AN ACT CONCERNING CHARTER SCHOOLS.

This bill makes the following changes to the laws governing state and local charter schools:

1. redesigns the State Board of Education's (SBE) and the legislature's roles in the charter school application approval process (§ 2);

2. narrows the definition of “charter management organization” (CMO) in current law to mean a nonprofit, tax-exempt organization, rather than any entity (§ 1);

3. defines “charter,” which is currently undefined in statute (§ 1);

4. expands SBE's duties in the charter renewal process (§ 2);

5. adds SBE-developed academic and organizational performance goals to initial certificates and charters granted to charter schools (§ 2);

6. requires each charter school governing council's annual report to the education commissioner to describe the school's progress in meeting the academic and organizational goals set forth in its charter (§ 3);

7. requires the education commissioner to monitor the auditor that she selects to randomly audit one state charter school each year, and requires the auditor to be independent (§ 4);

8. requires, beginning October 1, 2015, each charter school governing council member to complete training about governing council responsibilities and best practices at least once during the charter's term (§ 5);

9. requires, beginning October 1, 2015, each charter school governing council to adopt anti-nepotism and conflict of interest policies aligned with state law and nonprofit corporate governance best practices (§ 5);

10. requires each CMO, or governing council in the absence of a CMO, to annually submit to the education commissioner a (a) certified audit statement of revenues from public and private sources and expenditures related to its function as a CMO or charter school governing council of a Connecticut charter school and (b) complete copy of its most recent Internal Revenue Service Form 990, with all its parts and schedules, except for Schedule B (§ 6);

11. requires the education commissioner to post online (a) any reports, certified audit statements, or forms that CMOs or governing councils submitted to SDE within 30 days of receipt and (b) the names of any CMOs or governing councils that failed to submit these documents within 30 days of failure of receipt (§ 7);

12. requires, beginning July 1, 2015, various individuals who manage and work in charter schools to submit to several types of background checks (§ 8);

13. establishes a process that governing councils must follow if they wish to make a material change in the charter school's operations (§ 9);

14. limits the type of contract a governing council may enter into with a CMO to one for whole school management services, and establishes new guidelines for the establishment of these contracts (§ 10); and

15. requires whole school management services contracts to contain provisions about (a) records sharing between the CMO and governing council who are parties to the contract and (b) the Freedom of Information Act (FOIA) disclosure requirements for these records (§ 501).

*Senate Amendment “A” (1) splits the definition of a “charter” between those granted prior to and after the bill's effective date; (2) delineates the charter school funding process and conditions a charter's effectiveness upon receipt of these funds; (3) expands statutory provisions from which charter schools may seek a waiver, including governing council training, background checks, and revenue disclosures; (4) allows SBE to condition an initial certificate's approval, rather than a charter school's opening, upon the applicant's satisfaction of the education commissioner's conditions; (5) requires schools seeking charter renewal to demonstrate evidence of initiating substantive communication, rather than establishing communication, with local or regional boards of education; (6) specifies types of revenue that charter schools must include in their annual certified audit reports for the education commissioner; (7) exempts a tax schedule from charter school disclosure to the education commissioner; (8) adds requirements to whole school management services contracts, including records-sharing requirements between charter school governing councils and their CMOs; (9) subjects certain CMO records and files to FOIA; and (10) makes various technical and conforming changes.

The bill defines “charter,” which is currently undefined in statute. It creates a split definition for charters approved before and after the bill's effective date. For charters granted on or before June 30, 2015, the bill defines them as a charter for a local or state charter school granted by SBE. For charters granted or renewed on or after July 1, 2015, the bill defines them as a contract between the governing council of a charter school and SBE that sets forth both parties' roles, powers, responsibilities, and performance expectations.

The bill redesigns SBE's and the legislature's roles in the charter school application approval process. Under current law, SBE may grant charters to state and local charter schools. The bill removes this authority from SBE and replaces it with the ability to grant charter school operator applicants an initial certificate of approval (“initial certificate”). The bill allows SBE to condition an initial certificate's approval, rather than a charter school's opening, upon the applicant's satisfaction of the education commissioner's conditions. The initial certificate does not become a charter until July 1 of the fiscal year in which the legislature chooses to appropriate funds to the State Department of Education for grants to the charter school. The charter then becomes valid for a five year term.

The bill adds new requirements to a prospective charter school's initial certificate application. First, it must contain a plan to share student learning practices and experiences with the local or regional board of education of the town where the proposed charter school is to be located.

Second, if a governing council intends to contract with a CMO for whole school management services, it must show evidence of the CMO's ability to:

1. contract's length;

2. roles and responsibilities of the governing council, staff, and CMO of the proposed charter school;

3. scope of services and resources the CMO will provide;

4. performance evaluation measures and times;

5. compensation structure, including a clear identification of all fees the CMO will be paid;

6. methods of contract oversight and enforcement; and

7. conditions for renewal and termination of the contract.

Additionally, the application must contain (1) evidence of compliance with whole school management services contracting provisions in law (2) and a provision allowing the superintendent of the district where the proposed school will be located to choose a designee to participate in the establishment of the school's governing council.

The bill also expands the factors SBE must consider when deciding whether to grant an initial certificate to include (1) the state's efforts to close achievement gaps and (2) the comments made at a public hearing that (a) the local or regional school board holds in the district regarding a local charter school applicant or (b) SBE holds in the district where a state charter school applicant would be located.

Under the bill, after awarding an initial certificate, SBE must submit to the Education and Appropriation committees (1) a copy of the initial certificate and (2) a summary of the comments made at the public hearing that (a) the local or regional school board holds in the district regarding a local charter school applicant or (b) SBE holds in the district where a state charter school applicant would be located.

For proposed local charter schools, the bill allows the local or regional board of education for the district where the proposed school would be located to vote on its approval 75, rather than 60, days after receipt of the application. Then SBE has 60, rather than 75, days to vote on whether to grant an initial certificate for the proposed local charter school.

Under the bill, beginning July 1, 2015, any initial certificate SBE approves for a local or state charter school must include academic and organizational performance goals, developed by SBE, that establish performance indicators, measures, and metrics that SBE will use to evaluate the school.

Also, the bill specifies that an initial certificate for a charter is not considered a license as defined under the state's Uniform Administrative Procedure Act.

Under current law, SBE may commission an independent appraisal of a charter school's performance as part of the charter application renewal process. Beginning July 1, 2015, the bill allows this appraisal to include progress in meeting the academic and organizational performance goals established in the charter previously granted to the charter school.

Current law allows SBE to deny a charter renewal application for various reasons, such as insufficient student progress or noncompliance with laws and regulations. The bill also allows SBE to deny a renewal if:

Beginning July 1, 2015, the bill requires any charter renewed by SBE to include the academic and organizational performance goals, developed by SBE, which establish the performance indicators, measures, and metrics that SBE will use to evaluate the school.

Beginning July 1, 2015, the bill requires various individuals who manage and work in charter schools to submit to several types of background checks. Specifically, SBE must require governing council and CMO members to submit to Department of Children and Families child abuse and neglect registry checks and state and national criminal history records checks (1) prior to SBE granting an initial certificate to the charter school or (2) before the governing council or CMO may hire new members.

It also requires governing councils to require each applicant for a position in local or state charter schools and each contractor doing business with these schools, who have direct student contact, to submit to the same background checks.

The bill establishes a process that governing councils must follow if they wish to make a material change in the charter school's operations. It defines “material change” as a change that fundamentally alters the school's mission, organizational structure, or educational program, including:

The bill requires a charter school's governing council to give SBE a written request to amend the school's charter if it plans to make a material change in the school's operations.

Under the bill, SBE must do the following when deciding whether to grant this request:

SBE may approve the material change by a majority vote of present voting members at a regular or special meeting called to (1) vote on the change or (2) consider whether to renew the charter.

The bill allows a charter school governing council to enter into a contract with a CMO only for the purpose of whole school management services. Such a contract must (1) be aligned with state or federal law or regulations, (2) not entail any financial or other conflicts of interest, and (3) not amend, alter, or modify any charter provision. If the contract contains a conflict with the charter terms, then the charter terms must govern.

1. the governing council's and CMO's roles and responsibilities, including all services to be provided under the contract;

2. performance measures, mechanisms, and consequences by which the governing council will hold the CMO accountable for performance;

3. compensation to be paid to the CMO, including all fees, bonuses, and a description of what the compensation includes or requires;

4. financial reporting requirements and provisions for the governing council's financial oversight;

5. a choice of law provision that states Connecticut law shall be the controlling law for the contract;

6. a statement that the (a) CMO will share with the governing council a copy of all records and files related to its charter school administration, including compensation the school paid to the CMO and its expenditures of this compensation and (b) governing council will disclose these records and files in accordance with FOIA; and

7. any other information that the education commissioner requires to ensure compliance with state laws that govern educational opportunities.

The bill requires a charter school governing council to submit any whole school management services contract with a CMO to SBE for approval. When determining whether to improve the contract, SBE must:

SBE may approve the contract by a majority vote of present voting board members at a regular or special meeting of the board called for this purpose. The contract cannot take effect unless SBE approves it. Any governing council that enters into such a contract must directly select, retain, and compensate the attorney, accountant, or audit firm representing the governing council.

Additionally, the bill prohibits a governing council from entering into any whole school management services contract that would (1) reduce the governing council's responsibility for operating the charter school or (2) hinder the governing council's ability to effectively supervise the charter school.

The bill requires any contract for whole school management services between a governing council and CMO to include the following records sharing provisions:

The bill allows the governing council to redact from disclosed records and files the personally identifiable information of any bona fide, lawful donors who requested redaction in writing. It also specifies that (1) requests for public disclosure of these records and files must be made to the governing council in accordance with FOIA and (2) requests that are denied may be brought to the Freedom of Information Commission in accordance with state law.