118588-1:n:02/17/2010:KMS/th LRS2010-1235

To establish the Alabama Innovative Charter Schools Act relating to public K-12 education; to provide for the creation of charter schools authorized by registered local school boards and the State Board of Education under certain conditions; to establish the process by which a local school board may register as an authorizer of charter schools; to establish the processes by which a charter contract may be approved, renewed, and revoked; to prohibit a private school from applying to become a charter school or converting to charter school status; to require certain accountability provisions in charter contracts; to require an authorizer to continually monitor the performance and compliance of each charter school; to provide for the organization, enrollment of students, employer requirements, and minimum number of instructional days for each charter school; to generally relieve charter schools from the requirements of state education statutes while requiring them to follow laws related to civil rights, health, safety, state content standards, accountability and student assessment, competitive bidding, open meetings, and open records; to provide for the funding of charter schools; to require independent annual audits; to provide for the acquisition and use of facilities and require that charter schools follow the same building codes as other public schools; to require the State Board of Education to promulgate rules to implement this act; and in connection therewith to have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the Alabama Innovative Charter Schools Act.

Section 2. Each charter school in the state established pursuant to this act is a public school and part of the public education system of this state. No nonpublic or private school, including church schools, may apply to or become a charter school under this act, and no charter agreement shall be granted pursuant to this act to authorize the conversion of any nonpublic, private, church, or home-based school to charter school status.

Section 3. For the purposes of this act, the following terms shall have the following meanings:

(1) APPLICANT. Any person or group that develops and submits a charter school application to an authorizer.

(2) APPLICATION. A proposal from an applicant to an authorizer to enter into a charter contract whereby the proposed school obtains charter school status.

(3) AT-RISK STUDENT. 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. An entity authorized under this act to review applications, decide whether to approve or reject applications, enter into charter contracts with applicants, oversee charter schools, and decide whether to renew, not renew, or revoke charter contracts.

(5) CHARTER CONTRACT. A fixed term, renewable contract between a charter school and an authorizer that outlines the roles, powers, responsibilities, and performance expectations for each party to the contract.

(6) CHARTER SCHOOL. A public K-12 school with all of the following qualities:

a. Autonomy over decisions including, but not limited to, matters concerning finance, personnel, scheduling, curriculum, and instruction.

b. Governed by an independent governing board.

c. Established and operating under the terms of a charter contract between the governing board and an authorizer.

d. Enrollment pursuant to parental choice.

e. Students are admitted on the basis of a random selection process if more students apply for enrollment than the charter school is able to accommodate.

f. Program of education includes one or more of the following grades or programs:

1. Preschool.

2. Prekindergarten.

3. Any grade or grades from kindergarten through 12th grade.

4. Adult community education.

5. Adult continuing education.

6. Career technical education.

g. Operates in pursuit of a specific set of educational objectives as defined by a charter contract.

h. Operates under the oversight of an authorizer in accordance with a charter contract.

(7) CHARTER SCHOOL CONVERSION. A charter school that existed as a non-charter public school before becoming a charter school.

(8) DEPARTMENT. The State Department of Education.

(9) EDUCATION SERVICE PROVIDER. A nonprofit or for profit charter management organization, school design provider, or any other partner entity with which a charter school may contract for educational design, implementation, or comprehensive management.

(10) GOVERNING BOARD. The independent board of a charter school that is party to the charter contract with the authorizer and whose members have been selected pursuant to the charter school application.

(11) LOCAL SCHOOL BOARD. A city or county board of education exercising management and control of a city or county school district pursuant to state law.

(12) LOCAL SCHOOL DISTRICT. A public agency that establishes and supervises one or more non-charter public schools within its geographical limits pursuant to state law.

(13) NON-CHARTER PUBLIC SCHOOL. A public K-12 school that is under the direct management, governance, and control of a local school board or the state.

(14) PARENT. A parent, guardian, or other person or entity having legal custody of a child.

(15) STUDENT. Any child who is eligible to attend public school in the state.

Section 4. (a) The State Board of Education, upon the recommendation of the State Superintendent of Education, may authorize charter schools within any local school district in the state.

(b) A local school board may register with the department, pursuant to Section 5, for chartering authority within the boundaries of the local school district.

Section 5. (a) The department shall publicize to all local school boards the opportunity to register with the department for chartering authority within the local school district. The department shall annually provide information about the opportunity, including a registration deadline, to each local school board. To register with the department as a charter authorizer in the local school district, a local school board shall submit to the department all of the following information in a format established by the department:

(1) Written notification of intent to serve as a charter authorizer.

(2) An explanation of the strategic vision of the local school board for chartering.

(3) An explanation of the budget and the personnel capacity of the local school board and the commitment of the local school board to executing the duties of quality charter authorizing.

(4) An explanation of how the local school board plans to solicit charter school applicants.

(5) A description or outline of the performance framework the local school board plans to use to establish a charter contract and provide ongoing oversight and evaluation of charter schools.

(6) A draft of the renewal, revocation, and nonrenewal processes to be used by the local school board consistent with Section 12.

(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 act, and commits to fully participating in any authorizer training provided or required by the state.

(b) Within 60 days after the submission of all registration materials by a local school board pursuant to subsection (a) and satisfaction of all conditions of subsection (a), the department shall register the local school board as a charter authorizer within the local school district and shall provide the local school board with a letter confirming registration as a charter authorizer. No local school board shall engage in any charter-authorizing functions without current state registration as a charter authorizer. Once registered, the registration of the local school board as a charter authorizer shall continue from year to year, provided that the local school board fulfills all charter-authorizing duties and expectations provided by this act and remains an authorizer in good standing with the department.

Section 6. (a)(1) An authorizer shall perform all of the following essential powers and duties:

a. Solicit and evaluate charter applications.

b. Approve charter applications that satisfy identified educational needs and promote a diversity of educational choices.

c. Decline to approve incomplete or inadequate charter applications.

d. Negotiate and execute sound charter contracts with each approved charter school.

e. Monitor, in accordance with charter contract terms, the performance and legal compliance of a charter school.

f. Determine whether a charter contract merits renewal, nonrenewal, or revocation.

(2) An authorizing entity may delegate its duties to offices, employees, and contractors.

(3) Regulation by authorizers shall be limited to the powers and duties listed in subdivision (1) that are consistent with the spirit and intent of this act.

(b)(1) An authorizer shall 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, but not limited to, all of the following:

a. Organizational capacity and infrastructure.

b. Solicitation and evaluation of charter applications.

c. Performance contracting.

d. Ongoing and continuous charter school oversight and evaluation.

e. Charter renewal decision making.

(2) An authorizer shall perform all duties under this act in a manner consistent with nationally recognized principles and standards and the spirit and intent of this act. Evidence of material or persistent failure to perform in such manner shall constitute grounds for loss of charter authorizing powers.

(3) The department shall develop model policies and practices for charter authorizing.

(c)(1) Each local school board registered as an authorizer shall annually submit to the department a report summarizing all of the following:

a. The strategic vision of the local school board for chartering and progress made toward achieving that vision.

b. The academic and financial performance of all charter schools operating under the purview of the local school board, according to the performance expectations for charter schools provided in this act.

c. The status of the charter school portfolio of the local school board, identifying the number of charter schools in each of the following categories:

1. Approved, but not yet operational.

2. Operating.

3. Renewed.

4. Transferred.

5. Revoked.

6. Not renewed.

7. Voluntarily closed.

8. Never opened.

d. The authorizing functions provided by the local school board to the charter schools under its purview including, but not limited to, the annual operating costs and expenses of the local school board detailed in audited financial statements that conform to generally accepted accounting principles.

e. Any services purchased by a charter school from the local school board including, but not limited to, an itemized accounting of the actual costs of the services pursuant to Section 17.

(2) The department shall produce an annual report detailing the authorizing activities of the State Board of Education including, but not limited to, the information required of local school board authorizers in subdivision (1).

(d)(1) The State Board of Education may permit an authorizer to assess an oversight fee, of not more than three percent of the annual per student funding provided to a charter school, from the per-student operational funding of each charter school the local school board authorizes.

(2) The oversight fee may not include any costs incurred in delivering services purchased by the charter school from the authorizer. The authorizer shall use funding provided under this subsection exclusively for fulfilling authorizing obligations under this act.

(3) The State Superintendent of Education shall annually review the effectiveness of any oversight fee adopted, and shall recommend to the State Board of Education any necessary adjustments to the fee in an effort to maximize public benefit and strengthen implementation of this act.

(e) No employee, trustee, agent, or representative of an authorizer may simultaneously serve as an employee, trustee, agent, representative, vendor, or contractor of a charter school under the purview of that authorizer.

(f) No governmental or other entity, unless expressly granted chartering authority pursuant to this act or other law, may assume any charter authorizing function or duty in any form.

(g)(1) With the exception of oversight services provided in subsection (d), a charter school may not be required to purchase services from its authorizer as a condition of charter approval or the execution of a charter contract.

(2) If a charter school purchases services from its authorizer, the charter school and authorizer shall execute an annual service contract, separate from the charter contract, specifying the mutual agreement of the charter school and the authorizer regarding the services to be provided and service fees to be charged. An authorizer may not charge more than current market rates for services provided to a charter school.

Section 7. The purpose of a charter application is to present the academic and operational vision and plans of the proposed charter school to an authorizer and to demonstrate the capacity of the applicant to execute the proposed vision and plans. An approved charter application is not a charter contract.

Section 8. (a) Charter school requests for proposals, application approval decisions, and application denial decisions shall be pursuant to a time line annually established by the department and applied uniformly throughout the state. The department shall issue guidelines regarding the content and format of charter school requests for proposals, application approval decisions, and application denial decisions.

(b) To solicit, encourage, and guide the development of quality charter school applications, each authorizer shall issue and broadly publicize requests for proposals.

(c)(1) An application to establish a charter school in a local school district where the local school board is registered as an authorizer shall be submitted to the local school board. If the local school board denies the application, the applicant may appeal the denial by submitting an application to the State Board of Education.

(2) An application to establish a charter school in a local school district where the local school board is not registered as an authorizer shall be submitted to the State Board of Education.

(d) The State Board of Education, upon the recommendation of the State Superintendent of Education, shall consider and may approve an application to establish a charter school submitted pursuant to subsection (c).

(e) A charter applicant may submit a proposal for a particular charter school to only one authorizer at a time.

(f) An application to establish a charter school submitted to the State Board of Education shall demonstrate the ability of the proposed charter school to serve students who are located in a local school district or attending a non-charter public school that the department has identified as persistently low achieving.

(g) An application to establish a charter school by converting an existing non-charter public school to charter school status shall also demonstrate support for the proposed charter school conversion pursuant to a petition signed by a majority of teachers of the non-charter public school and a petition signed by a majority of parents of students enrolled at the existing non-charter public school. A petition is not required if the establishment of the charter school is the result of state intervention due to consistently low academic performance, as determined by state or federal regulation.

(h) An application to establish a charter school submitted by an applicant that currently operates one or more charter schools shall also provide documentation detailing past performance and current capacity for growth.

Section 9. (a) In reviewing and evaluating a charter application, an authorizer shall employ procedures, practices, and criteria consistent with nationally recognized principles and standards for quality charter authorizing. The application review process shall include a thorough evaluation of each written charter application, a personal interview with the applicant group, and an opportunity in a public forum for residents of the local school district to receive and provide information relating to the application.

(b) In deciding whether to approve a charter application, an authorizer shall do all of the following:

(1) Grant a charter only to an applicant that demonstrates competence in each element of the published approval criteria of the authorizer and is likely to open and operate a successful charter school.

(2) Base decisions on documented evidence collected through the application review process.

(3) Follow charter-granting policies and practices that are transparent and based on merit.

(4) Avoid any conflict of interest.

(c) An authorizer shall adopt by resolution all charter approval or denial decisions during an open meeting of the governing board of the authorizer.

(d) The decision to approve a charter application may include reasonable conditions for the charter applicant to satisfy before a charter contract is executed.

(e) A decision to deny a charter application shall clearly inform the applicant of the reasons for the denial. A denial does not prohibit an applicant from resubmitting an application to the same authorizer or submitting an application to any other authorizer in the state.

(f) An authorizer shall annually submit a written report of all approval and denial actions taken by the authorizer to the department. A copy of the report shall also be provided by the authorizer to any charter applicant mentioned in the report at the same time that the report is submitted to the department. The report shall include a copy of all resolutions adopted by the governing board pursuant to subsection (c), a list of all actions taken, reasons supporting those decisions, and assurances as to compliance with all applicable rules and guidelines adopted pursuant to this act.

Section 10. An initial charter shall be granted for a term of up to five operating years. The charter term shall commence on the first day of operation of the charter school. An approved charter school may delay opening for one school year in order to plan and prepare for the physical opening of the charter school. If the approved charter school requires an opening delay of more than one school year, the charter school shall request an extension from the authorizer. The authorizer may grant or deny the extension, depending on the particular circumstances of the charter school.

Section 11. (a) The authorizer and the governing board of an approved charter school shall execute a charter contract. The charter contract shall include academic and operational performance expectations for the charter school, measures by which the charter school shall be judged, and specifics relating to the administrative relationship between the authorizer and the charter school, including the rights and duties of both the authorizer and the charter school. Performance expectations and measures contained in the charter contract shall include, but not be limited to, applicable federal and state accountability requirements. Performance provisions in a charter contract may be refined or amended by mutual agreement of the authorizer and the charter school after the charter school begins operation and baseline achievement data has been collected for enrolled students.

(b) The charter contract shall be signed by the president of the governing board of the authorizer and the president of the governing board of the charter school. The authorizer shall submit written notification of the charter contract execution to the department, including a copy of the executed charter contract and any attachments.

(c) No charter school may commence operations without a charter contract executed in accordance with this section and approved during an open meeting of the governing board of the authorizer.

Section 12. An authorizer may establish reasonable preopening requirements or conditions to monitor the startup progress of a newly approved charter school to ensure that the charter school is prepared to open on the agreed date and that all building, health, safety, insurance, and other legal requirements for the opening are satisfied.

Section 13. (a) An authorizer may not restrict the number of students a charter school may enroll. The capacity of a charter school shall be determined annually by the governing board of the charter school in conjunction with the authorizer and in consideration of the ability of the charter school to facilitate the academic success of its students, to achieve objectives specified in the charter contract, and to ensure that student enrollment does not exceed the physical limitations of the charter school facility or site.

(b) A charter school shall be open to any student who resides in the local school district where a charter school is authorized.

(c) A local school district may not require any student enrolled in the local school district to attend a charter school.

(d) A charter school may not limit admission based on race, ethnicity, national origin, religion, gender, income level, disabling condition, proficiency in the English language, or academic or athletic ability.

(e) A charter school may limit admission to students within a given age group or grade level.

(f) A charter school may be organized around a special emphasis, theme, or concept as stated in the charter application.

(g) A charter school shall enroll all students who apply for admission, unless the number of students exceeds the capacity of the applicable program, class, grade level, or building.

(h) If the capacity of the charter school is insufficient to enroll all students who apply for admission, the charter school shall enroll students through a random selection process.

(i) In regard to athletic programs, a charter school shall comply with the same rules and regulations regarding athletic eligibility as other non-charter public schools in the public school attendance zone.

Section 14. Each local school district shall provide and publicize information relating to the existence of a charter school authorized by the local school district as an enrollment option within the local school district to the same extent and through the same means as the local school district provides and publicizes information about non-charter public schools within the local school district.

Section 15. (a)(1) A non-charter public school converting to a charter school shall adopt and maintain a policy giving enrollment preference to students enrolled in the non-charter public school.

(2) A charter school shall provide enrollment preference to students enrolled in the charter school the previous school year and to siblings of students who are enrolled in the charter school. The enrollment preference provided for returning students and siblings exempts those students from the random selection process.

(3) A charter school may also provide enrollment preference to children of charter school founders, governing board members, and full-time employees, so long as the number of children provided enrollment preference does not exceed 10 percent of the total student population of the charter school.

(b) This section does not preclude the formation of a charter school with a mission of serving students eligible for free or reduced price lunches, students with disabilities, students of the same gender, students who pose such severe disciplinary problems that they warrant a specific educational program, or at-risk students.

(c) Credits earned by a student in a charter school shall transfer with the student if he or she transfers to another charter school or non-charter public school in this state. The new school shall accept the credits earned by the student in courses or instructional programs at the charter school in a uniform and consistent manner and according to the same criteria established by the department for accepting academic credits from a non-charter public school.

Section 16. (a) The performance provisions of a charter contract shall be based on a performance framework that clearly specifies the academic and operational performance indicators, measures, and methods to guide evaluations by the authorizer of the charter school. The performance framework shall include indicators, measures, and methods to evaluate, 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) Postsecondary readiness, for charter high schools.

(7) Financial performance and sustainability.

(8) Board performance and stewardship including, but not limited to, compliance with all applicable law and the charter contract.

(b) Annual performance targets shall be established by each charter school, in conjunction with its authorizer, and shall be designed to assist the charter school in meeting or exceeding applicable federal, state, and authorizer expectations.

(c) The performance framework shall allow the inclusion of additional rigorous, valid, and reliable indicators proposed by the charter school to augment external evaluations of performance. The authorizer may approve inclusion of the additional indicators if the indicators are consistent with the purposes of this act.

(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 as a second language status, and gifted status.

(e) An authorizer shall collect, analyze, and report all data from state assessments in accordance with the performance framework for each charter school under its purview.

(f) Multiple charter schools operating under a single charter contract or under the purview of a single governing board shall report their performance as separate, individual charter schools, and each charter school shall be held independently accountable for its performance.

Section 17. (a) The department shall oversee the performance and effectiveness of each authorizer established pursuant to this act.

(b) In accordance with subsection (c) of Section 6, each local school board registered as an authorizer shall submit to the department an annual report. The department shall communicate to each authorizer the format, content, and submission requirements for the annual report.

(c) If a local school board or the portfolio of charter schools under the purview of the local school board exhibits persistent unsatisfactory performance or is the subject of a pattern of well-founded complaints, or if other objective circumstances exist, the department may perform a special review and evaluation of the local school board utilizing nationally recognized principles and standards for quality charter authorizing. If the department determines that a local school board is not in compliance with an existing charter contract, the authorizing contract with the department, or the requirements of this act, the department shall notify the local school board in writing of the identified problems, and afford the local school board reasonable opportunity to respond and remedy those problems.

(d) If a local school board as authorizer continues to violate a charter contract or fails to remedy other authorizing problems after due notice from the department, the department shall notify the local school board that its chartering authority shall be revoked unless the local school board timely and satisfactorily remedies the violation or deficiencies.

(e) If the chartering authority of a local school board is revoked, the State Board of Education shall assume the role of authorizer for any existing charter contracts held by the local school board for the remainder of the charter term.

(f) If the chartering authority of a local school board is reinstated, the State Board of Education may transfer back to the local school board any existing charter contracts assumed by the State Board of Education pursuant to subsection (e).

Section 18. (a) An authorizer shall continually monitor the performance and legal compliance of the charter schools under its purview. Monitoring shall include, but not be limited to, collecting and analyzing data to support ongoing evaluation according to the charter contract. An authorizer may conduct oversight activities that enable the authorizer to fulfill responsibilities under this act. The activities shall include, but not be limited to, conducting appropriate inquiries and performing investigations. Any monitoring and oversight activities conducted by an authorizer pursuant to this section shall adhere to the terms of the charter contract, not unduly inhibit the autonomy granted to the charter school, and be consistent with the intent of this act.

(b) An authorizer shall annually publish and provide, as part of its annual report to the department, a performance report for each charter school under its purview, in accordance with the performance framework contained in the charter contract and this act. An authorizer may require each charter school under its purview to submit to the authorizer an annual report to assist the authorizer in gathering complete information about each charter school.

(c) If the performance or legal compliance of a charter school appears substandard, the authorizer shall promptly notify the charter school of any perceived problems and shall provide reasonable opportunity for the charter school to remedy the problems. If the problems warrant revocation, specific revocation time frames shall apply.

(d) An authorizer may take any appropriate corrective action, including sanctions and excluding revocation, against a charter school in response to apparent deficiencies in performance or legal compliance. Such actions or sanctions may include requiring the charter school to develop and execute a corrective action plan within a specified time frame.

Section 19. (a) A charter may be renewed for successive five-year terms of duration. An authorizer may vary the term based on the performance, demonstrated capacities, and particular circumstances of the charter school. An authorizer may also impose certain conditions for renewal, such as making necessary improvements at the charter school.

(b) An authorizer shall issue a charter school performance report and provide charter renewal application guidance to any charter school with a charter scheduled to expire the following year. The performance report shall summarize the performance record of the charter school to date, based on the data required by this act and the charter contract, and shall provide notice to the charter school of any weakness or other concern that may jeopardize renewal of the charter school. The charter school shall reply to the performance report and shall correct or clarify any information provided in the report.

(c) At a minimum, renewal application guidance shall provide an opportunity for the charter school to do all of the following:

(1) Present additional evidence, beyond the data contained in the performance report, supporting charter renewal.

(2) Describe any improvements undertaken or planned for the charter school.

(3) Detail the plans for the next charter term.

(d) Renewal application guidance shall include or explicitly refer to the criteria the authorizer shall use to make a renewal decision. The criteria shall be based on the performance framework contained in the charter contract and consistent with this act.

(e) The governing board of a charter school seeking renewal shall submit a renewal application to the authorizer pursuant to renewal application guidance issued by the authorizer. The authorizer, by resolution, shall rule on the renewal application not later than 30 days after submission of the renewal application.

(f) In making a charter renewal decision, an authorizer shall do all of the following:

(1) Base any decision on evidence of the performance of the charter school, over the term of the charter contract, in accordance with the performance framework provided in the charter contract.

(2) Ensure that all data used in making a renewal decision is available to the charter school and the public.

(3) Provide a public report summarizing the basis for each decision.

(g) An authorizer, at any time, may revoke or not renew a charter contract if the authorizer determines that the charter school has failed to comply with this act or does any of the following:

(1) Commits a material or substantial violation of any of the terms, conditions, standards, or procedures required by this act or the charter contract.

(2) Fails to meet or make sufficient progress toward the performance expectations contained in the charter contract.

(3) Fails to meet generally accepted standards of fiscal management.

(4) Substantially violates any material provision of law that applies to the charter school.

(h) An authorizer shall develop revocation and nonrenewal processes that satisfy all of the following:

(1) Provide the holder of the charter with timely notification of potential revocation or nonrenewal and of the reasons for possible closure.

(2) Grant the holder of the charter a reasonable amount of time in which to prepare a response.

(3) Provide the holder of the charter with an opportunity to submit documents and give testimony, challenging closure and supporting continuation of the charter school, at an orderly proceeding held for that purpose.

(4) Allow the holder of the charter to be represented by counsel and to call witnesses.

(5) Permit the recording of proceedings.

(6) After a reasonable time period for deliberation, require a final determination to be made and conveyed in writing to the holder of the charter.

(i) If an authorizer revokes or does not renew a charter, the reasons for the revocation or nonrenewal shall be clearly stated in a resolution adopted by the governing board of the authorizer.

(j) An authorizer shall immediately submit a written report of any action to renew, not renew, or revoke a charter to the department. A copy of the report shall also be provided by the authorizer to the charter school at the same time that the report is submitted to the department. The report shall include a copy of the resolution adopted by the governing board pursuant subsection (i), stating the action taken, reasons supporting the decision, and assurances as to compliance with the requirements of this act.

Section 20. (a) An authorizer shall develop a charter school closure protocol. The protocol shall specify tasks, time lines, and responsible parties and shall delineate the respective duties of the charter school and the authorizer. The protocol shall include all of the following elements:

(1) Timely notification to parents.

(2) Orderly transition of students and student records to new charter schools or non-charter public schools.

(3) Proper disposition of charter school funds, property, and assets in accordance with this act.

(b) In the event of a charter school closure, the authorizer shall oversee and work with the closing charter school to ensure a smooth and orderly closure and transition for students and parents pursuant to closure protocol.

(c) Upon closure of a charter school, the assets of the charter school shall be distributed first to satisfy outstanding payroll obligations for employees of the charter school, next to satisfy creditors of the charter school, and last to the local school board. If the assets of the charter school are insufficient to pay all parties owed, prioritization of the distribution of assets may be determined by court order.

Section 21. Transfer of a charter contract and oversight of a charter school from one authorizer to another before the expiration of a charter term is prohibited except upon special petition to the department by the charter school or its authorizer. The department shall review petitions for transfer on a case-by-case basis and may grant a transfer request in response to special circumstances and evidence that the transfer would serve the best interests of the students enrolled in the charter school.

Section 22. The department shall annually issue to the Governor, the Legislature, and the public a report on the status of charter schools in the state. The report shall include information provided in the annual reports submitted by the authorizers and any additional relevant data compiled by the department for the school year ending in that calendar year. The annual report shall compare the performance of charter school students with the performance of academically, ethnically, and economically comparable students in non-charter public schools. The annual report shall also include an assessment by the department of the successes, challenges, and areas needing improvement under this act, including an assessment of the sufficiency of funding for charter schools, the efficacy of any adopted fee for authorizer funding, and any suggested changes in state law or policy necessary to strengthen charter schools.

Section 23. (a)(1) A charter school is a nonprofit educational organization.

(2) A charter school is subject to all federal laws and authorities enumerated in this act or in a charter contract, where the contract is consistent with applicable laws, rules, and regulations.

(3) Except as provided in this act, a charter school is not subject to state education law or any state or local rule, regulation, policy, or procedure relating to non-charter public schools.

(4) A charter contract may apply to one or more charter schools, to the extent approved by the authorizer and consistent with applicable law. Each charter school covered by a charter contract shall be separate and distinct from any other charter school.

(5) A single governing board may hold one or more charter contracts.

(b) The local school district in which a charter school is located is the local educational agency (LEA) for the charter school and shall retain responsibility for special education and shall serve students in applicable charter schools in a manner consistent with local school district obligations under applicable federal, state, and local law.

(c) No local school board which authorizes a charter school within its jurisdiction, or has a charter school authorized by the State Board of Education within its jurisdiction, shall be liable for any action taken by the charter school located within its jurisdiction.

Section 24. A charter school shall have all powers necessary for carrying out the terms of its charter contract, including all of the following powers:

(1) To receive and disburse funds for charter school purposes.

(2) To secure appropriate insurance and to enter into contracts and leases.

(3) To contract with an education service provider for the management and operation of the charter school, with the governing board of the charter school retaining oversight authority over the charter school.

(4) To incur debt in reasonable anticipation of the receipt of public or private funds.

(5) To pledge, assign, or encumber its assets to be used as collateral for loans or extensions of credit.

(6) To solicit and accept any gifts or grants for charter school purposes subject to applicable laws and the terms of the charter contract.

(7) To acquire real property for use as a facility or facilities, from public or private sources.

(8) To sue and be sued in its own name.

Section 25. (a) A charter school may not discriminate against any person on the basis of race, creed, color, sex, disability, national origin, limited English proficiency, or any other category that would be unlawful if done by a non-charter public school.

(b) A charter school shall be nonsectarian in its educational programs, admissions, employment policies, and operations.

(c) Consistent with federal civil rights laws, a charter school shall provide students of limited English proficiency with appropriate services designed to teach the student English and the general curriculum.

(d) A charter school may not charge tuition and may only charge such fees as may be imposed by non-charter public schools.

(e) The powers, obligations, and responsibilities contained in a charter contract may not be delegated or assigned by the charter school or the authorizer.

Section 26. (a) A charter school is subject to the same civil rights, health, and safety requirements applicable to a non-charter public school, except as otherwise specifically provided in this act.

(b) A charter school is subject to the same state content standards and student assessment and accountability requirements as are applicable to non-charter public schools. Nothing in this act shall preclude a charter school from establishing additional student assessment or performance measures with the approval of the authorizer.

(c) A charter school shall provide, at a minimum, the same number of instructional days required by law for a non-charter public school.

(d) A charter school is subject to the same competitive bid requirements as a non-charter public school.

(e) A charter school governing board is subject to and shall comply with state open meetings and state open records laws.

Section 27. (a) A charter school shall comply with all applicable federal laws, rules, and regulations regarding the qualification of teachers and other instructional staff. At least 75 percent of the teaching faculty of a charter school shall be certified by the department.

(b) Charter school employees shall participate in the Teachers' Retirement System of Alabama and the Public Education Employees' Health Insurance Plan.

(c) A charter school is not subject to any minimum salary schedule established by the state or local school district and shall compensate employees based on policies set by the governing board of the charter school.

(d) A charter contract shall guarantee due process for employees of the charter school pursuant to procedures adopted by the governing board of the charter school.

(e) Teachers, employees, and members of the governing board of a charter school shall be subject to criminal history background checks and fingerprinting requirements applicable to non-charter public schools pursuant to the Alabama Child Protection Act of 1999, Chapter 22A, Title 16, Code of Alabama 1975.

(f) The governing board of each charter school shall name an individual to the position of principal and shall establish the duties of the position. The individual named as principal shall be certified by, or actively pursuing appropriate certification from, the State Department of Education.

Section 28. (a) A charter school is eligible for state-sponsored or district-sponsored interscholastic leagues, competitions, awards, scholarships, and recognition programs for students, educators, administrators, and schools to the same extent as non-charter public schools.

(b) Charter school students shall satisfy the same eligibility or participation requirements as non-charter public school students.

Section 29. (a) The enrollment of students attending a charter school shall be included in the enrollment, attendance, and, if applicable, count of students with disabilities of the local school district in which the student resides. The charter school shall report all such data to the local school district of residence in a timely manner. Each local school district shall report enrollment, attendance, and count of students with disabilities to the department.

(b) The local school district where the charter school is located shall pay directly to the charter school, for each student enrolled in the charter school who resides in the local school district, an amount for that student equal to 100 percent of the amount calculated pursuant to the state funding formula for local school districts, notwithstanding any oversight fee reductions made pursuant to this act. In times of proration, funding allocated to charter schools shall be subject to proration. A local school board may allocate funding generated at the local level to a charter school.

(c) Payments made pursuant to this section shall be made by a local school district in 12 substantially equal installments each year beginning on the first business day of November, and every month thereafter. Amounts payable under this section shall be determined by the department. Amounts payable to a charter school in its first year of operation shall be based on the projections of initial year enrollment as provided in the charter contract. Such projections shall be reconciled with actual enrollment at the end of the first year of operation of the charter school, and any necessary adjustments shall be made to payments during the second year of operation of the charter school.

(d) In the event of the failure of a local school district to make payments required by this section, the department shall deduct from any state funds which become due to the local school district an amount equal to the unpaid obligation. The department shall pay over such sum to the charter school upon certification by the department.

(e) A local school district shall direct the proportionate share of monies generated under federal and state categorical aid programs to those charter schools serving students eligible for such aid. Each 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.

(f)(1) The local school district shall provide special education services to students enrolled in charter schools on the same basis as such services are provided to students enrolled in non-charter public schools in the local school district.

(2) The local school district shall retain any federal or state aid attributable to a student with a disability attending a charter school in the same proportion to the level of services for such student with a disability that the local school district provides directly or indirectly.

(3) Upon request of either party, the charter school and the local school district may negotiate and include in a contract alternate arrangements for the provision of and payment for special education services. If the charter school and the local school district negotiate to allow the charter school to provide special education services, the proportionate share of state and federal resources generated by such students shall be directed by the local school district to the charter school enrolling such students.

(g)(1) A charter school shall adhere to generally accepted accounting principles.

(2) A charter school shall annually employ an independent external auditor to perform an independent audit of charter school finances. A copy of the audit report and accompanying management letter shall be filed with the authorizer.

(h)(1) The department shall disburse state transportation funding to a local school district for each charter school student residing in the local school district on the same basis and in the same manner as is paid to local school districts. A local school district shall disburse state transportation funding to a charter school in proportion to the amount generated by the students of the charter school who reside in the local school district.

(2) A charter school may enter into a contract with a local school district or private provider to provide transportation to charter school students.

(i) Any monies received by a charter school from any source and remaining in the accounts of the charter school at the end of any budget year shall remain in the accounts of the charter school for use by the charter school during subsequent budget years.

(j) Nothing in this act shall be construed to prohibit any person or organization from providing funding or other assistance to the establishment or operation of a charter school. The governing board of a charter school may accept gifts, donations, and grants of any kind made to the charter school and may expend or use such gifts, donations, and grants in accordance with the conditions prescribed by the donor. No gift, donation, or grant may be accepted if subject to a condition that is contrary to law or the charter contract.

Section 30. (a)(1) A charter school may receive funding from the Alabama Public School and College Authority.

(2) A charter school is subject to the same building codes as a non-charter public school.

(b) A charter school shall have a right of first refusal to purchase or lease, at or below fair market value, a closed non-charter public school facility or property or unused portions of a non-charter public school facility or property located in a local school district from which the charter school enrolls students, if the local school district decides to sell or lease the facility or property. Nothing in this act shall affect the distribution of revenues derived from sixteenth section or indemnity school lands.

(c) A charter school may negotiate and contract with a local school district, the governing board of a state college or university or public community college, or any other public or for-profit or nonprofit private entity, at or below fair market value, for the use of a facility for a school building.

(d) Library, community service, museum, performing arts, theatre, cinema, church, community college, college, and university facilities may provide space to a charter school within their facilities under preexisting zoning and land use designations.

(e)(1) Any facility, or portion thereof, used to house a charter school is exempt from ad valorem taxes.

(2) Charter school facilities are exempt from the assessment of fees for building permits, fees for building and occupational licenses, impact fees, service availability fees, and assessments for special benefits to the same extent as non-charter public schools are exempt.

Section 31. The State Board of Education shall promulgate necessary rules and regulations consistent with the requirements and intent of this act regarding the implementation and operation of this act. The State Superintendent of Education shall interpret the intent and meaning of this act and shall decide controversies and disputes involving the proper administration of this act.

Section 32. To the extent that any provision of this act is inconsistent with any other state or local law, rule, or regulation, the provisions of this act shall govern and be controlling.

Section 33. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Section 34. Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621 because the bill requires expenditures only by a school board.

Section 35. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

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