Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 787

Introduced by Assembly Member Roger Hernández

February 25, 2015

An act to amend begin delete Section end delete begin insert Sections end insert 47604 begin insert and 47605 end insert of the Education Code, relating to charter schools.

LEGISLATIVE COUNSEL’S DIGEST

AB 787, as amended, Roger Hernández. Charter schools: operation: nonprofit public benefit corporations.

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(1) Existing law, the Charter Schools Act of 1992, authorizes a charter school to elect to operate as, or be operated by, a nonprofit public benefit corporation, as specified. The act requires the governing board of a school district that grants a charter for the establishment of a charter school formed and organized as a nonprofit public benefit corporation to be entitled to a single representative on the board of directors of the nonprofit public benefit corporation.

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This bill instead would require that an authority that grants a charter for the establishment of a charter school formed and organized as a nonprofit public benefit corporation be entitled to a single representative on the board of directors of the nonprofit public benefit corporation. The bill also would require that the initial chartering authority appoint a majority of the members of the board of directors of the nonprofit public benefit corporation, as provided, for a charter school that elects to operate as, or be operated by, a nonprofit public benefit corporation and submits a charter petition, charter renewal, or material revision application on or after January 1, 2016. By imposing additional duties on local educational agencies, the bill would impose a state-mandated local program.

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This bill also would prohibit a charter school from operating as, or being operated by, a for-profit corporation.

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(2) The Charter Schools Act of 1992 prohibits the governing board of a school district from denying a petition for the establishment of a charter school unless the governing board of the school district finds that the petition does not contain specified information, including, among other information, a reasonably comprehensive description of the governance structure of the school.

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This bill would require the petition for the establishment of a charter school that will operate as, or be operated by, a nonprofit public benefit corporation also to include the names and background information for all persons whom the petitioner nominates to serve on the board of directors of the nonprofit public benefit corporation.

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(3) 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.

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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.

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The Charter Schools Act of 1992 specifies the procedures for the submission, review, and approval or denial of a petition to establish a charter school. Existing law provides that a charter school 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.

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This bill would make nonsubstantive changes to the provision authorizing a charter school to elect to operate as, or be operated by, a nonprofit public benefit corporation.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

SECTION 1.  

Section 47604 of the Education Code is amended
to read:

47604.  

(a) A charter school 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 of the Corporations Code).

(b)  begin delete The governing board of a school district end delete begin insert An authority end insert 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.

begin insert

(c) For a charter school that elects to operate pursuant to this
section, and that submits a charter petition, charter renewal, or
material revision application on or after January 1, 2016, all of
the following shall apply:

end insert begin insert

(1) The initial chartering authority shall appoint a majority of
the members of the board of directors of the nonprofit public
benefit corporation from persons publicly nominated in the charter
petition, charter renewal, or material revision application. The
number of persons nominated shall be twice the total number of
members that comprise the board of directors. The majority
calculation required by this subdivision shall not include the
representative appointed pursuant to subdivision (b).

end insert begin insert

(2) The initial chartering authority, during the term of the
charter, shall ensure that a majority of the members of the board
of directors of the nonprofit public benefit corporation are
members appointed pursuant to paragraph (1). In the event that
a member appointed pursuant to paragraph (1) no longer serves
on the board of directors, for reasons including, but not limited
to, death, disability, removal, or resignation, the initial chartering
authority shall appoint a new member from persons nominated by
the nonprofit public benefit corporation at the time the vacancy
occurs, consistent with paragraph (1) and by submitting a material
revision application.

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(3) Nothing in this subdivision limits or supersedes the ability
of a charter school operated pursuant to this section to either use
an election process or other community involvement process to
select nominees for the board of directors of the nonprofit public
benefit corporation for consideration by the initial chartering
authority or to nominate persons for positions on the board of
directors of the nonprofit public benefit corporation by using
specified eligibility criteria. It shall be the policy of the state to
encourage and to promote parental, educator, and community
participation in the governance of a charter school.

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(4) A member of the board of directors of the nonprofit public
benefit corporation is subject to removal from his or her board
position pursuant to Article 3 (commencing with Section 3060) of
Chapter 7 of Division 4 of Title 1 of the Government Code and as
otherwise provided by law.

end insert begin insert

(d) A charter school shall not operate as, or be operated by, a
for-profit corporation.

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(c)

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begin insert (e) end insert  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.

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begin insert SEC. 2. end insert   

end insert

begin insert Section 47605 of the end insert begin insert Education Code end insert begin insert is amended to
read: end insert

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 is 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 begin insert charter end insert 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 begin insert charter end insert 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 begin delete (b) end delete begin insert (c) end insert 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. If the
additional locations are approved, they shall be a material revision
to the charter school’s 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 exists:

(A) The begin insert charter end insert 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 begin insert charter end insert 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 begin delete may end delete begin insert shall end insert 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
begin insert school end insert district, other employees of the begin insert school end insert 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, provided,
however, that the date may be extended by an additional 30 days
if both parties 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 begin insert the end insert establishment of charter
schools should be encouraged. The governing board of the school
district shall grant a charter for the operation of a begin insert charter end insert 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.

(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 begin insert charter end insert
school, designed, among other things, to identify those whom the
begin insert charter end insert 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) A description, for the charter school, of annual goals, for
all pupils and for each subgroup of pupils identified pursuant to
Section 52052, to be achieved in the state priorities, as described
in subdivision (d) of Section 52060, that apply for the grade levels
served, or the nature of the program operated, by the charter school,
and specific annual actions to achieve those goals. A charter
petition may identify additional begin insert charter end insert school priorities, the goals
for the begin insert charter end insert school priorities, and the specific annual actions to
achieve those goals.

(iii) If the proposed begin insert charter end insert 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 begin insert charter end insert school demonstrate
that they have attained the skills, knowledge, and attitudes specified
as goals in the begin insert charter end insert school’s educational program. Pupil
outcomes shall include outcomes that address increases in pupil
academic achievement both schoolwide and for all groups of pupils
served by the charter school, as that term is defined in subparagraph
(B) of paragraph (3) of subdivision (a) of Section 47607. The pupil
outcomes shall align with the state priorities, as described in
subdivision (d) of Section 52060, that apply for the grade levels
served, or the nature of the program operated, by the charter school.

(C) The method by which pupil progress in meeting those pupil
outcomes is to be measured. To the extent practicable, the method
for measuring pupil outcomes for state priorities shall be consistent
with the way information is reported on a school accountability
report card.

(D)  begin insert (i) end insert begin insert   end insert The governance structure of the begin insert charter end insert school,
including, but not limited to, the process to be followed by the
begin insert charter end insert school to ensure parental involvement.

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(ii) If the charter school elects to operate as, or be operated by,
a nonprofit public benefit corporation pursuant to Section 47604,
the names and background information for all persons whom the
petitioner nominates to serve on the board of directors of that
nonprofit public benefit corporation, pursuant to subdivision (c)
of Section 47604.

end insert

(E) The qualifications to be met by individuals to be employed
by the begin insert charter end insert school.

(F) The procedures that the begin insert charter end insert school will follow to ensure
the health and safety of pupils and staff. These procedures shall
include the requirement that each employee of the begin insert charter end insert school
furnish the begin insert charter end insert school with a criminal record summary as
described in Section 44237.

(G) The means by which the begin insert charter end insert 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.

(H) Admission requirements, if applicable.

(I) The manner in which annual, independent financial audits
shall be conducted, which shall employ generally accepted
accounting principles, and the manner in which audit exceptions
and deficiencies shall be resolved to the satisfaction of the
chartering authority.

(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 begin delete any end delete begin insert an end insert 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 begin insert of end insert whether or not the charter school shall be
deemed the exclusive public school employer of the employees of
the charter school for 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
begin insert charter end insert 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.

(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, on a regular basis, consult with their
parents, legal guardians, and teachers regarding the begin insert charter end insert 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 begin delete any end delete begin insert a end insert
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 begin insert charter end insert school.

(B) If the number of pupils who wish to attend the charter school
exceeds the begin insert charter end insert 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
begin insert school end insert 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 shall, upon request,
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
begin delete any end delete begin insert an end insert employee of the school district to be employed in a charter
school.

(f) The governing board of a school district shall not require
begin delete any end delete begin insert a end insert 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 begin insert charter end insert school,
including, but not limited to, the facilities to be used by the begin insert charter end insert
school, the manner in which administrative services of the begin insert charter end insert
school are to be provided, and potential civil liability effects, if
any, upon the begin insert charter end insert school and upon the school district. The
description of the facilities to be used by the charter school shall
specify where the begin insert charter end insert school intends to locate. The petitioner
or petitioners begin insert also end insert shall begin delete also end delete 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 before 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 begin delete (b) end delete begin insert (b), end insert and shall define “reasonably
begin delete comprehensive” end delete begin insert comprehensive,” end insert as used in paragraph (5) of
subdivision begin delete (b) end delete begin insert (b), end insert 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 begin delete a end delete begin insert the end insert petition
shall begin delete , thereafter, end delete 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 begin delete petition end delete begin insert petition, end insert to the
department and the state board.

(k) (1) The state board may, by mutual agreement, designate
its supervisorial and oversight responsibilities for a charter school
approved by the state board 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 is granted its charter through an appeal
to the state board and elects to seek renewal of its charter shall,
before 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
begin insert charter end insert school’s petition for renewal, the begin insert charter end insert 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.

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begin insert SEC. 3. end insert   

end insert begin insert

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.

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