1Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2act relating to the public school system, including certain
3provisions applicable as well to private and parochial
4schools; amending, revising, consolidating and changing the
5laws relating thereto," in professional employees, further
6providing for rating system; in pupils and attendance,
7providing for transfer of records to another school entity or
8nonpublic school; in charter schools, further providing for
9definitions; providing for Charter School Entities Funding
10Advisory Commission and for Office of Charter School
11Entities; further providing for powers of charter schools,
12for charter school requirements and for powers of board of
13trustees; providing for organization of meetings of boards of
14trustees and for duties of administrators; further providing
15for establishment of charter school, for contents of
16application, for term and form of charter, for State Charter
17School Appeal Board, for facilities, for enrollment, for
18school staff and for funding for charter schools; providing
19for actual costs of educational services; further providing
20for transportation, for annual reports and assessments, for
21causes for nonrenewal or termination and for provisions
22applicable to charter schools; providing for charter school
23fund balance limit; further providing for powers and duties
24of department, for assessment and evaluation, for cyber
25charter school requirements and prohibitions, for school
26district and intermediate unit responsibilities, for
27enrollment and notification and for applicability of other
28provisions of this act and of other acts and regulations;

1providing for cyber charter school fund balance limit; and in
2auditing of school finances, further providing for duties of
3controller.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Section 1123(e), (i), (n) and (o)(2) of the act
7of March 10, 1949 (P.L.30, No.14), known as the Public School
8Code of 1949, amended June 30, 2012 (P.L.684, No.82), are
9amended to read:

10Section 1123. Rating System.--* * *

11(e) Notwithstanding subsections (b), (c) and (d),
12professional employes and temporary professional employes
13serving as classroom teachers, principals and nonteaching
14professional employes may be evaluated through the use of a
15rating tool developed by an individual school district,
16intermediate unit [or], area vocational-technical school, 
17charter school or cyber charter school that the department has
18approved as meeting or exceeding the measures of effectiveness
19established under this section.

20* * *

21(i) All school districts, intermediate units [and], area
22vocational-technical schools, charter schools and cyber charter 
23schools shall provide to the department the aggregate results of
24all professional employe and temporary professional employe,
25principal and nonteaching professional employe evaluations.

26* * *

27(n) The requirements of this section shall apply to all
28school districts, intermediate units [and], area vocational-
29technical schools, charter schools and cyber charter schools.

30(o) For purposes of this section:

31* * *

1(2) The term "chief school administrator" shall include
2individuals who are employed as a school district
3superintendent, an executive director of an intermediate unit
4[or], a chief school administrator of an area vocational-
5technical school and a charter school or cyber charter school 
6chief executive officer.

7* * *

8Section 2. The act is amended by adding a section to read:

9Section 1313.1. Transfer of Records to Another School Entity
10or Nonpublic School.--(a) Whenever a student transfers to
11another school entity or nonpublic school within this
12Commonwealth, a certified copy of the student's attendance
13record shall be transmitted to the school entity or nonpublic
14school to which the student has transferred. The school entity
15or nonpublic school to which the student has transferred shall
16request the record. The sending school entity or nonpublic
17school shall have ten (10) days from the receipt of the request
18to supply a certified copy of the student's attendance record.

19(b) In the case of a student transferring during the course
20of a school term, the student's unexcused absences shall be
21included in the student's attendance record at the school entity
22or nonpublic school to which the student has transferred for
23that school term.

24(c) For purposes of this section, the term "school entity"
25shall mean a public school district, charter school, cyber
26charter school, regional charter school, intermediate unit or
27area vocational-technical school.

28Section 3. Section 1703-A of the act, amended June 29, 2002
29(P.L.524, No.88), is amended to read:

30Section 1703-A. Definitions.--As used in this article,

1"Administrator" shall include the chief administrator of a
2charter school entity and all other employes of a charter school
3entity who by virtue of their positions exercise management or
4operational oversight responsibilities.

5"Appeal board" shall mean the State Charter School Appeal
6Board established by this article.

7"At-risk student" shall mean a student at risk of educational
8failure because of limited English proficiency, poverty,
9community factors, truancy, academic difficulties or economic
10disadvantage.

11"Charter school" shall mean an independent public school
12established and operated under a charter from the local [board
13of school directors] school board and in which students are
14enrolled or attend. A charter school must be organized as a
15public, nonprofit corporation. Charters may not be granted to
16any for-profit entity.

17"Charter school entity" shall mean a charter school, regional
18charter school or cyber charter school.

19"Charter school entity foundation" shall mean a nonprofit
20organization as defined under section 501(c)(3) of the Internal
21Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3))
22that provides funding or resources to a charter school entity,
23either directly or through an affiliated entity.

24"Charter school fund balance limit" shall mean the amount
25determined under section 1733-A.

26"Chief [executive officer] administrator" shall mean an
27individual appointed by the board of trustees to oversee and
28manage the operation of the charter school entity, but who shall
29not be deemed a professional staff member under this article.

30"Cyber charter school" shall mean an independent public

1school established and operated under a charter from the
2Department of Education and in which the school uses technology
3in order to provide a significant portion of its curriculum and
4to deliver a significant portion of instruction to its students
5through the Internet or other electronic means. A cyber charter
6school must be organized as a public, nonprofit corporation. A
7charter may not be granted to a for-profit entity.

8"Cyber charter school fund balance limit" shall mean the
9amount determined under section 1752-A.

10"Department" shall mean the Department of Education of the
11Commonwealth.

12"Educational service provider" shall mean a for-profit
13education management organization, nonprofit charter management
14organization, school design provider, business manager or any
15other partner entity with which a charter school entity intends
16to contract or presently contracts to provide educational
17services, operational services or management services to the
18charter school entity. An educational service provider does not
19include a charter school foundation.

20"Financial relationship" shall mean any formal or informal
21arrangement pursuant to which a charter school entity is
22obligated to make payment or in fact does make payment to an
23individual, group of individuals or any entity.

24"Immediate family member" shall mean a spouse, parent,
25brother, sister or child and any descendant of these
26individuals, including any relationships established by
27marriage.

28"Local [board of school directors] school board" shall mean
29the board of directors of a school district in which a proposed
30or an approved charter school is located. The term shall include 

1a board of control established under Article XVII-B, a special 
2board of control established under section 692 or a school 
3reform commission established under section 696.

4"Office" shall mean the Office of Charter School Entities
5established within the Department of Education.

6"Regional charter school" shall mean an independent public
7school established and operated under a charter from more than
8one local school board [of school directors] and in which
9students are enrolled or attend. A regional charter school must
10be organized as a public, nonprofit corporation. Charters may
11not be granted to any for-profit entity.

12"School district of residence" shall mean the school district
13in this Commonwealth in which the parents or guardians of a
14child reside.

15"School entity" shall mean a school district, intermediate
16unit, joint school or area vocational-technical school.

17"Secretary" shall mean the Secretary of Education of the
18Commonwealth.

19"State board" shall mean the State Board of Education of the
20Commonwealth.

21Section 4. The act is amended by adding sections to read:

22Section 1704-A. Charter School Entities Funding Advisory
23Commission.--(a) The Governor shall immediately convene a
24Statewide advisory commission, to be known as the Charter School
25Entities Funding Advisory Commission, to examine the cost and
26funding of charter school entities in the public education
27system. The commission shall examine how charter school entities
28finances affect opportunities for teachers, parents, pupils and
29community members to establish and maintain schools that operate
30independently from the existing school district structure as a

1method to accomplish the intent of section 1702-A. The
2commission shall also examine how the financing of charter
3school entities affects the finances of existing school
4districts and educational opportunities for students in existing
5school districts. The commission shall also receive input and
6gather information on charter school entities funding
7reimbursements regarding eligible students. The Office of the
8Budget and the department shall provide administrative support,
9meeting space and any other assistance required by the
10commission to carry out its duties under this section.

11(b) The commission shall consist of the following members:

12(1) One member of the Senate appointed by the Majority
13Leader of the Senate.

14(2) One member of the Senate appointed by the Minority
15Leader of the Senate.

16(3) One member of the House of Representatives appointed by
17the Majority Leader of the House of Representatives.

18(4) One member of the House of Representatives appointed by
19the Minority Leader of the House of Representatives.

20(5) The secretary or a designee.

21(6) The chairman of the State board or a designee.

22(7) One member who shall represent charter schools, who
23shall be appointed by the Pennsylvania Coalition of Public
24Charter Schools.

25(8) One member who shall represent regional charter schools,
26who shall be appointed by the Pennsylvania Coalition of Public
27Charter Schools.

28(9) One member who shall represent cyber charter schools,
29who shall be appointed by the Pennsylvania Coalition of Public
30Charter Schools.

1(10) One member who shall represent teachers in a public
2school that is not a charter school entity, who shall be
3appointed by the American Federation of Teachers --
4Pennsylvania.

5(11) One member who shall represent teachers in a public
6school that is not a charter school entity, who shall be
7appointed by the Pennsylvania State Education Association.

8(12) One member who shall represent school administrators,
9who shall be appointed by the Pennsylvania Association of School
10Administrators.

11(13) One member who shall represent school board members,
12who shall be appointed by the Pennsylvania School Boards
13Association.

14(14) One member who shall be a business manager of a school
15district, who shall be appointed by the Pennsylvania Association
16of School Business Officials.

17(15) One member who shall represent an institution of higher
18education with experience in operating a charter school entity,
19who shall be appointed by the Pennsylvania Association of
20Colleges and Universities.

21(c) Members of the commission shall be appointed within
22twenty (20) days of the effective date of this section. Any
23vacancy on the commission shall be filled by the original
24appointing authority. The commission shall select a chairman and
25vice chairman from among its membership at an organizational
26meeting. The organizational meeting shall take place not later
27than thirty (30) days following the effective date of this
28section.

29(d) The commission shall hold meetings at the call of the
30chairman. The commission may also hold public hearings on the

1matters to be considered by the commission at locations
2throughout this commonwealth. All meetings and public hearings
3of the commission shall be deemed public meetings for the
4purpose of 65 Pa.C.S. Ch. 7 (relating to open meetings). Eight
5(8) members of the commission shall constitute a quorum at any
6meeting. Each member of the commission may designate another
7person to represent that member at meetings of the commission.

8(e) Commission members shall receive no compensation for
9their services but shall be reimbursed for all necessary travel
10and other reasonable expenses incurred in connection with the
11performance of their duties as members. Whenever possible, the
12commission shall utilize the services and expertise of existing
13personnel and staff of State government. The department may
14utilize undistributed funds not expended, encumbered or
15committed from appropriations for grants and subsidies made to
16the department, not to exceed three hundred thousand dollars
17($300,000), to carry out this section.

18(f) The commission shall have the following powers and
19duties:

20(1) Meet with current charter school entity operators within
21this Commonwealth, including cyber charter schools with blended
22programs.

23(2) Meet with public education organizations, including, but
24not limited to, the Pennsylvania School Boards Association, the
25Pennsylvania Association of School Business Officials, the
26Pennsylvania State Education Association and the American
27Federation of Teachers - Pennsylvania.

28(3) Review charter school entity financing laws in operation
29throughout the United States.

30(4) Determine the per-pupil cost of charter school entities

1in terms of their instructional expenditures, noninstructional
2student services expenditures, special education expenditures
3and administrative expenditures based on these expenditures in
4existing charter school entities in this Commonwealth and in
5other states and on existing research on the costs of providing
6an adequate education to students enrolled in charter school
7entities.

8(5) Review the process by which charter school entities are
9funded under section 1725-A, including review of those budget
10expenditures of a school district that should be excluded from
11funding that a school district shall provide to a charter school
12entity for a student enrolling in a charter school entity.

13(6) Evaluate and make recommendations on the following:

14(i) Powers and duties extended to charter school entities as
15they relate to financing.

16(ii) Funding formulas for charter school entities, including
17reimbursement procedures and funding under Title I of the
18Elementary and Secondary Education Act of 1965 (Public Law 89-
1910, 20 U.S.C. § 6301 et seq.).

20(iii) The process by which charter school entities are
21funded under section 1725-A, including what budget expenditures
22of a school district should be excluded from funding that a
23school district shall provide to a charter school entity for a
24student enrolling in a charter school entity.

25(iv) Student residency as it relates to funding.

26(v) Special education funding reimbursements and other
27special program funding.

28(vi) Charter school entity transportation.

29(vii) Charter school entity eligibility to receive grants
30and funding.

1(7) The commission shall, not later than September 30, 2013,
2issue a report of its findings and recommendations to the
3Governor, the President pro tempore of the Senate, the Minority
4Leader of the Senate, the chairman and minority chairman of the
5Appropriations Committee of the Senate, the chairman and
6minority chairman of the Education Committee of the Senate, the
7Speaker of the House of Representatives, the Minority Leader of
8the House of Representatives, the chairman and minority chairman
9of the Appropriations Committee of the House of Representatives
10and the chairman and minority chairman of the Education
11Committee of the House of Representatives.

12Section 1705-A. Office of Charter School Entities.--(a) The
13department shall establish an Office of Charter School Entities
14within one hundred twenty (120) days of the effective date of
15this section. The office shall report directly to the secretary.
16The office shall be responsible for:

17(1) Implementing the provisions of this article.

18(2) Overseeing the performance and effectiveness of all
19charter school entities under subsection (b).

20(3) Collecting, developing and disseminating information,
21policies, strategies and best practices for the effective
22management and operation of charter school entities.

23(4) Identifying model charter school entity applications and
24providing best practices.

25(5) Organizing and providing mandatory training for members
26of the board of trustees and chief administrators of a charter
27school entity. The training shall be paid for exclusively by the
28charter school entity. The following apply:

29(i) A person who serves as a member of a charter school
30entity board of trustees or as a chief administrator shall be

1required to complete a minimum of eight (8) hours of continuing
2education annually in coursework directly related to his
3position in a charter school entity.

4(ii) Continuing education training shall be provided by an
5eligible provider selected by the office. Training topics that
6may be provided include:

7(a) Charter school best practices.

8(b) Overview of charter school law, including special
9education topics.

10(c) Role of the board of trustees and administrators.

11(d) Audits and financing.

12(E) The act of July 19, 1957 (P.L.1017, No.451), known as
13the "State Adverse Interest Act."

14(F) The act of February 14, 2008 (P.L.6, No.3), known as the
15"Right-to-Know Law."

16(G) 15 Pa.C.S. Pt. Ii subpt. C (relating to nonprofit
17corporations).

18(H) 65 pa.c.s. Ch. 7 (relating to open meetings).

19(I) 65 pa.c.s. Ch. 11 (relating to ethics standards and
20financial disclosure).

21(iii) The charter school entity shall annually certify to
22the office on a form developed by the office for this purpose
23and supported by submitted documentary evidence that each member
24of the charter school entities board of trustees and chief
25administrator have completed the minimum hours of continuing
26education as required under this section. The charter school
27entity shall also include this certification in its annual
28report and publish the same on its Internet website.

29(6) The development and issuance of standardized forms that
30shall be used by all applicants, local school boards, charter

1school entities and student applicants as required under
2sections 1717-a, 1719-a, 1723-a, 1728-a, 1731-a, 1747-a and 
31748-a.

4(7) Directing all charter school entities to submit an
5annual report to the office not later than September 1 of each
6year and to publish the same on the department's Internet
7website on an annual basis.

8(8) Providing administrative support for the appeal board.

9(b) The office shall have the following powers and duties:

10(1) To conduct a special review of a local school board or
11charter school entity in the event of persistently
12unsatisfactory performance of a local school board's portfolio
13of charter schools, a pattern of well-founded complaints about a
14local school board or its charter schools or other objective
15circumstances, and take any appropriate action authorized under
16this article.

17(2) To investigate fraud, waste, mismanagement and
18misconduct in the operation of a local school board or charter
19school entity, including any of the following:

20(i) Misuse of movable and immovable property.

21(ii) Evidence of a pattern of wasteful spending or
22misappropriation of funds by board of trustee members,
23administrators or staff.

24(iii) Mismanagement of school operations.

25(iv) Waste or abuse of things of value belonging to State or
26local government.

27(v) Allegations of collusion or coercion.

28(3) To receive complaints of fraud, waste, mismanagement,
29misconduct or persistently unsatisfactory academic performance
30by a local school board or charter school entity.

1(4) To receive and investigate a complaint from any parent
2who has a student enrolled in a charter school entity regarding
3a member of the board of trustees who refuses or neglects to
4perform any duty imposed upon the member under this article or
5has violated any requirement established under this article or
6has committed misfeasance or malfeasance while in office as a
7trustee.

8(5) To notify the local school board or charter school
9entity in writing if at any time the office finds that a local
10school board or charter school entity is not in compliance with
11an existing charter contract or the requirements of this act and
12to allow the local school board or charter school entity to have
13reasonable opportunity to respond and comply.

14(6) If the local school board or charter school entity fails
15to comply with the direction given pursuant to this subsection,
16to notify the secretary, who shall have the authority to
17withhold payment of all funds to the local school board or
18charter school entity or order school districts not to make any
19payments to the charter school entity until the secretary
20determines that the charter school entity has complied with the
21direction given pursuant to this subsection. If the secretary
22withholds payment of the subsidy to a local school board based
23on the actions of that board, the local board shall not
24intentionally withhold payment of per pupil allocation payments
25to a charter school entity unless directed by the secretary.

26(7) To refer findings to the district attorney with
27jurisdiction or to the Office of Attorney General or to any
28other appropriate law enforcement agency for prosecution if the
29office discovers or receives information about possible
30violations of law by any person affiliated with or employed by a

1local school board or charter school entity.

2Section 5. Section 1714-A(a) introductory paragraph and (5)
3of the act, amended July 4, 2004 (P.L.536, No.70), are amended
4to read:

5Section 1714-A. Powers of Charter Schools.--(a) A charter
6school entity established under this act is a body corporate and
7shall have all powers necessary or desirable for carrying out
8its charter, including, but not limited to, the power to:

9* * *

10(5) Make contracts and leases for the procurement of
11services, equipment and supplies[.], subject to the following:

12(i) No contract or lease entered into by a charter school
13entity for an amount greater than one hundred dollars ($100) may
14provide for a payment in excess of the fair market value of the
15services, equipment, supplies or other property being acquired
16or leased.

17(ii) A charter school entity may not enter into or continue
18operating under a contract for management, operations or
19educational services that involve the charter school entity
20providing a percentage of the charter school entity's revenues
21to the educational service provider.

22(iii) No contract entered into by a charter school entity
23shall have a term that extends beyond the charter school
24entity's existing charter agreement with a local school board or
25the department.

26* * *

27Section 6. Section 1715-A(11) and (12) of the act, amended
28or added June 19, 1997 (P.L.225, No.22) and July 9, 2008
29(P.L.846, No.61), are amended to read:

30Section 1715-A. Charter School Requirements.--Charter

1schools shall be required to comply with the following
2provisions:

3* * *

4[(11) Trustees of a charter school shall be public
5officials.

6(12) A person who serves as an administrator for a charter
7school shall not receive compensation from another charter
8school or from a company that provides management or other
9services to another charter school. The term "administrator"
10shall include the chief executive officer of a charter school
11and all other employes of a charter school who by virtue of
12their positions exercise management or operational oversight
13responsibilities. A person who serves as an administrator for a
14charter school shall be a public official under 65 Pa.C.S. Ch.
1511 (relating to ethics standards and financial disclosure). A
16violation of this clause shall constitute a violation of 65
17Pa.C.S. § 1103(a) (relating to restricted activities), and the
18violator shall be subject to the penalties imposed under the
19jurisdiction of the State Ethics Commission.]

20(11) The board of trustees of a charter school entity must
21record in written format the minutes of each meeting of the
22board at which any business of the charter school entity is
23considered or transacted. All meeting minutes must be maintained
24by a charter school entity for at least seven (7) years.

25(12) The board minutes of the trustees of a charter school
26entity must reflect the board's approval or disapproval of all
27contracts, agreements and obligations in excess of one hundred
28dollars ($100), including how each member voted on the contract,
29agreement or obligation.

30(13) The board minutes of the trustees of a charter school

1entity must reflect the board's approval of an annual budget,
2including how each member voted on the budget.

3(14) An individual who is a trustee of a charter school
4entity shall not serve as a trustee at any other charter school
5entity.

6(15) An individual who is a trustee of a charter school 
7entity shall not serve as an employe of any other charter school 
8entity.

9(16) An individual who is a trustee of a charter school
10entity shall not have a financial relationship with an entity
11with which the charter school entity transacts any business,
12including educational service providers.

13(17) Members of the board of trustees and administrators of
14a charter school entity shall be deemed to be public officials
15and subject to the provisions of 65 Pa.C.S. Chs. 7 (relating to
16open meetings) and 11 (relating to ethics standards and
17financial disclosure).

18(18) Members of the board of trustees and administrators of
19a charter school entity shall be subject to the following
20statutory requirements:

21(i) The act of July 19, 1957 (P.L.1017, No.451), known as
22the "State Adverse Interest Act."

23(ii) The act of February 14, 2008 (P.L.6, No.3), known as
24the "Right-to-Know Law."

25(19) Notwithstanding section 322, an administrator,
26supervisor, principal, teacher or employe of a charter school
27entity shall not serve on a local school board which granted or
28renewed its charter. This clause shall not prevent any
29administrator, supervisor, teacher or employe of any charter
30school entity from being a school director in a district other

1than a district that granted the charter school entity's
2charter.

3(20) All members of the board of trustees and administrators
4of a charter school entity shall take the oath of office as
5required by section 321 before entering upon the duties of the
6office.

7(21) All payments made by a charter school entity shall be
8cosigned by the treasurer of the board of trustees and the chief
9administrator of the charter school entity.

10(22) Within ten (10) days of the execution of an agreement
11between a charter school entity and any educational service
12provider, the board of trustees shall publish on the charter
13school entity's publicly accessible Internet website all of the
14following:

15(i) a copy of the executed agreement;

16(ii) a plain language explanation of all costs and fees
17associated with the agreement;

18(iii) a description of all financial relationships between
19the charter school entity and the educational service provider
20or any of its board members or employes;

21(iv) the educational service provider's status as a for-
22profit or nonprofit organization; and

23(v) if the educational service provider is a for-profit
24organization, a plain language explanation of how any profit
25will be determined and distributed between the charter school
26and the educational service provider.

27Section 7. Section 1716-A of the act, added June 19, 1997
28(P.L.225, No.22), is amended to read:

29Section 1716-A. [Powers of] Board of Trustees.--(a) The
30board of trustees of a charter school entity shall have the

1authority to decide matters related to the operation of the
2school, including, but not limited to, budgeting, curriculum and
3operating procedures, subject to the school's charter. [The
4board]

5(a.1) The board of trustees shall have the authority to
6employ, discharge and contract with necessary professional and
7nonprofessional employes subject to the school's charter and the
8provisions of this [article.] act. The board of trustees, only 
9with written permission of the department, may contract with 
10educators who are not employes of the charter school entity to 
11serve as teaching staff, provided that no more than five per 
12centum of the teaching staff of a charter school entity shall be 
13contracted out, except that a charter school entity may, upon 
14written permission of the department, contract for teaching 
15staff in specialized subjects above the five per centum limit.

16(a.2) The board of trustees of a charter school entity shall
17have a minimum of five (5) voting members. If a charter school
18entity has fewer than five (5) voting members serving on its
19board as of the effective date of this subsection, the charter
20school entity shall have sixty (60) days to appoint additional
21members to the board to meet the minimum requirements of this
22section.

23(b) The following shall apply to all members of the board of 
24trustees of a charter school:

25(1) No member of a local school board [of school directors]
26of a school entity shall serve on the board of trustees of a
27charter school that is located in the member's district.

28(2) No administrator or member of a local school board which
29granted or renewed a charter shall serve on the board of
30trustees of a charter school that is the subject of the granted

1or renewed charter.

2(3) No member of the board of trustees shall be employed in
3any capacity or have any financial relationship with the local
4school board from which the charter school received its charter.
5No member of the board of trustees of a cyber charter school
6shall be employed in any capacity or have any financial
7relationship with the department.

8(4) No member of the board of trustees or a member of the
9immediate family of the member of the board of trustees shall be
10employed by the charter school entity or have a financial
11relationship with the charter school entity, nor be employed by
12any entity that has a financial relationship with the charter
13school entity or any related or associated foundation unless the
14charter school or cyber charter school complies with the
15requirements of 65 Pa.C.S. § 1103(f) (relating to restricted
16activities).

17(5) No member of the board of trustees or a member of the
18immediate family of the member of the board of trustees shall be
19employed by or have a financial relationship with an educational
20service provider which is under contract with the charter school
21entity or any related or associated foundation.

22(6) A member of the board of trustees shall disqualify
23himself and abstain from voting in a proceeding which
24constitutes a conflict of interest or where the objectivity,
25impartiality, integrity or independence of judgment of the
26member may be reasonably questioned.

27(7) A member of the board of trustees shall be automatically
28disqualified from serving on the board upon conviction for an
29offense graded as a felony, an infamous crime or any offense
30pertaining to the member's official capacity as a board member

1or any crime involving moral turpitude.

2(8) No member of the board of trustees, employe or
3administrator of a charter school entity shall convert to his
4own use or use by way of investment or contract any portion of
5the charter school entity's funds or school property or deposit
6any of the funds of the charter school entity in any other name.

7(9) No business entity, including for-profit and nonprofit
8entities with which a member of the board of trustees, an
9administrator or a member of the immediate family of the member
10of the board of trustees or administrator is associated shall
11contract with the charter school entity unless the charter
12school complies with the requirements of 65 Pa.C.S. § 1103(f).

13(10) No member of the board of trustees or a member of the
14immediate family of the member of the board of trustees shall
15act as an agent for any vendor or subvendor for goods or
16services with the local school board or charter school entity.

17(11) No member of the board of trustees shall commingle or
18allow the commingling of any portion of the charter school
19entity's funds or property or deposit any of the funds of the
20charter school entity in accounts unrelated to the charter
21school entity.

22(12) No member of the board of trustees of a charter school
23entity shall be employed by a charter school entity foundation
24or any entity affiliated with a charter school entity
25foundation. No immediate family member of a member of the board
26of trustees shall serve on, receive compensation from or be
27employed by a charter school entity foundation or any entity
28affiliated with a charter school entity foundation.

29(13) No member of the board of trustees of a charter school
30entity shall be employed in any capacity or have a financial

1relationship with the department.

2(14) Any member of the board of trustees, elected officials,
3administrators or their immediate families or staff determined
4to have engaged in any conduct in contravention of any aspect of
5this subsection shall be immediately barred and prohibited from
6the handling or receipt of funds, directly or indirectly, for a
7period of five (5) consecutive years from the date of receipt,
8expenditure, oversight or handling in any fashion, directly or
9indirectly, of the funds of any school board, charter school
10entity, charter school entity foundation or appropriated by the
11Commonwealth, including, but not limited to, awards of contracts
12to third parties, hiring or retention of employes or consultants
13and the purchase or acquisition of goods or services.

14[(c) The board of trustees shall comply with the act of July
153, 1986 (P.L.388, No.84), known as the "Sunshine Act."]

16(c.1) At least one member of the board of trustees of a
17charter school entity shall be a parent of a child attending
18that charter school entity.

19(d) The following shall apply:

20(1) The secretary, upon a petition, may remove a member of a
21board of trustees if the secretary determines the member has
22refused or neglected to perform any duty imposed under this
23article or has violated any requirement established under this
24article or has committed misfeasance or malfeasance while in
25office as a trustee.

26(2) Before a trustee is removed, that trustee shall be
27provided with a written statement of the reasons for removal and
28an opportunity to be heard in accordance with 2 Pa.C.S. Chs. 5
29Subch. A (relating to practice and procedure of Commonwealth
30agencies) and 7 Subch. A (relating to judicial review of

1Commonwealth agency action).

2(3) When in the judgment of the secretary the immediate
3removal of a board member is reasonably necessary, the removal
4process described under this subsection may be expedited.

5(4) Any person removed as a member of the board of trustees
6of a charter school entity under this subsection shall not be
7eligible again to serve as a board member or administrator for
8the period of five (5) years from the date of removal.

9Section 8. The act is amended by adding sections to read:

10Section 1716.1-A. Organization of Meetings of Boards of
11Trustees.--(a) A majority of the members of the board of
12trustees shall constitute a quorum. If less than a majority is
13present at any meeting, no business shall be transacted at the
14meeting.

15(b) The affirmative vote of a majority of all the members of
16the board of trustees, duly recorded, shall be required in order
17to take action on the subjects enumerated under section 508.

18Section 1716.2-A. Duties of Administrators.--(a) The chief
19administrator shall have the duty of the general supervision of
20all business affairs of the charter school entity, subject to
21the direction of the board of trustees, and the following duties
22subject to the direction of the board of trustees:

23(1) Upon action by the board as described in this article,
24to approve any bill or account for payment of money and to
25prepare and sign an order for the payment of money.

26(2) To attest in writing the executing of all deeds,
27contracts, reports and other instruments that are to be executed
28by the board.

29(3) To furnish when requested to do so all reports as
30required under this act.

1(4) Notwithstanding other provisions of this act and other
2laws, to serve as custodian of all records, offices and property
3of the charter school entity.

4(5) To receive all funds and make payments out of the same
5on proper orders approved by the board of trustees.

6(6) To deposit funds and at the end of each month make a
7report to the school controller of the amount of funds received
8and the amount dispersed during the month.

9(7) To perform other duties pertaining to the business of
10the charter school entity as required under this act.

11(b) The following restrictions and requirements shall apply:

12(1) No administrator shall receive compensation from another
13charter school entity or from a company that provides management
14or other services to another charter school entity.

15(2) No administrator shall be employed by or have a
16financial relationship with the local school boards from which
17the charter school received its charter.

18(2.1) No administrator of a cyber charter school shall be
19employed or have a financial relationship with the department.

20(3) No immediate family member of an administrator shall be
21employed by or have any financial relationship with the charter
22school entity unless the charter school entity complies with the
23requirements of 65 Pa.C.S. § 1103(f) (relating to restricted
24activities).

25(4) No administrator shall be employed by or have a
26financial relationship with an educational service provider.

27(5) No immediate family member of an administrator shall be
28employed by or have a financial relationship with an educational
29service provider which is under contract with the charter school
30entity.

1(6) An administrator shall be dismissed upon conviction for
2an offense graded as a felony, an infamous crime or any crime
3involving moral turpitude.

4(7) No business with which an administrator, or a member of
5the immediate family of the administrator, is associated shall
6contract with the charter school entity unless the charter
7school or cyber charter school complies with the requirements of
865 Pa.C.S. § 1103(f).

9(8) No administrator shall commingle or convert to his own
10use or use by way of investment any portion of the school funds
11or school property or deposit any of the funds of the school in
12accounts unrelated to the charter school entity.

13(9) No administrator shall act as an agent for any vendor
14for school supplies, program materials or related educational
15services with the local school board.

16(10) No administrator shall receive compensation from or be
17employed by a charter school entity foundation or any entity
18affiliated with a charter school entity foundation. No immediate
19family member of an administrator shall serve on or be employed
20by a charter school entity foundation or any entity affiliated
21with a charter school entity foundation.

22Section 9. Sections 1717-A(e) and 1719-A of the act, added
23June 19, 1997 (P.L.225, No.22), are amended to read:

24Section 1717-A. Establishment of Charter School.--* * *

25(e) (1) Not later than seventy-five (75) days after the
26first public hearing on the application, the local [board of
27school directors] school board shall grant or deny the
28application. For a charter school beginning in the 1997-1998
29school year, the local board of school directors shall grant or
30deny the application no later than sixty (60) days after the

1first public hearing.

2(2) A charter school application submitted under this
3article shall be evaluated by the local [board of school
4directors] school board based on criteria, including, but not
5limited to, the following:

6(i) The demonstrated, sustainable support for the charter
7school plan by teachers, parents, other community members and
8students, including comments received at the public hearing held
9under subsection (d).

10(ii) The capability of the charter school applicant, in
11terms of support and planning, to provide comprehensive learning
12experiences to students pursuant to the adopted charter.

13(iii) The extent to which the application considers the
14information requested in section 1719-A and conforms to the
15legislative intent outlined in section 1702-A.

16(iv) The extent to which the charter school may serve as a
17model for other public schools.

18(v) The student performance baselines and objectives for
19future student performance that will be used to evaluate the
20charter school.

21(3) The local [board of school directors] school board, in
22the case of an existing school being converted to a charter
23school, shall establish the alternative arrangements for current
24students who choose not to attend the charter school.

25(4) A charter application shall be deemed approved by the
26local [board of school directors] school board of a school
27district upon affirmative vote by a majority of all the
28directors. Formal action approving or denying the application
29shall be taken by the local [board of school directors] school 
30board at a public meeting, with notice or consideration of the

1application given by the board, under the "Sunshine Act."

2(5) Written notice of the board's action shall be sent to
3the applicant, the department and the appeal board. If the
4application is denied, the reasons for the denial, including a
5description of deficiencies in the application, shall be clearly
6stated in the notice sent by the local [board of school
7directors] school board to the charter school applicant.

8* * *

9Section 1719-A. Contents of Application.--[An] (a) The 
10office shall develop and issue a standard application form that 
11shall be used by all applicants to establish a charter school or 
12cyber charter school. The application to establish a charter
13school entity shall include all of the following information:

14(1) The identification of the charter school entity 
15applicant.

16(2) The name of the proposed charter school entity.

17(3) The grade or age levels served by the school.

18(4) [The proposed governance structure of the charter
19school, including a description and method for the appointment
20or election of members of the board of trustees.] An 
21organization chart clearly presenting the proposed governance 
22structure of the charter school entity, including lines of 
23authority and reporting among the board of trustees, 
24administrators, staff and any educational service provider that 
25will play a role in providing management services to the charter 
26school entity.

27(4.1) A clear description of the roles and responsibilities
28for the board of trustees, administrators and any other
29entities, including a charter school entity foundation, shown in
30the organization chart.

1(4.2) A clear description and method for the appointment or
2election of members of the board of trustees.

3(4.3) Standards for board performance and stewardship, 
4including compliance with all applicable laws, regulations and 
5terms of the charter.

6(4.4) If the charter school entity intends to contract with
7an educational service provider for services, the charter or
8cyber charter school applicant shall:

9(i) Provide evidence of the educational service provider's
10record in serving student populations, including demonstrated
11academic achievement and demonstrated management of nonacademic
12school functions, including proficiency with public school-based
13accounting, if applicable.

14(ii) Provide a copy of the finalized management agreement,
15which shall include all of the following:

16(A) The proposed duration of the service contract.

17(B) Roles and responsibilities of the governing board, the
18school staff and the educational service provider.

19(c) The scope of services and resources to be provided by 
20the educational service provider.

21(d) Performance evaluation measures and timelines.

22(e) The compensation structure, including clear 
23identification of all fees to be paid to the educational service 
24provider.

25(f) Methods of contract oversight and enforcement.

26(g) Investment disclosure or the advance of moneys by the 
27educational service provider on behalf of the charter school 
28entity.

29(h) Conditions for renewal and termination of the contract.

30(iii) Disclose and explain any existing or potential

1conflicts of interest between the board of trustees and proposed
2educational service provider and any affiliated business
3entities, including a charter school entity foundation.

4(5) The mission and education goals of the charter school
5entity, the curriculum to be offered and the methods of
6assessing whether students are meeting educational goals.

7(6) The admission policy and criteria for evaluating the
8admission of students which shall comply with the requirements
9of section 1723-A, including the maximum number of students the 
10school will enroll during each year of its charter.

11(7) Procedures which will be used regarding the suspension
12or expulsion of pupils. Said procedures shall comply with
13section 1318.

14(8) Information on the manner in which community groups will
15be involved in the charter school planning process.

16(9) The financial plan for the charter school entity based 
17on the projected range of the number of students enrolled in the 
18school during each year of the proposed charter period and the
19provisions which will be made for auditing the school under
20section 437, including the role of any charter school entity 
21foundation.

22(10) Procedures which shall be established to review
23complaints of parents regarding the operation of the charter
24school entity.

25(11) A description of and address of the physical facility
26in which the charter school will be located and the ownership
27thereof and any lease arrangements.

28(12) Information on the proposed school calendar for the
29charter school entity, including the length of the school day
30and school year consistent with the provisions of section 1502.

1(13) The proposed faculty and a professional development
2plan for the faculty and staff of a charter school entity.

3(14) Whether any agreements have been entered into or plans
4developed with the local school district regarding participation
5of the charter school students in extracurricular activities
6within the school district. Notwithstanding any provision to the
7contrary, no school district of residence shall prohibit a
8student of a charter school from participating in any
9extracurricular activity of that school district of residence:
10Provided, That the student is able to fulfill all of the
11requirements of participation in such activity and the charter
12school does not provide the same extracurricular activity.

13(15) A report of criminal history record, pursuant to
14section 111, for all individuals who shall have direct contact
15with students.

16(16) An official clearance statement regarding child injury
17or abuse from the Department of Public Welfare as required by 23
18Pa.C.S. Ch. 63 Subch. C.2 (relating to background checks for
19employment in schools) for all individuals who shall have direct
20contact with students.

21(17) How the charter school entity will provide adequate
22liability and other appropriate insurance for the charter school
23entity, its employes and the board of trustees of the charter
24school entity.

25(18) The proposed manner in which the charter school entity
26will assess student performance, including the manner in which
27the State assessment set forth in 22 Pa. Code Ch. 4 (relating to
28academic standards and assessment) will be utilized.

29(b) A local school board may not impose additional terms or
30require additional information outside the standard application

1required under subsection (a).

2Section 10. Section 1720-A of the act, amended July 9, 2008
3(P.L.846, No.61), is amended to read:

4Section 1720-A. Term and Form of Charter.--(a) Upon
5approval of a charter application under section 1717-A, a
6written charter shall be developed which shall contain the
7provisions of the standardized charter application under section 
81719-A and which shall be signed by the local board of school
9directors of a school district, by the local boards of school
10directors of a school district in the case of a regional charter
11school or by the chairman of the appeal board pursuant to
12section 1717-A(i)(5) and the board of trustees of the charter
13school or regional charter school. This written charter, when
14duly signed by the local board of school directors of a school
15district, or by the local boards of school directors of a school
16district in the case of a regional charter school, and the
17charter school's or regional charter school's board of trustees,
18shall act as legal authorization for the establishment of a
19charter school or regional charter school. This written charter
20shall be legally binding on both the local board of school
21directors of a school district and the charter school's and 
22regional charter school's board of trustees. [Except as
23otherwise provided in subsection (b), the] If the charter school 
24or regional charter school contracts with an educational service 
25provider, an executed contract shall be signed once the charter 
26is approved. The charter shall be for a period of no less than
27three (3) nor more than five (5) years and may be renewed for
28five (5) year periods upon reauthorization by the local board of
29school directors of a school district or the appeal board. A
30charter will be granted only for a school organized as a public,

1nonprofit corporation.

2(b) (1) Notwithstanding subsection (a), a governing board
3of a school district of the first class may renew a charter for
4a period of one (1) year if the board of school directors
5determines that there is insufficient data concerning the
6charter school's academic performance to adequately assess that
7performance and determines that an additional year of
8performance data would yield sufficient data to assist the
9governing board in its decision whether to renew the charter for
10a period of five (5) years.

11(2) A one-year renewal pursuant to paragraph (1) shall not
12be considered an adjudication and may not be appealed to the
13State Charter School Appeal Board.

14(3) A governing board of a school district of the first
15class does not have the authority to renew a charter for
16successive one (1) year periods.

17(c) (1) A charter school or regional charter school shall
18request an amendment to its approved written charter if at any
19time after the approval or renewal of its written charter the
20charter school or regional charter school seeks to contract out
21services of the charter school or regional charter school with
22an educational service provider or contract with another
23educational service provider not disclosed in the charter school
24or regional charter school's application under section 1719-A.

25(2) The charter school or regional charter school shall file
26a written document describing the requested amendment with the
27local board of school directors and include the following:

28(i) Provide evidence of the educational service provider's
29record in serving student populations, including demonstrated
30academic achievement and demonstrated management of nonacademic

1school functions, including proficiency with public school-based
2accounting, if applicable.

3(ii) Provide a copy of the finalized management agreement,
4which shall include all of the following:

5(a) The proposed duration of the service contract.

6(b) Roles and responsibilities of the governing board, the
7school staff and the educational service provider.

8(c) The scope of services and resources to be provided by
9the educational service provider.

10(d) Performance evaluation measures and timelines.

11(e) The compensation structure, including clear
12identification of all fees to be paid to the educational service
13provider.

14(f) Methods of contract oversight and enforcement.

15(g) Investment disclosure or the advance of moneys by the
16educational service provider on behalf of the charter school or
17regional charter school.

18(h) Conditions for renewal and termination of the contract.

19(iii) Disclose and explain any existing or potential
20conflicts of interest between the board of trustees and proposed
21educational service provider and any affiliated business
22entities, including a charter school entity.

23(3) Within twenty (20) days of its receipt of the request
24for an amendment, the local board of school directors shall hold
25a public hearing on the requested amendment under 65 Pa.C.S. Ch.
267 (relating to open meetings).

27(4) Within twenty (20) days after the hearing, the local
28board of school directors shall grant or deny the requested
29amendment. Failure by the local board of school directors to
30hold a public hearing and to grant or deny the amendment within

1the time period specified in this subsection shall be deemed an
2approval.

3(5) An applicant for an amendment shall have the right to
4appeal the denial of the requested amendment to the appeal board
5provided for under section 1721-A.

6Section 11. Section 1721-A(e) of the act, added June 19,
71997 (P.L.225, No.22), is amended to read:

8Section 1721-A. State Charter School Appeal Board.--* * *

9(e) Meetings of the appeal board shall be conducted under
10[the act of July 3, 1986 (P.L.388, No.84), known as the
11"Sunshine Act."] 65 Pa.C.S. Ch. 7 (relating to open meetings).
12Documents of the appeal board shall be subject to the act of
13[June 21, 1957 (P.L.390, No.212), referred to as the Right-to-
14Know Law.] February 14, 2008 (P.L.6, No.3), known as the "Right-
15to-Know Law."

16Section 12. Section 1722-A of the act is amended by adding
17subsections to read:

18Section 1722-A. Facilities.--* * *

19(b.1) (1) Alcoholic beverages shall not be available for
20consumption, purchase or sale in any charter school facility.

21(2) If the secretary reasonably believes that alcoholic
22beverages have been made available for consumption, purchase or
23sale in any charter school facility, the department shall order
24the following forfeitures against the charter school:

25(i) One thousand dollars ($1,000) for a first violation.

26(ii) Five thousand dollars ($5,000) for a second or
27subsequent violation.

28The department shall deduct the amount of the forfeiture from
29any and all State payments made to the charter school or order
30school districts to redirect payments to the department that the

1school district would have made to the charter school until the
2department determines that the amount of the forfeiture has been
3paid.

4(3) The charter school may appeal the order of the secretary 
5pursuant to 2 Pa.C.S. Chs. 5 (relating to practice and 
6procedure) and 7 (relating to judicial review).

7(b.2) A charter school facility shall not be located in a
8building that is within three hundred (300) feet of a place that
9has a liquor license. This subsection shall not apply to a
10charter school facility in existence and operating on the
11effective date of this subsection.

12* * *

13Section 13. Section 1723-A(d) of the act, added July 9, 2008
14(P.L.846, No.61), is amended and the section is amended by
15adding a subsection to read:

16Section 1723-A. Enrollment.--* * *

17(d) (1) Enrollment of students in a charter school or cyber
18charter school shall not be subject to a cap or otherwise
19limited by any past or future action of a [board of school
20directors] local school board, a board of control established
21under Article XVII-B, a special board of control established
22under section 692 or any other governing authority, unless
23agreed to by the charter school or cyber charter school as part
24of a written charter pursuant to section 1720-A. A charter 
25school entity or applicant for a charter school entity and the 
26governing authority shall negotiate maximum reasonable 
27enrollment levels in good faith.

28(2) The provisions of this subsection shall apply to a 
29charter school [or cyber charter school] entity regardless of 
30whether the charter was approved prior to or is approved 

1subsequent to the effective date of this subsection.

2(e) The department, through the office established under
3section 1705-A, shall develop a standard application form that
4shall be used by all charter school entities for admission.

5Section 14. Section 1724-A(g) and (i) of the act, added June
619, 1997 (P.L.225, No.22), are amended to read:

7Section 1724-A. School Staff.--* * *

8(g) [Professional] Except as provided under section 1743-A, 
9professional employes who hold a first level teaching or
10administrative certificate may, at their option, have the time
11completed in satisfactory service in a charter school applied to
12the length of service requirements for the next level of
13certification.

14* * *

15(i) All individuals who shall have direct contact with
16students or contact through electronic means via the Internet or 
17e-mail with students shall be required to submit a report of
18criminal history record information as provided for in section
19111 prior to accepting a position with the charter school
20entity. This subsection shall also apply to any individual who
21volunteers to work on a full-time or part-time basis at the
22charter school entity.

23* * *

24Section 15. Section 1725-A(a) of the act, amended June 29,
252002 (P.L.524, No.88), is amended and the section is amended by
26adding a subsection to read:

27Section 1725-A. Funding for Charter [Schools] School 
28Entities.--(a) Funding for a charter school entity shall be
29provided in the following manner and shall not be in violation 
30of any applicable Federal or State law, regulation or agreement:

1(1) There shall be no tuition charge for a resident or
2nonresident student attending a charter school entity.

3(2) For non-special education students, the charter school
4entity shall receive for each student enrolled no less than the
5[budgeted] actual total expenditure per average daily membership
6of the prior school year, as defined in section 2501(20), minus
7the [budgeted] actual expenditures at the end of the most recent 
8fiscal year of the district of residence for nonpublic school
9programs; adult education programs; community/junior college
10programs and services; student transportation services; for
11special education programs; facilities acquisition, construction
12and improvement services; athletic funds and school-sponsored 
13extracurricular activities set up in accordance with section 
14511; the full employer's share of retirement contributions paid 
15to the Public School Employees' Retirement System; tuition to 
16Pennsylvania charter schools for educational services provided 
17to students attending the charter school; for programs and 
18services to the extent they are funded from Federal funds; for 
19programs and services to the extent they are funded from the 
20proceeds of competitive grants from private or public sources or 
21from contributions or donations from private sources; and other
22financing uses, including debt service and fund transfers as
23provided in the manual of accounting and related financial
24procedures for pennsylvania school systems established by the
25department. This amount shall be paid by the district of
26residence of each student[.] or, upon written request of the 
27charter school entity, by the department to the charter school 
28entity in which a Pennsylvania resident student is enrolled from 
29any allocation for basic education funding to which the school 
30district in which the student resides is entitled. The 

1department shall establish payment guidelines and notify the 
2school district of receipt of a request for direct payment by 
3the department. Beginning in the 2013-2014 school year, the 
4charter school entity shall receive for each student enrolled in 
5a cyber charter school not less than the amount calculated under 
6this clause minus a cyber program deduction; a district pupil 
7services deduction; and an extracurricular activities deduction.

8(3) The following shall apply to special education:

9(i) For special education students, the charter school
10entity shall receive for each student enrolled the same funding
11as for each non-special education student as provided in clause
12(2), plus an additional amount determined by dividing the
13district of residence's total special education expenditure by
14the product of multiplying the combined percentage of section
152509.5(k) times the district of residence's total average daily
16membership for the prior school year. This amount shall be paid
17by the district of residence of each student[.], but shall not 
18exceed the actual cost of the educational services provided for 
19each special education student. Upon written request of the 
20charter school, this amount shall be paid by the department to 
21the charter school entity in which a Pennsylvania resident 
22student is enrolled from any allocation for basic education 
23funding to which the school district where the student resides 
24is entitled. The department shall establish payment guidelines 
25and notify the school district of the receipt of a request for 
26direct payment by the department.

27(ii) If a non-special education student is identified by the
28charter school entity in which the student is enrolled as a
29student with a disability in need of special education services,
30the district of residence shall have the power to administer and

1deliver the educational services required to address the
2specific needs of the exceptional student in lieu of payments by
3the district of residence for such student.

4(iii) A resident school district may not pay out to charter 
5schools or cyber charter schools an amount greater than it 
6receives for special education in a school year.

7(iv) Beginning in the 2013-2014 school year, the charter
8school entity shall receive for each student enrolled in a cyber
9charter school, no less than the amount calculated under this
10clause minus a cyber program deduction; a district pupil
11services deduction; and an extracurricular activities deduction.

12(4) A charter school entity may request the intermediate
13unit in which the charter school entity is located to provide
14services to assist the charter school entity to address the
15specific needs of exceptional students. The intermediate unit
16shall assist the charter school entity and bill the charter
17school entity for the services. The intermediate unit may not
18charge the charter school entity more for any service than it
19charges the constituent districts of the intermediate unit. If 
20the service is provided by the intermediate unit or school 
21district, the charter school entity shall provide a copy of the 
22contract and invoice for the services to the student's school 
23district of residence.

24(5) Payments shall be made to the charter school entity in
25twelve (12) equal monthly payments, by the fifth day of each
26month, within the operating school year, unless the charter 
27school entity receives direct payment from the department. A
28student enrolled in a charter school entity shall be included in
29the average daily membership of the student's district of
30residence for the purpose of providing basic education funding

1payments and special education funding pursuant to Article XXV.
2If a school district fails to make a payment to a charter school
3entity as prescribed in this clause, the secretary shall deduct
4the estimated amount, as documented by the charter school
5entity, from any and all State payments made to the district
6after receipt of documentation from the charter school entity.

7(6) Within thirty (30) days after the secretary makes the
8deduction described in clause (5) or if the charter school 
9entity receives direct payment from the department, a school
10district [may notify] shall file a notice of dispute with the
11secretary if the school district determines that the deduction
12made from State payments to the district under this subsection
13is inaccurate. The secretary shall hold a hearing within thirty 
14(30) days of the notice to provide the school district with an
15opportunity to be heard concerning whether the charter school
16entity accurately documented that its students were enrolled in
17the charter school entity, the period of time during which each
18student was enrolled, the school district of residence of each
19student and whether the amounts deducted from the school
20district were accurate. The secretary shall, within thirty (30) 
21days of the school district's hearing, make a determination of 
22the accuracy of the deduction.

23* * *

24(f) As used in this section,

25"Cyber charter school" shall mean a charter school as defined
26in section 1703-A which uses technology in order to provide a
27significant portion of its curriculum and delivers a significant
28portion of its instruction to students through the Internet or
29other electronic means.

30"Cyber program deduction" shall mean an amount equal to fifty

1per centum of the expenditure per average daily membership for a
2cyber education program offered by the district of residence,
3including a cyber education program offered in conjunction with
4an intermediate unit.

5"District pupil services deduction" shall mean an amount
6equal to one hundred per centum of the expenditure per average
7daily membership for student health services, food services and
8library services offered by the district of residence.

9"Extracurricular activities deduction" shall mean an amount
10equal to fifty per centum of the expenditure per average daily
11membership for extracurricular activities offered by the
12district of residence.

13Section 16. The act is amended by adding a section to read:

14Section 1725.1-A. Actual Costs of Educational Services.--(a)
15Within one hundred eighty (180) days of the effective date of
16this section, the department shall promulgate audit standards
17under this article which shall be used in determining the year-
18end actual costs of educational services per non-special
19education student and special education student provided by a
20charter school entity to any child who is a resident of a school
21district, which are subject to payment in accordance with
22section 1725-A. The department shall follow the procedures
23provided in the act of July 31, 1968 (P.L.769, No.240), referred
24to as the Commonwealth Documents Law, and the act of June 25,
251982 (P.L.633, No.181), known as the "Regulatory Review Act,"
26for promulgation and review of final-omitted regulations.
27Subsequent audit standards promulgated under this section or
28amendments to the initial audit standards may not be in final-
29omitted form. The audit standards shall take effect at the
30beginning of the first school year after which such audit

1standards have been promulgated.

2(b) In order for the year-end actual costs of educational
3services per non-special education student and special education
4student to be thoroughly and properly determined, the audit
5standards promulgated by the department shall:

6(1) Specify reasonable costs associated with the operation
7of the educational program offered by a charter school entity.
8The following may not be considered reasonable costs associated
9with the operation of the educational program offered by a
10charter school entity:

11(i) Any paid media advertisement, including television,
12radio, movie theater, billboard, bus poster, newspaper,
13magazine, the Internet or any other commercial method that may
14promote enrollment of a charter school entity.

15(ii) Any bonuses or additional compensation beyond the
16annual or termed contractual compensation for all faculty,
17administration and staff, including salary, benefits and any
18additional compensation not specifically enumerated in the
19contract.

20(2) Allow a closely related business entity to charge up to
21one hundred seven per centum of the actual educational costs.

22(3) Require information as necessary for a full-scope review
23of a finalized management agreement entered into between a
24charter school entity and a closely related business entity,
25including:

26(i) All payments received from school districts of
27residence.

28(ii) Expenditures of the closely related business entity
29related to the delivery of educational and administrative
30services pursuant to the management agreement.

1(4) List and show all receipts and expenditures for an
2educational service provider that provides any service to a
3charter school or cyber charter school.

4(5) Provide reasonable penalties for failure to comply.

5(c) The following shall apply:

6(1) The department shall effectuate an annual year-end final
7reconciliation process of tuition payments against actual costs
8of educational services per non-special education student and
9special education student providing any necessary procedures for
10the transfer of funds from the charter school entity to the
11school district of residence. The final reconciliation process
12shall include one of the following:

13(i) Allowing a school district of residence to withhold its
14last monthly payment from a charter school entity to account for
15any overpayments as identified by the year-end audit. If the
16school district of residence has sent overpayments, the district
17may adjust its last monthly payment accordingly.

18(ii) Requiring a charter school entity at the end of each
19school year to return any overpayments to a school district of
20residence owed a refund. A charter school entity may not return
21any overpayments on a pro rata basis.

22(2) Procedures for the transfer of funds may not permit the
23department to deduct from a school district of residence's basic
24education subsidy any amount in excess of the selected
25expenditure per average daily membership amount calculated in
26accordance with section 1725-A.

27(d) Charter school entities, educational service providers
28and closely related business entities shall provide to the
29department, unless already retained by the department, any
30information necessary to carry out the provisions of this

1section.

2(e) Except as provided under subsection (c), nothing
3contained under this section shall permit a school district of
4residence to provide funding for charter school entities in a
5manner other than that which is specified in section 1725-A.

6(f) As used in this section,

7"Closely related business entity" shall mean any organization
8with a management or operational relationship with a charter
9school involving either shared or overlapping aspects of
10corporate identity such as ownership, board of directors or
11trustees membership, capital or profits.

12"Educational and administrative services" shall mean any
13direct expenditure for any instruction and the administration of
14the instructional program. The term shall not include any
15expenditures not pertaining directly to the instruction and the
16administration of the instructional program.

17"Educational service provider" shall mean a for-profit
18education management organization, nonprofit charter management
19organization, school design provider, business manager or any
20other partner entity with which a charter school or cyber
21charter school intends to contract or presently contracts to
22provide educational services, operational services or management
23services to the charter school. The term shall not include a
24charter school or cyber charter school foundation.

25"Management agreement" shall mean any contract establishing a
26management or operational relationship between a charter school
27or cyber charter school and closely related business entity for
28the provision of professional or nonprofessional services to the
29charter school or cyber charter school.

30Section 17. Section 1726-A(a) of the act, amended July 9,

12008 (P.L.846, No.61), is amended to read:

2Section 1726-A. Transportation.--(a) (1) Students who
3attend a charter school located in their school district of
4residence, a regional charter school of which the school
5district is a part or a charter school located outside district
6boundaries at a distance not exceeding ten (10) miles by the
7nearest public highway shall be provided free transportation to
8the charter school by their school district of residence on such
9dates and periods that the charter school is in regular session
10[whether or not transportation is provided on such dates and
11periods to students attending schools of the district].

12(2) Transportation is not required for elementary students,
13including kindergarten students, residing within one and one-
14half (1.5) miles or for secondary students residing within two
15(2) miles of the nearest public highway from the charter school
16in which the students are enrolled unless the road or traffic
17conditions are such that walking constitutes a hazard to the
18safety of the students when so certified by the Department of
19Transportation, except that if the school district provides
20transportation to the public schools of the school district for
21elementary students, including kindergarten students, residing
22within one and one-half (1.5) miles or for secondary students
23residing within two (2) miles of the nearest public highway
24under nonhazardous conditions, transportation shall also be
25provided to charter schools under the same conditions.

26(3) Notwithstanding any other provision of this article, a
27school district that does not transport resident school district
28students on a daily basis shall not be required to transport
29students who attend a charter school or regional charter school.

30(4) Districts providing transportation to a charter school

1outside the district and, for the 2007-2008 school year and each
2school year thereafter, districts providing transportation to a
3charter school within the district shall be eligible for
4payments under section 2509.3 for each public school student
5transported.

6* * *

7Section 18. Section 1728-A of the act, added June 19, 1997
8(P.L.225, No.22), is amended to read:

9Section 1728-A. Annual Reports and Assessments.--(a) The
10local [board of school directors] school board shall annually
11assess on a standard form developed by the office whether each
12charter school is meeting the goals of its charter and shall
13conduct a comprehensive review prior to granting a five (5) year
14renewal of the charter. The local [board of school directors] 
15school board shall have ongoing access to the records and
16facilities of the charter school and any educational service 
17provider of the charter school that provides management, 
18operations or educational services to the charter school to
19ensure that the charter school is in compliance with its charter
20and this act and that requirements for testing, civil rights and
21student health and safety are being met. Ongoing reasonable 
22access to a charter school's or educational service provider's 
23records shall mean that the local school board shall have access 
24to records such as financial reports, financial audits and 
25aggregate standardized test scores without student identifying 
26information and teacher certification and personnel records. 
27Charter schools and local school boards shall comply fully with 
28the requirements of the Family Educational Rights and Privacy 
29Act of 1974 (Public Law 90-247, 20 U.S.C. § 1232g) and its 
30implementing regulations, and no personally identifiable 

1information from education records shall be provided by the 
2charter school to the local school board which authorized it 
3except in compliance with the Family Educational Rights and 
4Privacy Act of 1974 and subsequent regulations.

5(b) In order to facilitate the local board's review and
6secretary's report, each charter school shall submit an annual
7report no later than August 1 of each year to the local [board
8of school directors] school board and the [secretary] office in
9the form prescribed by the [secretary.] office. Within ten (10) 
10days of receipt of the charter school's annual report, the local 
11school board and the secretary shall each certify to the charter 
12school that the annual report has been received with an 
13indication of the date of receipt. Within thirty (30) days of 
14the date of receipt, the local school board and the secretary 
15shall each certify to the charter school that the annual report 
16has been reviewed and is complete or, alternatively, has been 
17reviewed and is missing specific information referenced in the 
18certification. This review does not constitute a review for the 
19accuracy of the contents of the charter school's annual report.

20(c) Five (5) years following the effective date of this
21article, the secretary shall contract with an independent
22professional consultant with expertise in public and private
23education. The consultant shall receive input from members of
24the educational community and the public on the charter school
25program. The consultant shall submit a report to the secretary,
26the Governor and the General Assembly and an evaluation of the
27charter school program, which shall include a recommendation on
28the advisability of the continuation, modification, expansion or
29termination of the program and any recommendations for changes
30in the structure of the program.

1(c.1) Each charter school entity shall form an independent
2audit committee of its board members which shall review at the
3close of each fiscal year a complete certified audit of the
4operations of the charter school entity. The audit shall be
5conducted by a qualified independent certified public accountant
6as selected from a list of approved providers established by the
7office. The audit shall be conducted under generally accepted
8audit standards of the Governmental Accounting Standards Board
9and shall include, but not be limited to, the following tests:

10(1) An enrollment test to verify the accuracy of student
11enrollment and reporting to the Commonwealth.

12(2) Full review of expense reimbursements for board members
13and administrators, including sampling of all reimbursements.

14(3) Review of internal controls, including review of
15receipts and disbursements.

16(4) Review of annual Federal and State tax filings,
17including the Internal Revenue Service Code Form 990, Return of
18Organization Exempt from Income Tax, and all related schedules
19and appendices for the charter school entity and charter school
20entity foundation, if applicable, including any educational
21service providers of the charter school entity.

22(5) Review of the financials of any charter school entity
23foundation, including any educational service providers of the
24charter school entity.

25(6) Review of all contracts over five thousand dollars
26($5,000) regarding the selection and acceptance process.

27(7) Review of potential conflicts of interest among board
28members and senior level administrators with employes of
29educational service providers of the charter school entity.

30(8) Review of employe files for compliance purposes but in

1accordance with Federal and State regulations governing
2confidentiality protection for employes.

3(9) Any other test the office deems appropriate.

4(c.2) The certified audit as required by subsection (c.1) is
5a public document and shall be made available on the
6department's Internet website and the charter school entity's
7Internet website, if applicable.

8(d) Charter school entities may be subject to an annual
9audit by the office, the department, its local school board or
10the Auditor General, in addition to any other audits required by
11Federal law or this act. Charter school entities located within
12a school district of the first class may be subject to an annual
13audit by the controller of the city of the first class.

14(e) The department shall publish an annual report that does
15all of the following:

16(1) Identifies charter schools whose students are
17academically outperforming comparable students enrolled in the
18chartering school district.

19(2) Describes best practices used in the charter school
20entities identified under clause (1) that should be disseminated
21to all school districts and charter school entities.

22(3) Makes any necessary recommendations to the General
23Assembly to further the dissemination and implementation of the
24best practices identified under clause (2).

25(f) Charter school entities shall annually provide a copy of
26the annual budget for the operation of the school that
27identifies the following:

28(1) The source of funding for all expenditures as part of
29its reporting under subsection (a).

30(2) Where funding is provided by a charter school entity

1foundation, including any educational service providers of the
2charter school entity, the amount of funds and a description of
3the use of such funds.

4(3) The salaries of all administrators of the charter school
5entity.

6(g) Notwithstanding any other provisions of law, the charter
7school entity, any affiliated charter school entity foundation
8and educational service providers of the charter school entity,
9shall make copies of annual Federal and State tax filings
10available upon request and on the foundation's Internet website,
11including Internal Revenue Service Code Form 990, Return of
12Organization Exempt from Income Tax, and all related schedules
13and appendices. The charter school entity foundation, including
14any educational service providers of the charter school entity,
15shall also make copies of its annual budget available upon
16request and on the foundation's, educational service provider's
17or the charter school entity's Internet website within thirty
18(30) days of the close of the foundation's or educational
19service provider's fiscal year. The annual budget must include
20the salaries of all employes of the charter school entity
21foundation or educational service provider of the charter school
22entity.

23(h) All operations of an educational service provider for a
24charter school entity pursuant to a contract or agreement with
25the charter school entity which relate to the charter school
26entity shall be subject to public audit requirements under
27section 2553. In addition, funds provided by a charter school
28entity to an educational service provider for a charter school
29entity pursuant to a contract or agreement with the charter
30school entity and the use of such funds by such educational

1service provider shall be subject to the audit provisions of
2section 403 of the act of April 9, 1929 (P.L.343, No.176), known
3as "The Fiscal Code."

4(i) The charter school entity records produced, obtained or
5maintained by an educational service provider for a charter
6school entity pursuant to a contract or agreement with the
7charter school entity shall be subject to disclosure under the
8act of February 14, 2008 (P.L.6, No.3), known as the "Right-to-
9Know Law."

10Section 19. Section 1729-A of the act, amended or added June
1119, 1997 (P.L.225, No.22), July 4, 2004 (P.L.536, No.70) and
12July 9, 2008 (P.L.846, No.61), is amended to read:

13Section 1729-A. Charter Renewal, Causes for Nonrenewal or
14Termination.--(a) Charter schools seeking renewal shall send a 
15renewal application in a form prescribed by the office to the 
16local school board not later than October 1 of the final school 
17year of the charter school's current charter. During the term of
18the charter or at the end of the term of the charter, the local
19[board of school directors] school board may choose to revoke or
20not to renew the charter based on any of the following:

21(1) One or more material violations of any of the
22conditions, standards or procedures contained in the written
23charter signed pursuant to section 1720-A.

24(2) Failure to meet the requirements for student performance
25[set forth in 22 Pa. Code Ch. 5 (relating to curriculum) or
26subsequent regulations promulgated to replace 22 Pa. Code Ch. 5
27or], failure to meet any performance standard set forth in the
28written charter signed pursuant to section [1716-A.] 1720-A or 
29failure to make adequate yearly progress for at least three (3) 
30consecutive years under the Pennsylvania accountability 

1standards that apply the requirements set forth in the 
2Elementary and Secondary Education Act of 1965 (Public Law 89-
310, 20 U.S.C. § 6301 et seq.).

4(3) Failure to meet generally accepted standards of fiscal
5management or audit requirements.

6(3.1) Failure to maintain the financial ability to continue
7as a going concern according to generally accepted accounting
8principles.

9(4) Violation of provisions of this article.

10(5) Violation of any provision of law from which the charter
11school has not been exempted, including Federal laws and
12regulations governing children with disabilities.

13(6) [The charter school has been convicted of fraud.] 
14Administrators or board members have been convicted of offenses 
15pertaining to fraud, theft or mismanagement of public funds or 
16any crime committed in the course of their official duties.

17(7) Failure to obtain and submit a certified independent
18audit to the department for any year of the school's operation
19by November 15 after the close of the school year.

20(8) Except as permitted pursuant to section 1716-A(a.1),
21failure of the charter school to be the employer of all teaching
22staff in the school.

23(9) Demonstration by the charter-granting entity that a
24material misrepresentation of fact was contained in the charter
25school's application or in its annual charter school report that
26was submitted to the chartering entity under section 1728-A(a)
27or 1743-A(f).

28(10) Failure to correct within thirty (30) days of receiving
29notice from the department any conflict of interest by a member
30of its board of trustees or administrators pursuant to sections

11716-A(b) and 1716.2-A.

2(a.1) [When a charter school located in a school district of
3the first class is in corrective action status and seeks renewal
4of its charter, if the governing body of the school district of
5the first class renews the charter, it may place specific
6conditions in the charter that require the charter school to
7meet specific student performance targets within stated periods
8of time subject to the following:

9(i) The performance targets and the periods of time in which
10the performance targets must be met shall be reasonable.

11(ii)] If a charter school entity has failed to make adequate 
12yearly progress for one (1) or two (2) years under the 
13Pennsylvania accountability standards that apply the 
14requirements set forth in the Elementary and Secondary Education 
15Act of 1965 and is seeking renewal of its charter and the 
16charter-granting entity renews the charter, it may do so for a 
17time period less than five (5) years and may require the charter 
18school entity to meet specific performance targets within 
19defined periods of time, subject to the following:

20(1)  The performance targets and the periods of time in which
21the performance targets must be met shall be reasonable. For
22purposes of this section, the standards defined as adequate
23yearly progress under the Elementary and Secondary Education Act
24of 1965 shall be deemed reasonable.

25(2)  The placement of conditions in a charter as specified in
26this subsection shall not be considered an adjudication and may
27not be appealed to the State Charter School Appeal Board.

28[(iii)] (3) If the charter school fails to meet the
29performance targets within the stated period of time, such
30failure shall be sufficient cause for revocation of the charter.

1(a.2) A school district shall revoke the charter of a
2charter school that has failed to make adequate yearly progress
3for at least five (5) consecutive years under the Pennsylvania
4accountability standards that apply the requirements set forth
5in the Elementary and Secondary Education Act of 1965. Any
6revocation pursuant to this subsection shall not be subject to
7the automatic stay provided for in subsection (f).

8(a.3) If, after a hearing under this section, a local school
9board proves by a preponderance of the evidence that certain
10administrators or board members have violated this act or the
11terms and conditions of the charter, the local school board
12shall have the authority to require the charter school to
13replace those administrators and board members in order to
14obtain renewal of the charter.

15(b) A member of the board of trustees who is convicted of a
16felony or any crime involving moral turpitude shall be
17immediately disqualified from serving on the board of trustees.

18(c) Any notice of revocation or nonrenewal of a charter
19given by the local [board of school directors] school board of a
20school district shall state the grounds for such action with
21reasonable specificity and give reasonable notice to the
22governing board of the charter school of the date on which a
23public hearing concerning the revocation or nonrenewal will be
24held. The local [board of school directors] school board shall
25conduct such hearing, present evidence in support of the grounds
26for revocation or nonrenewal stated in its notice and give the
27charter school reasonable opportunity to offer testimony before
28taking final action. Formal action revoking or not renewing a
29charter shall be taken by the local [board of school directors] 
30school board at a public meeting pursuant to [the act of July 3,

11986 (P.L.388, No.84), known as the "Sunshine Act,"] 65 Pa.C.S. 
2Ch. 7 (relating to open meetings) after the public has had
3thirty (30) days to provide comments to the board. All
4proceedings of the local board pursuant to this subsection shall
5be subject to 2 Pa.C.S. Ch. 5 Subch. B (relating to practice and
6procedure of local agencies). Except as provided in subsection
7(d), the decision of the local board shall not be subject to 2
8Pa.C.S. Ch. 7 Subch. B (relating to judicial review of local
9agency action).

10(d) [Following the appointment and confirmation of the
11appeal board, but not before July 1, 1999, the] The charter
12school may appeal the decision of the local [board of school
13directors] school board to revoke or not renew the charter to
14the appeal board. The appeal board shall have the exclusive
15review of a decision not to renew or revoke a charter. The
16appeal board shall review the record and shall have the
17discretion to supplement the record if the supplemental
18information was previously unavailable. The appeal board may
19consider the charter school plan, annual reports, student
20performance and employe and community support for the charter
21school in addition to the record. The appeal board shall give
22due consideration to the findings of the local [board of
23directors] school board and specifically articulate its reasons
24for agreeing or disagreeing with those findings in its written
25decision.

26(e) If the appeal board determines that the charter should
27not be revoked or should be renewed, the appeal board shall
28order the local [board of directors] school board to rescind its
29revocation or nonrenewal decision.

30(f) Except as provided in subsection (g), the charter shall

1remain in effect until final disposition by the appeal board.

2(g) In cases where the health or safety of the school's
3pupils, staff or both is at serious risk, the local [board of
4school directors] school board may take immediate action to
5revoke a charter.

6(h) All decisions of the charter school appeal board shall
7be subject to appellate review by the Commonwealth Court.

8(i) When a charter is revoked, not renewed, forfeited,
9surrendered or otherwise ceases to operate, the charter school
10shall be dissolved. After the disposition of any liabilities and
11obligations of the charter school, any remaining assets of the
12charter school, both real and personal, shall be distributed on
13a proportional basis to the school entities with students
14enrolled in the charter school for the last full or partial
15school year of the charter school. In no event shall such school
16entities or the Commonwealth be liable for any outstanding
17liabilities or obligations of the charter school.

18(j) When a charter is revoked or is not renewed, a student
19who attended the charter school shall apply to another public
20school in the student's school district of residence. Normal
21application deadlines will be disregarded under these
22circumstances. All student records maintained by the charter
23school shall be forwarded to the student's district of residence
24within ten (10) days of the revocation or nonrenewal of the 
25charter.

26Section 20. Section 1732-A(a) of the act, amended June 29,
272002 (P.L.524, No.88), is amended to read:

28Section 1732-A. Provisions Applicable to Charter Schools.--
29(a) Charter schools shall be subject to the following:

30Sections 108, 110, 111, 321, 325, 326, 327, 431, 436, 443,

1510, 518, 527, 708, 736, 737, 738, 739, 740, 741, 752, 753,
2[755,] 771, 776, 777, 808, 809, 810, 1109, 1111, 1112(a), 1123,
31301, 1310, 1317, 1317.1, 1317.2, 1318, 1327, 1330, 1332, 1333, 
41303-A, 1513, 1517, 1518, 1521, 1523, 1531, 1547, 2014-A,
5Article XIII-A and Article XIV.

6Act of July 17, 1961 (P.L.776, No.341), known as the
7"Pennsylvania Fair Educational Opportunities Act."

8Act of July 19, 1965 (P.L.215, No.116), entitled "An act
9providing for the use of eye protective devices by persons
10engaged in hazardous activities or exposed to known dangers in
11schools, colleges and universities."

12Section 4 of the act of January 25, 1966 (1965 P.L.1546,
13No.541), entitled "An act providing scholarships and providing
14funds to secure Federal funds for qualified students of the
15Commonwealth of Pennsylvania who need financial assistance to
16attend postsecondary institutions of higher learning, making an
17appropriation, and providing for the administration of this
18act."

19Act of July 12, 1972 (P.L.765, No.181), entitled "An act
20relating to drugs and alcohol and their abuse, providing for
21projects and programs and grants to educational agencies, other
22public or private agencies, institutions or organizations."

23Act of December 15, 1986 (P.L.1595, No.175), known as the
24"Antihazing Law."

2565 Pa.C.S. Ch. 7 (relating to open meetings).

2665 Pa.C.S. §§ 1102 (relating to definitions) and 1103(f)
27(relating to restricted activities).

28* * *

29Section 21. The act is amended by adding a section to read:

30Section 1733-A. Charter School Fund Balance Limit.--(a) for

1the 2012-2013 school year and each school year thereafter, a
2charter school that is not a cyber charter school shall not
3accumulate an unassigned fund balance greater than the charter
4school fund balance limit, which will be determined as follows:

5  6Charter School Total 7Budgeted Expenditures 8

Maximum Unassigned Fund Balance as Percentage of Total Budgeted Expenditures

9Less than or equal to $11,999,999	12%
10More than $12,000,000 and less than $12,999,999	11.5%
11More than $13,000,000 and less than $13,999,999	11%
12More than $14,000,000 and less than $14,999,999	10.5%
13More than $15,000,000 and less than $15,999,999	10%
14More than $16,000,000 and less than $16,999,999	9.5%
15More than $17,000,000 and less than $17,999,999	9%
16More than $18,000,000 and less than $18,999,999	8.5%
17More than or equal to $19,000,000	8%

18(b) Any unassigned fund balance in place on June 30, 2013,
19that exceeds the charter school fund balance limit shall be
20refunded on a per student pro rata basis within ninety (90) days
21of the effective date of this subsection to all school districts
22that made payments under section 1725-A in the 2011-2012 and
232012-2013 school years. The funds may not be used to pay bonuses
24to any administrator, board of trustee member, employe, staff or
25contractor or be transferred to a charter school foundation.

26(c) For The 2013-2014 school year and each school year
27thereafter, any unassigned fund balance in excess of the charter
28school fund balance limit shall be refunded on a per student pro
29rata basis to all school districts that made payments under
30section 1725-A in the prior school year.

1(d) By August 15, 2013, and August 15 of each year
2thereafter, each charter school shall provide the department
3with information certifying compliance with this section. The
4information shall be provided in a form and manner prescribed by
5the department and shall include information on the charter
6school's estimated ending unassigned fund balance expressed as a
7dollar amount and as a percentage of the charter school's total
8budgeted expenditures for that school year.

9(e) As used in this section, "unassigned fund balance" shall
10mean that portion of the fund balance which represents the part
11of spendable fund balance that has not been categorized as
12restricted, committed or assigned.

13Section 22. Section 1741-A(c) of the act, added June 29,
142002 (P.L.524, No.88), is amended and subsection (a) is amended
15by adding a paragraph to read:

16Section 1741-A. Powers and duties of department.

17(a) Powers and duties.--The department shall:

18* * *

19(6) Promulgate regulations in accordance with the act of
20June 25, 1982 (P.L.633, No.181), known as the Regulatory
21Review Act, that provide all of the following with regard to
22cyber charter schools:

23(i) The minimum number of hours that students must
24be online and offline engaged in educational activities
25in order to meet the attendance requirements of 22 Pa.
26Code Ch. 11 (relating to student attendance).

27(ii) The requirements that each cyber charter school
28must meet to be able to demonstrate in its annual report
29to the department due by September 1 of each year under
30section 1743-A(f) that the minimum number of online and

1offline hours has been attained by each student.

2* * *

3(c) Documents.--Documents of the appeal board shall be
4subject to the act of [June 21, 1957 (P.L.390, No.212), referred
5to as the Right-to-Know Law] February 14, 2008 (P.L.6, No.3), 
6known as the Right-to-Know Law.

7Section 23. Section 1742-A of the act, added June 29, 2002
8(P.L.524, No.88), is amended to read:

9Section 1742-A. Assessment and evaluation.

10The department shall:

11(1) Annually assess on a standard form developed by the 
12office whether each cyber charter school is meeting the goals
13of its charter and is in compliance with the provisions of
14the charter and conduct a comprehensive review prior to
15granting a five-year renewal of the charter.

16(2) Annually review each cyber charter school's
17performance on the Pennsylvania System of School Assessment
18test, standardized tests and other performance indicators to
19ensure compliance with 22 Pa. Code Ch. 4 (relating to
20academic standards and assessment) or subsequent regulations
21promulgated to replace 22 Pa. Code Ch. 4.

22(3) Have ongoing access to all records, instructional
23materials and student and staff records of each cyber charter
24school [and], to every cyber charter school facility and to 
25any educational service provider of the cyber charter school 
26that provides management, operations or educational services 
27to the cyber charter school to ensure the cyber charter
28school is in compliance with its charter and this
29subdivision. Ongoing reasonable access to a cyber charter 
30school's records shall mean that the department shall have 

1access to records, including, but not limited to, financial 
2records, financial audits, standardized test scores, teacher 
3certification and personnel records. Cyber charter schools 
4and the department shall comply fully with the requirements 
5of the Family Educational Rights and Privacy Act of 1974 
6(Public Law 90-247, 20 U.S.C. § 1232g) and its implementing 
7regulations.

8(3.1) Every cyber charter school shall also comply with
9the requirements of section 1728-A(c.1), (c.2), (d), (e),
10(f), (g) and (h).

11(4) Under section 1743-A(f) and within ten days of
12receipt of the cyber charter school's annual report, the
13secretary shall certify to the cyber charter school that the
14annual report has been received with an indication of the
15date of receipt. Within 45 days of the date of receipt, the
16secretary shall certify to the cyber charter school that the
17annual report has been reviewed and is complete or,
18alternatively, has been reviewed and is missing specific
19information referenced in the certification. This review does
20not constitute a review for the accuracy of the contents of
21the cyber charter school's annual report.

22Section 24. Section 1743-A(a)(1), (e) and (f) of the act,
23added June 29, 2002 (P.L.524, No.88), are amended and the
24section is amended by adding subsections to read:

25Section 1743-A. Cyber charter school requirements and
26prohibitions.

27(a) Special financial requirements prohibited.--A cyber
28charter school shall not:

29[(1) provide discounts to a school district or waive
30payments under section 1725-A for any student;]

1* * *

2(a.1) Truancy.--In order to enroll a student, the school
3district in which the student is a resident must certify to the
4office whether the student is in compliance with section 1327.

5* * *

6(e) Students.--For each student enrolled, a cyber charter
7school shall:

8(1) provide all instructional materials;

9(2) provide all equipment, including, but not limited
10to, a computer, computer monitor and printer; and

11(3) provide or reimburse for all technology and services
12necessary for the on-line delivery of the curriculum and
13instruction.

14The Commonwealth shall not be liable for any reimbursement owed
15to students, parents or guardians by a cyber charter school
16under paragraph (3). All computers, software and Internet 
17connections purchased by the cyber charter school shall be the 
18property of the cyber charter school. If a student discontinues 
19enrollment in a cyber charter school, the student must return 
20the school's property in usable condition or pay a civil penalty 
21in the form of fair market value for the property.

22(f) Annual report.--A cyber charter school shall submit an
23annual report no later than [August] September 1 of each year to
24the department in the form prescribed by the department.

25* * *

26(j) Out-of-State students.--A cyber charter school may not
27expend any funds, including funds provided by the Commonwealth,
28on the education of any student who is not a resident of a
29Pennsylvania school district.

30Section 25. Section 1744-A of the act, added June 29, 2002

1(P.L.524, No.88), is amended to read:

2Section 1744-A. School district and intermediate unit
3responsibilities.

4An intermediate unit or a school district in which a student
5enrolled in a cyber charter school resides shall do all of the
6following:

7(1) Provide the cyber charter school within ten days of
8receipt of the notice of the admission of the student under
9section 1748-A(a) with all records relating to the student,
10including transcripts, test scores and a copy of any
11individualized education program for that student.

12(2) Provide the cyber charter school with reasonable
13access to its facilities for the administration of
14standardized tests required under this subdivision.

15(3) Upon request and subject to agreement between a 
16cyber charter school and an intermediate unit or school 
17district, provide assistance to the cyber charter school in
18the delivery of services to a student with disabilities. The
19school district or intermediate unit shall not charge the
20cyber charter school more for a service than it charges a
21school district.

22(4) Make payments to the cyber charter school under
23section 1725-A.

24Section 26. Section 1748-A(a) of the act, added June 19,
252002 (P.L.524, No.88), is amended and the section is amended by
26adding a subsection to read:

27Section 1748-A. Enrollment and notification.

28(a) Notice to school district.--

29(1) Within [15] ten days of the enrollment of a student
30to a cyber charter school, the parent or guardian and the

1cyber charter school shall notify the student's school
2district of residence of the enrollment through the use of
3the notification form under subsection (b).

4(2) If a school district which has received notice under
5paragraph (1) determines that a student is not a resident of
6the school district, the following apply:

7(i) Within [seven] 20 days of receipt of the notice
8under paragraph (1), the school district shall notify the
9cyber charter school and the department that the student
10is not a resident of the school district. Notification of
11nonresidence shall include the basis for the
12determination.

13(ii) Within seven days of notification under
14subparagraph (i), the cyber charter school shall review
15the notification of nonresidence, respond to the school
16district and provide a copy of the response to the
17department. If the cyber charter school agrees that a
18student is not a resident of the school district, it
19shall determine the proper district of residence of the
20student [before requesting funds from another school
21district].

22(iii) Within seven days of receipt of the response
23under subparagraph (ii), the school district shall notify
24the cyber charter school that it agrees with the cyber
25charter school's determination or does not agree with the
26cyber charter school's determination.

27(iv) A school district that has notified the cyber
28charter school that it does not agree with the cyber
29charter school's determination under subparagraph (iii)
30shall appeal to the department for a final determination.

1(v) All decisions of the department regarding the
2school district of residence of a student shall be
3subject to review by the Commonwealth Court.

4[(vi) A school district shall continue to make
5payments to a cyber charter school under section 1725-A
6during the time in which the school district of residence
7of a student is in dispute.

8(vii) If a final determination is made that a
9student is not a resident of an appealing school
10district, the cyber charter school shall return all funds
11provided on behalf of that student to the school district
12within 30 days.]

13(3) When a school district has received notice under
14paragraph (1), the school district shall certify to the cyber
15charter school whether the student is in compliance with
16section 1327.

17* * *

18(d) Truancy.--

19(1) When a school district receives a notification form,
20as required by subsection (a)(1), that a resident student who
21is truant from the school district schools has enrolled in a
22cyber charter school, the school district shall notify the
23cyber charter school and the office in writing about the
24student's truancy.

25(2) Upon receipt of notice from the resident school
26district of a student's truancy at the school district
27school, the cyber charter school must provide to the
28student's resident school district evidence during the first
29three months that the student is enrolled in the cyber
30charter school and that the student is receiving educational

1instruction and completing assignments as required by the
2cyber charter school. This evidence shall be provided by the
3cyber charter school monthly, as determined by the office.

4(3) If the cyber charter school fails to comply with the
5requirements of this subsection, the student's resident
6school district shall notify the office.

7(4) If any student enrolled in the cyber charter school
8accrues three or more days of unlawful absences, the cyber
9charter school has the authority to, and shall be responsible
10for, instituting truancy proceedings as set forth in section
111333.

12(5) Truancy proceedings shall be held in the
13jurisdiction wherein the truant student resides.

14Section 27. Section 1749-A(a) of the act, added June 29,
152002 (P.L.524, No.88), is amended to read:

16Section 1749-A. Applicability of other provisions of this act
17and of other acts and regulations.

18(a) General requirements.--Cyber charter schools shall be
19subject to the following:

20(1) Sections 108, 110, 111, 321, 325, 326, 327, 431,
21436, 443, 510, 518, 527, 609, 687(a), (b), (c), (d), (h) and 
22(j), 708, 752, 753, [755,] 771, 776, 777, 807.1, 808, 809,
23810, 1109, 1111, 1112(a), 1123, 1205.1, 1205.2, 1301, 1302,
241310, 1317.2, 1318, 1330, 1332, 1333, 1354, 1355, 1303-A,
251518, 1521, 1523, 1531, 1547, 1702-A, 1703-A, 1704-A, 1714-A,
261715-A, 1716-A, 1716.1-A, 1716.2-A, 1719-A, 1721-A, 1722-A,
271723-A(a) and (b), 1724-A, 1725-A, 1727-A, 1729-A, 1730-A,
281731-A(a)(1) and (b) and 2014-A and Articles [XII-A,] XIII-A
29and XIV.

30(2) The act of July 17, 1961 (P.L.776, No.341), known as

1the Pennsylvania Fair Educational Opportunities Act.

2(3) The act of July 19, 1965 (P.L.215, No.116), entitled
3"An act providing for the use of eye protective devices by
4persons engaged in hazardous activities or exposed to known
5dangers in schools, colleges and universities."

6(4) Section 4 of the act of January 25, 1966 (1965
7P.L.1546, No.541), entitled "An act providing scholarships
8and providing funds to secure Federal funds for qualified
9students of the Commonwealth of Pennsylvania who need
10financial assistance to attend postsecondary institutions of
11higher learning, making an appropriation, and providing for
12the administration of this act."

13(5) The act of July 12, 1972 (P.L.765, No.181) entitled
14"An act relating to drugs and alcohol and their abuse,
15providing for projects and programs and grants to educational
16agencies, other public or private agencies, institutions or
17organizations."

18(6) The act of December 15, 1986 (P.L.1595, No.175),
19known as the Antihazing Law.

20(7) The act of February 18, 2008 (P.L.6, No.3), known as
21the Right-to-Know Law.

22(8) 65 Pa.C.S. Ch. 7 (relating to open meetings).

23(9) 65 Pa.C.S. §§ 1102 (relating to definitions) and
241103(f) (relating to restricted activities).

25* * *

26Section 28. The act is amended by adding a section to read:

27Section 1752-A. Cyber charter school fund balance limit.

28(a) Limit.--For the 2012-2013 school year and each school
29year thereafter, no cyber charter school shall accumulate an
30unassigned fund balance greater than the cyber charter school

1fund balance limit, which shall be determined as follows:

2  3Cyber Charter School Total 4Budgeted Expenditures 5

Maximum Unassigned Fund Balance as Percentage of Total Budgeted Expenditures

6Less than or equal to $11,999,999	12%
7More than $12,000,000 and less than $12,999,999	11.5%
8More than $13,000,000 and less than $13,999,999	11%
9More than $14,000,000 and less than $14,999,999	10.5%
10More than $15,000,000 and less than $15,999,999	10%
11More than $16,000,000 and less than $16,999,999	9.5%
12More than $17,000,000 and less than $17,999,999	9%
13More than $18,000,000 and less than $18,999,999	8.5%
14More than or equal to $19,000,000	8%

15(b) Distribution.--Any unassigned fund balance in place on
16June 30, 2013, that exceeds the cyber charter school fund
17balance limit shall be distributed by the cyber charter school
18on a per student pro rata basis within 90 days of the effective
19date of this subsection to all school districts that made
20payments under section 1725-A to the cyber charter school in the
212011-2012 and 2012-2013 school years. The funds may not be used
22to pay bonuses to any administrator, board of trustee member,
23employee, staff or contractor or be transferred to a cyber
24charter school foundation.

25(c) Refunds.--For the 2013-2014 school year and each school
26year thereafter, any unassigned fund balance in excess of the
27cyber charter school fund balance limit shall be refunded on a
28per student pro rata basis to all school districts that made
29payments to the cyber charter school under section 1725-A in the
30prior school year.

1(d) Certification of compliance.--By August 15, 2013, and
2August 15 of each year thereafter, each cyber charter school
3shall provide the department with information certifying
4compliance with this section. The information shall be provided
5in a form and manner prescribed by the department and shall
6include information on the cyber charter school's estimated
7ending unassigned fund balance expressed as a dollar amount and
8as a percentage of the cyber charter school's total budgeted
9expenditures for that school year.

10(e) Definitions.--As used in this section, "unassigned fund
11balance" shall mean that portion of the fund balance which
12represents the part of spendable fund balance that has not been
13categorized as restricted, committed or assigned.

14Section 29. Section 2421 of the act is amended to read:

15Section 2421. Duties of Controller.--The school controller,
16herein provided in each school district of the first class,
17shall properly audit the finances of the school district,
18including the accounts of the receiver of school taxes, school
19treasurer, or other proper authority collecting school taxes,
20school depositories, and all other funds under the control of
21the board of public education[.] and all funds provided by the 
22school district of the first class to a charter school entity, 
23including, but not limited to, those funds provided by a charter 
24school entity to an educational service provider contractor or 
25subcontractor that provides management, operations or 
26educational services to the charter school entity.

27The school controller shall, at the end of each school year,
28certify to the board of public education that he has audited the
29several accounts above stated, and shall report to it the result
30of such audit.

1Section 30. This act shall take effect in 120 days.