PRINTER'S NO.  3655

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

2364

Session of

2012

  

  

INTRODUCED BY FLECK, O'NEILL, DeLUCA, REESE, BAKER, BARBIN, BARRAR, CAUSER, DAVIS, EMRICK, J. EVANS, EVERETT, GEIST, GINGRICH, HALUSKA, HESS, HUTCHINSON, M. K. KELLER, LONGIETTI, MICOZZIE, MILLER, MOUL, MULLERY, MUNDY, PASHINSKI, PEIFER, PICKETT, REED, ROEBUCK, SAYLOR, SCAVELLO, SCHMOTZER, SONNEY, STERN, STURLA, SWANGER, VULAKOVICH, KORTZ AND HARHART, JUNE 5, 2012

  

  

REFERRED TO COMMITTEE ON EDUCATION, JUNE 5, 2012  

  

  

  

AN ACT

  

1

Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An

2

act relating to the public school system, including certain

3

provisions applicable as well to private and parochial

4

schools; amending, revising, consolidating and changing the

5

laws relating thereto," in charter schools, further providing

6

for definitions, for powers of Board of Trustees, for funding

7

for charter schools, for annual reports and assessments, for

8

cyber charter school requirements and prohibitions, for

9

enrollment and notification and for applicability of other

10

provisions of this act and of other acts and regulations; and

11

providing for requirements, for duties of administrators, for

12

notification and for actual costs of education services.

13

The General Assembly of the Commonwealth of Pennsylvania

14

hereby enacts as follows:

15

Section 1.  The definitions of "chief executive officer" and

16

"local board of school directors" in section 1703-A of the act

17

of March 10, 1949 (P.L.30, No.14), known as the Public School

18

Code of 1949, amended June 29, 2002 (P.L.524, No.88), are

19

amended and the section is amended by adding definitions to

20

read:

 


1

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

2

"Administrator" shall include the chief administrator of a

3

charter school or cyber charter school and all other employes of

4

a charter school or cyber charter school who by virtue of their

5

positions exercise management or operational oversight

6

responsibilities.

7

*  *  *

8

"Charter school foundation" shall mean a nonprofit

9

organization as defined under section 501(c)(3) of the Internal

10

Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3))

11

that provides funding or resources to a charter school or cyber

12

charter school, either directly or through an affiliated entity.

13

"Charter school fund balance limit" shall mean the amount

14

determined under section 1733—A.

15

"Chief [executive officer] administrator" shall mean an

16

individual appointed by the board of trustees to oversee and

17

manage the operation of the charter school, but who shall not be

18

deemed a professional staff member under this article.

19

*  *  *

20

"Cyber charter school fund balance limit" shall mean the

21

amount determined under section 1743-A.

22

*  *  *

23

"Financial relationship" shall mean any formal or informal

24

arrangement pursuant to which a charter is obligated to make

25

payment or in fact does make payment to an individual, group of

26

individuals or any entity.

27

"Immediate family member" shall mean a spouse, parent,

28

brother, sister or child.

29

"Local [boards of school directors] school board" shall mean

30

the board of directors of a school district in which a proposed

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1

or an approved charter school is located. The term shall include

2

a board of control established under Article XVII—B, a special

3

board of control established under section 692 or a school

4

reform commission established under section 696.

5

Section 1.1.  Section 1715-A of the act is amended by adding

6

a clause to read:

7

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

8

schools shall be required to comply with the following

9

provisions:

10

* * *

11

(13)  (i)  For the 2012-2013 school year and each school year

12

thereafter, a charter school may not accumulate an unassigned

13

fund balance greater than the charter school fund balance limit,

14

which shall be determined as follows:

15

16

17

18

  

  

Charter School Total

Budgeted Expenditures

Maximum Unassigned Fund Balance as Percentage of Total Budgeted Expenditures

19

Less Than or Equal to $11,999,999

12%

20

Between $12,000,000 and $12,999,999

11.5%

21

Between $13,000,000 and $13,999,999

11%

22

Between $14,000,000 and $14,999,999

10.5%

23

Between $15,000,000 and $15,999,999

10%

24

Between $16,000,000 and $16,999,999

9.5%

25

Between $17,000,000 and $17,999,999

9%

26

Between $18,000,000 and $18,999,999

8.5%

27

Greater Than or Equal to $19,000,000

8%

28

(ii)  Any unassigned fund balance in place on June 30, 2012,

29

that exceeds the charter school fund balance limit shall be

30

refunded on a per student pro rata basis within ninety (90) days

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1

of the effective date of this subclause to all school districts

2

that made payments under section 1725-A in the 2010-2011 and

3

2011-2012 school years. The funds may not be used to pay bonuses

4

to any administrator, board of trustees member, employe, staff

5

or contractor or be transferred to a charter school foundation,

6

closely related business entity or educational service provider.

7

(iii)  For the 2012-2013 school year and each school year

8

thereafter, any unassigned fund balance in excess of the charter

9

school fund balance limit shall be refunded on a per student pro

10

rata basis to all school districts that made payments under

11

section 1725-A in the prior school year.

12

(iv)  By August 15, 2012, and August 15 of each year

13

thereafter, each charter school shall provide the department

14

with information certifying compliance with this clause. The

15

information shall be provided in a form and manner prescribed by

16

the department and shall include information on the charter

17

school's estimated ending unassigned fund balance expressed as a

18

dollar amount and as a percentage of the charter school's total

19

budgeted expenditures for that school year.

20

(v)  As used in this section, the term "unassigned fund

21

balance" shall mean that portion of the fund balance which

22

represents the part of the spendable fund balance that has not

23

been categorized as restricted, committed or assigned.

24

Section 2.  Section 1716-A of the act, added June 19, 1997

25

(P.L.225, No.22), is amended to read:

26

Section 1716-A.  [Powers of] Board of Trustees.--(a)  The

27

board of trustees of a charter school or cyber charter school 

28

shall have the authority to decide matters related to the

29

operation of the school, including, but not limited to,

30

budgeting, curriculum and operating procedures, subject to the

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1

school's charter. [The board] 

2

(a.1)  The board of trustees shall have the authority to

3

employ, discharge and contract with necessary professional and

4

nonprofessional employes subject to the school's charter and the

5

provisions of this [article.] act. The board of trustees, with

6

written permission of the department, may contract with

7

educators who are not employes of the charter school or cyber

8

charter school to serve as teaching staff in specialized

9

subjects, except that the arrangements shall constitute no more

10

than five per centum of the teaching staff of the charter school

11

or cyber charter school.

12

(a.2)  The board of trustees of a charter school or cyber

13

charter school shall have a minimum of five (5) voting members.

14

If a charter school or cyber charter school has fewer than five

15

(5) voting members serving on its board as of the effective date

16

of this subsection, the charter school or cyber charter school

17

shall have sixty (60) days to appoint additional members to the

18

board to meet the minimum requirements of this subsection.

19

(b)  The following shall apply to all members of the board of

20

trustees of a charter school or cyber charter school:

21

(1)  No member of a local school board [of school directors]

22

of a school entity shall serve on the board of trustees of a

23

charter school that is located in the member's district.

24

[(c)  The board of trustees shall comply with the act of July

25

3, 1986 (P.L.388, No.84), known as the "Sunshine Act."]

26

(2)  No administrator or member of a local school board which

27

granted or renewed a charter shall serve on the board of

28

trustees of a charter school that is the subject of the granted

29

or renewed charter.

30

(3)  No member of the board of trustees may be employed in

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1

any capacity or have any financial relationship with the local

2

school board from which the charter school received its charter.

3

No member of the board of trustees of a charter school may be

4

employed in any capacity or have any financial relationship with

5

the board of trustees.

6

(4)  No member of the board of trustees or a member of the

7

immediate family of the member of the board of trustees may:

8

(i)  Be employed by the charter school or cyber charter

9

school or have a financial relationship with the charter school

10

or cyber charter school.

11

(ii)  Be employed by any entity that has a financial

12

relationship with the charter school or cyber charter school or

13

any related or associated foundation unless the charter school

14

or cyber charter school complies with the requirements of 65

15

Pa.C.S. § 1103(f) (relating to restricted activities).

16

(5)  No member of the board of trustees or a member of the

17

immediate family of the member of the board of trustees may be

18

employed by or have a financial relationship with an educational

19

service provider which is under contract with the charter school

20

or cyber charter school or any related or associated foundation.

21

(6)  A member of the board of trustees must disqualify

22

himself and abstain from voting in a proceeding which

23

constitutes a conflict of interest or where the objectivity,

24

impartiality, integrity or independence of judgment of the

25

member may be reasonably questioned.

26

(7)  A member of the board of trustees shall be automatically

27

disqualified from serving on the board upon conviction for an

28

offense graded as a felony, an infamous crime, any offense

29

pertaining to the member's official capacity as a board member

30

or any crime involving moral turpitude.

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1

(8)  No member of the board of trustees, employe or

2

administrator of a charter school or cyber charter school may

3

convert to his own use or use by way of investment or contract

4

any portion of the charter school or cyber charter school funds

5

or school property or deposit any of the funds of the charter

6

school or cyber charter school in any other name.

7

(9)  No business entity, including for-profit and nonprofit

8

entities with which a member of the board of trustees, an

9

administrator or a member of the immediate family of the member

10

of the board of trustees or administrator is associated, may

11

contract with the charter school or cyber charter school unless

12

the charter school complies with the requirements of 65 Pa.C.S.

13

§ 1103(f).

14

(10)  No member of the board of trustees or a member of the

15

immediate family of the member of the board of trustees may act

16

as an agent for any vendor or subvendor for goods or services

17

with the local school board or charter school or cyber charter

18

school.

19

(11)  No member of the board of trustees may commingle or

20

allow the commingling of any portion of the charter school or

21

cyber charter school funds or property or deposit any of the

22

funds of the charter school or cyber charter school in accounts

23

unrelated to the charter school or cyber charter school.

24

(12)  No member of the board of trustees of a charter school

25

or cyber charter school may be employed by a charter school or

26

cyber charter school foundation or any entity affiliated with a

27

charter school or cyber charter school foundation. No immediate

28

family member of a member of the board of trustees may serve on,

29

receive compensation from or be employed by a charter school or

30

cyber charter school foundation or any entity affiliated with a

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1

charter school or cyber charter school foundation.

2

(13)  No member of the board of trustees of a charter school

3

or cyber charter school may be employed in any capacity or have

4

a financial relationship with the department.

5

(14)  Any member of the board of trustees, elected officials,

6

administrators or their immediate families or staff determined

7

to have engaged in any conduct in contravention of this

8

subsection shall be immediately barred and prohibited from the

9

handling or receipt of funds, directly or indirectly, for a

10

period of five (5) consecutive years from the date of receipt,

11

expenditure, oversight or handling in any fashion, directly or

12

indirectly, of the funds of any school board, charter school,

13

cyber charter school, charter school or cyber charter school

14

foundation or appropriated by the Commonwealth, including awards

15

of contracts to third parties, hiring or retention of employes

16

or consultants and the purchase or acquisition of goods or

17

services.

18

(c.1)  At least one member of the board of trustees of a

19

charter school or cyber charter school must be a parent of a

20

child attending that charter school or cyber charter school.

21

(d)  The following shall apply:

22

(1)  The secretary, upon request by department staff, may

23

remove a member of a board of trustees if the secretary

24

determines the member has refused or neglected to perform any

25

duty imposed under this article, has violated any requirement

26

established under this article or has committed misfeasance or

27

malfeasance while in office as a trustee.

28

(2)  Before a trustee is removed under clause (1), the

29

trustee shall be provided with a written statement of the

30

reasons for removal and an opportunity to be heard in accordance

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1

with 2 Pa.C.S. Chs. 5 Subch. A (relating to practice and

2

procedure of Commonwealth agencies) and 7 Subch. A (relating to

3

judicial review of Commonwealth agency action).

4

(3)  If, in the judgment of the secretary, the immediate

5

removal of a board member is reasonably necessary, the removal

6

process under this subsection may be expedited.

7

(4)  Any person removed as a member of the board of trustees

8

of a charter school or cyber charter school under this

9

subsection shall not be eligible again to serve as a board

10

member or administrator for the period of five (5) years from

11

the date of removal.

12

Section 2.1.  The act is amended by adding sections to read:

13

Section 1716.1-A.  Duties of Administrators.--(a)  The chief

14

administrator shall have the duty of the general supervision of

15

all business affairs of the charter school or cyber charter

16

school, subject to the direction of the board of trustees, and

17

the following duties subject to the direction of the board of

18

trustees:

19

(1)  Upon action by the board as described under this

20

article, to approve any bill or account for payment of money and

21

to prepare and sign an order for the payment of money.

22

(2)  To attest in writing the executing of all deeds,

23

contracts, reports and other instruments that are to be executed

24

by the board.

25

(3)  To furnish upon request all reports as required under

26

this act.

27

(4)  Notwithstanding any other provisions of this act and

28

other laws, to serve as custodian of all records, offices and

29

property of the charter school or cyber charter school.

30

(5)  To receive all funds and make payments from funds on

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1

proper orders approved by the board of trustees.

2

(6)  To deposit funds and at the end of each month to make a

3

report to the school controller of the amount of funds received

4

and the amount dispersed during the month.

5

(7)  To perform other duties pertaining to the business of

6

the charter school or cyber charter school as required under

7

this act.

8

(b)  The following restrictions and requirements shall apply:

9

(1)  No administrator may receive compensation from another

10

charter school, cyber charter school or from a company that

11

provides management or other services to another charter school

12

or cyber charter school.

13

(2)  No administrator shall be employed by or have a

14

financial relationship with the local school boards from which

15

the charter school received its charter.

16

(2.1)  No administrator of a cyber charter school may be

17

employed or have a financial relationship with the department.

18

(3)  No immediate family member of an administrator may be

19

employed by or have any financial relationship with the charter

20

school or cyber charter school unless the charter school or

21

cyber charter school complies with the requirements of 65

22

Pa.C.S. § 1103(f) (relating to restricted activities).

23

(4)  No administrator may be employed by or have a financial

24

relationship with an educational service provider without the

25

approval of the board of trustees.

26

(5)  No immediate family member of an administrator shall be

27

employed by or have a financial relationship with an educational

28

service provider which is under contract with the charter school

29

or cyber charter school.

30

(6)  An administrator shall be dismissed upon conviction for

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1

an offense graded as a felony, an infamous crime or any crime

2

involving moral turpitude.

3

(7)  No business with which an administrator, or a member of

4

the immediate family of the administrator, is associated may

5

contract with the charter school or cyber charter school unless

6

the charter school or cyber charter school complies with the

7

requirements of 65 Pa.C.S. § 1103(f).

8

(8)  No administrator may commingle or convert to his own use

9

or use by way of investment any portion of the school funds or

10

school property or deposit any of the funds of the school in

11

accounts unrelated to the charter school or cyber charter

12

school.

13

(9)  No administrator may act as an agent for any vendor for

14

school supplies, program materials or related educational

15

services with the local school board.

16

(10)  No administrator may receive compensation from or be

17

employed by a charter school or cyber charter school foundation

18

or any entity affiliated with a charter school or cyber charter

19

school foundation. No immediate family member of an

20

administrator may serve on or be employed by a charter school or

21

cyber charter school foundation or any entity affiliated with a

22

charter school or cyber charter school foundation.

23

Section 1723.1-A.  Notification.--(a)  The following shall

24

apply:

25

(1)  Within ten (10) days of the enrollment of a student to a

26

charter school, the parent or guardian and the charter school

27

shall notify the student's school district of residence of the

28

enrollment through the use of the notification form under

29

subsection (b) and provide a copy of documentation allowable

30

under Article XIII verifying the student's residence.

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1

(2)  If a school district which has received notice under

2

paragraph (1) determines that a student is not a resident of the

3

school district, the following shall apply:

4

(i)  Within ten (10) days of receipt of the notice under

5

paragraph (1), the school district shall notify the charter

6

school and the department that the student is not a resident of

7

the school district. Notification of nonresidence shall include

8

the basis for the determination.

9

(ii)  Within seven (7) days of notification under

10

subparagraph (i), the charter school shall review the

11

notification of nonresidence, respond to the school district and

12

provide a copy of the response to the department. If the charter

13

school agrees that a student is not a resident of the school

14

district, it shall determine the proper district of residence of

15

the student before requesting funds from another school

16

district.

17

(iii)  Within seven (7) days of receipt of the response under

18

subparagraph (ii), the school district shall notify the charter

19

school that it agrees with the charter school's determination or

20

does not agree with the charter school's determination.

21

(iv)  A school district that has notified the charter school

22

that it does not agree with the charter school's determination

23

under subparagraph (iii) shall appeal to the department for a

24

final determination.

25

(v)  All decisions of the department regarding the school

26

district of residence of a student shall be subject to review by

27

the Commonwealth Court.

28

(vi)  The department shall continue to make payments to a

29

charter school under section 1725-A during the time in which the

30

school district of residence of a student is in dispute.

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1

(vii)  If a final determination is made that a student is not

2

a resident of an appealing school district, the charter school

3

shall return all funds provided on behalf of that student to the

4

school district within thirty (30) days.

5

(b)  The department shall develop a notification form for use

6

under subsection (a). The notification shall include:

7

(1)  The name, home address and mailing address of the

8

student.

9

(2)  The grade in which the student is being enrolled.

10

(3)  The date the student will be enrolled.

11

(4)  The name and address of the charter school and the name

12

and telephone number of a contact person able to provide

13

information regarding the charter school.

14

(5)  The signature of the parent or guardian and an

15

authorized representative of the charter school.

16

(6)  The student's former school information, including the

17

name and address of the school district, the student's record of

18

attendance, the withdrawal date from the former school district,

19

if applicable, and the type of education services received, for

20

example, nonspecial education or special education.

21

(7)  Verification of the student's residency, including the

22

parent or guardian's deed, lease, current utility bill, current

23

credit card bill, property tax bill, vehicle registration,

24

driver's license or Department of Transportation identification

25

card.

26

(b.1)  A charter school shall submit to the student's school

27

district of residence verification of the student's residency

28

upon enrollment under subsection (a)(1) and every six (6) months

29

thereafter. A school district shall notify the department of all

30

resident students enrolled in charter schools for whom

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1

enrollment notification and verification of residency have not

2

been received.

3

(c)  The charter school and the parent or guardian of a

4

student enrolled in a charter school shall provide written

5

notification to the student's school district of residence

6

within ten (10) days following the withdrawal of a student from

7

the charter school.

8

(d)  The following shall apply:

9

(1)  Within ten (10) days of a change in a student's

10

residency status, including a move which would affect the

11

student's district of residence determination, the parent or

12

guardian shall notify the former school district of residence of

13

the change in residency through the use of a form developed by

14

the department. The notification shall include:

15

(i)  The name, home address and mailing address of the

16

student.

17

(ii)  The date the change of residency became effective.

18

(iii)  The name and address of the new school district of

19

residence and the name and telephone number of a contact person

20

able to provide information regarding the school.

21

(iv)  The signature of the parent or legal guardian of the

22

student.

23

(2)  A parent or guardian who knowingly refuses or neglects

24

to comply with the requirements of this subsection shall be

25

subject to penalty under section 1302(c).

26

(e)  Failure of a charter school to submit notification under

27

this section shall result in a school district withholding

28

payment to the charter school until fifteen (15) days after the

29

district of residence is in receipt of the required

30

notification, if the district of residence determines the

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1

student is a resident of the district.

2

Section 3.  Section 1725-A(a) of the act, amended June 29,

3

2002 (P.L.524, No.88), is amended to read:

4

Section 1725-A.  Funding for Charter Schools.--(a)  Funding

5

for a charter school shall be provided in the following manner:

6

(1)  There shall be no tuition charge for a resident or

7

nonresident student attending a charter school.

8

(2)  For non-special education students, the charter school

9

shall receive for each student enrolled no less than the

10

[budgeted] actual total expenditure per average daily membership

11

of the prior school year, as defined in section 2501(20), minus

12

the [budgeted] actual expenditures at the end of the most recent

13

fiscal year of the district of residence for nonpublic school

14

programs and services; adult education programs;

15

community/junior college programs; student transportation

16

services; for special education programs; facilities

17

acquisition, construction and improvement services; athletic

18

funds and school sponsored extra-curricular activities set up in

19

accordance with section 511; the full employer's share of

20

retirement contributions paid to the Public School Employees'

21

Retirement System; tuition to Pennsylvania charter schools for

22

educational services provided to students attending the charter

23

school; and other financing uses, including debt service and

24

fund transfers as provided in the Manual of Accounting and

25

Related Financial Procedures for Pennsylvania School Systems

26

established by the department. This amount shall be paid by the

27

district of residence of each student.

28

(3)  (i)  For special education students, the charter school

29

shall receive for each student enrolled the same funding as for

30

each non-special education student as provided in clause (2),

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1

plus an additional amount determined by dividing the district of

2

residence's total special education expenditure by the product

3

of multiplying the combined percentage of section 2509.5(k)

4

times the district of residence's total average daily membership

5

for the prior school year. This amount shall be paid by the

6

district of residence of each student, but not to exceed the

7

actual cost of the educational services provided for special

8

education students.

9

(ii)  If a nonspecial education student is identified by the

10

charter school in which the student is enrolled as a student

11

with a disability in need of special education services, the

12

district of residence shall have the power to administer and

13

deliver the educational services required to address the

14

specific needs of the exceptional student in lieu of payments by

15

the district of residence for such student.

16

(iii)  A resident school district may not pay out to charter

17

schools or cyber charter schools an amount greater than it

18

receives for special education in a school year.

19

(4)  A charter school may request the intermediate unit in

20

which the charter school is located to provide services to

21

assist the charter school to address the specific needs of

22

exceptional students. The intermediate unit shall assist the

23

charter school and bill the charter school for the services. The

24

intermediate unit may not charge the charter school more for any

25

service than it charges the constituent districts of the

26

intermediate unit. If the service is provided by the

27

intermediate unit or school district, the charter school shall

28

provide a copy of the contract and invoice for the services to

29

the student's school district of residence.

30

(5)  [Payments] (i)  Except as provided under subclause (ii),

- 16 -

 


1

payments shall be made to the charter school in twelve (12)

2

equal monthly payments, by the fifth day of each month, within

3

the operating school year. A student enrolled in a charter

4

school shall be included in the average daily membership of the

5

student's district of residence for the purpose of providing

6

basic education funding payments and special education funding

7

pursuant to Article XXV. If a school district fails to make a

8

payment to a charter school as prescribed in this clause, the

9

secretary shall deduct the estimated amount, as documented by

10

the charter school, from any and all State payments made to the

11

district after receipt of documentation from the charter school.

12

(ii)  Payments may not be made for any resident student

13

attending a charter school if the district of residence or

14

intermediate unit offers a cyber school program that is

15

available to resident students at the same grade level and same

16

academic subject or the district of residence administers and

17

delivers the educational services required to address the

18

specific needs of non-special education and exceptional students

19

enrolled at the charter school.

20

(6)  Within thirty (30) days after the secretary makes the

21

deduction described in clause (5), a school district may notify

22

the secretary that the deduction made from State payments to the

23

district under this subsection is inaccurate. The secretary

24

shall provide the school district with an opportunity to be

25

heard concerning whether the charter school documented that its

26

students were enrolled in the charter school, the period of time

27

during which each student was enrolled, the school district of

28

residence of each student and whether the amounts deducted from

29

the school district were accurate.

30

(7)  Except for a student who is enrolled in a charter school

- 17 -

 


1

on the effective date of this clause, payment to a charter

2

school may be no more than one-half of the amount in clauses (2)

3

and (3), where applicable, for each resident student who attends

4

a half-day kindergarten program offered by the charter school.

5

(8)  The amounts calculated in clauses (2) and (3) shall be

6

calculated using the actual expenditure data at the end of the

7

most recent fiscal year and submitted on a form prescribed by

8

the department not later than October 31 of each year. The

9

amount calculated shall remain in effect until October 31 of the

10

next year.

11

* * *

12

Section 3.1.  Section 1728-A(b) of the act, added June 19,

13

1997 (P.L.225, No.22), is amended to read:

14

Section 1728-A.  Annual Reports and Assessments.--* * *

15

(b)  In order to facilitate the local board's review and

16

secretary's report, each charter school shall submit an annual

17

report no later than August 1 of each year to the local board of

18

school directors and the secretary in the form prescribed by the

19

secretary. The annual report shall include all of the following:

20

(1)  The actual cost of nonspecial education services

21

provided to each nonspecial education student and the amount of

22

payment received by each district of residence.

23

(2)  The actual cost of nonspecial and special education

24

services provided to each special education student and the

25

amount of payment received by each district of residence.

26

* * *

27

Section 4.  The act is amended by adding a section to read:

28

Section 1733-A.  Actual Costs of Education Services.--(a)  

29

Within one hundred eighty (180) days of the effective date of

30

this section, the department shall promulgate audit standards

- 18 -

 


1

under this article which shall be used in determining the year-

2

end actual costs of educational services per non-special

3

education student and special education student provided by a

4

charter school or a cyber charter school to any child who is a

5

resident of a school district, which are subject to payment in

6

accordance with section 1725-A. The department shall follow the

7

procedures provided in the act of July 31, 1968 (P.L.769,

8

No.240), referred to as the Commonwealth Documents Law, and the

9

act of June 25, 1982 (P.L.633, No.181), known as the Regulatory

10

Review Act, for promulgation and review of final-omitted

11

regulations. Subsequent audit standards promulgated under this

12

section or amendments to the initial audit standards may not be

13

in final-omitted form. The audit standards shall take effect at

14

the beginning of the first school year after which such audit

15

standards have been promulgated.

16

(b)  In order that the year-end actual costs of educational

17

services per non-special education student and special education

18

student are thoroughly and properly determined, the audit

19

standards promulgated by the department shall:

20

(1)  Specify reasonable costs associated with the operation

21

of the educational program offered by a charter school and a

22

cyber charter school. The following may not be considered

23

reasonable costs associated with the operation of the

24

educational program offered by a charter school and a cyber

25

charter school:

26

(i)  Any paid media advertisement, including television,

27

radio, movie theater, billboard, bus poster, newspaper,

28

magazine, the Internet or any other commercial method that may

29

promote enrollment of a charter school and a cyber charter

30

school.

- 19 -

 


1

(ii)  Any lobbying, legislative advocacy consulting or any

2

effort to influence Federal or State legislation or policy

3

affecting either that charter school or cyber charter school

4

specifically or charter schools in general.

5

(iii)  Any bonuses or additional compensation beyond the

6

annual or termed contractual compensation for all faculty,

7

administration and staff, including salary, benefits and any

8

additional compensation not specifically enumerated in the

9

contract.

10

(2)  Allow a closely related business entity to charge up to

11

one hundred and seven per centum (107%) of the actual

12

educational costs.

13

(3)  Require information as necessary for a full-scope review

14

of a finalized management agreement entered into between a

15

charter school or cyber charter school and a closely related

16

business entity, including:

17

(i)  All payments received from school districts of

18

residence.

19

(ii)  Expenditures of the closely related business entity

20

related to the delivery of educational and administrative

21

services pursuant to the management agreement.

22

(4)  List and show all receipts and expenditures for an

23

educational service provider that provides any service to a

24

charter school or cyber charter school.

25

(5)  Provide reasonable penalties for failure to comply.

26

(c)  The following shall apply:

27

(1)  The department shall effectuate an annual year-end final

28

reconciliation process of tuition payments against actual costs

29

of educational services per non-special education student and

30

special education student provided and necessary procedures for

- 20 -

 


1

the transfer of funds from the charter school or cyber charter

2

school to the school district of residence. The final

3

reconciliation process shall include one of the following:

4

(i)  Allowing a school district of residence to withhold its

5

last monthly payment from a charter school or cyber charter

6

school to account for any overpayments as identified by the

7

year-end audit. If the school district of residence has sent

8

overpayments, the district may adjust its last monthly payment

9

accordingly.

10

(ii)  Requiring a charter school or cyber charter school at

11

the end of each school year to return any overpayments to a

12

school district of residence owed a refund. A charter school or

13

cyber charter school may not return any overpayments on a pro-

14

rata basis.

15

(2)  Procedures for the transfer of funds may not permit the

16

department to deduct from a school district of residence's basic

17

education subsidy any amount in excess of the selected

18

expenditure per average daily membership amount calculated in

19

accordance with section 1725-A.

20

(d)  Charter schools, cyber charter schools, educational

21

service providers and closely related business entities shall

22

provide to the department, unless already retained by the

23

department, any information necessary to carry out the

24

provisions of this section.

25

(e)  Except as provided under subsection (c), nothing

26

contained under this section shall permit a school district of

27

residence to provide funding for charter schools or cyber

28

charter schools in a manner other than that which is specified

29

in section 1725-A.

30

(f)  For the purposes of this section:

- 21 -

 


1

"Closely related business entity" shall mean any organization

2

with a management or operational relationship with a charter

3

school involving either shared or overlapping aspects of

4

corporate identity such as ownership, board of directors or

5

trustees membership, capital or profits.

6

"Educational and administrative services" shall mean any

7

direct expenditures for any instruction and the administration

8

of the instructional program. The term shall not include any

9

expenditures not pertaining directly to the instruction and the

10

administration of the instructional program.

11

"Educational service provider" shall mean a for-profit

12

education management organization, nonprofit charter management

13

organization, school design provider, business manager or any

14

other partner entity with which a charter school or cyber

15

charter school intends to contract or presently contracts to

16

provide educational services, operational services or management

17

services to the charter school. The term shall not include a

18

charter school or cyber charter school foundation.

19

"Management agreement" shall mean any contract establishing a

20

management or operational relationship between a charter school

21

or cyber charter school and closely related business entity for

22

the provision of professional or nonprofessional services to the

23

charter school or cyber charter school.

24

Section 5.  Section 1743-A(a) and (f) of the act, added June

25

29, 2002 (P.L.524, No.88), are amended to read:

26

Section 1743-A.  Cyber charter school requirements and

27

prohibitions.

28

(a)  Special financial requirements prohibited.--A cyber

29

charter school shall not:

30

(1)  [provide] Provide discounts to a school district or

- 22 -

 


1

waive payments under section 1725-A for any student[;].

2

(2)  [except] Except as provided for in subsection (e),

3

provide payments to parents or guardians for the purchase of

4

instructional materials[; or].

5

(3)  [except] Except as compensation for the provision of

6

specific services, enter into agreements to provide funds to

7

a school entity.

8

(4)  (i)  For the 2012-2013 school year and each school

9

year thereafter, accumulate an unassigned fund balance

10

greater than the cyber charter fund balance limit, which

11

shall be determined as follows:

12

13

14

Cyber Charter School Total Budgeted

Expenditures

  

Maximum Unassigned Fund Balance as Percentage of Total Budgeted Expenditures

15

Less Than or Equal to $11,999,999

12%

16

Between $12,000,000 and $12,999,999

11.5%

17

Between $13,000,000 and $13,999,999

11%

18

Between $14,000,000 and $14,999,999

10.5%

19

Between $15,000,000 and $15,999,999

10%

20

Between $16,000,000 and $16,999,999

9.5%

21

Between $17,000,000 and $17,999,999

9%

22

Between $18,000,000 and $18,999,999

8.5%

23

Greater Than or Equal to $19,000,000

8%

24

(ii)  Any unassigned fund balance in place on June

25

30, 2012, that exceeds the cyber charter school fund

26

balance limit shall be refunded on a per student pro rata

27

basis within 90 days of the effective date of this

28

subparagraph to all school districts that made payments

29

under section 1725-A in the 2010-2011 and 2011-2012

30

school years. The funds may not be used to pay bonuses to

- 23 -

 


1

any administrator, board of trustees member, employee,

2

staff or contractor or be transferred to a charter school

3

foundation, closely related business entity or

4

educational service provider.

5

(iii)  For the 2012-2013 school year and each school

6

year thereafter, any unassigned fund balance in excess of

7

the cyber charter school fund balance limit shall be

8

refunded on a per student pro rata basis to all school

9

districts that made payments under section 1725-A in the

10

prior school year.

11

(iv)  By August 15, 2012, and August 15 of each year

12

thereafter, each cyber charter school shall provide the

13

department with information certifying compliance with

14

this paragraph. The information shall be provided in a

15

form and manner prescribed by the department and shall

16

include information on the cyber charter school's

17

estimated ending unassigned fund balance expressed as a

18

dollar amount and as a percentage of the cyber charter

19

school's total budgeted expenditures for that school

20

year.

21

(v)  As used in this section, the term "unassigned

22

fund balance" shall mean that portion of the fund balance

23

which represents the part of the spendable fund balance

24

that has not been categorized as restricted, committed or

25

assigned.

26

* * *

27

(f)  Annual report.--A cyber charter school shall submit an

28

annual report no later than August 1 of each year to the

29

department in the form prescribed by the department. The annual

30

report shall include all of the following:

- 24 -

 


1

(1)  The actual cost of non-special education services

2

provided to each non-special education student and the amount

3

of payment received by each district of residence.

4

(2)  The actual cost of non-special and special education

5

services provided to each special education student and the

6

amount of payment received by each district of residence.

7

* * *

8

Section 6. Section 1748-A heading, (a)(1) and (2)(i) and (vi)

9

and (c) of the act, added June 29, 2002 (P.L.524, No.88), are

10

amended, subsection (b) is amended by adding paragraphs and the

11

section is amended by adding subsections to read:

12

Section 1748-A.  Enrollment and notification and attendance.

13

(a)  Notice to school district.--

14

(1)  Within [15] ten days of the enrollment of a student

15

to a cyber charter school, the parent or guardian and the

16

cyber charter school shall notify the student's school

17

district of residence of the enrollment through the use of

18

the notification form under subsection (b) and provide a copy

19

of documentation allowable under Article XIII verifying the

20

student's residence.

21

(2)  If a school district which has received notice under

22

paragraph (1) determines that a student is not a resident of

23

the school district, the following apply:

24

(i)  Within [seven] ten days of receipt of the notice

25

under paragraph (1), the school district shall notify the

26

cyber charter school and the department that the student

27

is not a resident of the school district. Notification of

28

nonresidence shall include the basis for the

29

determination.

30

* * *

- 25 -

 


1

(vi)  [A school district] The department shall

2

continue to make payments to a cyber charter school under

3

section 1725-A during the time in which the school

4

district of residence of a student is in dispute.

5

* * *

6

(b)  Notification form.--The department shall develop a

7

notification form for use under subsection (a). The notification

8

shall include:

9

* * *

10

(6)  The student's former school information, including

11

the name and address of the school district, the student's

12

record of attendance, the withdrawal date from the former

13

school district, if applicable and the type of education

14

services received, for example, non-special education or

15

special education.

16

(7)  Verification of the student's residency, including

17

the parent or guardian's deed, lease, current utility bill,

18

current credit care bill, property tax bill, vehicle

19

registration, driver's license or Department of

20

Transportation identification card.

21

(b.1)  Residency.--A cyber charter school shall submit to the

22

student's school district of residence verification of the

23

student's residency upon enrollment under subsection (a)(1) and

24

every six months thereafter. A school district shall notify the

25

department of all resident students enrolled in cyber charter

26

schools for whom enrollment notification and verification of

27

residency have not been received.

28

(c)  Withdrawal.--The cyber charter school and the parent or

29

guardian of a student enrolled in a cyber charter school shall

30

provide written notification to the student's school district of

- 26 -

 


1

residence within [15] ten days following the withdrawal of a

2

student from the cyber charter school.

3

(d)  Change in residency status.--

4

(1)  Within ten days of a change in a student's residency

5

status, including a move which would affect the student's

6

district of residence determination, the parent or guardian

7

shall notify the former school district of residence of the

8

change in residency through the use of a form developed by

9

the department. The notification shall include:

10

(i)  The name, home address and mailing address of

11

the student.

12

(ii)  The date the change of residency became

13

effective.

14

(iii)  The name and address of the new school

15

district of residence and the name and telephone number

16

of a contact person able to provide information regarding

17

the school.

18

(iv)  The signature of the parent or legal guardian

19

of the student.

20

(2)  A parent or guardian who knowingly refuses or

21

neglects to comply with the requirements of this subsection

22

shall be subject to penalty under section 1302(c).

23

(e)  Attendance.--

24

(1)  In addition to requirements under Article XIII, upon

25

a student's unlawful absence from the cyber charter school at

26

any point within the school year, a cyber charter school

27

shall immediately inform a student's parents or guardians and

28

his or her student's school district of residence of each

29

incident of the student's unlawful absence from the cyber

30

charter school. Notice shall be sent as follows:

- 27 -

 


1

(i)  Immediately after a student's first and second

2

unlawful absence, the cyber charter school shall send a

3

printed notice to the parent or guardian indicating the

4

student's unlawful absence from the cyber charter school.

5

The legal penalties established by law for violation of

6

compulsory attendance requirements shall be attached to

7

the notice. The notice shall also include the name and

8

telephone number of a cyber charter school contact person

9

who shall be able to offer assistance in resolving the

10

student's truant behavior. A printed copy, exactly as

11

sent to the parent or guardian, shall be mailed to the

12

student's district of residence after each unlawful

13

absence.

14

(ii)  Immediately after a student's third unlawful

15

absence from the cyber charter school, the cyber charter

16

school shall send by certified mail an official notice of

17

the student's third illegal absence. The legal penalties

18

for violation of compulsory attendance requirements as

19

they pertain to both the student and the parent or

20

guardian, including information that three days after

21

giving the notice, the student or parent or guardian who

22

again violates the compulsory requirements shall be

23

liable without further notice, shall be attached to the

24

notice. A printed copy of the official notice of the

25

student's third illegal absence, exactly as sent to the

26

parent or guardian, shall be sent to the student's

27

district of residence by certified mail.

28

(2)  Immediately after a student's third unlawful absence

29

from the cyber charter school, the cyber charter school shall

30

immediately institute truancy proceedings under section 1333

- 28 -

 


1

in the jurisdiction wherein the truant student resides and

2

notify the parent or guardian by certified mail that a

3

citation is being sent to the magisterial district judge. A

4

copy of the notice and the citation, exactly as sent to the

5

parent or guardian and magisterial district judge, shall be

6

sent to the student's district of residence by certified

7

mail.

8

(3)  The cyber charter school shall refer all future

9

incidents of truancy directly to the magisterial district

10

judge. Instead of or in addition to any other sentence

11

imposed under section 1333, the magisterial district judge

12

may order the parent or guardian to withdraw the student from

13

the cyber charter school and enroll the student in the

14

district of residence for a period of at least six months.

15

(4)  The following shall apply:

16

(i)  Upon a school district receiving a notification

17

of an enrollment form for any student who is in violation

18

of compulsory attendance requirements and is truant from

19

the school district, the school district of residence

20

shall inform the cyber charter school in writing about

21

the student's truant behavior.

22

(ii)  If a student who is truant from the student's

23

school district of residence enrolls in a cyber charter

24

school, the cyber charter school shall provide to the

25

student's district of residence documentation during the

26

student's first three months of enrollment that the

27

student is fulfilling compulsory attendance requirements

28

and completing assignments as required by the cyber

29

charter school.

30

(f)  Penalties.--Failure of a charter or cyber charter school

- 29 -

 


1

to submit notification under this section shall result in a

2

school district withholding payment to the charter school until

3

15 days after the district of residence is in receipt of the

4

required notification, if the district of residence determines

5

the student is a resident of the district.

6

Section 7.  Section 1749-A(a)(1) of the act, added June 29,

7

2002 (P.L.524, No.88), is amended to read:

8

Section 1749-A.  Applicability of other provisions of this act

9

and of other acts and regulations.

10

(a)  General requirements.--Cyber charter schools shall be

11

subject to the following:

12

(1)  Sections 108, 110, 111, 321, 325, 326, 327, 431,

13

436, 443, 510, 518, 527, 609, 687(a), (b), (c), (d), (h) and

14

(i), 708, 752, 753, [755], 771, 776, 777, 807.1 808, 809,

15

810, 1109, 1111, 1112(a), 1205.1, 1205.2, 1301, 1302, 1310,

16

1317.2, 1318, 1330, 1332, 1333, 1354, 1355, 1303-A, 1518,

17

1521, 1523, 1531, 1547, 1702-A, 1703-A, 1714-A, 1715-A, 1716-

18

A, 1719-A, 1721-A, 1722-A, 1723-A(a) and (b), 1724-A, 1725-A,

19

1727-A, 1729-A, 1730-A, 1731-A(a)(1) and (b), 1733-A and

20

2014-A and Articles XII-A, XIII-A [and], XIV and XXIV.

21

* * *

22

Section 8.  This act shall take effect in 60 days.

- 30 -