GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 1696

Short Title:  Charter Applications/Public Schools.	(Public)

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Sponsors: Representatives Shubert; Allred, Arnold, Gardner, Grady, Howard, McCombs, Preston, Russell, Sexton, Watson, and Wood.

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Referred to:  Rules, Calendar and Operations of the House.

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June 1, 1998

A BILL TO BE ENTITLED
AN ACT TO PERMIT A LOCAL BOARD OF EDUCATION TO APPLY FOR CHARTER STATUS FOR ONE OR MORE OF ITS PUBLIC SCHOOLS AND TO DIRECT THE STATE BOARD OF EDUCATION TO USE THE ADDITIONAL APPLICATION FEES TO OFFSET THE COST OF ADMINISTERING THE LAW REGARDING CHARTER SCHOOLS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 115C-238.29B reads as rewritten:
"§ 115C-238.29B.  Eligible applicants; contents of applications; submission of applications for approval.
(a)	Any person, group of persons, nonprofit corporation, or local board of education seeking to establish a charter school may apply to establish a charter school. If an applicant other than a local board of education seeks to convert a public school to a charter school, the application shall include a statement signed by a majority of the teachers and instructional support personnel currently employed at the school indicating that they favor the conversion and evidence that a significant number of parents of children enrolled in the school favor conversion.  If a local board of education seeks a charter for a school, the application shall include a statement that the local board understands that no employee shall be required to work at the charter school and no student shall be assigned to the school except at the request of the student's parent or guardian.
(b)	The application shall contain at least the following information:
(1)	A description of a program that implements one or more of the purposes in G.S. 115C-238.29A.
(2)	A description of student achievement goals for the school's educational program and the method of demonstrating that students have attained the skills and knowledge specified for those student achievement goals.
(3)	The governance structure of the school, if the applicant is not a local board of education, including the names of the proposed initial members of the board of directors of the nonprofit, tax-exempt corporation and the process to be followed by the school to ensure parental involvement.
(3a)	The local school administrative unit in which the school will be located.
(4)	Admission policies and procedures.
(5)	A proposed budget for the school and evidence that the financial plan for the school is economically sound.
(6)	Requirements and procedures for program and financial audits.
(7)	A description of how the school will comply with G.S. 115C-238.29F.
(8)	Types and amounts of insurance coverage, including bonding insurance for the principal officers of the school, to be obtained by the charter school.
(9)	The term of the charter.
(10)	The qualifications required for individuals employed by the school.
(11)	The procedures by which students can be excluded from the charter school and returned to a public  school other than a charter school. Notwithstanding any law to the contrary, any local board may refuse to admit any student who is suspended or expelled from a charter school due to actions that would lead to suspension or expulsion from a public school under G.S. 115C-391 until the period of suspension or expulsion has expired.
(12)	The number of students to be served, which number shall be at least 65, and the minimum number of teachers to be employed at the school, which number shall be at least three. However, the charter school may serve fewer than 65 students or employ fewer than three teachers if the application contains a compelling reason, such as the school would serve a geographically remote and small student population.
(13)	Information regarding the facilities to be used by the school and the manner in which administrative services of the school are to be provided.
(14)	Repealed by Session Laws 1997-430, s. 1.
(c)	An applicant shall submit the application to a chartering entity for preliminary approval. A chartering entity may be:
(1)	The local board of education of the local school administrative unit in which the charter school will be located, unless the applicant is a local board of education;
(2)	The board of trustees of a constituent institution of The University of North Carolina, so long as the constituent institution is involved in the planning, operation, or evaluation of the charter school; or
(3)	The State Board of Education.
Regardless of which chartering entity receives the application for preliminary approval, the State Board of Education shall have final approval of the charter school.
Notwithstanding the provisions of this subsection, if the State Board of Education finds that an applicant (i) submitted an application to a local board of education and received final approval from the State Board of Education, but (ii) is unable to find a suitable location within that local school administrative unit to operate, the State Board of Education may authorize the charter school to operate within an adjacent local school administrative unit for one year only. The charter school cannot operate for more than one year unless it reapplies, in accordance with subdivision (1), (2), or (3) of this subsection, and receives final approval from the State Board of Education.
(d)	Unless an applicant submits its application under subsection (c) of this section to the local board of education of the local school administrative unit in which the charter school will be located or the applicant is the local board of education, the applicant shall submit a copy of its application to that local board within seven days of its submission under subsection (c) of this section. The local board may offer any information or comment concerning the application it considers appropriate to the chartering entity. The local board shall deliver this information to the chartering entity no later than January 1 of the next calendar year. The applicant shall not be required to obtain or deliver this information to the chartering entity on behalf of the local board. The State Board shall consider any information or comment it receives from a local board and shall consider the impact on the local school administrative unit's ability to provide a sound basic education to its students when determining whether to grant preliminary and final approval of the charter school."
Section 2.  G.S. 115C-238.29D reads as rewritten:
"§ 115C-238.29D.  Final approval of applications for charter schools.
(a)	The State Board shall grant final approval of an application if it finds that the application meets the requirements set out in this Part or adopted by the State Board of Education and that granting the application would achieve one or more of the purposes set out in G.S. 115C-238.29A. The State Board shall act by March 15 of a calendar year on all applications and appeals it receives prior to February 15 of that calendar year.
(b)	The State Board shall authorize no more than five charter schools, except for charter schools operated by a local board of education, per year in one local school administrative unit. The State Board shall authorize no more than 100 charter schools statewide, except for charter schools operated by a local board of education.   If more than five charter schools in one local school administrative unit or more than 100 schools statewide meet the standards for final approval, the State Board shall give priority to applications that are most likely to further State education policies and to strengthen the educational program offered in the local school administrative units in which they are located.
The State Board may authorize as many charter schools operated by a local board of education in a local school administrative unit or on a statewide-basis as it deems appropriate.
(c)	The State Board of Education may authorize a school before the applicant has secured its space, equipment, facilities, and personnel if the applicant indicates the authority is necessary for it to raise working capital. The State Board shall not allocate any funds to the school until the school has obtained space.
(d)	The State Board of Education may grant the initial charter for a period not to exceed five years and may renew the charter upon the request of the chartering entity for subsequent periods not to exceed five years each. A material revision of the provisions of a charter application shall be made only upon the approval of the State Board of Education. Beginning with the charter school's second year of operation and annually thereafter, the State Board shall allow a charter school to increase its enrollment by ten percent (10%) of the school's previous year's enrollment or as is otherwise provided in the charter. This enrollment growth shall not be considered a material revision of the charter application and shall not require the prior approval of the State Board."
Section 3.  G.S. 115C-238.29E reads as rewritten:
"§ 115C-238.29E.  Charter school operation.
(a)	A charter school that is approved by the State shall be a public school within the local school administrative unit in which it is located. It shall be accountable to the local board of education if the applicant for the charter is the local board of education or if it applied for and received preliminary approval from that local board for purposes of ensuring compliance with applicable laws and the provisions of its charter. All other charter schools shall be accountable to the State Board for ensuring compliance with applicable laws and the provisions of their charters, except that any of these charter schools may agree to be accountable to the local board of the school administrative unit in which the charter school is located rather than to the State Board.
(b)	A charter school other than a charter school for which the applicant is a local board of education shall be operated by a private nonprofit corporation that shall have received federal tax-exempt status no later than 24 months following final approval of the application.  A charter school for which the applicant is a local board of education shall be operated by the local board of education.
(c)	A charter school shall operate under the written charter signed by the entity to which it is accountable under subsection (a) of this section and the applicant. A charter school is not required to enter into any other contract. The charter shall incorporate the information provided in the application, as modified during the charter approval process, and any terms and conditions imposed on the charter school by the State Board of Education. No other terms may be imposed on the charter school as a condition for receipt of local funds.
(d)	The board of directors of the charter school operated by a private nonprofit corporation shall decide matters related to the operation of the school, including budgeting, curriculum, and operating procedures.  The local board of education shall decide these matters for a charter school operated by a local board.
(e)	The specific location of a charter school operated by a private nonprofit corporation shall not be prescribed or limited by a local board or other authority except a zoning authority. The school may lease space from a local board of education or as is otherwise lawful in the local school administrative unit in which the charter school is located. If a charter school leases space from a sectarian organization, the charter school classes and students shall be physically separated from any parochial students, and there shall be no religious artifacts, symbols, iconography, or materials on display in the charter school's entrance, classrooms, or hallways. Furthermore, if a charter school leases space from a sectarian organization, the charter school shall not use the name of that organization in the name of the charter school.
At the request of the charter school, the local board of education of the local school administrative unit in which the charter school will be located shall lease any available building or land to the charter school unless the board demonstrates that the lease is not economically or practically feasible or that the local board does not have adequate classroom space to meet its enrollment needs. Notwithstanding any other law, a local board of education may provide a school facility to a charter school free of charge; however, the charter school is responsible for the maintenance of and insurance for the school facility.
(f)	Except as provided in this Part and pursuant to the provisions of its charter, a charter school is exempt from statutes and rules applicable to a local board of education or local school administrative unit."
Section 4.  G.S. 115C-238.29F reads as rewritten:
"§ 115C-238.29F.  General requirements.
(a)	Health and Safety Standards. – A charter school shall meet the same health and safety requirements required of a local school administrative unit.
(b)	School Nonsectarian. – A charter school shall be nonsectarian in its programs, admission policies, employment practices, and all other operations and shall not charge tuition or fees. A charter school shall not be affiliated with a nonpublic sectarian school or a religious institution.
(c)	Civil Liability and Insurance. – 
(1)	The board of directors of a charter school may sue and be sued. The State Board of Education shall adopt rules to establish reasonable amounts and types of liability insurance that the board of directors shall be required by the charter to obtain. The board of directors shall obtain at least the amount of and types of insurance required by these rules to be included in the charter. Any sovereign immunity of the charter school, of the organization that operates the charter school, or its members, officers, or directors, or of the employees of the charter school or the organization that operates the charter school, is waived to the extent of indemnification by insurance.
(2)	No civil liability shall attach to any chartering entity, to the State Board of Education, or to any of their members or employees, individually or collectively, for any acts or omissions of the charter school.
(3)	The civil liability for a charter school operated by a local school administrative unit shall be the same as for any other school operated by the unit.
(d)	Instructional Program. – 
(1)	The school shall provide instruction each year for at least 180 days.
(2)	The school shall design its programs to at least meet the student performance standards adopted by the State Board of Education and the student performance standards contained in the charter.
(3)	A charter school shall conduct the student assessments required for charter schools by the State Board of Education.
(4)	The school shall comply with policies adopted by the State Board of Education for charter schools relating to the education of children with special needs.
(5)	The school is subject to and shall comply with Article 27 of Chapter 115C of the General Statutes, except that a charter school operated by a private nonprofit corporation or a charter school operated by a local school administrative unit may also exclude a student from the charter school and return that student to another school in the local school administrative unit in accordance with the terms of its charter.
(e)	Employees. – 
(1)	An employee of a charter school operated by a private nonprofit corporation is not an employee of the local school administrative unit in which the charter school is located. An employee of a charter school operated by a local school administrative unit is an employee of the local school administrative unit in which the charter school is located.  The charter school's board of directors shall employ and contract with necessary teachers to perform the particular service for which they are employed in the school; at least seventy-five percent (75%) of these teachers in grades kindergarten through five, at least fifty percent (50%) of these teachers in grades six through eight, and at least fifty percent (50%) of these teachers in grades nine through 12 shall hold teacher certificates. The board also may employ necessary employees who are not required to hold teacher certificates to perform duties other than teaching and may contract for other services. The board may discharge teachers and noncertificated employees.
(2)	No local board of education shall require any employee of the local school administrative unit to be employed in a charter school.
(3)	If a teacher employed by a local school administrative unit makes a written request for an extended leave of absence to teach at a charter school operated by a private nonprofit corporation, the local school administrative unit shall grant the leave. The local school administrative unit shall grant a leave for any number of years requested by the teacher, shall extend the leave for any number of years requested by the teacher, and shall extend the leave at the teacher's request. For the initial year of a charter school's operation, the local school administrative unit may require that the request for a leave or extension of leave be made up to 45 days before the teacher would otherwise have to report for duty. For subsequent years, the local school administrative unit may require that the request for a leave or extension of leave be made up to 90 days before the teacher would otherwise have to report for duty. A teacher who has career status under G.S. 115C-325 prior to receiving an extended leave of absence to teach at a charter school may return to a public school in the local school administrative unit with career status at the end of the leave of absence or upon the end of employment at the charter school if an appropriate position is available. If an appropriate position is unavailable, the teacher's name shall be placed on a list of available teachers and that teacher shall have priority on all positions for which that teacher is qualified in accordance with G.S. 115C-325(e)(2).
(4)	The employees of the charter school operated by a private nonprofit corporation shall be deemed employees of the local school administrative unit for purposes of providing certain State-funded employee benefits, including membership in the Teachers' and State Employees' Retirement System and the Teachers' and State Employees' Comprehensive Major Medical Plan. The State Board of Education provides funds to charter schools operated by private nonprofit corporations, approves the original members of the boards of directors of the charter schools, has the authority to grant, supervise, and revoke charters, and demands full accountability from charter schools for school finances and student performance. Accordingly, it is the determination of the General Assembly that charter schools operated by private nonprofit corporations are public schools and that the employees of these charter schools are public school employees and are "teachers”for purposes of membership in the North Carolina Teachers' and State Employees' Retirement System and State Employees' Comprehensive Major Medical Plan. In no event shall anything contained in this Part require the North Carolina Teachers' and State Employees' Retirement System to accept employees of a private employer as members or participants of the System.
(f)	Accountability. – 
(1)	The school is subject to the financial audits, the audit procedures, and the audit requirements adopted by the State Board of Education for charter schools. These audit requirements may include the requirements of the School Budget and Fiscal Control Act.
(2)	The school shall comply with the reporting requirements established by the State Board of Education in the Uniform Education Reporting System.
(3)	The school shall report at least annually to the chartering entity and the State Board of Education the information required by the chartering entity or the State Board.
(g)	Admission Requirements. – 
(1)	Any child who is qualified under the laws of this State for admission to a public school is qualified for admission to a charter school.
(2)	No local board of education shall require any student enrolled in the local school administrative unit to attend a charter school.
(3)	Admission to a charter school shall not be determined according to the school attendance area in which a student resides, except that any local school administrative unit in which a public school converts to a charter school shall give admission preference to students who reside within the former attendance area of that school.
(4)	Admission to a charter school shall not be determined according to the local school administrative unit in which a student resides.
(5)	A charter school shall not discriminate against any student on the basis of ethnicity, national origin, gender, or disability. Except as otherwise provided by law or the mission of the school as set out in the charter, the school shall not limit admission to students on the basis of intellectual ability, measures of achievement or aptitude, athletic ability, disability, race, creed, gender, national origin, religion, or ancestry. The charter school may give enrollment priority to siblings of currently enrolled students who were admitted to the charter school in a previous year and to children of the school's principal, teachers, and teacher assistants. In addition, and only for its first year of operation, the charter school may give enrollment priority to children of the initial members of the charter school's board of directors, so long as (i) these children are limited to no more than ten percent (10%) of the school's total enrollment or to 20 students, whichever is less, and (ii) the charter school is not a former public or private school. Within one year after the charter school begins operation, the population of the school shall reasonably reflect the racial and ethnic composition of the general population residing within the local school administrative unit in which the school is located or the racial and ethnic composition of the special population that the school seeks to serve residing within the local school administrative unit in which the school is located. The school shall be subject to any court-ordered desegregation plan in effect for the local school administrative unit.
(6)	During each period of enrollment, the 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 shall be accepted by lot. Once enrolled, students are not required to reapply in subsequent enrollment periods.
(7)	Notwithstanding any law to the contrary, a charter school may refuse admission to any student who has been expelled or suspended from a public school under G.S. 115C-391 until the period of suspension or expulsion has expired.
(h)	Transportation. – The charter school may provide transportation for students enrolled at the school. The charter school shall develop a transportation plan so that transportation is not a barrier to any student who resides in the local school administrative unit in which the school is located. The charter school is not required to provide transportation to any student who lives within one and one-half miles of the school. At the request of the charter school and if the local board of the local school administrative unit in which the charter school is located operates a school bus system, then that local board may contract with the charter school to provide transportation in accordance with the charter school's transportation plan to students who reside in the local school administrative unit and who reside at least one and one-half miles of the charter school. A local board may charge the charter school a reasonable charge that is sufficient to cover the cost of providing this transportation. Furthermore, a local board may refuse to provide transportation under this subsection if it demonstrates there is no available space on buses it intends to operate during the term of the contract or it would not be practically feasible to provide this transportation.
A student who attends a charter school operated by a local board of education and who resides within the local school administrative unit in which the school is located has the same right to school transportation as students assigned to other public schools in the local school administrative unit.
(i)	Assets. – Upon dissolution of the charter school or upon the nonrenewal of the charter, all net assets of the charter school purchased with public funds shall be deemed the property of the local school administrative unit in which the charter school is located."
Section 5.  G.S. 115C-238.29H reads as rewritten:
"§ 115C-238.29H.  State and local funds for a charter school.
(a)	The State Board of Education shall allocate to each charter school (i) an amount equal to the average per pupil allocation for average daily membership from the local school administrative unit allotments in which the charter school is located for each child attending the charter school except for the allocation for children with special needs and (ii) an additional amount for each child attending the charter school who is a child with special needs. In accordance with G.S. 115C-238.29D(d), the State Board shall allow for annual adjustments to the amount allocated to a charter school based on its enrollment growth in school years subsequent to the initial year of operation.
In the event a child with special needs leaves the charter school and enrolls in a public school during the first 60 school days in the school year, the charter school shall return a pro rata amount of funds allocated for that child to the State Board, and the State Board shall reallocate those funds to the local school administrative unit in which the public school is located. In the event a child with special needs enrolls in a charter school during the first 60 school days in the school year, the State Board shall allocate to the charter school the pro rata amount of additional funds for children with special needs.
(a1)	Funds allocated by the State Board of Education may be used to enter into operational and financing leases for real property or mobile classroom units for use as school facilities for charter schools and may be used for payments on loans made to charter schools for facilities or equipment. However, State funds shall not be used to obtain any other interest in real property or mobile classroom units. No indebtedness of any kind incurred or created by the charter school shall constitute an indebtedness of the State or its political subdivisions, and no indebtedness of the charter school shall involve or be secured by the faith, credit, or taxing power of the State or its political subdivisions, unless the charter school is operated by a local board of education. Every contract or lease into which a charter school enters except for contracts or leases entered into by a local board of education shall include the previous sentence. The school also may own land and buildings it obtains through non-State sources.
(b)	If a student attends a charter school, the local school administrative unit in which the child resides shall transfer to the charter school an amount equal to the per pupil local current expense appropriation to the local school administrative unit for the fiscal year."
Section 6.  The State Board of Education shall use the additional revenue generated by charter school applications in accordance with this act to offset the cost of administering the law regarding charter schools.
Section 7.  Section 6 of this act becomes effective July 1, 1998.  The remainder of this act is effective when it becomes law.