Senate File 2241 - Introduced SENATE FILE 2241 BY DONAHUE , DOTZLER , STAED , HARDMAN , DREY , BLAKE , PETERSEN , ZIMMER , QUIRMBACH , WINCKLER , BENNETT , BISIGNANO , WEINER , TRONE GARRIOTT , TOWNSEND , and WAHLS A BILL FOR An Act relating to charter school requirements, including 1 reporting requirements, governance standards, financial 2 accountability, and oversight by the state board of 3 education. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6073XS (5) 91 mb/jh

S.F. 2241 Section 1. Section 256.9, Code 2026, is amended by adding 1 the following new subsections: 2 NEW SUBSECTION . 80. Notify school districts of the amount 3 of resident students enrolled in a charter school under chapter 4 256E prior to the beginning of the school year. 5 NEW SUBSECTION . 81. Report to school districts the amount 6 of resident students who withdrew from a charter school under 7 chapter 256E and reentered the public school district during 8 the school year, indicating whether the student’s return to a 9 public school was voluntary. 10 Sec. 2. Section 256E.4, Code 2026, is amended by adding the 11 following new subsection: 12 NEW SUBSECTION . 8A. The state board shall not approve 13 a charter school application under this section if doing so 14 would result in more than one charter school per ten thousand 15 students statewide in the grade level groupings of elementary, 16 middle, or high school. 17 Sec. 3. Section 256E.5, Code 2026, is amended by adding the 18 following new subsection: 19 NEW SUBSECTION . 7A. The state board shall not approve 20 a charter school application under this section if doing so 21 would result in more than one charter school per ten thousand 22 students statewide in the grade level groupings of elementary, 23 middle, or high school. 24 Sec. 4. Section 256E.7, subsection 2, Code 2026, is amended 25 by adding the following new paragraphs: 26 NEW PARAGRAPH . 0v. Be subject to and comply with the 27 restrictions regarding the use of public funds for public 28 purposes under chapters 11, 274, and 279 in the same manner as 29 a school district. 30 NEW PARAGRAPH . 00v. Require each pupil to take all 31 applicable state and federally required student assessments and 32 report the results of those assessments to the pupil’s parents 33 or guardians and to the department of education, in the same 34 manner as a school district. 35 -1- LSB 6073XS (5) 91 mb/jh 1/ 8

S.F. 2241 Sec. 5. Section 256E.7, subsection 6, Code 2026, is amended 1 to read as follows: 2 6. A charter school shall enroll an eligible student who 3 submits a timely application unless the number of applications 4 exceeds the capacity of a program, class, grade level, or 5 building. In this case, students must be accepted by lot. 6 Upon enrollment of an eligible student, the charter school 7 shall notify the department and public school district of 8 residence not later than March 1 of the school year preceding 9 the school year of enrollment. 10 Sec. 6. Section 256E.7, subsection 11, Code 2026, is amended 11 by striking the subsection and inserting in lieu thereof the 12 following: 13 11. The governing board of a charter school shall be 14 composed in accordance with all of the following: 15 a. All members of the governing board shall be residents of 16 this state. 17 b. At least fifty percent of the membership of the governing 18 board shall be parents or legal guardians of students currently 19 enrolled in the charter school. 20 c. At least one member of the governing board shall be a 21 representative of the school district in which the charter 22 school is physically located. The representative shall be a 23 voting member of the governing board. 24 Sec. 7. Section 256E.7, Code 2026, is amended by adding the 25 following new subsections: 26 NEW SUBSECTION . 13. The governing board of a charter school 27 shall select and retain independent auditors and legal counsel. 28 A management entity shall not select the independent auditor or 29 legal counsel of the charter school. 30 NEW SUBSECTION . 14. Each charter school governing board 31 shall report to the department the amount of resident students 32 who withdrew from the charter school and reentered a public 33 school during the school year, indicating whether the student’s 34 return to a public school was voluntary. 35 -2- LSB 6073XS (5) 91 mb/jh 2/ 8

S.F. 2241 Sec. 8. Section 256E.10, Code 2026, is amended by adding the 1 following new subsection: 2 NEW SUBSECTION . 14. The state board shall develop and 3 implement oversight standards and procedures that provide for 4 all of the following: 5 a. Regular monitoring, including periodic on-site visits, 6 data validation, and annual performance reports evaluating 7 a charter school’s academic, financial, and operational 8 performance. 9 b. Differentiated oversight and monitoring based on a 10 charter school’s performance, including enhanced monitoring 11 for schools that fail to meet performance expectations or meet 12 compliance standards. Such monitoring may include corrective 13 action plans, probationary status, or nonrenewal of a charter 14 school contract. 15 Sec. 9. Section 256E.12, subsection 1, Code 2026, is amended 16 to read as follows: 17 1. Each charter school shall prepare and file an annual 18 report with the department. The department shall prescribe 19 by rule the required contents of the report, but each such 20 report shall include information regarding student achievement, 21 including annual academic growth and proficiency, graduation 22 rates, and financial performance and sustainability. Financial 23 performance reporting shall include detailed information 24 regarding the charter school’s revenues and expenditures, 25 including salaries and benefits, management or administrative 26 fees, contractual payments, and any profits, surpluses, or 27 other financial benefits realized by a founding or managing 28 entity, including an education management organization or 29 charter management organization, as well as any related-party 30 transactions. The reports are public records and the 31 examination, publication, and dissemination of the reports are 32 governed by the provisions of chapter 22 . 33 Sec. 10. Section 256E.12, Code 2026, is amended by adding 34 the following new subsection: 35 -3- LSB 6073XS (5) 91 mb/jh 3/ 8

S.F. 2241 NEW SUBSECTION . 3. Each charter school shall annually 1 report to the department the number of resident students who 2 applied for admission and the number of resident students who 3 were denied admission. The report must include the reason for 4 each denial. Personal information regarding an applicant in 5 a report submitted pursuant to this subsection shall be kept 6 confidential as required under the federal Family Educational 7 Rights and Privacy Act, 20 U.S.C. §1232g, and in the same 8 manner as personal information in student records maintained, 9 created, collected, or assembled by or for a school corporation 10 or educational institution in accordance with section 22.7, 11 subsection 1. 12 Sec. 11. 2013 Iowa Acts, chapter 121, section 73, subsection 13 2, is amended to read as follows: 14 2. The department shall develop an achievement score that 15 calculates aggregate growth as well as aggregate proficiency 16 of students which when combined with other academic indicators 17 results in an overall school performance grade for each 18 attendance center in the school district. For purposes of 19 calculating the performance grade, a student dropping out of 20 an accredited nonpublic school, a charter school established 21 pursuant to chapter 256E, or a charter school or innovation 22 zone school established pursuant to chapter 256F, shall not 23 adversely affect the performance grade of the student’s school 24 district of residence. The performance grade may also be used 25 as one measure to rank and classify schools into six different 26 performance categories: exceptional, high performing, 27 commendable, acceptable, needs improvement, and priority. 28 The categories may be used to define support and specialized 29 assistance to schools classified as needs improvement or 30 priority as well as to recognize schools designated exceptional 31 or high performing. Additionally, a closing gap score shall 32 be calculated as another measure to determine subgroup 33 performance and to rank and classify attendance centers. Other 34 academic indicators shall be defined as criterion referenced 35 -4- LSB 6073XS (5) 91 mb/jh 4/ 8

S.F. 2241 variables that will be utilized in the calculation of the 1 performance grade. Other academic indicators shall include 2 but not be limited to graduation rates, attendance rates, and 3 college-readiness rates. Additional indicators of academic 4 success and progress may include post-graduation data, 5 suspension and expulsion rates, levels of student engagement, 6 parent satisfaction, parent engagement, and staff working 7 conditions. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill relates to charter school requirements, including 12 reporting requirements, governance standards, financial 13 accountability, and oversight by the state board of education. 14 Current law requires charter schools to be subject to 15 and comply with all of the following in the same manner as 16 a school district: the governing board’s meetings shall be 17 conducted in a manner that is open to the public; all records, 18 documents, and electronic data of the charter school and of the 19 governing board shall be public records; be free of tuition 20 and application fees to Iowa resident students between the 21 ages of 5 and 21 years; comply with Code chapters 216 and 22 216A relating to civil and human rights; meet all applicable 23 federal, state, and local health and safety requirements and 24 laws prohibiting discrimination on the basis of race, creed, 25 color, sex, sexual orientation, national origin, religion, 26 ancestry, or disability; be prohibited from administering or 27 conducting an invasive physical examination of a student, a 28 student health screening that is not required by state or 29 federal law, or a formal examination or survey of a student 30 that is designed to assess the student’s mental, emotional, or 31 physical health that is not required by state or federal law, 32 without first acquiring the written consent of the student’s 33 parent or guardian; establish a multidisciplinary school 34 safety assessment; conduct state criminal history checks for 35 -5- LSB 6073XS (5) 91 mb/jh 5/ 8

S.F. 2241 teachers and registry checks for school employees; and meet 1 the requirements of Code section 256.7, subsection 21, and the 2 educational standards of Code section 256.11. 3 The bill requires charter schools to also be subject to and 4 comply with the restrictions regarding the use of public funds 5 for public purposes under Code chapters 11, 274, and 279 in 6 the same manner as a school district, and requires each pupil 7 to take all applicable state and federally required student 8 assessments and report the results of those assessments to 9 the pupil’s parents or guardians and to the department of 10 education, in the same manner as a school district. 11 The bill requires charter schools to annually report to the 12 department of education the number of resident students who 13 applied for admission and the number of resident students who 14 were denied admission, including the reason for each denial. 15 Current law requires charter schools to notify the public 16 school district of residence not later than March 1 of the 17 school year preceding the school year of enrollment. The bill 18 requires charter schools to also report to the department. The 19 bill further requires the department to notify school districts 20 of the amount of resident students enrolled in a charter school 21 under Code chapter 256E prior to the beginning of the school 22 year. 23 The bill requires each charter school governing board to 24 report to the department the amount of resident students who 25 withdrew from the charter school and reentered a public school 26 during the school year, indicating whether the student’s return 27 to a public school was voluntary. The bill further requires 28 the department to report such information to the affected 29 school districts. 30 The bill requires the governing board of a charter school to 31 select and retain independent auditors and legal counsel, and 32 prohibits a management entity from doing so. 33 The bill requires that all members of the governing board 34 of a charter school be residents of Iowa, at least 50 percent 35 -6- LSB 6073XS (5) 91 mb/jh 6/ 8

S.F. 2241 of the membership be parents or legal guardians of students 1 currently enrolled in the charter school, and at least one 2 member of the governing board be a representative of the 3 school district in which the charter school is physically 4 located. The bill requires the representative to be a voting 5 member of the governing board. Current law requires governing 6 board members of a charter school to provide full financial 7 disclosures that, at a minimum, meet the standards in Code 8 section 68B.35. 9 The bill requires the state board of education to develop 10 and implement oversight standards and procedures for charter 11 schools that provide for regular monitoring, including 12 periodic on-site visits, data validation, annual performance 13 reports evaluating a charter school’s academic, financial, 14 and operational performance, and differentiated oversight and 15 monitoring based on a charter school’s performance, including 16 enhanced monitoring for schools that fail to meet performance 17 expectations or meet compliance standards. Such monitoring 18 may include corrective action plans, probationary status, or 19 nonrenewal of a charter school contract. 20 The bill requires that the state board shall not approve a 21 charter school application if doing so would result in more 22 than one charter school per 10,000 students statewide in the 23 grade level groupings of elementary, middle, or high school. 24 The bill requires charter schools to include, in their 25 annual report concerning financial performance, detailed 26 information regarding the charter school’s revenues and 27 expenditures, including salaries and benefits, management or 28 administrative fees, contractual payments, and any profits, 29 surpluses, or other financial benefits realized by a founding 30 or managing entity, including an education management 31 organization or charter management organization, as well as any 32 related-party transactions. 33 Pursuant to the federal Every Student Succeeds Act and 2013 34 Iowa Acts, chapter 121, section 73, the department is required 35 -7- LSB 6073XS (5) 91 mb/jh 7/ 8

S.F. 2241 to publish on its internet site an online tool showing how 1 public schools performed on certain required measures. The 2 department fulfills these requirements by publishing the Iowa 3 school performance profiles annually. The bill provides that, 4 for purposes of calculating the performance grade, a student 5 dropping out of an accredited nonpublic school, a charter 6 school established pursuant to Code chapter 256E, or a charter 7 school or innovation zone school established pursuant to Code 8 chapter 256F, will not adversely affect the performance grade 9 of the student’s school district of residence. 10 -8- LSB 6073XS (5) 91 mb/jh 8/ 8