BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 440|
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THIRD READING
Bill No: AB 440
Author: Brownley (D), et al.
Amended: 8/30/11 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE : 7-3, 7/6/11
AYES: Lowenthal, Alquist, Hancock, Liu, Price, Simitian,
Vargas
NOES: Runner, Blakeslee, Huff
NO VOTE RECORDED: Vacancy
SENATE APPROPRIATIONS COMMITTEE : 8-1, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Steinberg
NOES: Runner
ASSEMBLY FLOOR : 51-27, 5/31/11 - See last page for vote
SUBJECT : Charter schools: accountability
SOURCE : Author
DIGEST : This bill establishes various academic and
fiscal accountability standards related to charter schools.
ANALYSIS : Existing law, the Charter Schools Act of 1992,
provides for the establishment of charter schools in
California for the purpose, among other things, of
improving student learning and expanding learning
experiences for pupils who are identified as academically
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low achieving. Charter schools may be authorized by a
school district governing board, a county board of
education, or the State Board of Education (SBE).
Existing law authorizes anyone to develop, circulate, and
submit a petition to establish a charter school and
requires charter developers to collect certain signatures
in support of the petition, as specified. Current law
requires governing boards to grant a charter unless the
petition fails to meet one or more of the following:
1. The charter school presents an unsound educational
program.
2. The petitioners are demonstrably unlikely to
successfully implement the program described in the
petition.
3. The petition does not contain the number of required
signatures.
4. The petition does not contain an affirmation that it
will be nonsectarian in its programs and policies, shall
not charge tuition, shall not discriminate, and other
affirmations, as specified.
5. The petition does not contain reasonably comprehensive
descriptions of 16 required elements, including a
description of the educational program at the school,
the means by which the school will achieve a racial and
ethnic balance among its pupils, and the manner in which
annual, independent financial audits will be conducted.
Existing law requires a charter school to annually prepare
specified financial reports to its chartering authority,
and requires the chartering authority to use any financial
information to assess the fiscal condition of the charter
school.
Existing law authorizes an initial charter to be granted
for not more than five years and specifies that each
renewal shall be for five years. Existing law requires the
renewal and any material revision of the provisions of the
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charter to be made only with the approval of the authority
that granted the charter and be based on the same standards
as the original charter.
Existing law requires a charter school to meet at least one
of the following performance standards in order to be
renewed: (1) attainment of the school's Academic
Performance Index (API) growth target in two of the last
three years or in the aggregate last three years; (2) an
API decile ranking of four or better in the prior year or
in two of the last three years; (3) a Similar Schools API
ranking of four or better in two of the last three years;
(4) academic performance that is at least equal to the
academic performance of the public schools that the charter
school pupils would otherwise been required to attend; or
(5) qualification for participation in the Alternative
School Accountability Model (ASAM).
Existing law requires the Superintendent of Public
Instruction (SPI), with approval of the SBE to develop an
alternative accountability system for schools under the
jurisdiction of a county board of education or a county
superintendent of schools, community day schools, nonpublic
nonsectarian schools, and alternative schools serving
high-risk pupils, including continuation high schools and
opportunity schools. Schools under the ASAM may receive an
API score, but the score is not included in API rankings.
This bill:
Charter School Academic Accountability :
1. Modifies existing requirement for charter school
petitions with regard to pupils to be served by the
charter school:
A. For initial approval . Requires petitions to
include a reasonably comprehensive description of the
means by which the school will serve pupil
populations that are similar to the local school
district populations or local community, or similar
to the pupil populations identified as the target
pupil population to be served, especially with regard
to high-need pupils, including, but not limited to,
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students with disabilities, students living in
poverty, and English learners.
B. For renewal . Requires the chartering authority to
consider, as one factor in determining whether to
grant a renewal, the degree to which a charter school
serves student populations that are similar to local
district student 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, as specified. Permits authorizers to
consider demographic and lottery fluctuations that
could affect the school's progress in serving a
diverse population.
2. Prohibits an authorizer of a charter school that has
been in operation for at least four years from
considering or granting 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:
A. Attain an API score of at least 700 in the most
recent year.
B. Attain academic growth of at least 50 points over
the previous three years as measured by the API,
using the most recent data available.
C. A rank in deciles six to 10, inclusive, on the API
for a demographically comparable school in the prior
year or in two of the last three years.
D. Participation in the ASAM, or in the event the
alternative accountability system is repealed or no
longer operative, a drop out recovery high school as
defined in statute. If the charter school has its
charter renewed by the meeting this requirement, the
charter school shall include the information that
made it eligible for the alternative accountability
system.
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E. Receipt of a determination of academic eligibility
for renewal from the SBE within the prior 12 months.
3. Specifies that the authorizer of a charter school that
has been in operation for at least four years, has
entered into year five of program improvement, pursuant
to the federal No Child Left Behind Act of 2001, and has
not exited program improvement, shall not consider or
grant the renewal of the school's charter unless the
school meets at least one of the following criteria,
based on data available as of October 1 of the fiscal
year of the renewal:
A. The school meets at least two criteria set forth
above.
B. The school receives a positive determination of
academic eligibility for renewal from the SBE within
the prior 12 months.
Specifies this provision does not apply to schools that
participate in the ASAM.
Specifies this provision shall not be operative 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.
4. Specifies that a charter school that the meets all of
the following shall be subject to the renewal process in
#2 and #3 above:
A. The charter school is established through the
conversion of an existing public school.
B. The charter school during the first year of
operation as a charter school is in year five of
program improvement pursuant to the federal No Child
Left Behind Act of 2001.
C. The charter school accepts all pupils from the
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area within the previous school attendance boundary
and adopts and maintains a policy giving admission
preference to pupils who reside within the former
attendance area of that public school.
Specifies that evidence submitted in support of an
application for determination may include, but is not
limited to, information on individual pupil achievement,
including longitudinal data that demonstrate individual
pupil progress, analysis of similar populations, or
other relevant data as determined by the school.
Requires the charter school submit a copy of its
application and supporting evidence to its charter
authorizer, and the charter authorizer may submit a
recommendation to the SBE on the application for
academic determination of a charter school it
authorizes.
5. Requires a charter school to apply to the SBE for a
determination of academic eligibility if it chooses to
submit its charter for renewal and only if any of the
following apply:
A. The charter does not meet at least one of the
criteria specified in #2 and #3 above.
6. Requires the SPI to make a recommendation to the SBE on
the application for a determination of academic
eligibility for the renewal of the charter. Requires
the SPI's recommendation to include an analysis of the
validity and reliability of the evidence of academic
success submitted by the charter school.
7. Requires the SBE to issue a positive determination of
academic eligibility if it finds that the charter school
clearly demonstrates that pupil academic performance
builds an expectation of continued academic growth, as
specified. Specifies that the further the school is
from satisfying the academic criteria specified above,
the greater the burden of proof on the school to
demonstrate why the school was unable to satisfy the
criterion and demonstrate why the academic performance
is such that the school deserves a positive
determination of academic eligibility.
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8. Specifies that a charter school that is granted a
renewal after obtaining a positive determination of
academic eligibility may be granted a renewal for no
more than three years.
9. Requires the SPI, after the SBE renders a decision,
notify the authorizer of the SBE action and any related
findings.
10.Authorizes the SBE, in the case of a charter school that
is authorized by the SBE and is seeking an academic
determination, to issue a positive academic
determination for the school and take action on the
renewal at the same board meeting.
11.Requires a charter school that applies for an academic
determination submit its complete application and
supporting evidence to the SBE at least 150 days before
the school's renewal date, and requires the make its
decision regarding the application at least 60 days
before the school's renewal date.
12.Specifies that if the SBE does not grant a positive
academic determination the charter school may not appeal
that decision, and that a charter school that is not
granted renewal by its authorizer because it failed to
obtain a positive academic determination from the SBE
may not appeal the nonrenewal decision.
Fiscal and Operational Accountability
1. Requires a charter school petition to specify the manner
in which annual, independent financial and compliance
audits will be conducted; requires charter school audits
to conform to government auditing standards instead of
generally accepted accounting principles, and specifies
that audits are to be conducted in a manner consistent
with the charter school audit guide developed by the
State Controller (Controller).
2. Specifies a charter school operated by a for-profit
corporation to notify the SPI of that fact in writing
when the petition is first approved, upon renewal of the
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petition, and if there is a change in the school's
for-profit status.
3. Allows a charter school authorizer, when reviewing a
charter school petition and determining whether
petitioners are demonstrably unlikely to successfully
implement the program, to consider whether a petitioner
has operated another charter school for at least three
consecutive years and any of the following has occurred:
A. The charter school demonstrated academic
achievement equivalent to a persistently
lowest-achieving school.
B. The charter school completed its first cycle and
was not renewed by the authorizing entity, the county
board of education, or the SBE.
C. The school has ever had its charter revoked and
the charter was not restored by the county board of
education or the SBE.
4. Requires the Controller to annually publish a directory
of certified public accountants (CPA) and public
accountants as specified, deemed by the Controller to be
qualified to conduct audits of the charter schools;
requires charter school audits to be conducted by a CPA
or public accountant selected by the charter school from
the directory published by the Controller; and expresses
Legislative intent that the regular rotation of public
accounting firms used to complete these audits
consistent with the federal Sarbanes-Oxley Act of 2002.
5. Makes it unlawful for a public accounting firm to
provide audit services to a charter school if the lead
audit partner or coordinating audit partner having
responsibility for the audit has performed audit
services for that charter school in each of the six
previous fiscal years.
6. Provides for local educational agencies to be reimbursed
for costs associated with the requirements of this act
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if the Commission on State Mandates determines that the
act contains mandated costs.
Related/Prior Legislation
AB 1950 (Brownley), 2009-10 Session, would have established
new academic and fiscal accountability standards for
charter schools. (Died in the Senate Education Committee)
SB 433 (Liu), 2011-12 Session, requires charter schools to
comply with state statutes governing the suspension and
expulsion of pupils. (In the Senate Education Committee)
SB 645 (Simitian), 2011-12 Session, establishes new
academic criteria for charter school renewal. (In the
Assembly Education Committee)
AB 86 (Mendoza), 2011-12 Session, expands signature
requirements for charter school petitions to include
classified employees. (In the Senate Appropriations
Committee)
AB 360 (Brownley), 2011-12 Session, makes charter schools
subject to the Ralph M. Brown Act or Bagley-Keene Open
Meeting Act, depending on the entity operating the school.
Also subjects charters to the California Public Records Act
and the Political Reform Act.
AB 925 (Lara), 2011-12 Session, requires charter schools to
provide classified employees employment benefits and
protections that mirror those provided to classified
employees in school districts.
AB 1034 (Gatto), 2011-12 Session, requires charter schools
to report specified information relating to pupil
demographics and academic progress, requires charter
schools to collect data regarding pupils who transfer out
of the school, and modifies existing law regarding charter
school admissions.
AB 1741 (Coto), 2009-10 Session, would have required
charter schools that expect 15 percent of their pupil
population to be English learners to meet additional
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petition requirements relating to the education of those
students. (Failed passage in the Senate Education
Committee)
AB 1991 (Arambula), 2009-10 Session, would have authorized
charter school renewals to be granted for five to 10 years.
(Failed passage in the Assembly Education Committee)
AB 2363 (Mendoza), 2009-10 Session, would have required
charter school petitioners to obtain the signatures of half
of the number of teachers and half of the number of
classified employees, as specified. (Failed passage in the
Senate Education Committee)
AB 2320 (Swanson), 2009-10 Session, would have added new
requirements to the charter school petition process,
deletes the authority of a charter school petitioner to
submit a petition to a County Board of Education to serve
pupils that would otherwise be served by the County Office
of Education, and eliminates the ability of the SBE to
approve charter school petition appeals. (Failed passage
in the Senate Education Committee)
AB 572 (Brownley), 2009-10 Session, would have required
charter schools to comply with the Brown Act open meeting
law, the California Public Records Act, and the Political
Reform Act. Passed the Senate with a vote of 21-14 on
August 24, 2010. The bill was subsequently vetoed by
Governor Schwarzenegger, whose veto message read, in
pertinent part:
"Charter school educators have proven that poverty is not
destiny for students that attend public schools in
California. Repeatedly, charter schools with high
proportions of disadvantaged students are among the
highest performing public schools in California. Any
attempt to regulate charter schools with incoherent and
inconsistent cross-references to other statutes is simply
misguided. Parents do not need renewed faith in charter
schools as suggested in this bill. On the contrary, tens
of thousands of parents in California have children on
waiting lists to attend a public charter school.
Legislation expressing findings and intent to provide
'greater autonomy to charter schools' may be well
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intended at first glance. A careful reading of the bill
reveals that the proposed changes apply new and
contradictory requirements, which would put hundreds of
schools immediately out of compliance, making it obvious
that it is simply another veiled attempt to discourage
competition and stifle efforts to aid the expansion of
charter schools."
AB 8X5 (Brownley), 2009-10 Session, Fifth Extraordinary
Session, would have deleted the cap on charter schools and
would have made other changes to provisions governing audit
and fiscal standards, and the authorization,
renewal and revocation of charter schools. (Died in the
Senate Education Committee)
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
SBE eligibility Potentially
significant ongoing costs General determination
New renewal criteria Potential savings/costs in
future years General and process
Charter schools audit Likely minor one-time costs
General
guide
Enforcement Significant ongoing costs and
workloadGeneral
SUPPORT : (Per Senate Education Committee analysis 6/29/11
- unable to verify)
California Charter Schools Association
California State PTA
San Francisco Unified School District
The Classical Academies
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Submitted for previous version of this bill :
California Federation of Teachers
California School Boards Association
California School Employees Association
California Teachers Association
Californians Together
Public Advocates
San Bernardino County District Advocates for Better Schools
United Teachers Los Angeles
OPPOSITION : (Per Senate Education Committee analysis
6/29/11 - unable to verify)
Association of Personalized Learning Schools and Services
Submitted for previous version of this bill :
Charter Schools Development Center
ARGUMENTS IN SUPPORT : According to the author's office,
the purpose of this bill is to encourage higher levels of
academic performance and improve fiscal management
practices among charter schools. The fiscal accountability
standards are intended to ensure that charter school audits
are conducted in the same manner as school district audits
while allowing for the unique nature of charter schools.
The academic accountability standards establish minimum
academic performance criteria for the renewal of charter
schools and will ensure that charter schools serve diverse
pupil populations.
ASSEMBLY FLOOR : 51-27, 5/31/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Campos, Carter, Cedillo, Chesbro, Davis,
Dickinson, Eng, Feuer, Fong, Fuentes, Furutani, Galgiani,
Gatto, Gordon, Hall, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Lara, Bonnie Lowenthal, Ma,
Mendoza, Mitchell, Monning, Pan, Perea, V. Manuel Pérez,
Portantino, Skinner, Solorio, Swanson, Torres,
Wieckowski, Williams, Yamada, John A. Pérez
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NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nestande, Nielsen, Norby, Olsen, Silva, Smyth,
Valadao, Wagner
NO VOTE RECORDED: Charles Calderon, Gorell
CPM:kc 8/30/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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