant transfer requests in response to special circumstances, evidence that such a transfer would serve the best interests of the charter school's students, and agreement by the school and the sponsor. A sponsor is permitted to relinquish its sponsorship at any time by sending a letter to the Department stating its intention and the date of relinquishment. However, if a sponsor relinquishes sponsorships, all of the sponsor's existing charter contracts and sponsorship fees are transferred to the Commission, and such sponsor will no longer be eligible to sponsor a charter school. A transfer or merger shall not extend the term of any existing charter contract that has been transferred or has been part of a merger. (Section 160.402) CHARTER CONTRACTS Current law sets forth the requirements that a charter school application must meet. This act modifies such provisions and removes the requirements that an application include a legally binding performance contract that describes the obligations of the school and sponsor. An application is not required to include a description of the school's pupil performance standards, but instead must submit a proposal for the charter school performance provisions and the sponsor's performance framework. The act also removes the requirement that an application include preopening requirements for applications that require that charter schools meet all health, safety, and other legal requirements prior to opening, and a description of the agreement and time frame for implementation as to when the sponsor shall intervene in a charter school, revoke a charter school for failure to comply with the act, and when a sponsor will not renew a charter. (Section 160.405.1) Under current law, if the charter application is denied, the proposed sponsor shall notify the applicant in writing as to the reasons for its denial and forward a copy to the State Board within five business days following the denial. The State Board has the authority, under current law, to grant or deny a charter application and, if granted, to act as sponsor. This act transfers such authority to the Commission. (Section 160.405.2(4)) Under current law, if a charter is approved, the application is required to be submitted to the State Board along with a statement of finding by the sponsor that the application meets certain requirements, and a monitoring plan under which the charter sponsor shall evaluate the academic performance reports of students enrolled in the charter school. This act requires the application be submitted to the Department, instead of the State Board, within 15 days of approval, and removes the requirement that a monitoring plan be submitted along with the application. This act also repeals the requirement that the State Board approve or deny a charter application within 60 days of receipt, and the provisions stating that the State Board may deny a charter on the grounds that the application fails to meet the requirements. The denial is no longer required to be in writing and identify the specific failures of the application. (Section 160.405.3) Current law sets forth requirements of a charter contract, which includes providing certain information to the State Board. Under this act, a charter contract shall require a charter school to provide a statement outlining a conflict of interest policy and a code of ethics, and incorporate application materials submitted into the charter contract. Charter schools operating on August 27, 2020, shall have until August 28, 2023, to meet such requirements. This act also repeals the provision requiring a charter contract to design a method to measure pupil progress toward the academic standards adopted by the State Board. A charter contract must instead comply with the performance provisions in the charter contract, which are required to be based on the performance framework established by the sponsor, and collect annual student performance data necessary to measure annual performance targets, with such targets being subject to approval to the sponsor, rather than requiring data defined by the annual performance report to be collected. (Section 160.405.4) Under current law, a vsponsor's policies shall give schools clear and timely notice of contract violations or performance deficiencies and mandate intervention based upon findings of the State Board that the charter school's annual performance results are below the district's annual performance report. Such provision is repealed under this act. (Section 160.405.8 page 32) A sponsor is required to revoke a charter during the charter term if, under this act, the charter school fails to meet the standards set forth in the act in three of the last four years. (Section 160.405.8) CHARTER CONTRACT RENEWAL Under current law, the sponsor's renewal process of a charter school shall be based on a thorough analysis of a comprehensive body of objective evidence and consider if the school has maintained results on its annual performance report that meet or exceed the district in which the school is located, and whether the charter school is organizationally and fiscally viable. This act repeals such provisions, and replaces them with provisions requiring the sponsor to consider whether the charter school has met the annual performance targets, and that the school has not been identified as experiencing financial stress in the three of the last four school years. If the Department verifies that the charter school has met the objectives set forth in the act, the Department shall notify the sponsor that the renewal has met all requirements. If a charter school fails to meet such standards for two of the three consecutive years immediately before a decision whether to renew the charter contract is made, any renewal granted shall only be for a three-year term. If a charter school again underperforms for two years of the three-year term, the school's charter contract shall not be renewed. (Section 160.405.9) CHARTER SCHOOL OVERSIGHT This act repeals the provision requiring the Joint Committee on Education to create a committee to investigate facility access and affordability for charter schools. (Section 160.405.16) This act repeals the requirements set forth under current law that a high-quality charter school must meet. The act replaces such provisions with the requirement that the percentage of students who perform proficient and advanced on the annual statewide system of assessments in English language arts and mathematics in the charter school is higher than the average percentage of grade-level equivalent students in the state for two of the three immediately preceding years, or that the average rate of growth in such subjects is equal to or higher than the average percentage of growth in students in the state for two of the three immediately preceding years. (Section 160.408.1) CHARTER SCHOOL ENROLLMENT AND DISBURSEMENT OF STATE AID Current law requires workplace charter schools to enroll any student whose parent is employed in the business district, who submits a timely application. This act repeals such provision. (Section 160.410.1(5)) If capacity is insufficient to enroll all pupils who submit a timely application, the charter school shall have an admissions process that does not discriminate based on parents' ability to pay, except that, under this act, a charter school may give a preference for admission to students who will be eligible for the free and reduced price lunch program in the upcoming year. (Section 160.410.2(4)) This act repeals the provision requiring a charter school to make available for public inspection the results of background checks on the charter school's board members. (Section 160.410.4(3)) This act modifies the calculation of the amount a school district with one or more pupils attending a charter school shall pay to the charter school. A school district having one or more resident pupils attending a charter school shall pay to the charter school an annual amount set forth in current law, plus local aid received by the school district divided by the total weighted average daily attendance of the school district and all charter schools within the school district. Local aid is defined as all local and county revenue received by the school district and charter schools within the school district. A charter school that has declared itself a local educational agency shall receive all state aid calculated under this act from the Department, and all local aid calculated under the act from the school district. A charter school shall receive an annual amount as set forth in the act. Each month the school district shall calculate the amount of local aid owed to the charter school by the school district, and the school district shall pay such amount to the charter school. If any payment of local aid is due, the school district shall make monthly payments on the twenty-first day of each month, beginning in July of each year. If the school district fails to make timely payments to the charter schools, the Department shall impose any penalty deemed appropriate. Each school district shall, as part of an annual audit, include a report converting the local aid received from an accrual basis to a cash basis. Such report shall be made publicly available on its district website. The Department shall be required, under this act, to conduct an annual review of any payments made in the previous fiscal year to determine whether there has been any underpayment or overpayment. Such review shall include a calculation of the amount of local aid owed to charter schools using the first preceding year's annual audit. The school district shall pay to the charter school the amount calculated by such review. In the event of an underpayment, the school district shall remit the underpayment amount to the charter school. In the event of an overpayment, the charter school shall remit the overpayment amount to the school district. If the school district or charter school fails to remit any required payment, the Department shall impose any penalty deemed necessary. If a prior year correction of the amount of local aid is necessary, the school district shall recalculate the amount owed to the charter school or provide a bill to the charter school for any overpayment amount. Each charter school and each school district responsible for distributing local aid to charter schools shall include as part of their annual independent audit, an audit of pupil residency, enrollment, and attendance in order to verify pupil residency in the school district or local education agency. The provisions of this section shall become effective on July 1, 2021. (Section 160.415) THE CHARTER PUBLIC SCHOOL SPONSORSHIP FUND This act creates the "Charter Public School Sponsorship Fund" to be used by the Commission to pay expenses associated with sponsorship of charter schools. (Section 160.425.11) This act is substantially similar to SCS/SB 271 (2019). JOSIE BUTLER