BILL ANALYSIS �
SB 645
Page 1
Date of Hearing: July 6, 2011
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
SB 645 (Simitian) - As Amended: June 29, 2011
SENATE VOTE : 27-10
SUBJECT : Charter schools: charter renewal.
SUMMARY : Creates charter school academic accountability
measures for renewal; expands eligibility for the Charter School
Facility Grant Program; and, authorizes the California School
Finance Authority to refinance working capital for charter
schools. Specifically, this bill :
Academic Accountability
1)Deletes the existing academic renewal criteria for charter
schools which requires a charter school to meet at least one
of the following criteria prior to receiving a charter
renewal:
a) Attain 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.
b) Achieve a rank in deciles 4 to 10, inclusive, on the API
in the prior year or in two of the last three years.
c) Achieve a rank 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.
d) 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.
e) Qualify for an alternative accountability system.
2)Specifies that 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
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criteria:
a) An Academic Performance Index (API) score of at least
700 in the most recent year.
b) Academic growth of at least 50 points over the previous
three years as measured by the Academic Performance Index,
using the most recent data available.
c) A rank in 6 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 alternative accountability system.
Specifies that in the event that the alternative
accountability system is repealed or no longer operative, a
drop out recovery high school shall meet this criterion.
e) Receipt of a positive determination of academic
eligibility for renewal from the State Board of Education
(SBE) within the prior 12 months.
3)Requires a charter school to apply to the SBE for a
determination of academic eligibility if it chooses to submit
its charter for renewal if a charter school does not meet at
least one of the academic criteria (#2 above), or if a charter
school has entered into year five of program improvement, has
not exited program improvement, and does not meet at least two
of the academic criteria (#2 above). Specifies that a charter
school in year five of program improvement shall not be
required to apply for an academic determination if the
Secretary of the US 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 evidence supporting an application for an
academic determination shall be submitted to the SBE and the
Superintendent of Public Instruction (SPI) and may include,
but is not limited to, information on individual pupil
achievement, including longitudinal data that demonstrate
individual pupil progress, analysis of similar pupil
populations, or other relevant data as determined by the
school; requires the SPI to make a recommendation, based on
evidence provided by the charter that is valid and reliable,
to the SBE on the application for a determination of academic
eligibility; and, 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.
5)Specifies that the SBE shall issue a positive determination of
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academic eligibility if the SBE 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; and, specifies that in
determining whether to grant a positive determination of
academic eligibility, the SBE shall consider that the further
the school is from satisfying the academic criteria (#2 above)
the greater the burden of proof on the school to demonstrate
why the school was unable to satisfy the academic criteria (#2
above) and demonstrate why the academic performance is such
that they deserve a positive determination of academic
eligibility.
6)Specifies that a charter school that is granted renewal by an
authorizer after receiving an academic determination shall
only be granted renewal for three years.
Charter School Facility Grant Program
1)Increases the amount for per unit average daily attendance
(ADA) from $750 to $800.
2)Expands, in any year in which additional funds remain after
state and federal funds have been allocated, eligibility to
additional charter schools by reducing the free and
reduced-price meals threshold one percentage point at a time,
from 70% to 50%, until all available funds are allocated.
3)Expands eligibility to units of attendance generated through
nonclassroom-based instruction. Specifies that the charter
school shall meet all other eligibility requirements of the
program and shall receive funds only for those portions of the
facility that are used for direct instruction and support.
Requires the California Department of Education (CDE) to
expand eligibility for nonclassroom-based instruction only in
a year in which state and federal funds have been allocated
for charter schools that meet existing eligibility. Specifies
that for purposes of calculating eligible funding, the ADA of
the school shall be reduced by the portion of its ADA that is
generated through nonclassroom-based instruction, as defined
in Education Code (EC) Section 47612.5(e)(2) and as reported
pursuant to EC Section 47634.2.
4)Authorizes charter schools to receive grants for school
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facility costs not associated with existing school district or
county office of education facilities.
5)Authorizes charter schools to receive grants for school
facility costs not associated with reasonably equivalent
facilities provided by their chartering authority.
6)Strikes obsolete provisions requiring a report to the
Legislature and expressing intent of the Legislature to
appropriate funds for the program.
California School Finance Authority
1)Extends the authority for the California School Finance
Authority (CSFA) to issue lease revenue bonds for the purpose
of financing working capital for public education entities,
including charter schools, to include the refinancing of
working capital.
EXISTING LAW :
Academic Accountability
1)Establishes the Charter Schools Act of 1992 which authorizes a
school district, a county board of education or the SBE to
approve or deny a petition for a charter school to operate
independently from the existing school district structure as a
method of accomplishing, among other things, improved student
learning, increased learning opportunities for all students,
with special emphasis on expanded learning experiences for
students who are identified as academically low achieving,
holding charter schools accountable for meeting measurable
student outcomes, and providing the schools with a method to
change from rule-based to performance-based accountability
systems.
2)Requires, 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:
a) Attain 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.
b) Achieve a rank in deciles 4 to 10, inclusive, on the API
in the prior year or in two of the last three years.
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c) Achieve a rank 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.
d) 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.
e) Qualify for an alternative accountability system.
Charter School Facility Grant Program
1)Establishes the Charter School Facility Grant Program intended
to provide assistance with facilities rent and lease costs for
pupils in charter schools.
2)Specifies that subject to the annual Budget act, eligible
schools shall receive an amount up to, but not more than $750
per unit of ADA to provide an amount up to, but not more than,
75% of the charter school's annual facilities rent and lease
costs. Specifies that in any fiscal year in which there are
insufficient funds to fully fund the approved amounts, the SPI
shall apportion the available funds on a pro rata basis.
3)Specifies that eligibility is based on the geographic location
of the charter schoolsite, pupil eligibility for free or
reduced price meals, and a preference in admissions, as
appropriate. Specifies that charter schoolsites are eligible
for funding if the charter schoolsite meets either of the
following conditions:
a) The charter schoolsite is physically located in the
attendance area of a public elementary school in which 70%
or more of the pupil enrollment is eligible for free or
reduced price meals and the schoolsite gives preference in
admissions to pupils who are currently enrolled in or
reside in the attendance area where the charter schoolsite
is located.
b) Seventy percent or more of the pupil enrollment at the
charter schoolsite is eligible for free or reduced price
meals.
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4)Prohibits grant funds to be apportioned for any of the
following:
a) Units of ADA generated through nonclassroom-based
instruction.
b) Charter schools occupying existing school district or
county office of education facilities.
c) Charter schools receiving reasonably equivalent
facilities from their chartering authority.
5)Specifies that grant funds shall be used for costs associated
with facilities rents and leases and may also be used for
costs associated with remodeling of a building, deferred
maintenance, initially installing or extending service systems
and other built-in equipment, and improving sites.
California School Finance Authority
1)Authorizes the CSFA to issue lease revenue bonds for the
purpose of financing working capital for school districts,
county offices of education, community college districts, and
charter schools.
FISCAL EFFECT : Unknown
COMMENTS : Charter School Background : According to the CDE,
the 2009-10 count of operating charter schools is 815 with
student enrollment of more than 323,000 in the state. This
includes three statewide benefit charters and 20 SBE-approved
charters. Some charter schools are new, while others are
conversions from existing public schools. Charter schools are
part of the state's public education system and are funded by
public dollars. A charter school is usually created or
organized by a group of teachers, parents and community leaders,
a community-based organization, or an education management
organization. Charter schools are authorized by school district
boards, county boards of education or the state board of
education. A charter school is generally exempt from most laws
governing school districts, except where specifically noted in
the law.
Academic Accountability Standards : The June 2009 Center for
Research on Education Outcomes (CREDO) report, "reveals that a
decent fraction of charter schools, 17 percent, provide superior
education opportunities for their students. Nearly half of the
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charter schools nationwide have results that are no different
from the local public school options and over a third, 37
percent, deliver learning results that are significantly worse
than their student would have realized had they remained in
traditional public schools. These findings underlie the
parallel findings of significant statebystate differences in
charter school performance and in the national aggregate
performance of charter schools. The policy challenge is how to
deal constructively with varying levels of performance today and
into the future.
Exiting law requires charter schools to meet specified academic
achievement targets prior to renewal. These targets include
attaining the school's API growth target over time, attaining a
rank in deciles 4 to 10 over time, attaining a rank in deciles 4
to 10 compared demographically comparable schools over time, or
achieving academic performance that is at least equal to the
school that the charter school students would otherwise attend.
This bill creates a higher level of scrutiny for charter schools
that fail to meet new minimum academic standards. The bill
requires a charter school that doesn't achieve one of the
following academic targets to obtain an academic determination
by the SBE before seeking renewal from their authorizer:
1)Achieve an API score of 700.
2)Achieve 50 points of growth on their API score over the
previous 3 years.
3)Attain a decile 6 to 10 ranking for demographically similar
schools.
The bill also requires charter schools in PI year 5 that do not
meet at least two of the criteria above, to obtain an academic
determination by the SBE prior to seeking renewal from their
authorizer. Since schools in PI year 5 have failed to make
academic process for 7 years, this bill requires an even higher
academic threshold for these schools in order to obtain a
charter renewal. It also specifies that charter schools that
must obtain an academic determination prior to renewal may only
be authorized for 3 years. This will provide the opportunity
for the authorizer to more closely monitor the academic progress
of the school. In addition, the bill provides an exemption to
charter schools that are eligible for ASAM by specifying that
they are not required to meet the specified academic criteria
for renewal.
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Schools that apply to the SBE for an academic determination
would be required to provide valid and reliable evidence that
clearly demonstrates that pupils at the school will continue to
improve academically. The SPI would be required to make a
recommendation to the SBE on each charter school academic
determination, after performing a thorough analysis of the data
provided by the school. The bill further directs the SBE to
consider that the farther a charter school is from meeting the
academic criteria established by the bill, the greater the
burden of proof the school must overcome in demonstrating why
the school failed to meet the academic criteria and why the
school deserves a positive academic determination. In other
words, the lowest performing charter schools will be required to
provide more overwhelming evidence of the current and future
success of the school, than schools that narrowly missed the
academic thresholds. If a charter school receives a positive
academic determination from the SBE, they then may return to
their authorizer to continue the traditional renewal process.
The intent of the author is that the SBE's decision on granting
an academic determination is final and is not subject to appeal.
If the SBE does not grant a positive academic determination to
a charter school, that school will be closed.
The author's intent is to create a high academic threshold for
low performing charters to meet in order to be renewed. While
the author's intent is to establish a process to close low
performing charter schools, it is unclear how many schools will
close under this new process that would not otherwise be closed
under existing practice. While the bill creates an additional
step to the renewal process for low performing charter schools,
the ultimate decision to renew or not renew will continue to be
made by the chartering authority.
Charter School Facility Grant Program : The Charter School
Facility Grant Program was established by SB 740 (O'Connell),
Chapter 892, Statutes of 2001, to provide charter schools
serving low-income areas with assistance in rent and lease
payments. Eligible charter schools may receive up to $750 per
unit of average daily attendance, but may not receive more than
75% of the school's annual rent or lease costs. If the program
is oversubscribed, the funds would be distributed on a pro-rata
basis.
Eligibility is limited to: 1.) a charter school physically
located in the attendance area of a public school with at least
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70% of its students eligible for free or reduced price meals,
and the school gives preference in admissions to pupils who are
currently enrolled in that public elementary school and to
pupils who reside in the attendance area where the charter
school is located (called the Expanded Eligibility criterion),
or 2.) a charter school in which 70% or more of its pupil
enrollment is eligible for free or reduce price meals. Funds
may be used for costs associated with facilities rents and
leases, but may also include remodeling, deferred maintenance,
initially installing or extending service systems and other
built-in equipment, and improving sites.
The enacting legislation stated the Legislature's intent to
appropriate $10 million for the program for the 2001-02,
2002-03, and 2003-04 fiscal years (FY). Funds for this program
have increased substantially over time, with the bulk of the
funding coming from the transfer of funds from the phase out of
the Year-Round Operational Grant Program. SB 658 (Romero),
Chapter 271, Statutes of 2008, required all funds appropriated
for the Year-Round School Grant Program at the FY 2007-08 level,
which, at the time, was $97 million, to be transferred to the
Charter School Facility Grant Program at a rate of 20% each
year. The FY 2009-10 budget reduced allocations to 39
categorical programs, including this program, by approximately
35% over two years. The appropriation for this program is $76.5
million for FY 2011-12 with an increase of approximately $15
million over the next two years from the transfer Year- Round
Operational Grant program funds.
Up until FY 2010-11, the Charter School Facility Grant Program
was a reimbursement-based program. The FY 2010-11 budget
contained language authorizing charters to receive grants at the
beginning of the fiscal year.
This bill contains a number of changes to expand eligibility and
increase funds per grant as follows:
1)Increases per unit of ADA amount from $750 to $800: The
California Charter School Association (CCSA) states that the
grant funds have not been increased since the inception of the
program and while CCSA recognizes that the depressed housing
market has driven down the prices of leases today, the grants
need to be adjusted to accommodate leases that were signed
when housing prices were higher.
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2)Expands eligibility to additional charters by lowering the
poverty threshold for location of schoolsites from the
requirement that a charter school enrolls or is located in the
attendance area of a public school that enrolls 70% or more
pupils who are eligible for free and reduced price meal
program to 50%. The expansion from 70% to 50% occurs one
percentage at a time and only after all charters meeting the
70% requirement have been funded. The CCSA states that the
70% threshold leaves out many schools that are in low-income
areas but fail to meet the 70% cut-off.
SB 740 required the CDE to submit a report to the Legislature
on the level of participation of the program and offer
recommendations to improve the program. The CDE issued a
report in 2005 which recommended, among others, eliminating
the expanded eligibility criterion, thereby requiring charter
schoolsites to qualify based on their own enrollment of
students eligible for free and reduced priced meals. The
Committee may wish to consider whether eligibility based on
the percentage of pupils eligible for free and reduced price
meals enrolled in the attendance area of a neighboring public
school should be eliminated.
3)Expands eligibility to ADA generated through
nonclassroom-based instruction after all charters eligible for
funding based on enrollment of 50% of pupils eligible for free
and reduced price meals have been funded. Under existing law,
nonclassroom instruction or nonclassroom-based instruction
includes, but is not limited to, independent study, home
study, work study, and computer-based instruction. Current
law explicitly prohibits eligibility for Charter School
Facility Grant Program funds for non-classroom based
instruction. Supporters argue that nonclassroom based
charters have facilities needs. Some meet with students on a
scheduled basis and/or provide some courses in a classroom
setting. This bill adjusts the funding to provide grant funds
only for the portion of a facility used for instruction and
support. The amount of the grant is based partially on the
amount of time pupils spend in a classroom. Currently, the
CDE does not currently have this data. Staff recommends
requiring charter schools offering nonclassroom-based
instruction to identify the proportion of time students in the
school are scheduled to receive "classroom-based instruction"
in each report provided to the SPI for apportionment purposes.
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4)Authorizes charter schools that receive facilities from school
districts, county offices of education, or equivalent
facilities from the chartering authority to receive grants for
facilities costs not associated with district, county office
or chartering authority facilities. Existing law prohibits
grant funds to be awarded to charter schools that already
receive facilities from districts or county offices of
education.
California School Finance Authority : The CSFA was created in
1985 to oversee the statewide system for the sale of revenue
bonds to reconstruct, remodel or replace existing school
buildings, acquire new school sites and buildings to be made
available to public school districts (K-12) and community
colleges, and to assist school districts by providing access to
financing for working capital and capital improvements. Over
the last 25 years, the CSFA has developed a number of school
facilities financing programs and most recently is focused on
assisting charter schools to meet their facility needs. The
CSFA is a three member board comprised of the State Treasurer,
the Superintendent of Public Instruction and the Director of the
Department of Finance, and is administered within the Office of
the State Treasurer.
Current law authorizes the CSFA to issue lease revenue bonds for
the purpose of financing working capital for school districts,
county offices of education, community college districts, and
charter schools. This working capital is available to be used
by these educational entities to pay maintenance or operating
expenses incurred in connection with the ownership or operation
of an educational facility, that could include reserves for
maintenance or operating expenses, interest for up to two years
on any working capital loan, reserves for debt service and any
other financing costs, payments for the rent or lease of an
educational facility. Current authority for CSFA includes
financing this working capital, but there is no authority for
CSFA to refinance these financing packages; this bill proposes
to extend the current authority in order to allow the CSFA to
refinance working capital financing that has previously been
structured. Given the recent volatility of credit markets, the
ability to refinance existing financing packages that provide
working capital would allow these educational entities,
including charter schools, to take advantage of any situation
where the bond rates have fallen, and thus be able to reap the
gains (in terms of lower financing costs) created by more
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advantageous market conditions.
Committee Amendments : Staff recommends the bill be amended to
clarify that PI year 5 charter schools that do not meet at least
2 of the 3 academic criteria shall not be renewed unless the
school receives a positive academic determination from the SBE
if they wish to submit a renewal application. Additionally,
staff recommends an amendment that requires the SPI to transmit
the findings and determination of the SBE to the authorizing
board for the renewal decision.
Staff further recommends the bill be amended to clarify that
each charter school offering nonclassroom-based instruction
shall, in each report provided to the SPI for apportionment
purposes, identify the proportion of time students in the school
are scheduled to receive "classroom-based instruction" as
defined in Education Code Section 47612.5(e)(1), and make
conforming changes.
Related Legislation : SB 440 (Brownley) establishes new academic
and fiscal accountability criteria for charter school renewal.
To avoid potential chaptering out problems, recent amendments to
this measure conform the renewal criteria and process to the
requirements in SB 645 (Simitian).
REGISTERED SUPPORT / OPPOSITION :
Support
California Charter Schools Association
The Classical Academies
Support Submitted on Previous Version
ACE Charter Schools
American Indian Model Schools
Charter Academy of the Redwoods
Darnall Charter School
Fenton Avenue Charter School
Green Dot Public Schools
Guajome Park Academy
Inland Leaders
King-Chavez Neighborhood of Schools
KIPP: Bay Area Schools
KIPP: LA Schools
Lewis Center for Educational Research
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New Vision Middle School
Oakland Military Institute-College Preparatory Academy
Pacific Collegiate School
Para Los Ni�os
Rocketship Education
Rocklin Academy
SOAR Charter Academy
St. Hope Public Schools
Sycamore Academy
Opposition
California Parents for Public Virtual Education (Previous
Version)
California Teachers Association (Previous Version)
K-12, Inc. Charter School
Analysis Prepared by : Sophia Kwong Kim, Chelsea Kelley, and
Gerald Shelton / ED. / (916) 319-2087