BILL NUMBER: AB 440	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 29, 2011

INTRODUCED BY   Assembly Member Brownley
    (   Principal coauthor:   Senator 
 Simitian   ) 

                        FEBRUARY 14, 2011

   An act to amend Sections 14502.1, 47604, 47605, 47605.6, and 47607
of, and to add Section 47630.6 to, the Education Code, relating to
charter schools.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 440, as amended, Brownley.  Charter schools.
   (1) Existing law requires the Controller, in consultation with the
Department of Finance and the State Department of Education, to
develop a plan to review and report on financial and compliance
audits. Existing law requires the Controller to propose the content
of an audit guide and authorizes a supplement to the audit guide to
be suggested in the audit year to address issues resulting from new
legislation in that year that changes the conditions of
apportionment. Existing law requires the Controller to submit the
proposed content of the audit guide and any supplement to the
Education  Audits Appeal   Audit Appeals 
Panel for review and possible amendment and requires the Education
 Audits Appeal   Audit Appeals  Panel to
adopt the audit guide and any supplement pursuant to the rulemaking
procedures of the Administrative Procedure Act.
   This bill would require the Controller to propose, and the
Education  Audits Appeal   Audit Appeals 
Panel to adopt, a charter school  supplement to the 
audit guide in order to provide guidance to auditors regarding which
sections of the school district and county office of education audit
guide apply to charter schools and to create specific guidance
related to the unique nature of charter schools. The bill also would
make conforming changes.
   (2) The Charter Schools Act of 1992 (Charter Schools Act) allows a
charter school to elect to operate as, or be operated by, a
nonprofit public benefit corporation, as specified.
   This bill would impose a state-mandated local program by requiring
a charter school operating as, or operated by, a for-profit
corporation to notify the Superintendent of Public Instruction of
that fact in writing  annually   when the
petition is first approved, upon renewal of the petition, and if
there is a change in the for-profit status of the school  .
   (3) The Charter Schools Act specifies the procedures for the
submission, review, and approval or denial of a petition to establish
a standard or countywide charter school. The act allows the
governing board of a school district to deny a charter petition only
if the board makes written factual findings that support certain
facts regarding the petition. The act requires a county board of
education to deny a petition to establish a countywide charter school
if the board makes any of several specified factual findings.
   This bill  , in addition, would allow a governing board of
a school district to deny a petition and would require a county
board of education to deny a petition for a countywide charter, if it
makes a written factual finding that   would authorize
a school district and a county board of education, in determining
whether to grant a   charter petition, to consider whether
 the petitioner has operated another charter school for at least
3 consecutive years and one of several specified events has
occurred.  The bill would require a charter petition to describe
the means by which the school will serve certain pupil populations.

   (4) The Charter Schools Act limits the duration of charters to a
period not to exceed 5 years and authorizes the chartering authority
to grant one or more subsequent renewals for an additional period of
5 years. The act prescribes the requirements a charter school must
comply with in order to have its charter renewed, including a
requirement that a charter school that has been in operation for 4
years satisfy at least one of several specified criteria regarding
academic performance.
   This bill would  authorize a charter renewal to be for a
period of 1 to 5 years. The bill would require a chartering authority
to consider, as one factor in determining whether to grant a
renewal, the degree to which a charter school serves pupil
populations that are similar to local school district pupil
populations, especially with regard to high-need pupils, as
specified. The bill would delete one of the criteria for the
requirement regarding charter schools in operation for 4 years. The
bill would prohibit a chartering authority from granting a renewal of
a charter school for longer than a 3-year period if that charter
school is in program improvement or has entered into year 5 of
program improvement, has not exited program improvement, and did not
meet Adequate Yearly Progress in the year prior to the renewal year
  change the criteria a charter school is required to
meet in order to have its charter renewed  . 
   The bill would authorize a charter school not meeting the renewal
criteria to apply to the State Board of Education for a determination
of academic eligibility for the renewal of its charter by submitting
supporting evidence to the state board and the Superintendent of
Public Instruction. The bill would require the Superintendent to make
a recommendation to the state board on the application. The bill
would require the state board to issue a positive determination of
academic eligibility if the state board finds that the charter school
clearly demonstrates that the academic performance of the school's
pupils builds an expectation that the pupils will continue to improve
academically and have the opportunity to be successful in college or
career. A charter renewal based on a determination of academic
eligibility would be granted for only 3 years. 
   (5) The Charter Schools Act requires a charter petition to include
a reasonably comprehensive description of the manner in which
annual, independent financial audits will be conducted. The act
requires a charter school to transmit a copy of its annual,
independent financial audit report for the preceding fiscal year to
its chartering entity, the Controller, the county superintendent of
schools of the county in which the charter school is sited, except as
specified, and the State Department of Education by December 15 of
each year.
   This bill would require the Controller, by December 31 of each
fiscal year, to publish a directory of certified public accountants
and public accountants, licensed by the California Board of
Accountancy, deemed by the Controller to be qualified to conduct
audits of charter schools. The bill would require each audit of a
charter school to be conducted by a certified public accountant or
public accountant selected by the charter school from the directory.
The bill would specify that it is unlawful for a public accounting
firm to provide audit services to a charter school if the lead audit
partner, or coordinating audit partner, having primary responsibility
for the audit, or the audit partner responsible for reviewing the
audit, has performed audit services for that charter school in each
of the 6 previous fiscal years, except as provided.
   (6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  It is the intent of the Legislature in enacting this
act to do all of the following:
   (a) Ensure successful conditions for high-performing and
high-quality charter schools and encourage high levels of academic
performance and sound fiscal management practices among charter
schools.
   (b) Implement accountability standards for charter schools that
will ensure that all charter schools are of high quality.
   (c) Ensure successful conditions for high-performing charter
schools by setting academic achievement targets as a condition of
charter renewal, accountability standards to identify charter schools
that are not high quality, and evaluation standards to determine
whether entities operating multiple charter schools are establishing
and operating high-quality charter schools.
   (d) Establish fiscal management standards for charter schools that
are as rigorous as those for other schools and school districts, in
order to ensure the most efficient and effective use of public funds
for the education of children in California.
   (e) Ensure successful conditions for high-performing charter
schools by setting standards for the auditing of, and financial
reporting by, charter schools so as to provide for the transparent
use of public funds.
   (f) Require a charter school authorizer to consider during a
charter school renewal whether a charter school has intentionally
targeted high-achieving pupils to attend the charter school and
whether the charter school's population generally reflects a similar
proportion of low-achieving pupils as the local school district pupil
population, especially high-need pupils, including, but not limited
to, pupils with disabilities, pupils living in poverty, and English
learners.
  SEC. 2.  Section 14502.1 of the Education Code is amended to read:
   14502.1.  (a) The Controller, in consultation with the Department
of Finance and the State Department of Education, shall develop a
plan to review and report on financial and compliance audits. The
plan shall commence with the 2003-04 fiscal year for audits of school
districts, other local education agencies, and the offices of county
superintendents of schools. The Controller, in consultation with the
Department of Finance, the State Department of Education, and
representatives of the California School Boards Association, the
California Association of School Business Officials, the California
County Superintendents Educational Service Association, the
California Teachers Association,  and  the California
Society of Certified Public Accountants, shall recommend the
statements and other information to be included in the audit reports
filed with the state, and shall propose the content of an audit guide
to carry out the purposes of this chapter. A supplement to the audit
guide may be suggested in the audit year, following the above
process, to address issues resulting from new legislation in that
year that changes the conditions of apportionment. The proposed
content of the audit guide and any supplement to the audit guide
shall be submitted by the Controller to the Education Audits Appeal
Panel for review and possible amendment.
   (b) The audit guide and any supplement shall be adopted by the
Education Audits Appeal Panel pursuant to the rulemaking procedures
of the Administrative Procedure Act as set forth in Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. It is the intent of the Legislature that, for
the 2003-04 fiscal year, the audit guide be adopted by July 1 of the
fiscal year to be audited. A supplemental audit guide may be adopted
to address legislative changes to the conditions of apportionment. It
is the intent of the Legislature that supplements be adopted before
March 1 of the audit year. Commencing with the 2004-05 fiscal year,
and each fiscal year thereafter, the audit guide shall be adopted by
July 1 of the fiscal year to be audited. A supplemental audit guide
may be adopted to address legislative changes to the conditions of
apportionment. The supplements shall be adopted before March 1 of the
audit year. To meet these goals and to ensure the accuracy of the
audit guide, the process for adopting emergency regulations set forth
in Section 11346.1 of the Government Code may be followed to adopt
the guide and supplemental audit guide. It is the intent of the
Legislature that once the audit guide has been adopted for a fiscal
year, as well as any supplement for that year, thereafter only
suggested changes to the audit guide and any additional supplements
need be adopted pursuant to the rulemaking procedures of the
Administrative Procedure Act. The audit guide and any supplement
shall be issued in booklet form and may be made available by any
means deemed appropriate. The Controller and consultants in the
development of the suggested audit guide and any supplement shall
work cooperatively on a timeline that will allow the 
education audits appeal panel   Education Audits Appeal
Panel  to meet the July 1 and March 1 issuance dates. Consistent
with current practices for development of the audit guide before the
2003-04 fiscal year, the Controller shall provide for the adoption
of procedures and timetables for the development of the suggested
audit guide, any supplement, and the format for additions, deletions,
and revisions.
   (c) For the audit of school districts or county offices of
education electing to take formal action pursuant to Sections 22714,
22714.5 (as it read prior to January 1, 2005), 44929, and 44929.1 (as
it read prior to January 1, 2005), the audit guide content proposed
by the Controller shall include, but not be limited to, the
following:
   (1) The number and type of positions vacated.
   (2) The age and service credit of the retirees receiving the
additional service credit provided by Sections 22714, 22714.5 (as it
read prior to January 1, 2005), 44929, and 44929.1 (as it read prior
to January 1, 2005).
   (3) A comparison of the salary and benefits of each retiree
receiving the additional service credit with the salary and benefits
of the replacement employee, if any.
   (4) The resulting retirement cost, including interest, if any, and
postretirement health care benefits costs, incurred by the employer.

   (d) The Controller shall annually prepare a cost analysis, based
on the information included in the audit reports for the prior fiscal
year, to determine the net savings or costs resulting from formal
actions taken by school districts and county offices of education
pursuant to Sections 22714, 22714.5 (as it read prior to January 1,
2005), 44929, and 44929.1 (as it read prior to January 1, 2005), and
shall report the results of the cost analysis to the Governor and the
Legislature by April 1 of each year.
   (e) All costs incurred by the Controller to implement subdivision
(c) shall be absorbed by the Controller.
   (f) Pursuant to subdivisions (a) and (b), the Controller shall
propose, and the Education Audits Appeal Panel shall adopt, a charter
school  supplement to the  audit guide to provide
guidance on the sections of the school district and county office
audit guide that apply to charter schools and to provide specific
guidance on the unique nature of charter schools. In developing the
charter school  supplement   audit guide  ,
the Controller shall consult with representatives of the following
organizations:
   (1) Organizations specified in subdivision (a).
   (2) The California Charter Schools Association. 
   (3) The Association of California School Administrators. 

   (3) 
    (4)  Other charter school organizations, as appropriate.

  SEC. 3.  Section 47604 of the Education Code is amended to read:
   47604.  (a) Charter schools may elect to operate as, or be
operated by, a nonprofit public benefit corporation, formed and
organized pursuant to the Nonprofit Public Benefit Corporation Law
(Part 2 (commencing with Section 5110) of Division 2 of Title
 1)   1  of the Corporations Code).
   (b) The governing board of a school district that grants a charter
for the establishment of a charter school formed and organized
pursuant to this section shall be entitled to a single representative
on the board of directors of the nonprofit public benefit
corporation.
   (c) An authority that grants a charter to a charter school to be
operated by, or as, a nonprofit public benefit corporation is not
liable for the debts or obligations of the charter school, or for
claims arising from the performance of acts, errors, or omissions by
the charter school, if the authority has complied with all oversight
responsibilities required by law, including, but not limited to,
those required by Section 47604.32 and subdivision (m) of Section
47605.
   (d) A charter school operated as, or operated by, a for-profit
corporation shall notify the Superintendent of that fact in writing
 annually   when the petition is first approved,
upon renewal of the   petition, and if there is a change in
the for-profit status of the school  .
  SEC. 4.  Section 47605 of the Education Code is amended to read:
   47605.  (a) (1) Except as set forth in paragraph (2), a petition
for the establishment of a charter school within a school district
may be circulated by one or more persons seeking to establish the
charter school. A petition for the establishment of a charter school
shall identify a single charter school that will operate within the
geographic boundaries of that school district. A charter school may
propose to operate at multiple sites within the school district, as
long as each location is identified in the charter school petition.
The petition may be submitted to the governing board of the school
district for review after either of the following conditions are met:

   (A) The petition is signed by a number of parents or legal
guardians of pupils that is equivalent to at least one-half of the
number of pupils that the charter school estimates will enroll in the
school for its first year of operation.
   (B) The petition is signed by a number of teachers that is
equivalent to at least one-half of the number of teachers that the
charter school estimates will be employed at the school during its
first year of operation.
   (2) A petition that proposes to convert an existing public school
to a charter school that would not be eligible for a loan pursuant to
subdivision (b) of Section 41365 may be circulated by one or more
persons seeking to establish the charter school. The petition may be
submitted to the governing board of the school district for review
after the petition is signed by not less than 50 percent of the
permanent status teachers currently employed at the public school to
be converted.
   (3) A petition shall include a prominent statement that a
signature on the petition means that the parent or legal guardian is
meaningfully interested in having his or her child or ward attend the
charter school, or in the case of a teacher's signature, means that
the teacher is meaningfully interested in teaching at the charter
school. The proposed charter shall be attached to the petition.
   (4) After receiving approval of its petition, a charter school
that proposes to establish operations at one or more additional sites
shall request a material revision to its charter and shall notify
the authority that granted its charter of those additional locations.
The authority that granted its charter shall consider whether to
approve those additional locations at an open, public meeting. The
approval of additional locations of a charter school constitutes a
material revision of its charter.
   (5) A charter school that is unable to locate within the
jurisdiction of the chartering school district may establish one site
outside the boundaries of the school district, but within the county
in which that school district is located, if the school district
within the jurisdiction of which the charter school proposes to
operate is notified in advance of the charter petition approval, the
county superintendent of schools and the Superintendent are notified
of the location of the charter school before it commences operations,
and either of the following circumstances exist:
   (A) The school has attempted to locate a single site or facility
to house the entire program, but a site or facility is unavailable in
the area in which the school chooses to locate.
   (B) The site is needed for temporary use during a construction or
expansion project.
   (6) Commencing January 1, 2003, a petition to establish a charter
school may not be approved to serve pupils in a grade level that is
not served by the school district of the governing board considering
the petition, unless the petition proposes to serve pupils in all of
the grade levels served by that school district.
   (b) No later than 30 days after receiving a petition, in
accordance with subdivision (a), the governing board of the school
district shall hold a public hearing on the provisions of the
charter, at which time the governing board of the school district
shall consider the level of support for the petition by teachers
employed by the district, other employees of the district, and
parents. Following review of the petition and the public hearing, the
governing board of the school district shall either grant or deny
the charter within 60 days of receipt of the petition. The 60-day
period may be extended by an additional 30 days if the governing
board and the proponents of the petition agree to the extension. In
reviewing petitions for the establishment of charter schools pursuant
to this section, the chartering authority shall be guided by the
intent of the Legislature that charter schools are and should become
an integral part of the California educational system and that
establishment of charter schools should be encouraged. The governing
board of the school district shall grant a charter for the operation
of a school under this part if it is satisfied that granting the
charter is consistent with sound educational practice. The governing
board of the school district shall not deny a petition for the
establishment of a charter school unless it makes written factual
findings, specific to the particular petition, setting forth specific
facts to support one or more of the following findings:
   (1) The charter school presents an unsound educational program for
the pupils to be enrolled in the charter school.
   (2) The petitioners are demonstrably unlikely to successfully
implement the program set forth in the petition.  In determining
if a petitioner is demonstrably unlikely to successfully implement
the program set forth in the petition, a chartering authority may
consider whether a petitioner has operated another charter school for
at least three consecutive years and whether any of the following
has occurred:  
   (A) The charter school demonstrated academic achievement
equivalent to a persistently lowest-achieving school, as defined in
Section 53200.  
   (B) The charter school completed its first renewal cycle and was
not renewed by the authorizing entity, the county board of education,
or the state board.  
   (C) The charter school had its charter revoked, and the charter
was not restored by the county board of education or the state board.

   (3) The petition does not contain the number of signatures
required by subdivision (a).
   (4) The petition does not contain an affirmation of each of the
conditions described in subdivision (d).
   (5) The petition does not contain reasonably comprehensive
descriptions of all of the following:
   (A) (i) A description of the educational program of the school,
designed, among other things, to identify those whom the school is
attempting to educate, what it means to be an "educated person" in
the 21st century, and how learning best occurs. The goals identified
in that program shall include the objective of enabling pupils to
become self-motivated, competent, and lifelong learners.
   (ii) If the proposed school will serve high school pupils, a
description of the manner in which the charter school will inform
parents about the transferability of courses to other public high
schools and the eligibility of courses to meet college entrance
requirements. Courses offered by the charter school that are
accredited by the Western Association of Schools and Colleges may be
considered transferable and courses approved by the University of
California or the California State University as creditable under the
"A" to "G" admissions criteria may be considered to meet college
entrance requirements.
   (B) The measurable pupil outcomes identified for use by the
charter school. "Pupil outcomes," for purposes of this part, means
the extent to which all pupils of the school demonstrate that they
have attained the skills, knowledge, and attitudes specified as goals
in the school's educational program.
   (C) The method by which pupil progress in meeting those pupil
outcomes is to be measured.
   (D) The governance structure of the school, including, but not
limited to, the process to be followed by the school to ensure
parental involvement.
   (E) The qualifications to be met by individuals to be employed by
the school.
   (F) The procedures that the school will follow to ensure the
health and safety of pupils and staff. These procedures shall include
the requirement that each employee of the school furnish the school
with a criminal record summary as described in Section 44237.
   (G) The means by which the school will  achieve a racial
and ethnic balance among its pupils that is reflective of the general
population residing within the territorial jurisdiction of the
school district to which the charter petition is submitted. 
 serve pupil populations that are similar to the local school
district pupil populations or simi   lar to pupil
populations in the school's local community, or similar to the pupil
populations identified in the charter petition as the target pupil
populations to be served, especially with regard to high-need pupils,
including, but not limited to, pupils with disabilities, pupils
living in poverty, and English learners. The chartering authority
that authorizes a charter school shall consider, when determining
whether to grant a renewal, the degree to which a charter school
serves pupil populations that are similar to the local district pupil
populations or similar to pupil populations in the school's local
community, or similar to the pupil populations identified in the
charter petition as the   target pupil populations to be
served, especially with regard to high-need pupils, including, but
not limited to, pupils with disabilities, pupils living in poverty,
and English learners, provided that the authorizer may take into
consideration demographic and lottery fluctuations that could affect
the school's progress. 
   (H) Admission requirements, if applicable.
   (I) The manner in which annual, independent  ,  financial
 and compliance  audits shall be conducted, which shall
employ government auditing standards, and the manner in which audit
exceptions and deficiencies shall be resolved to the satisfaction of
the chartering  authority, consistent with the supplement to
the   authority. This subparagraph shall be implemented
in a manner consistent with the charter school  audit guide
adopted pursuant to subdivision (f) of Section 14502.1.
   (J) The procedures by which pupils can be suspended or expelled.
   (K) The manner by which staff members of the charter schools will
be covered by the State Teachers' Retirement System, the Public
Employees' Retirement System, or federal social security.
   (L) The public school attendance alternatives for pupils residing
within the school district who choose not to attend charter schools.
   (M) A description of the rights of any employee of the school
district upon leaving the employment of the school district to work
in a charter school, and of any rights of return to the school
district after employment at a charter school.
   (N) The procedures to be followed by the charter school and the
entity granting the charter to resolve disputes relating to
provisions of the charter.
   (O) A declaration whether or not the charter school shall be
deemed the exclusive public school employer of the employees of the
charter school for the purposes of Chapter 10.7 (commencing with
Section 3540) of Division 4 of Title 1 of the Government Code.
   (P) A description of the procedures to be used if the charter
school closes. The procedures shall ensure a final audit of the
school to determine the disposition of all assets and liabilities of
the charter school, including plans for disposing of any net assets
and for the maintenance and transfer of pupil records. 
   (6) The petitioner has operated another charter school for at
least three consecutive years and any of the following have occurred:
 
   (A) The charter school demonstrated academic achievement
equivalent to a persistently lowest-achieving school as set forth in
Section 53200.  
   (B) The charter school completed its first renewal cycle and was
not renewed by the authorizing entity, the county board of education,
or the state board.  
   (C) The charter school had its charter revoked, and the charter
was not restored by the county board of education or the state board.

   (c) (1) Charter schools shall meet all statewide standards and
conduct the pupil assessments required pursuant to Sections 60605 and
60851 and any other statewide standards authorized in statute or
pupil assessments applicable to pupils in noncharter public schools.
   (2) Charter schools shall consult, on a regular basis, with their
parents, legal guardians, and teachers regarding the school's
educational programs.
   (d) (1) In addition to any other requirement imposed under this
part, a charter school shall be nonsectarian in its programs,
admission policies, employment practices, and all other operations,
shall not charge tuition, and shall not discriminate against any
pupil on the basis of the characteristics listed in Section 220.
Except as provided in paragraph (2), admission to a charter school
shall not be determined according to the place of residence of the
pupil, or of his or her parent or legal guardian, within this state,
except that an existing public school converting partially or
entirely to a charter school under this part shall adopt and maintain
a policy giving admission preference to pupils who reside within the
former attendance area of that public school.
   (2) (A) A charter school shall admit all pupils who wish to attend
the school.
   (B) If the number of pupils who wish to attend the charter school
exceeds the school's capacity, attendance, except for existing pupils
of the charter school, shall be determined by a public random
drawing. Preference shall be extended to pupils currently attending
the charter school and pupils who reside in the district except as
provided for in Section 47614.5. Other preferences may be permitted
by the chartering authority on an individual school basis and only if
consistent with the law.
   (C) In the event of a drawing, the chartering authority shall make
reasonable efforts to accommodate the growth of the charter school
and in no event shall take any action to impede the charter school
from expanding enrollment to meet pupil demand.
   (3) If a pupil is expelled or leaves the charter school without
graduating or completing the school year for any reason, the charter
school shall notify the superintendent of the school district of the
pupil's last known address within 30 days, and, upon request, shall
provide that school district with a copy of the cumulative record of
the pupil, including a transcript of grades or report card, and
health information. This paragraph applies only to pupils subject to
compulsory full-time education pursuant to Section 48200.
   (e) The governing board of a school district shall not require any
employee of the school district to be employed in a charter school.
   (f) The governing board of a school district shall not require any
pupil enrolled in the school district to attend a charter school.
   (g) The governing board of a school district shall require that
the petitioner or petitioners provide information regarding the
proposed operation and potential effects of the school, including,
but not limited to, the facilities to be utilized by the school, the
manner in which administrative services of the school are to be
provided, and potential civil liability effects, if any, upon the
school and upon the school district. The description of the
facilities to be used by the charter school shall specify where the
school intends to locate. The petitioner or petitioners shall also be
required to provide financial statements that include a proposed
first-year operational budget, including startup costs, and cashflow
and financial projections for the first three years of operation.
   (h) In reviewing petitions for the establishment of charter
schools within the school district, the governing board of the school
district shall give preference to petitions that demonstrate the
capability to provide comprehensive learning experiences to pupils
identified by the petitioner or petitioners as academically low
achieving pursuant to the standards established by the department
under Section 54032 as it read prior to July 19, 2006.
   (i) Upon the approval of the petition by the governing board of
the school district, the petitioner or petitioners shall provide
written notice of that approval, including a copy of the petition, to
the applicable county superintendent of schools, the department, and
the state board.
   (j) (1) If the governing board of a school district denies a
petition, the petitioner may elect to submit the petition for the
establishment of a charter school to the county board of education.
The county board of education shall review the petition pursuant to
subdivision (b). If the petitioner elects to submit a petition for
establishment of a charter school to the county board of education
and the county board of education denies the petition, the petitioner
may file a petition for establishment of a charter school with the
state board, and the state board may approve the petition, in
accordance with subdivision (b). A charter school that receives
approval                                          of its petition
from a county board of education or from the state board on appeal
shall be subject to the same requirements concerning geographic
location to which it would otherwise be subject if it received
approval from the entity to which it originally submitted its
petition. A charter petition that is submitted to either a county
board of education or to the state board shall meet all otherwise
applicable petition requirements, including the identification of the
proposed site or sites where the charter school will operate.
   (2) In assuming its role as a chartering agency, the state board
shall develop criteria to be used for the review and approval of
charter school petitions presented to the state board. The criteria
shall address all elements required for charter approval, as
identified in subdivision (b)  ,  and shall define
"reasonably comprehensive" as used in paragraph (5) of subdivision
(b) in a way that is consistent with the intent of this part. Upon
satisfactory completion of the criteria, the state board shall adopt
the criteria on or before June 30, 2001.
   (3) A charter school for which a charter is granted by either the
county board of education or the state board based on an appeal
pursuant to this subdivision shall qualify fully as a charter school
for all funding and other purposes of this part.
   (4) If either the county board of education or the state board
fails to act on a petition within 120 days of receipt, the decision
of the governing board of the school district to deny a petition
shall, thereafter, be subject to judicial review.
   (5) The state board shall adopt regulations implementing this
subdivision.
   (6) Upon the approval of the petition by the county board of
education, the petitioner or petitioners shall provide written notice
of that approval, including a copy of the petition, to the
department and the state board.
   (k) (1) The state board, by mutual agreement, may designate its
supervisorial and oversight responsibilities for a charter school it
approves to any local educational agency in the county in which the
charter school is located or to the governing board of the school
district that first denied the petition.
   (2) The designated local educational agency shall have all
monitoring and supervising authority of a chartering agency,
including, but not limited to, powers and duties set forth in Section
47607, except the power of revocation, which shall remain with the
state board.
   (3) A charter school that has been granted its charter through an
appeal to the state board and elects to seek renewal of its charter
shall, prior to expiration of the charter, submit its petition for
renewal to the governing board of the school district that initially
denied the charter. If the governing board of the school district
denies the school's petition for renewal, the school may petition the
state board for renewal of its charter.
   (  l  ) Teachers in charter schools shall hold a
Commission on Teacher Credentialing certificate, permit, or other
document equivalent to that which a teacher in other public schools
would be required to hold. These documents shall be maintained on
file at the charter school and are subject to periodic inspection by
the chartering authority. It is the intent of the Legislature that
charter schools be given flexibility with regard to noncore,
noncollege preparatory courses.
   (m) A charter school shall transmit a copy of its annual,
independent financial audit report for the preceding fiscal year, as
described in subparagraph (I) of paragraph (5) of subdivision (b), to
its chartering entity, the Controller, the county superintendent of
schools of the county in which the charter school is sited, unless
the county board of education of the county in which the charter
school is sited is the chartering entity, and the department by
December 15 of each year. This subdivision does not apply if the
audit of the charter school is encompassed in the audit of the
chartering entity pursuant to Section 41020.
  SEC. 5.  Section 47605.6 of the Education Code is amended to read:
   47605.6.  (a) (1) In addition to the authority provided by Section
47605.5, a county board of education may also approve a petition for
the operation of a charter school that operates at one or more sites
within the geographic boundaries of the county and that provides
instructional services that are not generally provided by a county
office of education. A county board of education may only approve a
countywide charter if it finds, in addition to the other requirements
of this section, that the educational services to be provided by the
charter school will offer services to a pupil population that will
benefit from those services and that cannot be served as well by a
charter school that operates in only one school district in the
county. A petition for the establishment of a countywide charter
school pursuant to this subdivision may be circulated throughout the
county by any one or more persons seeking to establish the charter
school. The petition may be submitted to the county board of
education for review after either of the following conditions are
met:
   (A) The petition is signed by a number of parents or guardians of
pupils residing within the county that is equivalent to at least
one-half of the number of pupils that the charter school estimates
will enroll in the school for its first year of operation and each of
the school districts where the charter school petitioner proposes to
operate a facility has received at least 30 days notice of the
petitioner's intent to operate a school pursuant to this section.
   (B) The petition is signed by a number of teachers that is
equivalent to at least one-half of the number of teachers that the
charter school estimates will be employed at the school during its
first year of operation and each of the school districts where the
charter school petitioner proposes to operate a facility has received
at least 30 days notice of the petitioner's intent to operate a
school pursuant to this section.
   (2) An existing public school may not be converted to a charter
school in accordance with this section.
   (3) After receiving approval of its petition, a charter school
that proposes to establish operations at additional sites within the
geographic boundaries of the county board of education shall notify
the school districts where those sites will be located. The charter
school also shall request a material revision of its charter by the
county board of education that approved its charter, and the county
board shall consider whether to approve those additional locations at
an open, public meeting, held no sooner than 30 days following
notification of the school districts where the sites will be located.
If approved, the location of the approved sites shall be a material
revision of the school's approved charter.
   (4) A petition shall include a prominent statement indicating that
a signature on the petition means that the parent or guardian is
meaningfully interested in having his or her child or ward attend the
charter school, or in the case of a teacher's signature, means that
the teacher is meaningfully interested in teaching at the charter
school. The proposed charter shall be attached to the petition.
   (b) No later than 60 days after receiving a petition, in
accordance with subdivision (a), the county board of education shall
hold a public hearing on the provisions of the charter, at which time
the county board of education shall consider the level of support
for the petition by teachers, parents or guardians, and the school
districts where the charter school petitioner proposes to place
school facilities. Following review of the petition and the public
hearing, the county board of education shall either grant or deny the
charter within 90 days of receipt of the petition. However, this
date may be extended by an additional 30 days if both parties agree
to the extension. A county board of education may impose any
additional requirements beyond those required by this section that it
considers necessary for the sound operation of a countywide charter
school. A county board of education may grant a charter for the
operation of a school under this part only if the board is satisfied
that granting the charter is consistent with sound educational
practice and that the charter school has reasonable justification for
why it could not be established by petition to a school district
pursuant to Section 47605. The county board of education shall deny a
petition for the establishment of a charter school if the board
finds one or more of the following:
   (1) The charter school presents an unsound educational program for
the pupils to be enrolled in the charter school.
   (2) The petitioners are demonstrably unlikely to successfully
implement the program set forth in the petition.  In determining
if a petitioner is demonstrably unlikely to successfully implement
the program set forth in the petition, a chartering authority may
consider whether a petitioner has operated another charter school for
at least three consecutive years and any of the following have
occurred:  
   (A) The charter school demonstrated academic achievement
equivalent to a persistently lowest-achieving school, as defined in
Section 53200.  
   (B) The charter school completed its first renewal cycle and was
not renewed by the authorizing entity, the county board of education,
or the state board.  
   (C) The charter school had its charter revoked, and the charter
was not restored by the county board of education or the state board.

   (3) The petition does not contain the number of signatures
required by subdivision (a).
   (4) The petition does not contain an affirmation of each of the
conditions described in subdivision (d).
   (5) The petition does not contain reasonably comprehensive
descriptions of all of the following:
   (A) (i) A description of the educational program of the school,
designed, among other things, to identify those pupils whom the
school is attempting to educate, what it means to be an "educated
person" in the 21st century, and how learning best occurs. The goals
identified in that program shall include the objective of enabling
pupils to become self-motivated, competent, and lifelong learners.
   (ii) If the proposed charter school will enroll high school
pupils, a description of  the manner in which  the
manner in which the charter school will inform parents regarding the
transferability of courses to other public high schools. Courses
offered by the charter school that are accredited by the Western
Association of Schools and Colleges may be considered to be
transferable to other public high schools.
   (iii) If the proposed charter school will enroll high school
pupils, information as to the manner in which the charter school will
inform parents as to whether each individual course offered by the
charter school meets college entrance requirements. Courses approved
by the University of California or the California State University as
satisfying their prerequisites for admission may be considered as
meeting college entrance requirements for purposes of this clause.
   (B) The measurable pupil outcomes identified for use by the
charter school. "Pupil outcomes," for purposes of this part, means
the extent to which all pupils of the school demonstrate that they
have attained the skills, knowledge, and attitudes specified as goals
in the school's educational program.
   (C) The method by which pupil progress in meeting those pupil
outcomes is to be measured.
   (D) The location of each charter school facility that the
petitioner proposes to operate.
   (E) The governance structure of the school, including, but not
limited to, the process to be followed by the school to ensure
parental involvement.
   (F) The qualifications to be met by individuals to be employed by
the school.
   (G) The procedures that the school will follow to ensure the
health and safety of pupils and staff. These procedures shall include
the requirement that each employee of the school furnish the school
with a criminal record summary as described in Section 44237.
   (H) The means by which the school will  achieve a racial
and ethnic balance among its pupils that is reflective of the general
population residing within the territorial jurisdiction of the
school district to which the charter petition is submitted. 
 serve pupil populations that are similar to the local school
district pupil populations or similar to pupil populations in the
school's local community, or similar to the pupil populations
identified in the charter   petition as the target pupil
populations to be served, especially with regard to high-need pupils,
including, but not limited to, pupils with disabilities, pupils
living in poverty, and English learners. The chartering authority
that authorizes a charter school shall consider, when determining
whether to grant a renewal, the degree to which a charter school
serves pupil populations that are similar to the local school
district pupil populations or similar to pupil populations identified
in the charter petition as the target pupil populations to be
served, especially with regard to  high-need pupils,
including, but not limited to, pupils with disabilities, pupils
living in poverty, and English learners, provided that the authorizer
may take into consideration demographic and lottery fluctuations
that could affect the school's progress.  
   (I) The manner in which annual, independent, financial, and
compliance audits shall be conducted, in accordance with audit guide
regulations adopted by the Education Audits Appeal Panel, and the
manner in which audit exceptions and deficiencies shall be resolved.
 
   (I) The manner in which annual, independent, financial and
compliance audits, which shall employ government auditing standards,
shall be conducted and the manner in which audit exceptions and
deficiencies shall be resolved to the satisfaction of the chartering
authority. This subparagraph shall be implemented in a manner
consistent with the charter school audit guide adopted pursuant to
subdivision (f) of Section 14502.1. 
   (J) The procedures by which pupils can be suspended or expelled.
   (K) The manner by which staff members of the charter schools will
be covered by the State Teachers' Retirement System, the Public
Employees' Retirement System, or federal social security.
   (L) The procedures to be followed by the charter school and the
county board of education to resolve disputes relating to provisions
of the charter.
   (M) A declaration whether or not the charter school shall be
deemed the exclusive public school employer of the employees of the
charter school for the purposes of the Educational Employment
Relations Act (Chapter 10.7 (commencing with Section 3540) of
Division 4 of Title 1 of the Government Code).
   (N) Admission requirements  ,  of the charter
school, if applicable.
   (O) The public school attendance alternatives for pupils residing
within the county who choose not to attend the charter school.
   (P) A description of the rights of an employee of the county
office of education, upon leaving the employment of the county office
of education, to be employed by the charter school, and a
description of any rights of return to the county office of education
that an employee may have upon leaving the employ of the charter
school.
   (Q) A description of the procedures to be used if the charter
school closes. The procedures shall ensure a final audit of the
school to determine the disposition of all assets and liabilities of
the charter school, including plans for disposing of any net assets
and for the maintenance and transfer of public records. 
   (6) The petitioner has operated another charter school for at
least three consecutive years and any of the following have occurred:
 
   (A) The charter school demonstrated academic achievement
equivalent to a persistently lowest-achieving school as set forth in
Section 53200.  
   (B) The charter school completed its first renewal cycle and was
not renewed by the authorizing entity, the county board of education,
or the state board.  
   (C) The charter school had its charter revoked, and the charter
was not restored by the county board of education or the state board.
 
   (7) 
    (6)  Any other basis that the county board of education
finds justifies the denial of the petition.
   (c) A county board of education that approves a petition for the
operation of a countywide charter may, as a condition of charter
approval, enter into an agreement with a third party, at the expense
of the charter school, to oversee, monitor, and report to the county
board of education on the operations of the charter school. The
county board of education may prescribe the aspects of the charter
school's operations to be monitored by the third party and may
prescribe appropriate requirements regarding the reporting of
information concerning the operations of the charter school to the
county board of education.
   (d) (1) Charter schools shall meet all statewide standards and
conduct the pupil assessments required pursuant to Section 60605 and
any other statewide standards authorized in statute or pupil
assessments applicable to pupils in noncharter public schools.
   (2) Charter schools shall consult, on a regular basis, with their
parents and teachers regarding the school's educational programs.
   (e) (1) In addition to any other requirement imposed under this
part, a charter school shall be nonsectarian in its programs,
admission policies, employment practices, and all other operations,
shall not charge tuition, and shall not discriminate against any
pupil on the basis of ethnicity, national origin, gender, or
disability. Except as provided in paragraph (2), admission to a
charter school shall not be determined according to the place of
residence of the pupil, or of his or her parent or guardian, within
this state.
   (2) (A) A charter school shall admit all pupils who wish to attend
the school.
   (B) If the number of pupils who wish to attend the charter school
exceeds the school's capacity, attendance, except for existing pupils
of the charter school, shall be determined by a public random
drawing. Preference shall be extended to pupils currently attending
the charter school and pupils who reside in the county except as
provided for in Section 47614.5. Other preferences may be permitted
by the chartering authority on an individual school basis and only if
consistent with the law.
   (C) In the event of a drawing, the county board of education shall
make reasonable efforts to accommodate the growth of the charter
school and, in no event, shall take any action to impede the charter
school from expanding enrollment to meet pupil demand.
   (f) No county board of education shall require any employee of the
county or a school district to be employed in a charter school.
   (g) No county board of education shall require any pupil enrolled
in a county program to attend a charter school.
   (h) The county board of education shall require that the
petitioner or petitioners provide information regarding the proposed
operation and potential effects of the school, including, but not
limited to, the facilities to be utilized by the school, the manner
in which administrative services of the school are to be provided,
and potential civil liability effects, if any, upon the school, any
school district where the charter school may operate, and upon the
county board of education. The petitioner or petitioners shall also
be required to provide financial statements that include a proposed
first-year operational budget, including startup costs, and cashflow
and financial projections for the first three years of operation.
   (i) In reviewing petitions for the establishment of charter
schools within the county, the county board of education shall give
preference to petitions that demonstrate the capability to provide
comprehensive learning experiences to pupils identified by the
petitioner or petitioners as academically low achieving pursuant to
the standards established by the department under Section 54032.
   (j) Upon the approval of the petition by the county board of
education, the petitioner or petitioners shall provide written notice
of that approval, including a copy of the petition, to the school
districts within the county, the Superintendent, and the state board.

   (k) If a county board of education denies a petition, the
petitioner may not elect to submit the petition for the establishment
of the charter school to the state board.
   (  l  ) Teachers in charter schools shall be required to
hold a Commission on Teacher Credentialing certificate, permit, or
other document equivalent to that which a teacher in other public
schools would be required to hold. These documents shall be
maintained on file at the charter school and shall be subject to
periodic inspection by the chartering authority.
   (m) A charter school shall transmit a copy of its annual,
independent, financial audit report for the preceding fiscal year, as
described in subparagraph (I) of paragraph (5) of subdivision (b),
to the county office of education, the Controller, and the department
by December 15 of each year. This subdivision shall not apply if the
audit of the charter school is encompassed in the audit of the
chartering entity pursuant to Section 41020. 
  SEC. 6.    Section 47607 of the Education Code is
amended to read:
   47607.  (a) (1) A charter may be granted pursuant to Sections
47605, 47605.5, and 47606 for a period not to exceed five years. A
charter granted by a school district governing board, a county board
of education, or the state board, may be granted one or more
subsequent renewals by that entity. Each renewal shall be for a
period of one to five years. A material revision of the provisions of
a charter petition may be made only with the approval of the
authority that granted the charter. The authority that granted the
charter may inspect or observe any part of the charter school at any
time.
   (2) Renewals and material revisions of charters are governed by
the standards and criteria in Section 47605, and shall include, but
not be limited to, a reasonably comprehensive description of any new
requirement of charter schools enacted into law after the charter was
originally granted or last renewed.
   (3) The chartering authority that authorizes a charter school
shall consider, as one factor in determining whether to grant a
renewal, the degree to which a charter school serves pupil
populations that are similar to the local school district pupil
populations or similar to pupil populations in the school's local
community, or similar to the pupil populations identified in the
charter petition as the target pupil populations to be served,
especially with regard to high-need pupils, including, but not
limited to, pupils with disabilities, pupils living in poverty, and
English learners.
   (b) A charter school that has been in operation for four years
shall meet at least one of the following criteria prior to receiving
a charter renewal pursuant to paragraph (1) of subdivision (a):
   (1) Attained its Academic Performance Index (API) schoolwide and
subgroup growth targets in the prior year or in two of the last three
years, or in the aggregate for the prior three years.
   (2) Ranked in deciles 4 to 10, inclusive, on the API in the prior
year or in two of the last three years.
   (3) Ranked in deciles 4 to 10, inclusive, on the API for a
demographically comparable school in the prior year or in two of the
last three years.
   (4) Has qualified for an alternative accountability system
pursuant to subdivision (h) of Section 52052.
   (5) Has met or exceeded the API of the local school district.
   (c) Notwithstanding subdivision (a), for purposes of achieving
high-performing charter schools, a chartering authority shall not do
either of the following:
   (1) Grant a renewal of a charter school for a period longer than
three years if that charter school is in program improvement,
pursuant to the federal No Child Left Behind Act of 2001 (20 U.S.C.
Sec. 6301 et seq.).
   (2) Grant a renewal of a charter school that has entered into year
five of program improvement, pursuant to the federal No Child Left
Behind Act of 2001 (20 U.S.C. Sec. 6301 et seq.), has not exited
program improvement, and did not meet Adequate Yearly Progress in the
year prior to the renewal year.
   (3) This subdivision does not apply to charter schools that
qualify for the alternative accountability system developed pursuant
to subdivision (h) of Section 52052.
   (d) A charter may be revoked by the authority that granted the
charter under this chapter if the authority finds, through a showing
of substantial evidence, that the charter school did any of the
following:
   (1) Committed a material violation of any of the conditions,
standards, or procedures set forth in the charter.
   (2) Failed to meet or pursue any of the pupil outcomes identified
in the charter.
   (3) Failed to meet generally accepted accounting principles, or
engaged in fiscal mismanagement.
   (4) Violated any provision of law.
   (e) Prior to revocation, the authority that granted the charter
shall notify the charter public school of any violation of this
section and give the school a reasonable opportunity to remedy the
violation, unless the authority determines, in writing, that the
violation constitutes a severe and imminent threat to the health or
safety of the pupils.
   (f) Prior to revoking a charter for failure to remedy a violation
pursuant to subdivision (e), and after expiration of the school's
reasonable opportunity to remedy without successfully remedying the
violation, the chartering authority shall provide a written notice of
intent to revoke and notice of facts in support of revocation to the
charter school. No later than 30 days after providing the notice of
intent to revoke a charter, the chartering authority shall hold a
public hearing, in the normal course of business, on the issue of
whether evidence exists to revoke the charter. No later than 30 days
after the public hearing, the chartering authority shall issue a
final decision to revoke or decline to revoke the charter, unless the
chartering authority and the charter school agree to extend the
issuance of the decision by an additional 30 days. The chartering
authority shall not revoke a charter, unless it makes written factual
findings supported by substantial evidence, specific to the charter
school, that support its findings.
   (g) (1) If a school district is the chartering authority and it
revokes a charter pursuant to this section, the charter school may
appeal the revocation to the county board of education within 30 days
following the final decision of the chartering authority.
   (2) The county board may reverse the revocation decision if the
county board determines that the findings made by the chartering
authority under subdivision (f) are not supported by substantial
evidence. The school district may appeal the reversal to the state
board.
   (3) If the county board does not issue a decision on the appeal
within 90 days of receipt, or the county board upholds the
revocation, the charter school may appeal the revocation to the state
board.
   (4) The state board may reverse the revocation decision if the
state board determines that the findings made by the chartering
authority under subdivision (f) are not supported by substantial
evidence. The state board may uphold the revocation decision of the
school district if the state board determines that the findings made
by the chartering authority under subdivision (f) are supported by
substantial evidence.
   (h) (1) If a county office of education is the chartering
authority and the county board revokes a charter pursuant to this
section, the charter school may appeal the revocation to the state
board within 30 days following the decision of the chartering
authority.
   (2) The state board may reverse the revocation decision if the
state board determines that the findings made by the chartering
authority under subdivision (f) are not supported by substantial
evidence.
   (i) If the revocation decision of the chartering authority is
reversed on appeal, the agency that granted the charter shall
continue to be regarded as the chartering authority.
   (j) During the pendency of an appeal filed under this section, a
charter school, whose revocation proceedings are based on paragraph
(1) or (2) of subdivision (d), shall continue to qualify as a charter
school for funding and for all other purposes of this part, and may
continue to hold all existing grants, resources, and facilities, in
order to ensure that the education of pupils enrolled in the school
is not disrupted.
   (k) Immediately following the decision of a county board to
reverse a decision of a school district to revoke a charter, the
following shall apply:
   (1) The charter school shall qualify as a charter school for
funding and for all other purposes of this part.
   (2) The charter school may continue to hold all existing grants,
resources, and facilities.
   (3) Any funding, grants, resources, and facilities that had been
withheld from the charter school, or that the charter school had
otherwise been deprived of use, as a result of the revocation of the
charter shall be immediately reinstated or returned.
   (  l  ) A final decision of a revocation or
appeal of a revocation pursuant to subdivision (d) shall be reported
to the chartering authority, the county board, and the department.
   SEC. 6.    Section 47607 of the   Education
Code   is amended to read: 
   47607.  (a) (1) A charter may be granted pursuant to Sections
47605, 47605.5, and 47606 for a period not to exceed five years. A
charter granted by the governing board of  a school district
 governing board  , a county board of education
 ,  or the state board  ,  may be granted
one or more subsequent renewals by that entity. Each renewal shall be
for a period of five years. A material revision of the provisions of
a charter petition may be made only with the approval of the
authority that granted the charter. The authority that granted the
charter may inspect or observe any part of the charter school at any
time.
   (2) Renewals and material revisions of charters are governed by
the standards and criteria in Section 47605, and shall include, but
not be limited to, a reasonably comprehensive description of any new
requirement of charter schools enacted into law after the charter was
originally granted or last renewed. 
   (b) Commencing on January 1, 2005, or after a charter school has
been in operation for four years, whichever date occurs later, a
charter school shall meet at least one of the following criteria
prior to receiving a charter renewal pursuant to paragraph (1) of
subdivision (a):  
   (1) Attained its Academic Performance Index (API) growth target in
the prior year or in two of the last three years, or in the
aggregate for the prior three years.  
   (2) Ranked in deciles 4 to 10, inclusive, on the API in the prior
year or in two of the last three years.  
   (3) Ranked in deciles 4 to 10, inclusive, on the API for a
demographically comparable school in the prior year or in two of the
last three years.  
   (4) (A) The entity that granted the charter determines that the
academic performance of the charter school is at least equal to the
academic performance of the public schools that the charter school
pupils would otherwise have been required to attend, as well as the
academic performance of the schools in the school district in which
the charter school is located, taking into account the composition of
the pupil population that is served at the charter school. 

   (B) The determination made pursuant to this paragraph shall be
based upon all of the following:  
   (i) Documented and clear and convincing data.  
   (ii) Pupil achievement data from assessments, including, but not
limited to, the Standardized Testing and Reporting Program
established by Article 4 (commencing with Section 60640) for
demographically similar pupil populations in the comparison schools.
 
   (iii) Information submitted by the charter school. 

   (C) A chartering authority shall submit to the Superintendent
copies of supporting documentation and a written summary of the basis
for any determination made pursuant to this paragraph. The
Superintendent shall review the materials and make recommendations to
the chartering authority based on that review. The review may be the
basis for a recommendation made pursuant to Section 47604.5.
 
   (D) A charter renewal may not be granted to a charter school prior
to 30 days after that charter school submits materials pursuant to
this paragraph.  
   (5) Has qualified for an alternative accountability system
pursuant to subdivision (h) of Section 52052.  
   (b) The authorizer of a charter school that has been in operation
for at least four years shall not consider or grant the renewal of
the school's charter unless the school, based on data available as of
October 1 of the fiscal year of the renewal, meets at least one of
the following criteria:  
   (1) An Academic Performance Index (API) score of at least 700 in
the most recent year.  
   (2) Academic growth of at least 50 points over the prior three
years as measured by the API, using the most recent data available.
 
   (3) A rank in 6 to 10, inclusive, on the API for a demographically
comparable school in the prior year or in two of the prior three
years.  
   (4) Participation in the alternative accountability system
developed pursuant to subdivision (h) of Section 52052. If
subdivision (h) of Section 52052 is repealed or no longer operative,
a dropout recovery high school, as defined in subparagraph (D) of
paragraph (4) of subdivision (a) of Section 52052, shall meet the
criteria of this paragraph.  
   (5) Receipt of a positive determination of academic eligibility
for renewal from the state board within the prior 12 months. 

   (c) (1) A charter school shall apply to the state board for a
determination of academic eligibility pursuant to paragraph (5) of
subdivision (b) if it chooses to submit its charter for renewal and
either of the following applies:  
   (A) The charter school does not meet at least one of the criteria
set forth in paragraphs (1) to (4), inclusive, of subdivision (b).
 
   (B) The charter school has entered into year five of program
improvement, pursuant to the federal No Child Left Behind Act of 2001
(20 U.S.C. Sec. 6301 et seq.), has not exited program improvement,
and does not meet at least two criteria set forth in paragraphs (1)
to (3), inclusive, of subdivision (b).  
   (2) Subparagraph (B) of paragraph (1) shall not be used as one of
the criteria for identifying a school that may seek a determination
of academic eligibility if the Secretary of the United States
Department of Education grants a waiver to the state related to the
suspension or delay in requirements of all schools in program
improvement.  
   (d) (1) Evidence supporting an application submitted pursuant to
subdivision (c) shall be submitted to the state board and the
Superintendent and may include, but is not limited to, information on
individual pupil achievement, including longitudinal data that
demonstrates individual pupil progress, analysis of similar pupil
populations, or other relevant data as determined by the school.
 
   (2) The Superintendent shall make a recommendation, based on
evidence provided by the charter that is valid and reliable, to the
state board on the application for a determination of academic
eligibility for the renewal of a charter. The Superintendent's
recommendation shall include an analysis of the validity and
reliability of the evidence of academic success submitted by the
charter school.  
   (3) The state board shall issue a positive determination of
academic eligibility if the state board finds that the charter school
clearly demonstrates that the academic performance of the school's
pupils builds an expectation that the pupils will continue to improve
academically and have the opportunity to be successful in college or
career. In determining whether to grant a positive determination of
academic eligibility, the state board shall consider that the farther
the school is from satisfying paragraphs (1) to (3), inclusive, of
subdivision (b), the greater the burden of proof on the school to
demonstrate why the school was unable to satisfy the criteria in
paragraphs (1) to (3), inclusive, of subdivision (b), and demonstrate
why the academic performance is such that the school deserves a
positive determination of academic eligibility.  
   (4) The charter of a charter school that is required to apply to
the state board for a determination of academic eligibility, if the
school chooses to submit its charter for renewal pursuant to
subdivision (c) and is granted renewal by satisfying paragraph (5) of
subdivision (b), shall be granted renewal for only three years.
 
   (c) 
    (e)  A charter may be revoked by the authority that
granted the charter under this chapter if the authority finds,
through a showing of substantial evidence, that the charter school
did any of the following:
   (1) Committed a material violation of any of the conditions,
standards, or procedures set forth in the charter.
   (2) Failed to meet or pursue any of the pupil outcomes identified
in the charter.
   (3) Failed to meet generally accepted accounting principles, or
engaged in fiscal mismanagement.
   (4) Violated any provision of law. 
   (d) Prior to revocation, the authority that granted the charter

    (f)     Before revoking a charter, the
chartering authority  shall notify the charter public school of
any violation of this section and give the school a reasonable
opportunity to remedy the violation  ,  unless the
authority determines, in writing, that the violation constitutes a
severe and imminent threat to the health or safety of the pupils.

   (e) Prior to 
    (g)     Before  revoking a charter for
failure to remedy a violation pursuant to subdivision  (d)
  (f)  , and after expiration of the school's
reasonable opportunity to remedy without successfully remedying the
violation, the chartering authority shall provide a written notice of
intent to revoke and notice of facts in support of revocation to the
charter school. No later than 30 days after providing the notice of
intent to revoke a charter, the chartering authority shall hold a
public hearing, in the normal course of business, on the issue of
whether evidence exists to revoke the charter. No later than 30 days
after the public hearing, the chartering authority shall issue a
final decision to revoke or decline to revoke the charter, unless the
chartering authority and the charter school agree to extend the
issuance of the decision by an additional 30 days. The chartering
authority shall not revoke a charter, unless it makes written factual
findings supported by substantial evidence, specific to the charter
school, that support its findings. 
   (f) 
    (h)  (1) If a school district is the chartering
authority and it revokes a charter pursuant to this section, the
charter school may appeal the revocation to the county board of
education within 30 days following the final decision of the
chartering authority.
   (2) The county board may reverse the revocation decision if the
county board determines that the findings made by the chartering
authority under subdivision  (e)   (g) are
not supported by substantial evidence. The school district may appeal
the reversal to the state board.
   (3) If the county board does not issue a decision on the appeal
within 90 days of receipt, or the county board upholds the
revocation, the charter school may appeal the revocation to the state
board.
   (4) The state board may reverse the revocation decision if the
state board determines that the findings made by the chartering
authority under subdivision  (e)   (g)  are
not supported by substantial evidence. The state board may uphold
the revocation decision of the school district if the state board
determines that the findings made by the chartering authority under
subdivision  (e)   (g)  are supported by
substantial evidence. 
   (g) 
    (i)  (1) If a county office of education is the
chartering authority and the county board revokes a charter pursuant
to this section, the charter school may appeal the revocation to the
state board within 30 days following the decision of the chartering
authority.
   (2) The state board may reverse the revocation decision if the
state board determines that the findings made by the chartering
authority under subdivision  (e)  (g)  are
not supported by substantial evidence. 
   (h) 
    (j)  If the revocation decision of the chartering
authority is reversed on appeal, the agency that granted the charter
shall continue to be regarded as the chartering authority. 
   (i) 
    (k)  During the pendency of an appeal filed under this
section, a charter school, whose revocation proceedings are based on
paragraph (1) or (2) of subdivision  (c)   (e)
 , shall continue to qualify as a charter school for funding and
for all other purposes of this part, and may continue to hold all
existing grants, resources, and facilities, in order to ensure that
the education of pupils enrolled in the school is not disrupted.

   (j) 
    (l)  Immediately following the decision of a county
board to reverse a decision of a school district to revoke a charter,
the following shall apply:
   (1) The charter school shall qualify as a charter school for
funding and for all other purposes of this part.
   (2) The charter school may continue to hold all existing grants,
resources, and facilities.
   (3) Any funding, grants, resources, and facilities that had been
withheld from the charter school, or that the charter school had
otherwise been deprived of use, as a result of the revocation of the
charter shall be immediately reinstated or returned. 
   (k) 
    (m)  A final decision of a revocation or appeal of a
revocation pursuant to subdivision  (c)   (e)
 shall be reported to the chartering authority, the county
board, and the department.
  SEC. 7.  Section 47630.6 is added to the Education Code, to read:
   47630.6.  (a) By December 31 of each fiscal year, the Controller
shall publish a directory of certified public accountants and public
accountants, licensed by the California Board of Accountancy, deemed
by the Controller to be qualified to conduct audits of charter
schools. Each audit of a charter school conducted pursuant to this
part shall be conducted by a certified public accountant or public
accountant selected by the charter school from the directory
established pursuant to this subdivision.
   (b) Except as provided in subdivision (d) of Section 41320.1, it
is unlawful for a public accounting firm to provide audit services to
a charter school if the lead audit partner, or coordinating audit
partner, having primary responsibility for the audit, or the audit
partner responsible for reviewing the audit, has performed audit
services for that charter school in each of the six previous fiscal
years.
   (c) It is the intent of the Legislature that, notwithstanding
subdivision (b), the rotation within public accounting firms conforms
to provisions of the federal Sarbanes-Oxley Act of 2002 (Public Law
107-204; 15 U.S.C. Sec. 7201 et seq.).
  SEC. 8.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.