SF 2241 (LSB 6073XS (5) 91)

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 reporting requirements, governance standards, financial accountability, and oversight by the state board of education.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 256.9, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  80.  Notify school districts of the amount of resident students enrolled in a charter school under chapter 256E prior to the beginning of the school year.
   NEW SUBSECTION.  81.  Report to school districts the amount of resident students who withdrew from a charter school under chapter 256E and reentered the public school district during the school year, indicating whether the student’s return to a public school was voluntary.
    Sec. 2.  Section 256E.4, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  8A.  The state board shall not approve a charter school application under this section if doing so would result in more than one charter school per ten thousand students statewide in the grade level groupings of elementary, middle, or high school.
    Sec. 3.  Section 256E.5, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  7A.  The state board shall not approve a charter school application under this section if doing so would result in more than one charter school per ten thousand students statewide in the grade level groupings of elementary, middle, or high school.
    Sec. 4.  Section 256E.7, subsection 2, Code 2026, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  0v.  Be subject to and comply with the restrictions regarding the use of public funds for public purposes under chapters 11, 274, and 279 in the same manner as a school district.
   NEW PARAGRAPH.  00v.  Require each pupil to take all applicable state and federally required student assessments and report the results of those assessments to the pupil’s parents or guardians and to the department of education, in the same manner as a school district.
    Sec. 5.  Section 256E.7, subsection 6, Code 2026, is amended to read as follows:
   6.  A charter school shall enroll an eligible student who submits a timely application unless the number of applications exceeds the capacity of a program, class, grade level, or building. In this case, students must be accepted by lot. Upon enrollment of an eligible student, the charter school shall notify the department and public school district of residence not later than March 1 of the school year preceding the school year of enrollment. 
    Sec. 6.  Section 256E.7, subsection 11, Code 2026, is amended by striking the subsection and inserting in lieu thereof the following:
   11.  The governing board of a charter school shall be composed in accordance with all of the following:
   a.  All members of the governing board shall be residents of this state.
   b.  At least fifty percent of the membership of the governing board shall be parents or legal guardians of students currently enrolled in the charter school.
   c.  At least one member of the governing board shall be a representative of the school district in which the charter school is physically located. The representative shall be a voting member of the governing board.
    Sec. 7.  Section 256E.7, Code 2026, is amended by adding the following new subsections:
   NEW SUBSECTION.  13.  The governing board of a charter school shall select and retain independent auditors and legal counsel. A management entity shall not select the independent auditor or legal counsel of the charter school.
   NEW SUBSECTION.  14.  Each charter school governing board shall report to the department the amount of resident students who withdrew from the charter school and reentered a public school during the school year, indicating whether the student’s return to a public school was voluntary.
    Sec. 8.  Section 256E.10, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  14.  The state board shall develop and implement oversight standards and procedures that provide for all of the following:
   a.  Regular monitoring, including periodic on-site visits, data validation, and annual performance reports evaluating a charter school’s academic, financial, and operational performance.
   b.  Differentiated oversight and monitoring based on a charter school’s performance, including enhanced monitoring for schools that fail to meet performance expectations or meet compliance standards. Such monitoring may include corrective action plans, probationary status, or nonrenewal of a charter school contract.
    Sec. 9.  Section 256E.12, subsection 1, Code 2026, is amended to read as follows:
   1.  Each charter school shall prepare and file an annual report with the department. The department shall prescribe by rule the required contents of the report, but each such report shall include information regarding student achievement, including annual academic growth and proficiency, graduation rates, and financial performance and sustainability.  Financial performance reporting shall include detailed information regarding the charter school’s revenues and expenditures, including salaries and benefits, management or administrative fees, contractual payments, and any profits, surpluses, or other financial benefits realized by a founding or managing entity, including an education management organization or charter management organization, as well as any related-party transactions. The reports are public records and the examination, publication, and dissemination of the reports are governed by the provisions of chapter 22.
    Sec. 10.  Section 256E.12, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  Each charter school shall annually report to the department the number of resident students who applied for admission and the number of resident students who were denied admission. The report must include the reason for each denial. Personal information regarding an applicant in a report submitted pursuant to this subsection shall be kept confidential as required under the federal Family Educational Rights and Privacy Act, 20 U.S.C. §1232g, and in the same manner as personal information in student records maintained, created, collected, or assembled by or for a school corporation or educational institution in accordance with section 22.7, subsection 1.
    Sec. 11.  2013 Iowa Acts, chapter 121, section 73, subsection 2, is amended to read as follows:
   2.  The department shall develop an achievement score that calculates aggregate growth as well as aggregate proficiency of students which when combined with other academic indicators results in an overall school performance grade for each attendance center in the school district.  For purposes of calculating the performance grade, a student dropping out of an accredited nonpublic school, a charter school established pursuant to chapter 256E, or a charter school or innovation zone school established pursuant to chapter 256F, shall not adversely affect the performance grade of the student’s school district of residence. The performance grade may also be used as one measure to rank and classify schools into six different performance categories: exceptional, high performing, commendable, acceptable, needs improvement, and priority. The categories may be used to define support and specialized assistance to schools classified as needs improvement or priority as well as to recognize schools designated exceptional or high performing. Additionally, a closing gap score shall be calculated as another measure to determine subgroup performance and to rank and classify attendance centers. Other academic indicators shall be defined as criterion referenced variables that will be utilized in the calculation of the performance grade. Other academic indicators shall include but not be limited to graduation rates, attendance rates, and college-readiness rates. Additional indicators of academic success and progress may include post-graduation data, suspension and expulsion rates, levels of student engagement, parent satisfaction, parent engagement, and staff working conditions.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to charter school requirements, including reporting requirements, governance standards, financial accountability, and oversight by the state board of education.
   Current law requires charter schools to be subject to and comply with all of the following in the same manner as a school district: the governing board’s meetings shall be conducted in a manner that is open to the public; all records, documents, and electronic data of the charter school and of the governing board shall be public records; be free of tuition and application fees to Iowa resident students between the ages of 5 and 21 years; comply with Code chapters 216 and 216A relating to civil and human rights; meet all applicable federal, state, and local health and safety requirements and laws prohibiting discrimination on the basis of race, creed, color, sex, sexual orientation, national origin, religion, ancestry, or disability; be prohibited from administering or conducting an invasive physical examination of a student, a student health screening that is not required by state or federal law, or a formal examination or survey of a student that is designed to assess the student’s mental, emotional, or physical health that is not required by state or federal law, without first acquiring the written consent of the student’s parent or guardian; establish a multidisciplinary school safety assessment; conduct state criminal history checks for teachers and registry checks for school employees; and meet the requirements of Code section 256.7, subsection 21, and the educational standards of Code section 256.11.
   The bill requires charter schools to also be subject to and comply with the restrictions regarding the use of public funds for public purposes under Code chapters 11, 274, and 279 in the same manner as a school district, and requires each pupil to take all applicable state and federally required student assessments and report the results of those assessments to the pupil’s parents or guardians and to the department of education, in the same manner as a school district.
   The bill requires charter schools to annually report to the department of education the number of resident students who applied for admission and the number of resident students who were denied admission, including the reason for each denial. Current law requires charter schools to notify the public school district of residence not later than March 1 of the school year preceding the school year of enrollment. The bill requires charter schools to also report to the department. The bill further requires the department to notify school districts of the amount of resident students enrolled in a charter school under Code chapter 256E prior to the beginning of the school year.
   The bill requires each charter school governing board to report to the department the amount of resident students who withdrew from the charter school and reentered a public school during the school year, indicating whether the student’s return to a public school was voluntary. The bill further requires the department to report such information to the affected school districts.
   The bill requires the governing board of a charter school to select and retain independent auditors and legal counsel, and prohibits a management entity from doing so.
   The bill requires that all members of the governing board of a charter school be residents of Iowa, at least 50 percent of the membership be parents or legal guardians of students currently enrolled in the charter school, and at least one member of the governing board be a representative of the school district in which the charter school is physically located. The bill requires the representative to be a voting member of the governing board. Current law requires governing board members of a charter school to provide full financial disclosures that, at a minimum, meet the standards in Code section 68B.35.
   The bill requires the state board of education to develop and implement oversight standards and procedures for charter schools that provide for regular monitoring, including periodic on-site visits, data validation, annual performance reports evaluating a charter school’s academic, financial, and operational performance, and differentiated oversight and monitoring based on a charter school’s performance, including enhanced monitoring for schools that fail to meet performance expectations or meet compliance standards. Such monitoring may include corrective action plans, probationary status, or nonrenewal of a charter school contract.
   The bill requires that the state board shall not approve a charter school application if doing so would result in more than one charter school per 10,000 students statewide in the grade level groupings of elementary, middle, or high school.
   The bill requires charter schools to include, in their annual report concerning financial performance, detailed information regarding the charter school’s revenues and expenditures, including salaries and benefits, management or administrative fees, contractual payments, and any profits, surpluses, or other financial benefits realized by a founding or managing entity, including an education management organization or charter management organization, as well as any related-party transactions.
   Pursuant to the federal Every Student Succeeds Act and 2013 Iowa Acts, chapter 121, section 73, the department is required to publish on its internet site an online tool showing how public schools performed on certain required measures. The department fulfills these requirements by publishing the Iowa school performance profiles annually. The bill provides that, for purposes of calculating the performance grade, a student dropping out of an accredited nonpublic school, a charter school established pursuant to Code chapter 256E, or a charter school or innovation zone school established pursuant to Code chapter 256F, will not adversely affect the performance grade of the student’s school district of residence.