SENATE FILE 222

BY  McKINLEY

A BILL FOR

An Act relating to the establishment, funding, and bonding authority of public charter schools and making an appropriation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  16.163  Authority to issue public charter school facilities bonds and notes.
   The authority shall assist a public charter school established under chapter 257A, and the authority shall have all of the powers delegated to it in a chapter 28E agreement by a governing board of a public charter school established pursuant to chapter 257A, or a private developer contracting with a public charter school established pursuant to chapter 257A, to develop a public charter school facility, with respect to the issuance or securing of bonds or notes as provided in section 257A.11, subsection 4.
   Sec. 2.  NEW SECTION.  257A.1  Short title.
   This chapter may be cited as the “Public Charter Schools Act”.
   Sec. 3.  NEW SECTION.  257A.2  Legislative findings and declaration of purpose.
   1.  The general assembly finds and declares the following:
   a.  It is in the best interests of the people of the state to provide all children with public schools that reflect high expectations and to create conditions in all schools where these expectations can be met.
   b.  Education reform is necessary to strengthen the performance of elementary and secondary public school students.
   c.  Those who know students best, their parents and educators, make the best education decisions regarding the students.
   d.  Parents and educators have a right and a responsibility to participate in the education institutions which serve Iowa’s children.
   e.  Different students learn differently and public school programs should be customized to fit the needs of individual students.
   f.  There are parents, educators, and other citizens in the state willing and able to offer educational programs but who lack a channel through which they can direct their efforts.
   2.  The purpose of establishing public charter schools in this state is to accomplish the following:
   a.  Improve student learning by creating high-quality schools with high standards for student performance.
   b.  Close achievement gaps between high-performing and low-performing groups of public school students.
   c.  Increase high-quality educational opportunities within the public education system for all students, especially those at risk of academic failure.
   d.  Create new professional opportunities for teachers, school administrators, and other school personnel that allow them to have a direct voice in the operation of their schools.
   e.  Encourage the use of different, high-quality models of teaching, governing, scheduling, or other aspects of schooling that meet a variety of student needs.
   f.  Allow public schools freedom and flexibility in exchange for exceptional levels of results-driven accountability.
   g.  Provide students, parents, community members, and local entities with expanded opportunities for involvement in the public education system.
   h.  Encourage the replication of successful public charter schools.
   3.  All public charter schools in the state established under this chapter are public schools and are part of the state’s public education system. The provisions of this chapter should be interpreted liberally to support the findings and purposes of this section and to advance a renewed commitment by the state to the mission, goals, and diversity of public education.
   Sec. 4.  NEW SECTION.  257A.3  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Applicant” means any person or group of persons that develops and submits an application for a public charter school to an authorizer.
   2.  “Application” means a proposal from an applicant to an authorizer to enter into a charter contract whereby the proposed school obtains public charter school status.
   3.  “At-risk student” means a student who has an economic or academic disadvantage that requires special services and assistance to succeed in educational programs. The term includes but is not limited to students who are members of economically disadvantaged families, students who are identified as having special educational needs, students who are limited in English proficiency, students who are at risk of dropping out of high school, and students who do not meet minimum standards of academic proficiency. 
   4.  “Authorizer” means an entity authorized under this chapter to review applications, decide whether to approve or reject applications, enter into charter contracts with applicants, oversee public charter schools, and decide whether to renew, not renew, or revoke charter contracts.
   5.  “Charter contract” means a fixed-term, renewable contract between a public charter school and an authorizer that outlines the roles, powers, responsibilities, and performance expectations for each party to the contract.
   6.  “Commission” means the Iowa public charter school commission created pursuant to section 257A.6.
   7.  “Conversion public charter school” means a charter school that existed as a noncharter public school before becoming a public charter school.
   8.  “Education service provider” means a for-profit education management organization, nonprofit charter management organization, school design provider, or any other partner entity with which a public charter school intends to contract for educational design, implementation, or comprehensive management.
   9.  “Governing board” means the independent board of a public charter school that is party to the charter contract with the authorizer and whose members have been elected or selected pursuant to the public charter school’s application.
   10.  “Local school board” means a school board exercising management and control of a local school district pursuant to state statutes.
   11.  “Local school district” means a public agency that establishes and supervises one or more public schools within its geographical limits pursuant to state statutes.
   12.  “Noncharter public school” means a public school that is under the direct management, governance, and control of a local school board.
   13.  “Parent” means a parent, guardian, or other person or entity having legal custody of a child.
   14.  “Public charter school” means a public school established under this chapter that meets the following criteria:
   a.  Has autonomy over decisions including but not limited to matters concerning finance, personnel, scheduling, curriculum, and instruction.
   b.  Is governed by an independent governing board.
   c.  Is established and operating under the terms of a charter contract between the school’s board and its authorizer.
   d.  Is a school to which parents choose to send their children.
   e.  Admits students on the basis of a lottery if more students apply for admission than can be accommodated.
   f.  Provides a program of education that includes one or more of the following:  preschool, prekindergarten, any grade or grades from kindergarten through grade twelve, and adult community, continuing, and vocational education programs.
   g.  Operates in pursuit of a specific set of educational objectives as defined in its charter contract.
   h.  Operates under the oversight of its authorizer in accordance with its charter contract.
   15.  “Start-up public charter school” means a public charter school that did not exist as a noncharter public school prior to becoming a public charter school.
   16.  “Student” means any child who is eligible for attendance in public schools in the state.
   17.  “Virtual public charter school” means a public charter school that offers educational services predominantly through the internet.
   Sec. 5.  NEW SECTION.  257A.4  Enrollment.
   1.  Enrollment requirements.  Open enrollment and lottery requirements are as follows:
   a.  A public charter school shall be open to any student residing in the state.
   b.  A school district shall not require any student enrolled in the school district to attend a public charter school.
   c.  A public charter school shall not limit admission based on ethnicity, national origin, religion, gender, income level, disabling condition, proficiency in the English language, or academic or athletic ability.
   d.  A public charter school may limit admission to students within a given age group or grade level and may be organized around a special emphasis, theme, or concept as stated in the school’s application.
   e.  A public charter school shall enroll all students who wish to attend the school, unless the number of students exceeds the capacity of a program, class, grade level, or building.
   f.  If capacity is insufficient to enroll all students who wish to attend the school, the public charter school shall select students through a lottery.
   2.  Enrollment preferences.  Enrollment preferences include the following:
   a.  Any noncharter public school converting partially or entirely to a public charter school shall adopt and maintain a policy giving enrollment preference to students who reside within the former attendance area of that public school.
   b.  A public charter school shall give enrollment preference to students enrolled in the public charter school the previous school year and to siblings of students already enrolled in the public charter school. An enrollment preference for returning students excludes those students from entering into a lottery.
   c.  A public charter school may give enrollment preference to children of a public charter school’s founders, governing board members, and full-time employees, so long as they constitute no more than ten percent of the school’s total student population.
   3.  Focusing of mission.  This section does not preclude the formation of a public charter school whose mission is focused on serving students with disabilities, students of the same gender, students who pose such severe disciplinary problems that they warrant a specific educational program, or students who are at risk of academic failure. If capacity is insufficient to enroll all students who wish to attend such school, the public charter school shall select students through a lottery.
   4.  Credit transferability.  If a student who was previously enrolled in a public charter school enrolls in another public school in this state, the student’s new school shall accept credits earned by the student in courses or instructional programs at the public charter school in a uniform and consistent manner and according to the same criteria that are used to accept academic credits from other public schools.
   5.  Information to parents and the general public.  A local school district shall provide or publicize to parents and the general public information about public charter schools authorized by the district as an enrollment option within the district to the same extent and through the same means that the district provides and publicizes information about noncharter public schools in the district. 
   6.  Determination of student capacity of public charter schools.  An authorizer shall not restrict the number of students a public charter school may enroll. The capacity of the public charter school shall be determined annually by the governing board of the public charter school in conjunction with the authorizer and in consideration of the public charter school’s ability to facilitate the academic success of its students, to achieve the other objectives specified in the charter contract, and to ensure that its student enrollment does not exceed the capacity of its facility or site.
   Sec. 6.  NEW SECTION.  257A.5  Authorizers.
   1.  Authority to authorize.  The state public charter school commission may authorize public charter schools anywhere in the state, provided that the commission fulfills requirements of all public charter school authorizers under this chapter.
   2.  Eligible authorizing entities.  The following eligible authorizing entities may register with the commission:
   a.  A local school board for chartering authority within the boundaries of the local school district overseen by the local school board.
   b.  Governing boards of accredited public or private postsecondary institutions, including community colleges and four-year colleges and universities for statewide, regional, or local chartering authority, in accordance with each institution’s regular operating jurisdiction.
   c.  A city may apply to the commission for chartering authority within the city’s jurisdiction.
   d.  Governing boards of nonprofit or charitable organizations, which are exempt from federal taxes under section 501(c)(3) or 501(c)(6) of the Internal Revenue Code, for statewide, regional, or local chartering authority. Nonpublic sectarian or religious organizations, and any other charitable organization which in their federal IRS Form 1023, Part IV, describe activities indicating a religious purpose, are not eligible to apply to become an authorizer.
   3.  Authorizer powers, duties, and liabilities.
   a.  Authorizers are responsible for executing, in accordance with this chapter, the following essential powers and duties:
   (1)  Soliciting and evaluating charter applications.
   (2)  Approving quality charter applications that meet identified educational needs and promote a diversity of educational choices.
   (3)  Declining to approve weak or inadequate charter applications.
   (4)  Negotiating and executing sound charter contracts with each approved public charter school.
   (5)  Monitoring, in accordance with charter contract terms, the performance and legal compliance of public charter schools.
   (6)  Determining whether each charter contract merits renewal, nonrenewal, or revocation.
   b.  An authorizing entity may delegate its duties to offices, employees, and contractors.
   c.  Regulation by authorizers shall be limited to these powers and duties, and consistent with the spirit and intent of this chapter.
   d.  An authorizing entity, members of the board of an authorizer in their official capacity, and employees of an authorizer are immune from civil and criminal liability with respect to all activities related to a public charter school they authorize.
   4.  Principles and standards for charter authorizing.  All authorizers shall be required to develop and maintain chartering policies and practices consistent with nationally recognized principles and standards for quality charter authorizing in all major areas of authorizing responsibility including: organizational capacity and infrastructure; soliciting and evaluating charter applications; performance contracting; ongoing public charter school oversight and evaluation; and charter renewal decision-making. Authorizers shall carry out all their duties under this chapter in a manner consistent with such nationally recognized principles and standards and with the spirit and intent of this chapter. Evidence of material or persistent failure to do so shall constitute grounds for losing charter authorizing powers. 
   5.  Authorizer reporting.  Every authorizer shall be required to submit to the commission and the general assembly an annual report summarizing:
   a.  The authorizer’s strategic vision for chartering and progress toward achieving that vision.
   b.  The academic and financial performance of all operating public charter schools overseen by the authorizer, according to the performance expectations for public charter schools set forth in this chapter.
   c.  The status of the authorizer’s public charter school portfolio, identifying all public charter schools in each of the following categories:  approved, but not yet open; and operating, renewed, transferred; and revoked, not renewed, voluntarily closed, or never opened.
   d.  The authorizing functions provided by the authorizer to the public charter schools under its purview, including the authorizer’s operating costs and expenses detailed in annual audited financial statements that conform with generally accepted accounting principles.
   e.  The services purchased from the authorizer by the public charter schools under its purview, including an itemized accounting of the actual costs of these services, as required in subsection 9.
   6.  Authorizer funding.
   a.  To cover authorizer costs for overseeing public charter schools in accordance with this chapter, the commission shall remit to each authorizer an oversight fee for each public charter school it authorizes. The oversight fee shall be drawn from and calculated as a uniform percentage of the per-student operational funding allocated to each public charter school under section 257A.10, subsection 2, not to exceed three percent of each public charter school’s per-student funding in a single school year. The commission shall establish a statewide formula for authorizer funding, which shall apply uniformly to every authorizer in the state. The commission shall submit the formula, and any succeeding amendments to the formula, to the department of management, the general assembly, and the governor, and shall provide any additional information required by the department of management. The formula shall be established by statute prior to the appropriation or distribution of state funds for purposes of establishing a public charter school. The commission may establish a sliding scale for authorizer funding, with the funding percentage decreasing after the authorizer has achieved a certain threshold, such as after a certain number of years of authorizing or after a certain number of schools has been authorized.
   b.  An authorizer’s oversight fee shall not include any costs incurred in delivering services that a public charter school may purchase at its discretion from the authorizer. The authorizer shall use its funding provided under this section exclusively for the purpose of fulfilling authorizing obligations in accordance with this chapter.
   c.  The commission shall annually review the effectiveness of the state formula for authorizer funding, and shall adjust the formula if necessary to maximize public benefit and strengthen the implementation of this chapter.
   7.  Conflicts of interest.  An employee, trustee, agent, or representative of an authorizer shall not simultaneously serve as an employee, trustee, agent, representative, vendor, or contractor of a public charter school authorized by that authorizer.
   8.  Exclusivity of authorizing functions and rights.  A governmental or other entity, other than those expressly granted chartering authority as set forth in this chapter or chapter 256F, shall not assume any charter authorizing function or duty in any form, unless expressly allowed by law.
   9.  Services purchased from authorizer —— itemized accounting.
   a.  With the exception of oversight services as required by subsection 6, a public charter school shall not be required to purchase services from its authorizer as a condition of charter approval or of executing a charter contract, and any such condition shall not be implied.
   b.  A public charter school may, at its discretion, choose to purchase services from its authorizer. In such event, the public charter school and authorizer shall execute an annual service contract, separate from the charter contract, stating the parties’ mutual agreement concerning any services to be provided by the authorizer and any service fees to be charged to the public charter school. An authorizer shall not charge more than market rates for services provided to a public charter school.
   c.  Within thirty days after the end of each fiscal year, an authorizer shall provide to each public charter school it oversees an itemized accounting of the actual costs of services purchased by the public charter school from the authorizer. Any difference between the amount initially charged to the public charter school and the actual cost shall be reconciled and paid to the owed party. If either party disputes the itemized accounting, any charges included in such accounting, or charges to either party, the disputing party is entitled to request a third-party review at its own expense. The review shall be conducted by the commission, whose determination shall be final.
   Sec. 7.  NEW SECTION.  257A.6  Iowa public charter school commission.
   1.  An Iowa public charter school commission is created as an independent state agency with statewide chartering jurisdiction and authority. 
   2.  The mission of the commission shall be to authorize high-quality public charter schools throughout the state, particularly schools designed to expand opportunities for at-risk students, consistent with the purposes of this chapter.
   3.  The commission shall consist of nine members serving three-year terms. Five members shall be appointed by the governor; one member shall be appointed by the president of the senate after consultation with the majority leader; one member shall be appointed by the minority leader of the senate; one member shall be appointed by the speaker of the house of representatives; and one member shall be appointed by the minority leader of the house of representatives. A member shall not serve more than seven consecutive years. In making the appointments, the governor, the president of the senate, the speaker of the house of representatives, and the respective minority leaders shall ensure statewide geographic diversity among commission members.
   4.  Members appointed to the commission shall collectively possess strong experience and expertise in public and nonprofit governance, management and finance, public school leadership, assessment, and curriculum and instruction, and public education law. All members of the commission shall have demonstrated understanding of and commitment to charter schooling as a strategy for strengthening public education. 
   5.  Notwithstanding subsection 3, to establish staggered terms of office, the governor and the senate and house of representatives appointing authorities as provided in subsection 3 shall each collectively appoint three members to an initial term of one year, three members to an initial term of two years, and three members to an initial term of three years. The initial appointments shall be made no later than May 1, 2012. This subsection is repealed July 1, 2015.
   6.  A member of the commission may be removed for any cause that renders the member incapable or unfit to discharge the duties of the office. Whenever a vacancy on the commission exists, the original appointing authority shall appoint a member for the remaining portion of the term.
   7.  The commission may receive and expend gifts, grants, and donations of any kind from any public or private entity to carry out the purposes of this chapter, subject to the terms and conditions under which they are given, provided that all such terms and conditions are permissible under law.
   8.  The commission shall operate with dedicated resources and staff qualified to execute the day-to-day responsibilities of public charter school authorizing in accordance with this chapter.
   9.  Chartering authority registration of local school boards.
   a.  The commission shall publicize to all local school boards the opportunity to register with the state for chartering authority within the local school districts they oversee. By October 1 annually, the commission shall provide information about the opportunity, including a registration deadline, to all local school boards. To register as a charter authorizer in its local school district, each interested local school board shall submit the following information in a format to be established by the commission:
   (1)  Written notification of intent to serve as a charter authorizer in accordance with this chapter.
   (2)  An explanation of the local school board’s strategic vision for chartering.
   (3)  An explanation of the local school board’s budget and personnel capacity and commitment to execute the duties of quality charter authorizing, in accordance with this chapter.
   (4)  An explanation of how the local school board will solicit public charter school applicants, in accordance with this chapter.
   (5)  A description or outline of the performance framework the local school board will use to guide the establishment of a charter contract and for ongoing oversight and evaluation of public charter schools, consistent with the requirements of this chapter.
   (6)  A draft of the local school board’s renewal, revocation, and nonrenewal processes, consistent with section 257A.8, subsection 3.
   (7)  A statement of assurance that the local school board commits to serving as a charter authorizer in fulfillment of the expectations, spirit, and intent of this chapter, and will fully participate in any authorizer training provided or required by the state.
   b.  Within sixty days of receipt of a local school board’s duly submitted registration materials, the commission shall register the local school board as a charter authorizer within the local school board’s local school district, and shall provide the local school board a letter confirming its registration as a charter authorizer. A local school board shall not engage in any charter-authorizing functions without current registration as a charter authorizer with the state. Once registered, the local school board’s registration as a charter authorizer shall continue from year to year, provided that the local school board fulfills all charter-authorizing duties and expectations set forth in this chapter and remains an authorizer in good standing with the commission.
   10.  Chartering authority application for eligible entities.
   a.  The commission shall establish the annual application and approval process, including cycles and deadlines during the fiscal year, for all entities eligible to apply for chartering authority. By December 1 of each year, the commission shall make available information and guidelines for all eligible entities concerning the opportunity to apply for chartering authority under this chapter. The application process shall require each interested eligible entity to submit an application that clearly explains or presents the following elements:
   (1)  Written notification of intent to serve as a charter authorizer in accordance with this chapter.
   (2)  The applicant entity’s strategic vision for chartering.
   (3)  A plan to support the vision presented, including explanation and evidence of the applicant entity’s budget and personnel capacity and commitment to execute the responsibilities of quality charter authorizing, in accordance with this chapter.
   (4)  A draft or preliminary outline of the request for proposals that the applicant entity would, if approved as a charter authorizer, issue to solicit public charter school applicants, consistent with section 257A.7, subsection 1.
   (5)  A draft of the performance framework that the applicant entity would, if approved as a charter authorizer, use to guide the establishment of a charter contract and for ongoing oversight and evaluation of public charter schools, consistent with the requirements of this chapter.
   (6)  A draft of the applicant entity’s renewal, revocation, and nonrenewal processes, consistent with section 257A.8, subsection 3.
   (7)  A statement of assurance that the applicant entity seeks to serve as a charter authorizer in fulfillment of the expectations, spirit, and intent of this chapter, and that if approved as a charter authorizer, the entity will fully participate in any authorizer training provided or required by the state.
   (8)  A statement of assurance that the applicant will ensure public accountability and transparency in all matters concerning their charter-authorizing practices, decisions, and expenditures.
   b.  By February 1 of each year, the commission shall decide whether to grant or deny chartering authority to each applicant. The commission shall make its decisions on the merits of each applicant’s proposal and plans.
   c.  Within thirty days of the commission’s decision, the commission shall execute a renewable authorizing contract with each entity it has approved for chartering authority. The initial term of each authorizing contract shall be six years. The authorizing contract shall specify each approved entity’s agreement to serve as a charter authorizer in accordance with the expectations of this chapter, and shall specify additional performance terms based on the applicant’s proposal and plan for chartering. An approved entity shall not commence charter authorizing without an authorizing contract in effect.
   11.  Oversight of public charter school authorizers.
   a.  The commission shall be responsible for overseeing the performance and effectiveness of all authorizers established under this chapter.
   b.  In accordance with section 257A.5, subsection 5, every authorizer shall be required to submit to the commission and the general assembly an annual report. The commission shall, by February 1 annually, communicate to every authorizer the requirements for the format, content, and submission of the annual report.
   c.  Persistently unsatisfactory performance of an authorizer’s portfolio of public charter schools, a pattern of well-founded complaints about the authorizer or its public charter schools, or other objective circumstances may trigger a special review by the commission. In reviewing or evaluating the performance of authorizers the commission shall apply nationally recognized principles and standards for quality charter authorizing. If at any time the commission finds that an authorizer is not in compliance with an existing charter contract, its authorizing contract with the commission, or the requirements of all authorizers under this chapter, the commission shall notify the authorizer in writing of the identified problems, and the authorizer shall have reasonable opportunity to respond and remedy the problems.
   d.  If a local school board registered as an authorizer under subsection 9 persists in violating a material provision of a charter contract or fails to remedy other authorizing problems after due notice from the commission, the commission shall notify the local school board, within a reasonable amount of time under the circumstances, that it intends to terminate the local school board’s chartering authority unless the local school board demonstrates a timely and satisfactory remedy for the violation or deficiencies.
   e.  If an authorizer granted chartering authority under subsection 10 persists, after due notice from the commission, in violating a material provision of a charter contract or its authorizing contract with the commission, or fails to remedy other identified authorizing problems, the commission shall notify the authorizer, within a reasonable amount of time under the circumstances, that it intends to revoke the authorizer’s chartering authority unless the authorizer demonstrates a timely and satisfactory remedy for the violation or deficiencies.
   f.  In the event of revocation of any authorizer’s chartering authority, the commission shall manage the timely and orderly transfer of each charter contract held by that authorizer to another authorizer in the state, with the mutual agreement of each affected public charter school and proposed new authorizer. The new authorizer shall assume the existing charter contract for the remainder of the charter term.
   Sec. 8.  NEW SECTION.  257A.7  Application process.
   1.  Request for proposals.
   a.  To solicit, encourage, and guide the development of quality public charter school applications, every authorizer operating under this chapter shall issue and broadly publicize a request for proposals by August 1. The content and dissemination of the request for proposals shall be consistent with the purposes and requirements of this chapter.
   b.  Charter applicants may submit a proposal for a particular public charter school to no more than one authorizer at a time.
   c.  The commission shall annually establish and disseminate a statewide timeline for charter approval or denial decisions, which shall apply to all authorizers in the state.
   d.  Each authorizer’s request for proposals shall present the authorizer’s strategic vision for chartering, including a clear statement of any preferences the authorizer wishes to grant to applications that assist at-risk students.
   e.  The request for proposals shall include or otherwise direct applicants to the performance framework that the authorizer has developed for public charter school oversight and evaluation in accordance with section 257A.8, subsection 1.
   f.  The request for proposals shall include the criteria that will guide the authorizer’s decision to approve or deny a charter application. 
   g.  The request for proposals shall state clear, appropriately detailed questions as well as guidelines concerning the format and content essential for applicants to demonstrate the capacities necessary to establish and operate a successful public charter school.
   h.  The request for proposals shall require charter applications to provide or describe thoroughly, and each charter application shall provide or describe thoroughly, all of the following essential elements of the proposed school plan:
   (1)  An executive summary.
   (2)  The mission and vision of the proposed public charter school, including identification of the targeted student population and the community the school hopes to serve.
   (3)  The location or geographic area proposed for the school.
   (4)  The grades to be served each year for the full term of the charter contract.
   (5)  Minimum, planned, and maximum enrollment per grade per year for the term of the charter contract.
   (6)  Evidence of need and community support for the proposed public charter school.
   (7)  Background information on the proposed founding governing board members and, if identified, the proposed school leadership and management team.
   (8)  The school’s proposed calendar and sample daily schedule.
   (9)  A description of the academic program aligned with the comprehensive school improvement plan and reporting requirements of section 256.7, subsection 21; the core curriculum established pursuant to section 256.7, subsection 26; the core content standards established pursuant to section 256.7, subsection 28; and the state educational standards pursuant to section 256.11.
   (10)  A description of the school’s instructional design, including the type of learning environment, class size and structure, curriculum overview, and teaching methods.
   (11)  The school’s plan for using internal and external assessments to measure and report student progress on the performance framework developed by the authorizer in accordance with section 257A.8, subsection 1.
   (12)  The school’s plans for identifying and successfully serving students with disabilities, children requiring special education pursuant to chapter 256B, students who are English language learners, students who are academically behind, and gifted students, including but not limited to compliance with applicable laws and rules.
   (13)  A description of cocurricular or extracurricular programs and how they will be funded and delivered.
   (14)  Plans and timelines for student recruitment and enrollment, including lottery procedures.
   (15)  The school’s student discipline policies, including those for children requiring special education as defined in section 256B.2, subsection 1, paragraph “a”.
   (16)  An organization chart that clearly presents the public charter school’s organizational structure, including lines of authority and reporting between the governing board, staff, any related advisory bodies or councils, and any external organizations that will play a role in managing the school. 
   (17)  A clear description of the roles and responsibilities for the governing board, the public charter school’s leadership and management team, and any other entities shown in the organization chart.
   (18)  A staffing chart for the public charter school’s first year, and a staffing plan for the term of the charter.
   (19)  Plans for recruiting and developing public charter school leadership and staff.
   (20)  The public charter school’s leadership and teacher employment policies, including performance evaluation plans.
   (21)  Proposed governing bylaws.
   (22)  Explanations of any partnerships or contractual relationships central to the public charter school’s operations or mission.
   (23)  The public charter school’s plans for providing transportation, food service, and all other significant operational or ancillary services.
   (24)  Opportunities and expectations for parent involvement.
   (25)  A detailed public charter school start-up plan, identifying tasks, timelines, and responsible individuals.
   (26)  Description of the public charter school’s financial plan and policies, including financial controls and audit requirements.
   (27)  A description of the insurance coverage the public charter school will obtain.
   (28)  Start-up and five-year budgets with clearly stated assumptions.
   (29)  Start-up and first-year cash-flow projections with clearly stated assumptions.
   (30)  Evidence of anticipated fund-raising contributions, if claimed in the application.
   (31)  A sound facilities plan, including backup or contingency plans if appropriate.
   i.  In the case of an application to establish a public charter school by converting an existing noncharter public school to public charter school status, the request for proposals shall additionally require the applicants to demonstrate support for the proposed public charter school conversion by a petition signed by a majority of teachers and a petition signed by a majority of parents of students in the existing noncharter public school.
   j.  In the case of a proposal to establish a virtual public charter school, the request for proposals shall additionally require the applicants to describe the proposed virtual public charter school’s system of course credits and how the school will do the following:
   (1)  Monitor and verify full-time student enrollment, student participation in a full course load, credit accrual, and course completion.
   (2)  Monitor and verify student progress and performance in each course through regular, proctored assessments and submissions of coursework.
   (3)  Conduct parent-teacher conferences.
   (4)  Administer state-required assessments to all students in a proctored setting.
   k.  In the case of a proposed public charter school that intends to contract with an education service provider for substantial educational services, management services, or both types of services, the request for proposals shall additionally require the applicants to do the following:
   (1)  Provide evidence of the education service provider’s success in serving student populations similar to the targeted population, including demonstrated academic achievement as well as successful management of nonacademic school functions if applicable.
   (2)  Provide a term sheet setting forth the proposed duration of the service contract; roles and responsibilities of the governing board, the school staff, and the service provider; scope of services and resources to be provided by the education service provider; performance evaluation measures and timelines; compensation structure, including clear identification of all fees to be paid to the education service provider; methods of contract oversight and enforcement; investment disclosure; and conditions for renewal and termination of the contract.
   (3)  Disclose and explain any existing or potential conflicts of interest between the public charter school governing board and the proposed education service provider or any affiliated business entities.
   l.  In the case of a public charter school proposal from an applicant that currently operates one or more schools in any state or nation, the request for proposals shall additionally require the applicant to provide evidence of past performance and current capacity for growth.
   2.  Application decision-making process.
   a.  In reviewing and evaluating charter applications, authorizers shall employ procedures, practices, and criteria consistent with nationally recognized principles and standards for quality charter authorizing. The application review process shall include thorough evaluation of each written charter application, an in-person interview with the applicant group, and an opportunity in a public forum for local residents to learn about and provide input on each application.
   b.  In deciding whether to approve charter applications, authorizers shall do the following:
   (1)  Grant charters only to applicants that have demonstrated competence in each element of the authorizer’s published approval criteria and are likely to open and operate a successful public charter school.
   (2)  Base decisions on documented evidence collected through the application review process.
   (3)  Follow charter-granting policies and practices that are transparent, based on merit, and avoid conflicts of interest or any appearance of conflicts of interests.
   c.  No later than ninety days after the filing of a charter application, the authorizer shall decide to approve or deny the charter application. The authorizer shall adopt by resolution all charter approval or denial decisions in an open meeting of the authorizer’s governing board.
   d.  An approval decision may include, if appropriate, reasonable conditions that the charter applicant must meet before a charter contract may be executed pursuant to subsection 5.
   e.  For any charter denial, the authorizer shall clearly state, for public record, its reasons for denial. A denied applicant may subsequently reapply to that authorizer or apply to any other authorizer in the state.
   f.  Within ten days of taking action to approve or deny a charter application, the authorizer shall report to the commission the action it has taken. The authorizer shall provide a copy of the report to the charter applicant at the same time that the report is submitted to the commission. The report shall include a copy of the authorizer governing board’s resolution setting forth the action taken and reasons for the decision and assurances as to compliance with all of the procedural requirements and application elements set forth in this section. 
   3.  Purposes and limitations of charter applications.  The purposes of the charter application are to present the proposed public charter school’s academic and operational vision and plans, demonstrate the applicant’s capacities to execute the proposed vision and plans, and provide the authorizer a clear basis for assessing the applicant’s plans and capacities. An approved charter application shall not serve as the school’s charter contract.
   4.  Initial charter term.  An initial charter shall be granted for a term of five operating years. The charter term shall commence on the public charter school’s first day of operation. An approved public charter school may delay its opening for one school year in order to plan and prepare for the school’s opening. If the public charter school requires an opening delay of more than one school year, the school must request an extension from its authorizer. The authorizer may grant or deny the extension depending on the particular public charter school’s circumstances.
   5.  Charter contracts.
   a.  Within thirty days of approval of a charter application, the authorizer and the governing board of the approved public charter school shall execute a charter contract that clearly sets forth the academic and operational performance expectations and measures by which the public charter school will be judged and the administrative relationship between the authorizer and public charter school, including each party’s rights and duties. The performance expectations and measures set forth in the charter contract shall include but need not be limited to applicable federal and state accountability requirements. The performance provisions may be refined or amended by mutual agreement after the public charter school is operating and has collected baseline achievement data for its enrolled students.
   b.  The charter contract for a virtual public charter school shall include description and agreement regarding the methods by which the school will do the following:
   (1)  Monitor and verify full-time student enrollment, student participation in a full course load, credit accrual, and course completion.
   (2)  Monitor and verify student progress and performance in each course through regular, proctored assessments and submissions of coursework.
   (3)  Conduct parent-teacher conferences.
   (4)  Administer state-required assessments to all students in a proctored setting.
   c.  The charter contract shall be signed by the president of the authorizer’s governing board and the president of the public charter school’s governing body. Within ten days of executing a charter contract, the authorizer shall submit to the commission written notification of the charter contract execution, including a copy of the executed charter contract and any attachments.
   d.  A public charter school shall not commence operations without a charter contract executed in accordance with this subsection and approved in an open meeting of the authorizer’s governing board.
   6.  Preopening requirements or conditions.  Authorizers may establish reasonable preopening requirements or conditions to monitor the start-up progress of newly approved public charter schools and ensure that they are prepared to open smoothly on the date agreed, and to ensure that each school meets all building, health, safety, insurance, and other legal requirements for school opening.
   Sec. 9.  NEW SECTION.  257A.8  Accountability.
   1.  Performance framework.
   a.  The performance provisions within the charter contract shall be based on a performance framework that clearly sets forth the academic and operational performance indicators, measures, and metrics that will guide the authorizer’s evaluations of each public charter school. The performance framework shall include indicators, measures, and metrics for, at a minimum, all of the following:
   (1)  Student academic proficiency.
   (2)  Student academic growth.
   (3)  Achievement gaps in both proficiency and growth between major student subgroups.
   (4)  Attendance.
   (5)  Recurrent enrollment from year to year.
   (6)  For secondary schools, postsecondary readiness.
   (7)  Financial performance and sustainability.
   (8)  Board performance and stewardship, including compliance with all applicable laws, rules, and terms of the charter contract.
   b.  Annual performance targets shall be set by each public charter school in conjunction with its authorizer, and shall be designed to help each school meet applicable federal, state, and authorizer expectations.
   c.  The performance framework shall allow the inclusion of additional rigorous, valid, and reliable indicators proposed by a public charter school to augment external evaluations of its performance, provided that the authorizer approves the quality and rigor of such school-proposed indicators, and they are consistent with the purposes of this chapter.
   d.  The performance framework shall require the disaggregation of all student performance data by major student subgroups including but not limited to gender, race, poverty status, special education status, English learner status, and talented and gifted status.
   e.  For each public charter school it oversees, the authorizer shall be responsible for collecting, analyzing, and reporting all data from state assessments in accordance with the performance framework.
   f.  Multiple public charter schools operating under a single charter contract or overseen by a single governing board shall be required to report their performance as separate, individual schools, and each school shall be held independently accountable for its performance.
   2.  Ongoing oversight and corrective actions.
   a.  An authorizer shall continually monitor the performance and legal compliance of the public charter schools it oversees, including collecting and analyzing data to support ongoing evaluation according to the charter contract. Every authorizer may conduct or require oversight activities that enable the authorizer to fulfill its responsibilities under this chapter, including conducting appropriate inquiries and investigations, so long as those activities are consistent with this chapter, adhere to the terms of the charter contract, and do not unduly inhibit the autonomy granted to public charter schools. 
   b.  Each authorizer shall annually publish and provide, as part of its annual report to the commission and the general assembly, a performance report for each public charter school it oversees, in accordance with the performance framework set forth in the charter contract and subsection 1. The authorizer may require each public charter school it oversees to submit an annual report to assist the authorizer in gathering complete information about each school, consistent with the performance framework.
   c.  If a public charter school’s performance or legal compliance appears unsatisfactory, the authorizer shall promptly notify the public charter school of the perceived problem and provide reasonable opportunity for the school to remedy the problem, unless the problem warrants revocation in which case the revocation time frames will apply.
   d.  Every authorizer may take appropriate corrective actions or exercise sanctions short of revocation in response to apparent deficiencies in public charter school performance or legal compliance. Such actions or sanctions may include, if warranted, requiring a school to develop and execute a corrective action plan within a specified time frame.
   3.  Renewals, revocations, and nonrenewals.
   a.  A charter may be renewed for successive five-year terms of duration, although the authorizer may vary the term based on the performance, demonstrated capacities, and particular circumstances of each public charter school. An authorizer may grant renewal with specific conditions for necessary improvements to a public charter school.
   b.  No later than December 1 annually, the authorizer shall issue a public charter school performance report and charter renewal application guidance to any public charter school whose charter will expire the following year. The performance report shall summarize the public charter school’s performance record to date, based on the data required by this chapter and the charter contract, and shall provide notice of any weaknesses or concerns perceived by the authorizer concerning the public charter school that may jeopardize its position in seeking renewal if not timely rectified. The public charter school shall have thirty days to respond to the performance report and submit any corrections or clarifications for the report.
   c.  The renewal application guidance shall, at a minimum, provide an opportunity for the public charter school to do the following:
   (1)  Present additional evidence, beyond the data contained in the performance report, supporting its case for charter renewal.
   (2)  Describe improvements undertaken or planned for the school.
   (3)  Detail the school’s plans for the next charter term.
   d.  The renewal application guidance shall include or refer explicitly to the criteria that will guide the authorizer’s renewal decisions, which shall be based on the performance framework set forth in the charter contract and consistent with this chapter.
   e.  No later than August 1, the governing board of a public charter school seeking renewal beginning with the next fiscal year shall submit a renewal application to the charter authorizer pursuant to the renewal application guidance issued by the authorizer. The authorizer shall rule by resolution on the renewal application no later than ninety days after the filing of the renewal application.
   f.  In making charter renewal decisions, every authorizer shall do the following:
   (1)  Ground its decisions in evidence of the school’s performance over the term of the charter contract in accordance with the performance framework set forth in the charter contract.
   (2)  Ensure that data used in making renewal decisions are available to the school and the public.
   (3)  Provide a public report summarizing the evidence basis for each decision.
   g.  A charter contract may be revoked at any time or not renewed if the authorizer determines that the public charter school did any of the following or otherwise failed to comply with the provisions of this chapter:
   (1)  Commits a material and substantial violation of any of the terms, conditions, standards, or procedures required under this chapter or the charter contract.
   (2)  Fails to meet or make sufficient progress toward the performance expectations set forth in the charter contract.
   (3)  Fails to meet generally accepted standards of fiscal management.
   (4)  Substantially violates any material provision of law from which the public charter school was not exempted.
   h.  An authorizer must develop revocation and nonrenewal processes that do the following:
   (1)  Provide the charter holders with a timely notification of the prospect of revocation or nonrenewal and of the reasons for such possible closure.
   (2)  Allow the charter holders a reasonable amount of time in which to prepare a response.
   (3)  Provide the charter holders with an opportunity to submit documents and give testimony challenging the rationale for closure and in support of the continuation of the school at an orderly proceeding held for that purpose.
   (4)  Allow the charter holders access to representation by counsel and to call witnesses on their behalf.
   (5)  Permit the recording of such proceedings.
   (6)  After a reasonable period for deliberation, require that a final determination be made and conveyed in writing to the charter holders.
   i.  If an authorizer revokes or does not renew a charter, the authorizer shall clearly state, in a resolution of its governing board, the reasons for the revocation or nonrenewal.
   j.  Within ten days of taking action to renew, not renew, or revoke a charter, the authorizer shall report to the commission the action taken, and shall provide a copy of the report to the public charter school at the same time that the report is submitted to the commission. The report shall include a copy of the authorizer governing board’s resolution setting forth the action taken and reasons for the decision and assurances as to compliance with all of the requirements set forth in this chapter.
   4.  School closure and dissolution.
   a.  Prior to any public charter school closure decision, an authorizer shall have developed a public charter school closure protocol to ensure timely notification to parents, orderly transition of students and student records to new schools, and proper disposition of school funds, property, and assets in accordance with the requirements of this chapter. The protocol shall specify tasks, timelines, and responsible parties, including delineating the respective duties of the school and the authorizer. In the event of a public charter school closure for any reason, the authorizer shall oversee and work with the closing school to ensure a smooth and orderly closure and transition for students and parents, as guided by the closure protocol.
   b.  In the event of a public charter school closure for any reason, the assets of the school shall be distributed first to satisfy outstanding payroll obligations for employees of the school, then to creditors of the school, and then to the commission for transfer to the treasurer of state for deposit in the general fund of the state. If the assets of the school are insufficient to pay all parties to whom the school owes compensation, the prioritization of the distribution of assets may be determined by decree of a court of law.
   5.  Charter transfers.  Transfer of a charter contract, and of oversight of that public charter school, from one authorizer to another before the expiration of the charter term shall not be permitted except by special petition to the commission by a public charter school or its authorizer. The commission shall review such petitions on a case-by-case basis and may grant transfer requests in response to special circumstances and evidence that such a transfer would serve the best interests of the public charter school’s students.
   6.  Annual report.  On or before December 1 of each year beginning in the first year after any public charter school established pursuant to this chapter has been operating for a full school year, the commission shall issue to the governor, the general assembly, and the public at large, an annual report on the state’s public charter schools established pursuant to this chapter, drawing from the annual reports submitted by every authorizer as well as any additional relevant data compiled by the commission, for the school year ending in the preceding calendar year. The annual report shall include a comparison of the performance of public charter school students with the performance of academically, ethnically, and economically comparable groups of students in noncharter public schools. In addition, the annual report shall include the commission’s assessment of the successes, challenges, and areas for improvement in meeting the purposes of this chapter, including the commission’s assessment of the sufficiency of funding for public charter schools, the efficacy of the state formula for authorizer funding, and any suggested changes in state law or policy necessary to strengthen the public charter schools established under this chapter.
   Sec. 10.  NEW SECTION.  257A.9  Operations and autonomy.
   1.  Legal status of public charter school.
   a.  Notwithstanding any provision of law to the contrary, to the extent that any provision of this chapter is inconsistent with any other state or local law, rule, or regulation, the provisions of this chapter shall govern and be controlling.
   b.  A public charter school shall be a nonprofit education organization.
   c.  A public charter school shall be subject to all federal laws and authorities enumerated herein or arranged by charter contract with the school’s authorizer, where such contracting is consistent with applicable laws, rules, and regulations. 
   d.  Except as provided in this chapter, a public charter school shall not be subject to the state’s education statutes or any state or local rule, regulation, policy, or procedure relating to noncharter public schools within an applicable local school district regardless of whether such rule, regulation, policy, or procedure is established by the local school board, the state board of education, or the state department of education. 
   e.  A charter contract may include one or more schools, to the extent approved by the authorizer and consistent with applicable law. Each public charter school that is part of a charter contract shall be separate and distinct from any others.
   f.  A single governing board may hold one or more charter contracts. Each public charter school that is part of a charter contract shall be separate and distinct from any others.
   2.  Local educational agency status.
   a.  A public charter school shall function as a local educational agency. A public charter school shall be responsible for meeting the requirements of a local educational agency under applicable federal, state, and local laws, including those relating to special education. Local educational agency status shall not preclude a public charter school from developing partnerships with districts for services, resources, and programs by mutual agreement or formal contract.
   b.  A public charter school shall have primary responsibility for special education at the school, including identification and service provision. It shall be responsible for meeting the needs of enrolled students with disabilities. In instances where a student’s individualized education program team determines that a student’s needs are so profound that they cannot be met in the public charter school and that the public charter school cannot provide a free, appropriate public education to that student, the student’s district of residence shall place the student in a more appropriate setting.
   Sec. 11.  NEW SECTION.  257A.10  Funding.
   1.  Enrollment.  The enrollment of students attending public charter schools shall be included in the enrollment, attendance, and, if applicable, count of children requiring special education of the school district in which the student resides. The public charter school shall report all such data to the school districts of residence in a timely manner. Each school district shall report such enrollment, attendance, and count of students with disabilities to the state department of education.
   2.  Operational funding.  The local school district of residence shall pay directly to the public charter school for each student enrolled in the public charter school who resides in the school district an amount for that student equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for local school districts, notwithstanding the oversight fee decreases pursuant to section 257A.5, subsection 6.
   3.  Payment schedule.  Payments made pursuant to this section shall be made by local school districts in twelve substantially equal installments each year beginning on the first business day of July and every month thereafter. Amounts payable under this section shall be determined by the department of education. Amounts payable to a public charter school in its first year of operation shall be based on the projections of initial-year enrollment set forth in the charter contract. Such projections shall be reconciled with the actual enrollment at the end of the public charter school’s first year of operation, and any necessary adjustments shall be made to payments during the school’s second year of operation.
   4.  Sanctions for failure to make payments.  In the event of the failure of a local school district to make payments required by this section, the department of management shall deduct from the state foundation aid paid under section 257.16 to the school district an amount equal to the unpaid obligation. The department of management shall pay over such sum to the public charter school upon certification of the department of education. The department of management shall adopt rules to implement the provisions of this subsection.
   5.  Categorical funding.  A local school district shall direct the proportionate share of moneys generated under federal and state categorical aid programs pursuant to section 257.10 to public charter schools serving students eligible for such aid. A local school district shall ensure that public charter schools with rapidly expanding enrollments are treated equitably in the calculation and disbursement of all federal and state categorical aid program dollars. Each public charter school that serves students who may be eligible to receive services provided through such programs shall comply with all reporting requirements to receive the aid.
   6.  Special education funding.
   a.  A local school district shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.
   b.  At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services.
   7.  Generally accepted accounting principles —— independent audit.
   a.  A public charter school shall adhere to generally accepted accounting principles.
   b.  A public charter school shall annually engage an external auditor to do an independent audit of the school’s finances. A public charter school shall file a copy of each audit report and accompanying management letter to its authorizer by October 1.
   8.  Transportation funding.
   a.  The department of education shall disburse state transportation funding pursuant to chapter 285 to a local school district for each of the public charter school students residing in the local school district on the same basis and in the same manner as it is paid to local school districts. A local school district shall disburse state transportation funding to a public charter school in proportion to the amount generated by the school’s students who reside in the local school district.
   b.  A public charter school may enter into a contract with a local school district or private provider to provide transportation to the school’s students.
   9.  Budget reserves.  Any moneys received by a public charter school from any source and remaining in the public charter school’s accounts at the end of any budget year shall remain in the public charter school’s accounts for use by the public charter school during subsequent budget years.
   10.  Ability to accept gifts, donations, and grants.  This chapter shall not be construed to prohibit any person or organization from providing funding or other assistance to the establishment or operation of a public charter school. The governing board of a public charter school may accept gifts, donations, and grants of any kind made to the public charter school and to expend or use such gifts, donations, and grants in accordance with the conditions prescribed by the donor; provided, however, that a gift, donation, or grant shall not be accepted if subject to a condition that is contrary to any provision of law or term of the charter contract.
   Sec. 12.  NEW SECTION.  257A.11  Facilities.
   1.  Per-student facility allowance.
   a.  The per-student facility allowance for public charter schools shall be determined as follows:  the total capital costs for public schools in the state over the past five years shall be divided by the total student count in the state over the past five years.
   b.  The actual facility allowance payments to be received by each public charter school shall be determined as follows: the per-student facility allowance shall be multiplied by the number of students estimated to be attending each public charter school.
   2.  Public charter school facility grant program.
   a.  The state board of education shall establish, within available bond authorizations, a grant program to assist public charter schools in financing school building projects, general improvements to school buildings, and repayment of debt for school building projects. Public charter schools may apply for such grants to the state board of education at such time and in such manner as the state board of education prescribes. The state board of education shall give preference to applications that provide for matching funds from nonstate sources.
   b.  For the purposes described in paragraph “a”, the Iowa finance authority shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate amounts to be determined by the school budget review committee.
   c.  The proceeds of the sale of bonds under paragraph “b”, to the extent of the amount specified by the Iowa finance authority pursuant to paragraph“b” shall be used by the state board of education for the purpose of grants pursuant to paragraph “a”.
   d.  Bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the treasurer of state shall pay such principal and interest as the same become due.
   3.  Public charter school facility revolving loan program.
   a.  A public charter school facility revolving loan program is created in the state treasury under the control of the state board of education. The public charter school facility revolving loan program shall be comprised of federal funds obtained by the state for public charter schools and any other funds appropriated or transferred to the fund by the state. Funds appropriated to the public charter school facility revolving loan program shall remain available for the purposes of the program until reappropriated or reverted by the general assembly.
   b.  Loans may be made from moneys in the public charter school facility revolving loan program to a public charter school, upon application by a public charter school and approval by the state board of education or its designee. Money loaned to a public charter school pursuant to this subsection shall be for construction, purchase, renovation, and maintenance of public charter school facilities. A loan to a public charter school shall not exceed the number of years allowed for loan payment or the loan amount specified by the Iowa finance authority. A public charter school may receive multiple loans from the public charter school facility revolving loan program, as long as the total number of years allowed for loan payment or the loan amount is not greater than specified by the Iowa finance authority.
   c.  The Iowa finance authority or its designee may consider all of the following when making a determination as to the approval of a public charter school’s loan application:
   (1)  Soundness of the financial business plans of the applicant public charter school.
   (2)  Availability to the public charter school of other sources of funding.
   (3)  Geographic distribution of loans made from the public charter school facility revolving loan program.
   (4)  The impact that loans received pursuant to this subsection will have on the public charter school’s receipt of other private and public financing.
   (5)  Plans for innovatively enhancing or leveraging funds received pursuant to this subsection, such as loan guarantees or other types of credit enhancements.
   (6)  The financial needs of the public charter school.
   d.  Commencing with the first fiscal year following the fiscal year the public charter school receives the loan, the department of management shall deduct from apportionments made to the public charter school, as appropriate, an amount equal to the annual repayment of the amount loaned to the public charter school under this subsection and pay the same amount into the public charter school facility revolving loan account in the state treasury. Repayment of the full amount loaned to the public charter school shall be deducted by the department of management in equal annual amounts over a number of years agreed upon between the public charter school and the state board of education or its designee, not to exceed the number of years allowed for loan payment specified by the Iowa finance authority for any loan.
   e.  Notwithstanding other provisions of law, a loan may be made to a public charter school pursuant to this subsection only in the case of a public charter school that is incorporated.
   f.  Notwithstanding other provisions of law, in the case of default of a loan made directly to a public charter school pursuant to this subsection, the public charter school shall be solely liable for repayment of the loan.
   4.  Bonding authority.
   a.  As used in this subsection and subsection 5, unless the context otherwise requires:
   (1)  “Authority” means the Iowa finance authority.
   (2)  “Bonds” means revenue bonds which are payable solely as provided in this subsection.
   b.  The authority shall cooperate with the governing board of public charter schools established pursuant to this chapter and private developers, acting in conjunction with a governing body to build school facilities in connection with the public charter school, in the creation, administration, and funding of a public charter school bond program to finance school facilities in connection with the public charter school.
   c.  The authority may issue its bonds and notes for the purpose of funding the nonrecurring cost of acquiring, constructing, and equipping a public charter school-related facility.
   d.  The authority may issue its bonds and notes for the purposes of this subsection and may enter into one or more lending agreements or purchase agreements with one or more bondholders or noteholders containing the terms and conditions of the repayment of and the security for the bonds or notes. The authority and the bondholders or noteholders or a trustee agent designated by the authority may enter into agreements to provide for any of the following:
   (1)  That the proceeds of the bonds and notes and the investments of the proceeds may be received, held, and disbursed by the authority or by a trustee or agent designated by the authority.
   (2)  That the bondholders or noteholders or a trustee or agent designated by the authority may collect, invest, and apply the amount payable under the loan agreements or any other instruments securing the debt obligations under the loan agreements.
   (3)  That the bondholders or noteholders may enforce the remedies provided in the loan agreements or other instruments on their own behalf without the appointment or designation of a trustee. If there is a default in the principal of or interest on the bonds or notes or in the performance of any agreement contained in the loan agreements or other instruments, the payment or performance may be enforced in accordance with the loan agreement or other instrument.
   (4)  Other terms and conditions as deemed necessary or appropriate by the authority.
   e.  The powers granted the authority under this subsection are in addition to other powers contained in chapter 16. The authority shall adopt rules pursuant to chapter 17A to implement this subsection. All other provisions of chapter 16, except section 16.28, subsection 4, apply to bonds or notes issued and powers granted to the authority under this subsection, except to the extent they are inconsistent with this subsection.
   f.  All bonds or notes issued by the authority in connection with the program are exempt from taxation by this state and the interest on the bonds or notes is exempt from state income tax, both personal and corporate.
   g.  The authority may provide in the resolution, trust agreement, or other instrument authorizing the issuance of its bonds or notes pursuant to this subsection that the principal of, premium, and interest on the bonds or notes are payable from any of the following and may pledge the same to its bonds and notes:
   (1)  From the net rents, profits, and income arising from the project or property pledged or mortgaged.
   (2)  From the net rents, profits, and income which has not been pledged for other purposes arising from any similar facility under the control and management of the public charter school or the public charter school’s governing body.
   (3)  From the funding received by the public charter school governing board pursuant to section 257A.10.
   (4)  From the amounts on deposit in the name of a public charter school or a private developer or operator of a public charter school facility, including but not limited to revenues from a purchase, rental, or lease agreement, loan agreement, or other facility charges. 
   (5)  From the amounts payable to the authority, the public charter school or the governing board, or a private developer or operator, pursuant to a loan agreement, lease agreement, or sale agreement.
   (6)  From funds received pursuant to subsection 6.
   (7)  From the other funds or accounts established by the authority in connection with the program or the sale and issuance of its bonds or notes.
   h.  No obligation created under this subsection shall ever be or become a charge against the state of Iowa but all such obligations, including principal and interest, shall be payable solely as provided in this subsection.
   i.  The authority may establish reserve funds to secure one or more issues of its bonds or notes. The authority may deposit in a reserve fund established under this subsection, the proceeds of the sale of its bonds or notes and other money which is made available from any other source.
   j.  A pledge made in respect of bonds or notes is valid and binding from the time the pledge is made. The money or property so pledged and received after the pledge by the authority is immediately subject to the lien of the pledge without physical delivery or further act. The lien of the pledge is valid and binding as against all persons having claims of any kind in tort, contract, or otherwise against the authority whether or not the parties have notice of the lien. Neither the resolution, trust agreement, nor any other instrument by which a pledge is created needs to be recorded, filed, or perfected under chapter 554, to be valid, binding, or effective against all persons.
   k.  The members of the authority or persons executing the bonds or notes are not personally liable on the bonds or notes and are not subject to personal liability or accountability by reason of the issuance of the bonds or notes.
   l.  The bonds or notes issued by the authority are not an indebtedness or other liability of the state or of a political subdivision of the state within the meaning of any constitutional or statutory debt limitations, but are special obligations of the authority and are payable solely from the income and receipts or other funds or property of the public charter school, governing body, or private developer, and the amounts on deposit in a public charter school bond fund, and the amounts payable to the authority under its loan agreements with a public charter school, governing body, or private developer to the extent that the amounts are designated in the resolution, trust agreement, or other instrument of the authority authorizing the issuance of the bonds or notes as being available as security for the bonds or notes. The authority shall not pledge the faith or credit of the state or of a political subdivision of the state to the payment of any bonds or notes. The issuance of any bonds or notes by the authority does not directly, indirectly, or contingently obligate the state or a political subdivision of the state to apply money from, or levy, or pledge any form of taxation whatever to the payment of the bonds or notes.
   5.  Moral obligation of the state.
   a.  The general assembly hereby finds and declares that its intent in enacting subsection 4 is to support public charter schools and public charter school capital construction by helping qualified public charter schools that choose to have the authority issue bonds on their behalf obtain more favorable financing terms for the bonds.
   b.  If the authority has issued bonds on behalf of a public charter school that defaults on its debt service payment obligations, the board of directors of the authority shall submit to the governor a certificate certifying any amount of moneys required to fulfill the school’s debt service payment obligations. The governor shall submit a request for appropriations in an amount sufficient to fulfill the school’s debt service payment obligations and the general assembly may, but shall not be required to, appropriate moneys for that purpose. If, in its sole discretion, the general assembly appropriates any moneys for that purpose, the aggregate outstanding principal amount of bonds for which moneys may be appropriated for said purpose shall not exceed an amount specified by the authority.
   6.  Access to state facilities programs for noncharter public schools.
   a.  A public charter school shall have access to any school infrastructure funds available under chapter 292 and any school infrastructure safety funds available under section 423E.6.
   b.  The school district of residence shall pay directly to the public charter school for each student enrolled in the public charter school who resides in the school district an amount for that student equal to one hundred percent of the amount calculated pursuant to the secure an advanced vision for education fund distribution formula pursuant to section 423E.4.
   7.  Credit enhancement fund.
   a.  A credit enhancement fund under the control of the state board of education is created in the state treasury if the general assembly appropriates funds to the department of education for purposes of this subsection.
   b.  Using the moneys deposited in the fund, the state board of education shall make and disburse grants to eligible nonprofit corporations to carry out the purposes described in paragraph “c”.
   c.  The recipient of a grant under this fund shall use the moneys provided under the grant to carry out activities to assist public charter schools in doing the following:
   (1)  Obtaining financing to acquire interests in real property, including but not limited to purchase, lease, or donation, and including financing to cover planning, development, and other incidental costs.
   (2)  Obtaining financing for construction of facilities or the renovation, repair, or alteration of existing property or facilities, including but not limited to the purchase or replacement of fixtures and equipment; including financing to cover planning, development, and other incidental costs.
   (3)  Enhancing the availability of loans, including but not limited to mortgages and bonds.
   (4)  Obtaining lease guarantees.
   d.  Funds provided under a grant under this subsection shall not be used by a recipient to make direct loans or grants to public charter schools.
   8.  Access to district facilities and land.  A public charter school shall have a right of first refusal to purchase or lease at or below fair market value a closed public school facility or property or unused portions of a public school facility or property located in a local school district from which it draws its students if the local school district decides to sell or lease the public school facility or property.
   9.  Contracting for use of facilities.  A public charter school may negotiate and contract at or below fair market value with a local school district, the governing body of a state college or university or public community college, or any other public or for-profit or nonprofit private entity for the use of a facility for a school building.
   10.  Use of other facilities under preexisting zoning and land use designations.  Library, community service, museum, performing arts, theatre, cinema, church, community college, college, and university facilities may provide space to public charter schools within their facilities under their preexisting zoning and land use designations.
   11.  Exemptions from property taxes and certain fees.  
   a.  Any facility, or portion thereof, used to house a public charter school shall be exempt from property taxes.
   b.  Public charter school facilities are exempt from assessments of fees for building permits, fees for building and occupational licenses, impact fees, service availability fees, and assessments for special benefits.
   Sec. 13.  IOWA PUBLIC CHARTER SCHOOL COMMISSION.  There is appropriated from the general fund of the state to the Iowa public charter school commission for the fiscal year beginning July 1, 2011, and ending June 30, 2012, the following amount, or so much thereof as is necessary, to be used for the purposes designated:
   For purposes of administering chapter 257A, if enacted by this Act, including salaries, support, maintenance, and miscellaneous purposes:
.................................................. $    250,000
EXPLANATION
   This bill establishes the “Public Charter Schools Act”, and creates the Iowa public charter school commission as a public charter school authorizer oversight body. Local school boards, accredited public and private postsecondary institutions, cities, and governing boards of nonprofit or charitable organizations may apply to the commission for authorizing ability. The bill appropriates $250,000 from the general fund of the state to the commission for fiscal year 2011-2012 for purposes of administering the Code chapter.
   The bill includes legislative findings and declarations, and provides for the establishment of virtual public charter schools that will offer educational services predominantly through the internet.
   A public charter school shall be open to any student residing in the state and may limit admission to students within a given age group or grade level and may be organized around a special emphasis, theme, or concept as stated in the school’s application. A public charter school must enroll all students who wish to attend the school, unless the number of students exceeds the capacity of a program, class, grade level, or building. The bill includes provisions for enrollment preferences and credit transferability.
   Eligible public charter school authorizers are responsible for soliciting and evaluating charter applications, approving quality charter applications, declining to approve weak or inadequate charter applications, negotiating and executing sound charter contracts with each approved public charter school, monitoring the performance and legal compliance of public charter schools, and determining whether each charter contract merits renewal, nonrenewal, or revocation. An authorizing entity may delegate its duties to offices, employees, and contractors.
   To cover authorizer costs for overseeing public charter schools, the commission shall remit to each authorizer an oversight fee for each public charter school it authorizes. The oversight fee shall be drawn from and calculated as a uniform percentage of the per-student operational funding allocated to each public charter school, not to exceed 3 percent of each public charter school’s per-student funding in a single school year.
   The commission consists of nine members serving three-year terms. Five members shall be appointed by the governor; two members collectively shall be appointed by the president and minority leader of the senate; and two members collectively shall be appointed by the speaker and minority leader of the house of representatives. The commission must establish the annual application and approval process, including cycles and deadlines during the fiscal year, for all entities eligible to apply for chartering authority. The commission is responsible for overseeing the performance and effectiveness of all authorizers.
   The commission shall establish a statewide formula for authorizer funding, which shall apply uniformly to every authorizer in the state. The commission shall submit the formula, and any succeeding amendments to the formula, to the department of management, the general assembly, and the governor, and shall provide any additional information required by the department. The formula shall be established by statute prior to the appropriation or distribution of state funds for purposes of establishing a public charter school. The commission may establish a sliding scale for authorizer funding, with the funding percentage decreasing after the authorizer has achieved a certain threshold, such as after a certain number of years of authorizing or after a certain number of schools has been authorized.
   Funding is provided through the school district of residence, as the enrollment of students attending public charter schools must be included in the enrollment, attendance, and, if applicable, count of children requiring special education of the school district in which the student resides. The public charter school shall report all such data to the school districts of residence in a timely manner. Each school district shall report such enrollment, attendance, and count of students with disabilities to the state department of education. The school district must pay directly to the public charter school for each student enrolled in the public charter school who resides in the school district 100 percent of the amount calculated under the state’s funding formula, and any categorical funds, for that student. A school district shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.
   Every authorizer is required to submit to the commission and the general assembly an annual report. Persistently unsatisfactory performance of an authorizer’s portfolio of public charter schools, a pattern of well-founded complaints about the authorizer or its public charter schools, or other objective circumstances may trigger a special review by the commission.
   If an authorizer granted chartering authority persists, after due notice from the commission, in violating a material provision of a charter contract or its authorizing contract with the commission, or fails to remedy other identified authorizing problems, the commission shall notify the authorizer that it intends to revoke the authorizer’s chartering authority unless the authorizer demonstrates a timely and satisfactory remedy for the violation or deficiencies. 
   To solicit, encourage, and guide the development of quality public charter school applications, every authorizer must issue and broadly publicize a request for proposals. Charter applicants may submit a proposal for a particular public charter school to no more than one authorizer at a time. The bill includes a list of what each charter application must include.
   In the case of a proposal to establish a virtual public charter school, the request for proposals for applications shall additionally require the applicants to describe the proposed school’s system of course credits and how the school will monitor and verify full-time student enrollment, student participation in a full course load, credit accrual, and course completion; monitor and verify student progress and performance in each course through regular, proctored assessments and submissions of coursework; conduct parent-teacher conferences; and administer state-required assessments to all students in a proctored setting.
   A proposed public charter school may contract with an education service provider for substantial educational services, management services, or both types of services.
   In reviewing and evaluating charter applications, authorizers must employ procedures, practices, and criteria consistent with nationally recognized principles and standards for quality charter authorizing. The application review process shall include thorough evaluation of each written charter application, an in-person interview with the applicant group, and an opportunity in a public forum for local residents to learn about and provide input on each application. 
   In deciding whether to approve charter applications, authorizers must grant charters only to applicants that have demonstrated competence in each element of the authorizer’s published approval criteria and are likely to open and operate a successful public charter school; base decisions on documented evidence collected through the application review process; and follow charter-granting policies and practices that are transparent, based on merit, and avoid conflicts of interest or any appearance of conflicts of interests.
   For any charter denial, the authorizer shall clearly state, for public record, its reasons for denial. A denied applicant may subsequently reapply to that authorizer or apply to any other authorizer in the state.
   An initial charter shall be granted for a term of five operating years.
   The performance provisions within the charter contract shall be based on a performance framework that clearly sets forth the academic and operational performance indicators, measures, and metrics that will guide the authorizer’s evaluations of each public charter school. The performance framework includes indicators and measures for student academic proficiency, student academic growth, achievement gaps in both proficiency and growth between major student subgroups, attendance, recurrent enrollment from year to year, postsecondary readiness, financial performance and sustainability, and board performance and stewardship.
   The bill provides for ongoing oversight and corrective actions. Every authorizer is authorized to take appropriate corrective actions or exercise sanctions short of revocation in response to apparent deficiencies in public charter school performance or legal compliance. Such actions or sanctions may include, if warranted, requiring a school to develop and execute a corrective action plan within a specified time frame.
   A charter may be renewed for successive five-year terms of duration. A charter contract may be revoked at any time or not renewed if the authorizer determines that the public charter school commits a material and substantial violation of any of the terms, conditions, standards, or procedures required under the new Code chapter or the charter contract; fails to meet or make sufficient progress toward the performance expectations set forth in the charter contract; fails to meet generally accepted standards of fiscal management; or substantially violates any material provision of law from which the public charter school was not exempted.
   Prior to any public charter school closure decision, an authorizer must have developed a public charter school closure protocol to ensure timely notification to parents, orderly transition of students and student records to new schools, and proper disposition of school funds, property, and assets. In the event of a public charter school closure, the assets of the school shall be distributed first to satisfy outstanding payroll obligations for employees of the school, then to creditors of the school, and then to the commission for transfer to the treasurer of state for deposit in the state general fund. 
   On or before December 1, the commission must issue to the governor, the general assembly, and the public at large, an annual report on the state’s public charter schools, drawing from the annual reports submitted by every authorizer as well as any additional relevant data compiled by the commission, for the school year ending in the preceding calendar year. 
   A public charter school shall be a nonprofit education organization subject to all federal laws. For purposes of federal programs and funding, a public charter school shall function as a local educational agency. 
   The per-student facility allowance for public charter schools shall be the total capital costs for public schools in the state over the past five years divided by the total student count in the state over the past five years. The actual facility allowance payments to be received by each public charter school shall be determined as follows:  the per-student facility allowance shall be multiplied by the number of students estimated to be attending each public charter school.
   The bill directs the state board of education to establish, within available bond authorizations, a grant program to assist public charter schools in financing school building projects, general improvements to school buildings, and repayment of debt for school building projects. Public charter schools may apply for such grants to the state board of education at such time and in such manner as the state board of education prescribes. The state board of education shall give preference to applications that provide for matching funds from nonstate sources.
   The bill authorizes the Iowa finance authority to issue bonds in aggregate amounts to be determined by the school budget review committee. The proceeds of the sale of bonds shall be used by the authority for public charter school facilities.
   The bill establishes a public charter school facility revolving loan program in the state treasury under the control of the state board of education comprised of federal funds obtained by the state for public charter schools and any other funds appropriated or transferred to the fund by the state. Loans may be made from moneys in the revolving loan program to a public charter school. Money loaned to a public charter school shall be for construction, purchase, renovation, and maintenance of public charter school facilities. 
   A public charter school shall have access to any school infrastructure funds available under Code chapter 292, any school infrastructure safety funds available under Code section 423E.6, and the school district of residence shall pay directly to the public charter school for each student enrolled in the public charter school who resides in the school district an amount for that student equal to 100 percent of the amount calculated pursuant to the secure an advanced vision for education fund distribution formula pursuant to Code section 423E.4.
   The bill creates in the state treasury, if the general assembly appropriates funds to the department of education for purposes of the fund, a credit enhancement fund under the control of the state board of education. Fund moneys can be used by the state board to make and disburse grants to eligible nonprofit corporations to carry out activities to assist public charter schools in obtaining financing to acquire interests in real property and for construction of facilities or the renovation, repair, or alteration of existing property or facilities; for enhancing the availability of loans; and for obtaining lease guarantees.
   A public charter school is given first refusal rights to purchase or lease at or below fair market value a closed public school facility or property or unused portions of a public school facility or property located in a school district from which it draws its students if the school district decides to sell or lease the public school facility or property.
   A public charter school may negotiate and contract at or below fair market value with a school district, the governing body of a state college or university or public community college, or any other public or for-profit or nonprofit private entity for the use of facility for a school building.
   Any facility used to house a public charter school is exempt from property taxes and from assessments of fees for building permits, fees for building and occupational licenses, impact fees, service availability fees, and assessments for special benefits.