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 charter schools, further providing
6for definitions, for powers of charter schools, for charter
7school requirements and for powers of board of trustees;
8providing for duties of administrators; further providing for
9establishment of charter schools, for funding of charter
10schools, for provisions applicable to charter schools, for
11cyber charter school requirements and prohibitions and for
12enrollment and notification; providing for funding for cyber
13charter schools and for actual costs of educational services
14for cyber charter schools; and further providing for
15applicability of other provisions of the act, other acts and
16regulations.

17The General Assembly of the Commonwealth of Pennsylvania
18hereby enacts as follows:

19Section 1. Section 1703-A of the act of March 10, 1949
20(P.L.30, No.14), known as the Public School Code of 1949, is
21amended by adding definitions to read:

22Section 1703-A. Definitions.--As used in this article,

23* * *

1"Charter" shall mean a contract formed between a local board
2of school directors and a charter school or between the
3Department of Education and a cyber charter school.

4* * *

5"Charter school foundation" shall mean a nonprofit
6organization as defined under section 501(c)(3) of the Internal
7Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §501(c)(3))
8that provides funding or resources to a charter school or cyber
9charter school, either directly or through an affiliated entity.

10* * *

11"Financial relationship" shall mean any formal or informal
12arrangement pursuant to which a person is obligated to make
13payment or in fact makes payment to an individual, group of
14individuals or any entity.

15"Immediate family member" shall mean a grandparent, parent,
16spouse, former spouse, child, grandchild, brother, sister or
17cousin; a child of a spouse, former spouse, brother, sister or
18cousin; or a spouse or former spouse of a grandparent, parent,
19child, grandchild, brother, sister, cousin, nephew or niece.
20Family members in these categories of relationship shall include
21first degree, in-law, half, adopted and step-relatives.

22* * *

23Section 2. Section 1714-A(a)(5) of the act, amended July 4,
242004 (P.L.536, No.70), is amended and the section is amended by
25adding a subsection to read:

26Section 1714-A. Powers of Charter Schools.--(a) A charter
27school established under this act is a body corporate and shall
28have all powers necessary or desirable for carrying out its
29charter, including, but not limited to, the power to:

30* * *

1(5) Make contracts and leases for the procurement of
2services, equipment and supplies[.], as long as no contract or 
3lease entered into by a charter school for an amount greater 
4than one hundred dollars ($100) may provide for a payment in 
5excess of the fair market value of the services, equipment, 
6supplies or other property being acquired or leased.

7* * *

8(d) The powers enumerated in this section may be subject to
9additional terms and conditions regarding the application and
10renewal process as outlined in the charter agreement between a
11charter school and a school district.

12Section 3. Section 1715-A(11) of the act, added June 19,
131997 (P.L.225, No.22), is amended and the section is amended by
14adding a clause to read:

15Section 1715-A. Charter School Requirements.--Charter
16schools shall be required to comply with the following
17provisions:

18* * *

19(11) Trustees of a charter school shall be public
20officials[.] and subject to the provisions of 65 Pa.C.S. Ch. 11 
21(relating to ethics standards and financial disclosure). A 
22violation of this clause shall constitute a violation of 65 
23Pa.C.S. § 1103(a) (relating to restricted activities), and the 
24violator shall be subject to the penalties imposed under the 
25jurisdiction of the State Ethics Commission.

26* * *

27(13) (i) For the 2013-2014 school year and each school year
28thereafter, a charter school shall not accumulate an unassigned
29fund balance greater than the charter school fund balance limit,
30which shall be determined as follows:

20130HB0984PN1148 -3-
1Charter School Total 2Budgeted Expenditures 3  4	Maximum Unassigned Fund Balance as Percentage of Total Budgeted Expenditures
5Less than or equal to $11,999,999	12%
6Between $12,000,000 and $12,999,999	11.5%
7Between $13,000,000 and $13,999,999	11%
8Between $14,000,000 and $14,999,999	10.5%
9Between $15,000,000 and $15,999,999	10%
10Between $16,000,000 and $16,999,999	9.5%
11Between $17,000,000 and $17,999,999	9%
12Between $18,000,000 and $18,999,999	8.5%
13Greater than or equal to $19,000,000	8%

14(ii) Any unassigned fund balance in place as of the most
15recently completed fiscal year that exceeds the charter fund
16balance limit shall be refunded on a per student pro rata basis
17within sixty (60) days of the effective date of this subclause
18to all school districts that made payments pursuant to section
191725-A in the 2011-2012 and 2012-2013 school years. The funds
20may not be used to pay bonuses to any administrator, board of
21trustees member, chief executive officer, employe, staff or
22contractor, to pay for media advertisements, including
23television, radio, movie theater, billboard, bus poster,
24newspaper, magazine, the Internet or any other commercial method
25that may promote student enrollment in a charter school or to
26pay for lobbying, legislative advocacy consulting or any effort
27to influence any member of the executive or legislative branch
28or Federal or State Government regarding the formulation,
29modification, or adoption of legislation or other policy
30affecting that charter school or all charter schools or to be

1transferred to a charter school foundation, closely related
2business entity or educational service provider.

3(iii) For the 2013-2014 school year and each school year
4thereafter, any unassigned fund balance in excess of the charter
5school fund balance limit shall be refunded on a per student pro
6rata basis, by August 1 of each year, to all school districts
7that made payments under section 1725-A or section 1748.1-A in
8the prior school year.

9(iv) By August 15, 2013, and August 15 of each year
10thereafter, each charter school shall provide the department
11with information certifying compliance with this clause. The
12information shall be provided in a form and manner prescribed by
13the department and shall include information on the charter
14school's estimated ending unassigned fund balance expressed as a
15dollar amount and as a percentage of the charter school's total
16budgeted expenditures for that school year.

17(v) As used in this clause, "unassigned fund balance" shall
18mean that portion of the fund balance which represents the part
19of spendable fund balance that has not been categorized as
20restricted, committed or assigned.

21Section 4. Section 1716-A of the act, added June 19, 1997
22(P.L.225, No.22), is amended to read:

23Section 1716-A. [Powers of] Board of Trustees.--(a) The
24board of trustees of a charter school shall have the authority
25to decide matters related to the operation of the school,
26including, but not limited to, budgeting, curriculum and
27operating procedures, subject to the school's charter. The board
28shall have the authority to employ, discharge and contract with
29necessary professional and nonprofessional employes subject to
30the school's charter and the provisions of this article.

1(a.1) The board of trustees of a charter school shall have a
2minimum of five (5) voting members. If a charter school has
3fewer than five (5) voting members serving on its board as of
4the effective date of this subsection, the charter school shall,
5within sixty (60) days of the effective date, appoint additional
6members to the board to meet the minimum requirements of this
7subsection.

8(b) [No member of a local board of school directors of a
9school entity shall serve on the board of trustees of a charter
10school that is located in the member's district.] The following 
11shall apply to all members of the board of trustees of a charter 
12school:

13(1) No member of a local board of school directors of a
14school entity or an immediate family member of a member of a
15local board of school directors of a school entity may serve on
16the board of trustees of a charter school or charter school
17foundation that is located in the member's school district.

18(2) No administrator or member of a local board of school
19directors that granted or renewed a charter may serve on the
20board of trustees of a charter school that is the subject of the
21granted or renewed charter.

22(3) No member of the board of trustees or an immediate
23family member of the member of the board of trustees may be
24employed in any capacity or have any financial relationship with
25the local board of school directors from which the charter
26school received its charter. No member of the board of trustees
27of a charter school may be employed in any capacity or have any
28financial relationship with the board of trustees.

29(4) No member of the board of trustees or an immediate
30family member of the member of the board of trustees may:

1(i) be employed by the charter school or have a financial
2relationship with the charter school; or

3(ii) be employed by any entity that has a financial
4relationship with the charter school or any related or
5associated charter school foundation unless the charter school
6complies with the requirements of 65 Pa.C.S. § 1103(f) (relating
7to restricted activities).

8(5) No member of the board of trustees or an immediate
9family member of the member of the board of trustees may be
10employed by or have a financial relationship with an educational
11service provider which is under contract with the charter school
12or any related or associated charter school foundation.

13(6) A member of the board of trustees must disqualify
14himself and abstain from voting in a proceeding which
15constitutes a conflict of interest or where the objectivity,
16impartiality, integrity or independence of judgment of the
17member may be reasonably questioned.

18(7) A member of the board of trustees shall be automatically
19disqualified from serving on the board upon conviction for an
20offense graded as a felony, an infamous crime, any offense

21pertaining to the member's official capacity as a board member
22or any crime involving moral turpitude.

23(8) No member of the board of trustees, employe or
24administrator of a charter school may convert to the member's
25own use or use by way of investment or contract any portion of
26the charter school funds or school property or deposit any of
27the funds of the charter school in any other name.

28(9) No business entity, including a for-profit or nonprofit
29entity, with which a member of the board of trustees, an
30administrator or an immediate family member of the member of the

1board of trustees or administrator is associated may contract
2with the charter school unless the charter school complies with
3the requirements of 65 Pa.C.S. § 1103(f).

4(10) No member of the board of trustees or a member of the
5immediate family of the member of the board of trustees may act
6as an agent for any vendor or subvendor of goods or services
7with the local school board or charter school.

8(11) No member of the board of trustees may commingle or
9allow the commingling of any portion of the charter school funds
10or property or deposit any of the funds of the charter school in
11accounts unrelated to the charter school.

12(12) No member of the board of trustees of a charter school
13may be employed by a charter school foundation or any entity
14affiliated with a charter school foundation. No immediate family
15member of a member of the board of trustees may serve on,
16receive compensation from or be employed by a charter school
17foundation or any entity affiliated with a charter school
18foundation.

19(13) No member of the board of trustees of a charter school
20may be employed in any capacity or have a financial relationship
21with the department.

22(14) Any member of the board of trustees, elected official, 
23administrator or their immediate family members or staff 
24determined to have engaged in any conduct in contravention of 
25this subsection shall be immediately barred and prohibited from 
26the handling or receipt of funds, directly or indirectly, for a 
27period of five (5) consecutive years from the date of receipt, 
28expenditure, oversight or handling in any fashion, directly or 
29indirectly, of the funds of any school board, charter school, 
30charter school foundation or appropriated by the Commonwealth, 

1including awards of contracts to third parties, hiring or 
2retention of employes or consultants and the purchase or 
3acquisition of goods or services.

4(c) The board of trustees shall comply with [the act of July
53, 1986 (P.L.388, No.84), known as the "Sunshine Act."] 65 
6Pa.C.S. Ch. 7 (relating to open meetings) and with the act of 
7February 14, 2008 (P.L.6, No.3), known as the "Right-to-Know 
8Law."

9(d) At least one member of the board of trustees of a
10charter school must be a parent of a child attending the charter
11school.

12(e) (1) The secretary, upon request by department staff,
13may remove a member of a board of trustees if the secretary
14determines the member has refused or neglected to perform any
15duty imposed under this article, has violated any requirement
16established under this article or has committed misfeasance or
17malfeasance while in office as a trustee.

18(2) Before a trustee is removed under clause (1), the
19trustee shall be provided with a written statement of the
20reasons for removal and an opportunity to be heard in accordance
21with 2 Pa.C.S. Chs. 5 Subch. A (relating to practice and
22procedure of Commonwealth agencies) and 7 Subch. A (relating to
23judicial review of Commonwealth agency action).

24(3) If, in the judgment of the secretary, the immediate
25removal of a member of the board of trustees is reasonably
26necessary, the removal process under this subsection may be
27expedited.

28(4) Any person removed as a member of the board of trustees
29of a charter school under this subsection shall not be eligible
30again to serve as a member of a board of trustees or

1administrator for a period of five (5) years from the date of
2removal.

3Section 5. The act is amended by adding a section to read:

4Section 1716.1-A. Duties of Administrators.--(a) The chief
5administrator shall have the duty of the general supervision of
6all business affairs of the charter school, subject to the
7direction of the board of trustees, and the following duties
8subject to the direction of the board of trustees:

9(1) Upon action by the board as described under this
10article, to approve any bill or account for payment of money and
11to prepare and sign an order for the payment of money.

12(2) To attest in writing the execution of all deeds,
13contracts, reports and other instruments that are to be executed
14by the board.

15(3) To furnish upon request all reports as required under
16this act.

17(4) Notwithstanding any other provisions of this act and
18other laws, to serve as custodian of all records, offices and
19property of the charter school.

20(5) To receive all funds and make payments from funds on
21proper orders approved by the board of trustees.

22(6) To deposit funds and at the end of each month to make a
23report to the school controller of the amount of funds received
24and the amount dispersed during the month.

25(7) To perform other duties pertaining to the business of
26the charter school as required under this act.

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

28(1) No administrator may receive compensation from another
29charter school, charter school foundation, educational service
30provider or from any other entity that provides services to

1another charter school.

2(2) No administrator shall be employed by, have a financial
3relationship with or be a member of the local school board from
4which the charter school received its charter or, in the case of
5a cyber charter school, the department.

6(3) No immediate family member of an administrator may be
7employed by or have any financial relationship with the charter
8school unless the charter school complies with the requirements
9of 65 Pa.C.S. § 1103(f) (relating to restricted activities).

10(4) No administrator may be employed by or have a financial
11relationship with an educational service provider or a subvendor
12of the educational service provider without the approval of the
13board of trustees.

14(5) No immediate family member of an administrator shall be
15employed by or have a financial relationship with an educational
16service provider which is under contract with the charter
17school.

18(6) An administrator shall be dismissed upon conviction for
19an offense graded as a felony, an infamous crime or any crime
20involving moral turpitude.

21(7) No business with which an administrator or an immediate
22family member of the administrator is associated may contract
23with the charter school unless the charter school complies with
24the requirements of 65 Pa.C.S. § 1103(f).

25(8) No administrator may commingle or convert to the
26administrator's own use or use by way of investment any portion
27of the school funds or school property or deposit any of the
28funds of the school in accounts unrelated to the charter school.

29(9) No administrator may act as an agent for any vendor or
30subvendor for school supplies, program materials or related

1educational services with the local school board.

2(10) No administrator or an immediate family member of the
3administrator may serve on the board of trustees, receive
4compensation from or be employed by a charter school foundation
5or any entity affiliated with a charter school foundation.

6Section 6. Section 1717-A(h) and (i)(6) and (7) of the act,
7added June 19, 1997 (P.L.225, No.22), are amended to read:

8Section 1717-A. Establishment of Charter School.--* * *

9(h) In the case of a review by the appeal board of an
10application that is revoked or is not renewed, the appeal board
11shall make its decision based on whether the decision of the 
12local board of school directors was arbitrary or capricious 
13pursuant to the local board's evaluation of the criteria
14established in subsection (e)(2). A [decision] determination by
15the appeal board that the local board of school directors acted 
16arbitrarily or capriciously under this subsection or a decision 
17by the appeal board under subsection (g) to grant, to renew or
18not to revoke a charter shall serve as a requirement for the
19local board of directors of a school district or school
20districts, as appropriate, to [sign the] negotiate with the 
21charter school and form a written charter of the charter school
22as provided for in section 1720-A. Should the local board of
23directors fail to [grant the application] negotiate and sign the
24charter within [ten (10)] thirty (30) days of notice of
25[reversal of] the decision of the [local board of directors] 
26appeal board, the charter shall be deemed to be approved and
27shall be signed by the [chairman of the appeal board] local 
28board of school directors and the charter applicant or the 
29chairman of the board of trustees of the existing charter 
30school.

1(i) * * *

2(6) In any appeal, the decision made by the local board of
3directors shall be reviewed by the appeal board on the record as
4certified by the local board of directors. The appeal board
5shall [give due consideration to] determine whether the findings
6of the local board of directors are arbitrary or capricious and
7specifically articulate its reasons for [agreeing or disagreeing
8with those findings] the determination in its written decision.
9The appeal board shall have the discretion to allow the local
10board of directors and the charter school applicant to
11supplement the record if the supplemental information was
12previously unavailable, to submit written briefs, to make oral 
13argument in person or to provide other relevant information.

14(7) Not later than thirty (30) days after the date of notice
15of the acceptance of the appeal, the appeal board shall meet to
16officially review the certified record and, if allowed by the 
17appeal board, to consider any written briefs, oral argument and 
18other relevant information.

19* * *

20Section 7. Sections 1725-A(a)(2), 1732-A(a), 1743-A(a)(1)
21and 1748-A of the act, added or amended June 29, 2002 (P.L.524,
22No.88), are amended to read:

23Section 1725-A. Funding for Charter Schools.--(a) Funding
24for a charter school shall be provided in the following manner:

25* * *

26(2) For non-special education students, the charter school
27shall receive for each student enrolled no less than the
28[budgeted] actual total expenditure per average daily membership
29of the prior school year, as defined in section 2501(20), minus
30the [budgeted] actual expenditures at the end of the most recent 

1fiscal year of the district of residence for nonpublic school
2programs and services; adult education programs;
3community/junior college programs; student transportation
4services; for special education programs; facilities
5acquisition, construction and improvement services; athletic 
6funds and school-sponsored extracurricular activities set up in 
7accordance with section 511; the full employer's share of 
8retirement contributions paid to the Public School Employees' 
9Retirement System; tuition to Pennsylvania charter schools for 
10educational services provided to students attending the charter 
11school; tax collection; and other financing uses, including debt
12service and fund transfers as provided in the Manual of
13Accounting and Related Financial Procedures for Pennsylvania
14School Systems established by the department. This amount shall
15be paid by the district of residence of each student.

16* * *

17Section 1732-A. Provisions Applicable to Charter Schools.--
18(a) Charter schools shall be subject to the following:

19Sections 108, 110, 111, 321, 325, 326, 327, 431, 436, 443,
20510, 518, 527, 708, 736, 737, 738, 739, 740, 741, 752, 753,
21[755,] 771, 776, 777, 808, 809, 810, 1109, 1111, 1112(a), 1301,
221310, 1317, 1317.1, 1317.2, 1318, 1327, 1330, 1332, 1303-A,
231513, 1517, 1518, 1521, 1523, 1531, 1547, 2014-A, Article XIII-A
24and Article XIV.

25Act of July 17, 1961 (P.L.776, No.341), known as the
26"Pennsylvania Fair Educational Opportunities Act."

27Act of July 19, 1965 (P.L.215, No.116), entitled "An act
28providing for the use of eye protective devices by persons
29engaged in hazardous activities or exposed to known dangers in
30schools, colleges and universities."

1Section 4 of the act of January 25, 1966 (1965 P.L.1546,
2No.541), entitled "An act providing scholarships and providing
3funds to secure Federal funds for qualified students of the
4Commonwealth of Pennsylvania who need financial assistance to
5attend postsecondary institutions of higher learning, making an
6appropriation, and providing for the administration of this
7act."

8Act of July 12, 1972 (P.L.765, No.181), entitled "An act
9relating to drugs and alcohol and their abuse, providing for
10projects and programs and grants to educational agencies, other
11public or private agencies, institutions or organizations."

12Act of December 15, 1986 (P.L.1595, No.175), known as the
13"Antihazing Law."

14* * *

15Section 1743-A. Cyber charter school requirements and
16prohibitions.

17(a) Special financial requirements prohibited.--A cyber
18charter school shall not:

19(1) provide discounts to a school district or waive
20payments under section 1725-A for any student unless the 
21discount or waiver of payments is available to all school 
22districts;

23* * *

24Section 1748-A. Enrollment [and], notification and attendance.

25(a) Notice to school district.--

26(1) Within [15] ten days of the enrollment of a student
27to a cyber charter school, the parent or guardian and the
28cyber charter school shall notify the student's school
29district of residence of the enrollment through the use of
30the notification form under subsection (b) and provide a copy 

1of documentation allowable under Article XIII verifying the 
2student's residence.

3(2) If a school district which has received notice under
4paragraph (1) determines that a student is not a resident of
5the school district, the following apply:

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

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

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

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

30(v) All decisions of the department regarding the

1school district of residence of a student shall be
2subject to review by the Commonwealth Court.

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

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

12(b) Notification form.--The department shall develop a
13notification form for use under subsection (a). The notification
14shall include:

15(1) The name, home address and mailing address of the
16student.

17(2) The grade in which the student is being enrolled.

18(3) The date the student will be enrolled.

19(4) The name and address of the cyber charter school and
20the name and telephone number of a contact person able to
21provide information regarding the cyber charter school.

22(5) The signature of the parent or guardian and an
23authorized representative of the cyber charter school.

24(6) The student's former school information, including
25the name and address of the school district, the student's
26record of attendance, the withdrawal date from the former
27school district, if applicable, and the type of educational
28services received, for example, non-special education or
29special education.

30(7) Verification of the student's residency, including

1the parent or guardian's deed, lease, current utility bill,
2current credit card bill, property tax bill, vehicle
3registration, driver's license or Department of
4Transportation identification card.

5(b.1) Residency.--A cyber charter school shall submit to the
6student's school district of residence verification of the
7student's residency upon enrollment under subsection (a)(1) and
8every six months thereafter. A school district shall notify the
9department of all resident students enrolled in cyber charter
10schools for whom enrollment notification and verification of
11residency have not been received.

12(c) Withdrawal.--The cyber charter school and the parent or
13guardian of a student enrolled in a cyber charter school shall
14provide written notification to the student's school district of
15residence within [15] ten days following the withdrawal of a
16student from the cyber charter school.

17(d) Change in residency status.--

18(1) Within ten days of a change in a student's residency
19status, including a move which would affect the student's
20district of residence determination, the parent or guardian
21shall notify the former school district of residence of the
22change in residency through the use of a form developed by
23the department. The notification shall include:

24(i) The name, home address and mailing address of
25the student.

26(ii) The date the change of residency became
27effective.

28(iii) The name and address of the new school
29district of residence and the name and telephone number
30of a contact person able to provide information regarding

1the school.

2(iv) The signature of the parent or legal guardian
3of the student.

4(2) A parent or guardian who knowingly refuses or
5neglects to comply with the requirements of this subsection
6shall be subject to penalty under section 1302(c).

7(e) Attendance.--

8(1) In addition to requirements under Article XIII, upon
9a student's unlawful absence from a cyber charter school at
10any point within the school year, the cyber charter school
11shall immediately inform a student's parents or guardians and
12the student's school district of residence of each incident
13of the student's unlawful absence from the cyber charter
14school. Notice shall be sent as follows:

15(i) Immediately after a student's first and second
16unlawful absences, the cyber charter school shall send a
17printed notice to the parent or guardian and the school
18district of residence indicating the following:

19(A) The dates of the student's unlawful absence
20from the cyber charter school.

21(B) Information about the legal penalties
22established by law for violation of compulsory
23attendance requirements.

24(C) The name and telephone number of a contact
25person employed by the cyber charter school who can
26assist in resolving the student's truant behavior.

27(ii) Immediately after a student's third unlawful
28absence from the cyber charter school, the cyber charter
29school shall send by certified mail an official notice of
30the student's third illegal absence to the parent or

1guardian and the school district of residence.
2Information about the legal penalties for violation of
3compulsory attendance requirements as they pertain to
4both the student and the parent or guardian, including
5information that three days after giving the notice, the
6student or parent or guardian who again violates the
7compulsory requirements shall be liable without further
8notice, shall be attached to the notice.

9(2) After a student's third unlawful absence from the
10cyber charter school, the cyber charter school shall
11immediately institute truancy proceedings under section 1333
12in the jurisdiction where the truant student resides and
13notify the parent or guardian and the school district of
14residence by certified mail that a citation is being sent to
15the magisterial district judge.

16(3) The cyber charter school shall refer all future
17incidents of truancy directly to the magisterial district
18judge. Notwithstanding any other sentence imposed under
19section 1333, the magisterial district judge may order the
20parent or guardian to withdraw the student from the cyber
21charter school and enroll the student in the district of
22residence for a period of at least six months.

23(4) A school district that receives a notification of
24enrollment in a cyber charter school for a student who is in
25violation of compulsory attendance requirements and is truant
26from the school district shall inform the cyber charter
27school in writing about the student's truant behavior.

28(5) If a student who is truant from the student's school
29district of residence enrolls in a cyber charter school, the
30cyber charter school shall provide to the student's district

1of residence documentation during the student's first three
2months of enrollment that the student is fulfilling
3compulsory attendance requirements and completing assignments
4as required by the cyber charter school.

5(f) Penalties.--Failure of a charter or cyber charter school
6to submit notification under this section shall result in a
7school district withholding payment to the cyber charter school
8until 15 days after the district of residence is in receipt of
9the required notification, if the district of residence
10determines the student is a resident of the district.

11Section 8. The act is amended by adding sections to read:

12Section 1748.1-A. Funding for cyber charter schools.

13Funding for a cyber charter school shall be provided in the
14following manner:

15(1) There shall be no tuition charge for a resident or
16nonresident student attending a cyber charter school.

17(2) For non-special education students, the cyber
18charter school shall receive for each student enrolled no
19less than the actual total expenditure per average daily
20membership of the prior school year, as defined in section
212501(20), minus the actual expenditures at the end of the
22most recent fiscal year of the district of residence for
23nonpublic school programs and services; adult education
24programs; community/junior college programs; student
25transportation services; for special education programs;
26facilities acquisition, construction and improvement
27services; athletic funds and school-sponsored extracurricular
28activities set up in accordance with section 511; the full
29employer's share of retirement contributions paid to the
30Public School Employees' Retirement System; tuition to

1Pennsylvania charter schools for educational services
2provided to students attending the charter school; library
3services; food services; health services; tax collection;
4school district cyber or online programs and technology; and
5other financing uses, including debt service and fund
6transfers as provided in the Manual of Accounting and Related
7Financial Procedures for Pennsylvania School Systems
8established by the department. This amount shall be paid by
9the district of residence of each student.

10(3) (i) For special education students, the cyber
11charter school shall receive for each student enrolled
12the same funding as for each non-special education
13student as provided in paragraph (2), plus an additional
14amount determined by dividing the district of residence's
15total special education expenditure by the product of
16multiplying the combined percentage of section 2509.5(k)
17times the district of residence's total average daily
18membership for the prior school year. This amount shall
19be paid by the district of residence of each special
20education student enrolled, but the amount of additional
21tuition per student under this subparagraph shall not
22exceed the actual cost of special education services
23provided by the cyber charter school to the special
24education student during the school year. If the amount
25of tuition paid by the school district to the cyber
26charter school for the school year exceeds the amount of
27special education services provided by the cyber charter
28school, the excess shall be refunded to the school
29district within 60 days of the end of the cyber charter
30school year, notwithstanding the annual audit and

1reconciliation process required in section 1748.2-A. The
2cyber charter school shall report to the school district
3of residence within 45 days following the end of the
4cyber charter school year, the actual cost of special
5education services for each special education student.
6This report shall include the actual cost of
7psychological services, speech pathology and audiology
8services, social work services, special education legal
9services, medical services and nursing services provided
10to each special education student.

11(ii) If a non-special education student is
12identified by the cyber charter school in which the
13student is enrolled as a student with a disability in
14need of special education services, the school district
15of residence may administer and deliver the educational
16services required to address the special education
17services of the student in lieu of providing the cyber
18charter school with the amount for such student required
19in subparagraph (i).

20(iii) The amount a school district provides to a
21cyber charter school on a per-student basis for special
22education students of the district who are enrolled in
23the cyber charter school shall not exceed the amount the
24school district receives in Federal and State subsidies
25for special education each year on a per special
26education student basis.

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

1intermediate unit shall assist the cyber charter school and
2bill the charter school for the services. The intermediate
3unit may not charge the cyber charter school more for any
4service than it charges the constituent districts of the
5intermediate unit. If the service is provided by the
6intermediate unit or school district, the cyber charter
7school shall provide a copy of the contract and invoice for
8the services to the student's school district of residence.

9(5) Payments shall be made to the cyber charter school
10in 12 equal monthly payments, by the fifth day of each month,
11within the operating school year, following receipt by the
12school district of documentation from the cyber charter
13school that lists the name and PAsecureID for each student
14enrolled from the school district, the residency status,
15enrollment date and tuition amount due for each student
16enrolled in the cyber charter school from the school district
17for that month. Each month a cyber charter school shall send
18the department a copy of the documentation provided to the
19school district. A student enrolled in a cyber charter school
20shall be included in the average daily membership of the
21student's district of residence for the purpose of providing
22basic education funding payments and special education
23funding pursuant to Article XXV. If, following receipt of the
24documentation from the cyber charter school, a school
25district fails to make a payment to the cyber charter school
26as prescribed in this paragraph, the secretary shall deduct
27the estimated amount, as documented by the cyber charter
28school, from any and all State payments made to the district
29after receipt of documentation from the cyber charter school.

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

1deduction described in paragraph (5), a school district may
2notify the secretary that the deduction made from State
3payments to the district under this subsection is inaccurate.
4The secretary shall provide the school district with an
5opportunity to be heard concerning whether the cyber charter
6school documented that its students were enrolled in the
7cyber charter school, the period of time during which each
8student was enrolled, the school district of residence of
9each student and whether the amounts deducted from the school
10district were accurate.

11(7) Except for a student who is enrolled in a cyber
12charter school on the effective date of this paragraph,
13payment to a cyber charter school may be no more than one-
14half of the amount in paragraphs (2) and (3), where
15applicable, for each resident student who attends a half-day
16kindergarten program offered by the cyber charter school.

17(8) The amounts under paragraphs (2) and (3) shall be
18calculated using the actual expenditure data at the end of
19the most recently completed fiscal year and submitted on a
20form prescribed by the department not later than October 31
21of each year. The amount calculated shall remain in effect
22until October 31 of the next year.

23(9) The department shall collect and aggregate the
24documentation provided monthly by cyber charter schools
25pursuant to paragraph (5). The department shall review all
26documentation received to determine duplicative enrollments
27and shall notify a cyber charter school and all relevant
28school districts within ten days of receipt of the
29documentation if the department finds duplicative enrollment.
30The department shall post on its publicly available Internet

1website within 30 days of receipt of the documentation each
2month a listing of:

3(i) The total number of students enrolled in each
4cyber charter school.

5(ii) The number of students enrolled in each cyber
6charter school from each school district.

7(iii) The total monthly payment made to the cyber
8charter school by each school district.

9(iv) The total monthly payment per student made to
10the cyber charter school by each school district.

11(v) The year-to-date total payment made to the cyber
12charter school by each school district.

13(vi) The year-to-date payment per student made to
14the cyber charter school by each school district.

15Section 1748.2-A. Actual costs of educational services for
16cyber charter schools.

17(a) General rule.--Within 180 days of the effective date of
18this section, the department shall issue audit guidelines and
19may promulgate audit regulations under this article which shall
20be used in determining the year-end actual costs of educational
21services per non-special education student and special education
22student provided by a cyber charter school to any student who is
23a resident of a school district and which services are subject
24to payment in accordance with section 1748.1-A. The audit
25guidelines shall take effect at the beginning of the first
26school year after which such audit guidelines have been issued.

27(b) Audit guidelines.--In order that the year-end actual
28costs of educational services per non-special education student
29and special education student are thoroughly and properly
30determined for the purpose of final reconciliation pursuant to

1subsection (d), the audit guidelines issued by the department
2shall specify the actual costs of the educational services
3associated with the operation of the educational program offered
4by a cyber charter school.

5(c) Excluded costs.--The following may not be considered
6actual costs of educational services associated with the
7operation of the educational program offered by a cyber charter
8school:

9(1) Any paid media advertisement, including television,
10radio, movie theater, billboard, bus poster, newspaper,
11magazine, the Internet or any other commercial method that
12may promote student enrollment in a cyber charter school.

13(2) Any lobbying, legislative advocacy consulting or any
14effort to influence any member of the executive or
15legislative branch of Federal or State Government regarding
16the formulation, modification or adoption of legislation or
17other policy affecting either that cyber charter school in
18particular or cyber charter schools in general.

19(3) Any bonuses or additional compensation beyond the
20annual or termed contractual compensation for members of the
21board of trustees, faculty, administration and staff,
22including salary, benefits and any additional compensation
23not specifically enumerated in the contract.

24(d) Contents of audit guidelines.--The audit guidelines
25issued by the department shall:

26(1) Allow a closely related business entity to charge no
27more than 107% of the actual educational costs.

28(2) Require information as necessary for a full-scope
29review of a finalized management agreement entered into
30between a cyber charter school and a closely related business

1entity, including:

2(i) All payments received from school districts of
3residence.

4(ii) Expenditures of the closely related business
5entity related to the delivery of educational and
6administrative services pursuant to the management
7agreement.

8(3) List and provide copies of all receipts and
9expenditures for an educational service provider that
10provides any service to a cyber charter school.

11(4) Provide reasonable penalties for failure to comply.

12(e) Reconciliation process.--

13(1) Within 60 days from the effective date of this
14section the department shall effectuate an annual year-end
15final reconciliation process of tuition payments against
16actual costs of educational services per non-special
17education student and special education student provided and
18necessary procedures for the transfer of funds from the cyber
19charter school to the school district of residence. The final
20reconciliation process shall include one of the following:

21(i) Allowing a school district of residence to
22withhold its last monthly payment from a charter school
23to account for any overpayments as identified by the
24year-end audit. If the school district of residence has
25sent overpayments, the district may adjust its last
26monthly payment accordingly.

27(ii) Requiring a cyber charter school at the end of
28each school year to return any overpayments to a school
29district of residence owed a refund based on payments
30made during that school year. A cyber charter school may

1not return any overpayments on a pro rata basis.

2(2) The department shall not deduct from a school
3district of residence's basic education subsidy any amount in
4excess of the selected expenditure per average daily
5membership amount calculated in accordance with section
61748.1-A.

7(f) Duty to provide information.--Cyber charter schools,
8educational service providers, charter school foundations and
9closely related business entities shall provide to the
10department, unless already retained by the department, any
11information necessary to carry out the provisions of this
12section within ten days from a request by the department.

13(g) Construction.--Except as provided under subsection (d),
14nothing contained under this section shall be construed to
15permit a school district of residence to provide funding for
16cyber charter schools in a manner other than that which is
17specified in section 1748.1-A.

18(h) Definitions.--As used in this section, the following
19words and phrases shall have the meanings given to them in this
20subsection unless the context clearly indicates otherwise:

21"Closely related business entity." Any organization with a
22management or operational relationship with a charter school or
23cyber charter school involving either shared or overlapping
24aspects of corporate identity such as ownership, board of
25directors or trustees membership, capital or profits.

26"Educational service provider." A for-profit education
27management organization, nonprofit charter management
28organization, school design provider, business manager or any

29other partner entity with which a cyber charter school intends
30to contract or presently contracts to provide educational

1services, operational services or management services to the
2cyber charter school. The term shall not include a charter
3school foundation.

4"Educational and administrative services." Any direct
5expenditures for any instruction and the administration of the
6instructional program. The term shall not include any

7expenditures not pertaining directly to the instruction and the
8administration of the instructional program.

9"Management agreement." Any contract establishing a
10management or operational relationship between a cyber charter
11school and closely related business entity for the provision of
12professional or nonprofessional services to the cyber charter
13school.

14Section 9. Section 1749-A(a)(1) 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(i), 708, 752, 753, [755,] 771, 776, 777, 807.1, 808, 809,
23810, 1109, 1111, 1112(a), 1205.1, 1205.2, 1301, 1302, 1310,
241317.2, 1318, 1330, 1332, 1333, 1354, 1355, 1303-A, 1518,
251521, 1523, 1531, 1547, 1702-A, 1703-A, 1714-A, 1715-A, 1716-
26A, 1716.1-A, 1719-A, 1721-A, 1722-A, 1723-A(a) and (b), 1724-
27A, 1725-A, 1727-A, 1729-A, 1730-A, 1731-A(a)(1) and (b) and
282014-A and Articles XII-A, XIII-A [and], XIV and XXIV.

29* * *

30Section 10. This act shall take effect in 60 days.