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 school finances, further providing
6for limitations on certain unreserved fund balances; and, in
7charter schools, further providing for funding for charter
8schools.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. Section 688(a) of the act of March 10, 1949
12(P.L.30, No.14), known as the Public School Code of 1949, added
13December 23, 2003 (P.L.304, No.48), is amended to read:

14Section 688. Limitations on Certain Unreserved Fund
15Balances.--(a) For the [2005-2006] 2013-2014 school year and
16each school year thereafter, no school district shall approve an
17increase in real property taxes [unless] and no charter school 
18shall be entitled to a payment from a resident school district 
19or the Commonwealth until it has adopted a budget that includes
20an estimated ending unreserved, undesignated fund balance less
21than the percentages set forth as follows:

20130HB0971PN1112 -1-
1School District 2Total Budgeted 3Expenditures	Estimated Ending Unreserved, Undesignated Fund Balance as Percentage of Total Budgeted Expenditures

4Less Than or Equal to $11,999,999	12%
5Between $12,000,000 and $12,999,999	11.5%
6Between $13,000,000 and $13,999,999	11%
7Between $14,000,000 and $14,999,999	10.5%
8Between $15,000,000 and $15,999,999	10%
9Between $16,000,000 and $16,999,999	9.5%
10Between $17,000,000 and $17,999,999	9%
11Between $18,000,000 and $18,999,999	8.5%
12Greater Than or Equal to $19,000,000	8%

13* * *

14Section 2. Section 1725-A(a) of the act, amended June 29,
152002 (P.L.524, No.88), is amended to read:

16Section 1725-A. Funding for Charter Schools.--(a) Funding
17for a charter school shall be provided in the following manner:

18(1) There shall be no tuition charge for a resident or
19nonresident student attending a charter school.

20(2) (i) For non-special education students, the charter
21school shall receive for each student enrolled no less than the
22budgeted total expenditure per average daily membership of the
23prior school year, as defined in section 2501(20), minus the
24budgeted expenditures of the district of residence for nonpublic
25school programs; adult education programs; community/junior
26college programs; student transportation services; for special
27education programs; facilities acquisition, construction and
28improvement services; and other financing uses, including debt
29service and fund transfers as provided in the Manual of
30Accounting and Related Financial Procedures for Pennsylvania

1School Systems established by the department. This amount shall
2be paid by the [district of residence of each student] 
3secretary.

4(ii) The amount under subclause (i) shall be paid by the
5secretary by deduction and transfer from all State payments to
6the district of residence of each student as provided under
7clause (5).

8(iii) If a charter or cyber charter school disputes the
9accuracy of a district's calculation under this clause, the
10charter school or cyber charter school shall file a notice of
11the dispute with the secretary who shall hold a hearing within
12thirty (30) days of the notice to determine the accuracy of the
13district's calculation. The secretary shall make the
14determination within thirty (30) days of the hearing. The
15district shall bear the burden of production and proof with
16respect to its calculation under this clause.

17(iv) The district shall be liable for the reasonable legal
18fees incurred by a charter school or cyber charter school if the
19charter school or cyber charter school is the substantially
20prevailing party after a hearing under this clause. The charter
21school or cyber charter school shall be liable for the
22reasonable legal fees incurred by the district if the district
23is the substantially prevailing party after a hearing under this
24clause.

25(v) All decisions of the secretary under this clause shall 
26be subject to appellate review by the Commonwealth Court. 

27(3) (i) For special education students, the charter school
28shall receive for each student enrolled the same funding as for
29each non-special education student as provided in clause (2),
30plus an additional amount determined by dividing the district of

1residence's total special education expenditure by the product
2of multiplying the combined percentage of section 2509.5(k)
3times the district of residence's total average daily membership
4for the prior school year. This amount shall be paid by the
5[district of residence of each student] secretary.

6(ii) If a charter school, regional charter school or cyber
7charter school disputes the accuracy of a district's calculation
8under this clause, the charter school, regional charter school
9or cyber charter school shall file a notice of the dispute with
10the secretary who shall hold a hearing within thirty (30) days
11of the notice to determine the accuracy of the district's
12calculation. The secretary shall make the determination within
13thirty (30) days of the hearing. The district shall bear the
14burden of production and proof with respect to its calculation
15under this clause.

16(iii) The district shall be liable for the reasonable legal
17fees incurred by a charter school, regional charter school or
18cyber charter school if the charter school, regional charter
19school or cyber charter school is the substantially prevailing
20party after a hearing under this clause. The charter school,
21regional charter school or cyber charter school shall be liable
22for the reasonable legal fees incurred by the school district if
23the district is the substantially prevailing party after a
24hearing under this clause.

25(iv) All decisions of the secretary under this clause shall
26be subject to appellate review by the Commonwealth Court.

27(4) A charter school may request the intermediate unit in
28which the charter school is located to provide services to
29assist the charter school to address the specific needs of
30exceptional students. The intermediate unit shall assist the

1charter school and bill the charter school for the services. The
2intermediate unit may not charge the charter school more for any
3service than it charges the constituent districts of the
4intermediate unit.

5(5) (i) Payments shall be made to the charter school in
6twelve (12) equal monthly payments, by the fifth day of each
7month, within the operating school year[. A student enrolled in
8a charter school shall be included in the average daily
9membership of the student's district of residence for the
10purpose of providing basic education funding payments and
11special education funding pursuant to Article XXV. If a school
12district fails to make a payment to a charter school as
13prescribed in this clause, the secretary shall deduct the
14estimated amount, as documented by the charter school, from any
15and all State payments made to the district after receipt of
16documentation from the charter school.] and shall be made by the 
17secretary by deducting and paying to the charter school or cyber 
18charter school the estimated amount, as documented by the 
19charter or cyber charter school, from all State payments made to 
20the district or, if no payments have been made to the district, 
21from all State payments reasonably expected to be made, after 
22receipt of documentation from the school as to its enrollment.

23(ii) If there are insufficient State payments being made to
24a district to cover all charter and cyber charter school
25deductions and transfers, the district shall pay the unpaid
26balance directly to the charter or cyber charter school by the
2715th day of each month.

28(iii) A student enrolled in a charter or cyber charter
29school shall be included in the average daily membership of the
30student's district of residence for the purpose of providing

1basic education funding payments and special education funding
2under Article XXV.

3(6) (i) Within thirty (30) days after the secretary [makes
4the deduction} transfers the funds described in clause (5), a
5school district may notify the secretary that the deduction made
6from State payments to the district under this subsection is
7inaccurate. The secretary shall provide the school district with
8an opportunity to be heard concerning whether the charter school
9documented that its students were enrolled in the charter
10school, the period of time during which each student was
11enrolled, the school district of residence of each student and
12whether the amounts deducted from the school district were
13accurate.

14(ii) The burden of proof and production at the hearing shall
15be on the school district. A hearing shall not be held before
16the secretary deducts from State payments to the district and
17transfers to the charter or cyber charter school the amount
18estimated by the charter or cyber charter school.

19(iii) The district shall be liable for the reasonable legal
20fees incurred by a charter or cyber charter school if the
21charter or cyber charter school is the substantially prevailing
22party after a hearing under this clause. The charter or cyber
23charter school shall be liable for the reasonable legal fees
24incurred by the district if the district is the substantially
25prevailing party after a hearing under this clause.

26(iv) All decisions of the secretary under this clause shall
27be subject to appellate review by the Commonwealth Court.
28Supersedeas shall not be granted to the secretary or any party
29to the proceeding on an appeal from the decision of the
30secretary under this clause.

1(v) Absent a court order, the secretary shall not hold any
2payments in escrow under this clause.

3(7) The secretary shall make no advance payments to a
4district which may limit the ability of the secretary to make
5scheduled payments to charter schools.

6(8) The board of trustees of a charter school entity may
7elect on an annual basis to be paid directly from the school
8district of residence. Any board of trustees of a charter school
9entity that makes such election shall notify the department in
10accordance with the timelines established in the department
11guidelines. The school district of residence shall provide for
12payment to the charter school entity that makes such election as
13follows:

14(i) Payments shall be made to the charter school entity in
15twelve (12) equal monthly payments, according to the established
16monthly unipay schedule, within the operating school year.

17(ii) Payments shall be made directly by the school district
18of residence paying to the charter school entity the estimated
19amount, as documented by the charter school entity, after
20receipt of documentation from the charter school entity.

21(iii) If a school district of residence fails to make a
22payment to a charter school entity as prescribed in this clause,
23the secretary shall deduct the estimated amount, as documented
24by the charter school entity, from any and all State payments
25made to the school district of residence for the operating
26school year or any subsequent school year after receipt of
27documentation from the charter school entity.

28* * *

29Section 3. The Secretary of Education's duty to make
30payments under this act includes all amounts accrued, but not

1paid, as of the effective date of this section.

2Section 4. This act shall take effect July 1, 2013, or
3immediately, whichever is later.