5012-S.E AMH MCDE H3128.1

ESSB 5012 - H AMD 560

By Representative McDermott

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. INTENT. The legislature intends to authorize the establishment of public optional schools within the general and uniform system of public schools for the primary purpose of providing more, high quality learning environments to assist educationally disadvantaged students and other students in meeting the state's academic standards. The legislature intends for optional schools to function as an integral element of the public school system maintained at public expense, and to be subject to the same academic standards and performance outcomes as other public schools. The legislature intends to encourage school districts to consider using optional schools as a tool for achieving state and federal accountability goals. The legislature finds that in addition to providing more, high quality public school choices for families, teachers, and students, public optional schools may be a tool for the improvement of schools in which significant numbers of students persistently fail to meet state standards. The legislature also intends to authorize the use of optional schools as a state intervention strategy, consistent with the provisions of the federal no child left behind act of 2001, to provide assistance to schools in which significant numbers of students persistently fail to meet state standards.

NEW SECTION. Sec. 2. DEFINITIONS. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Alternate sponsor" means either: (a) The board of directors of the educational service district in which the proposed optional school will be located; or (b) the governing board of a state or regional university as defined in RCW 28B.10.016 or of The Evergreen State College, when such board has approved a contractual performance agreement. Optional schools sponsored by an institution of higher education may be approved by the governing board of the sponsoring institution or by an official or agency designated by and accountable to the governing board of the sponsoring institution. A contractual performance agreement may be approved by an official or agency under this subsection, only after the governing board has consented to such approval in writing.

(2) "Applicant" means a nonprofit corporation that has submitted an application to a sponsor or an alternate sponsor to obtain approval to operate an optional school. The nonprofit corporation must be either a public benefit nonprofit corporation as defined in RCW 24.03.490, or a nonprofit corporation as defined in RCW 24.03.005 that has applied for tax-exempt status under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3)). The nonprofit corporation may not be a sectarian or religious organization and must meet all of the requirements for a public benefit nonprofit corporation before receiving any funding under section 12 of this act.

(3) "Board of directors" means the board of directors appointed or elected by the applicant to manage and operate the optional school.

(4) "Contractual performance agreement" means a contract between an applicant and a sponsor or an alternate sponsor. The contractual performance agreement establishes, in accordance with this chapter, the terms and conditions for the management, operation, and educational program of the optional school.

(5) "Conversion optional school" means a public school converted to an optional public school through a contractual performance agreement in accordance with this chapter.

(6) "Educationally disadvantaged students" includes students who do not speak English proficiently, students with special needs, students who qualify for free and reduced priced meals, students exercising choice options under the federal no child left behind act of 2001, and other students who may be at risk of failing to meet state and federal academic performance standards.

(7) "Optional school" means a public school managed by an applicant's board of directors and operating independently of any school district board under a contractual performance agreement approved in accordance with this chapter.

(8) "Sponsor" means the board of directors of the school district in which the proposed optional school will be located, when such board has approved a contractual performance agreement.

NEW SECTION. 3. OPTIONAL SCHOOLS--POWERS. (1) In carrying out its duty to manage and operate the optional school, the board of directors of an optional school may:

(a) Hire, manage, and discharge any optional school employee in accordance with the terms of this chapter and that school's contractual performance agreement;

(b) Enter into a contract with any school district, or any other public or private entity, also empowered to enter into contracts, for any and all real property, equipment, goods, supplies, and services, including educational instructional services;

(c) Rent, lease, or own property, but may not acquire property by eminent domain. All contractual performance agreements with other public and private entities must include provisions regarding the disposition of the property if the optional school fails to open as planned, closes, or the contractual performance agreement is revoked or not renewed;

(d) Issue secured and unsecured debt to manage cash flow, improve operations, or finance the acquisition of real property or equipment. Such an issuance does not constitute an obligation, either general, special, or moral of the state, the optional school sponsor, the school district in which the optional school is located or any other political subdivision or agency of the state. Neither the full faith and credit nor the taxing power of the state, the optional school sponsor, the school district in which the optional school is located, or any other political subdivision or agency of the state may be pledged for the payment of such debt;

(e) Accept and administer for the benefit of the optional school and its students gifts, grants, and donations from other governmental and private entities, excluding sectarian or religious organizations. Optional schools may not accept any gifts or donations the conditions of which violate this chapter.

(2) An optional school may not charge tuition, levy taxes, or issue tax-backed bonds, however it may charge fees for optional noncredit extracurricular events.

(3) Neither an optional school sponsor, an alternate sponsor, nor the school district in which the optional school is located is liable for acts or omissions of an optional school, including but not limited to acts or omissions related to the application, the contractual performance agreement, the operation, the performance, and the closure of the optional school.

NEW SECTION. Sec. 4. LEGAL STATUS. An optional school is a public school including one or more of grades kindergarten through twelve, operated by a board of directors appointed or elected by an optional school applicant, according to the terms of a renewable five- year contract granted by a sponsor or an alternate sponsor. An optional school may offer any program or course of study that another public school may offer.

NEW SECTION. Sec. 5. OPTIONAL SCHOOLS--EXEMPTIONS. (1) An optional school shall operate independently of any school district board, under a contractual performance agreement approved by a sponsor or an alternate sponsor under this chapter.

(2) Optional schools are exempt from all state statutes and rules applicable to school districts and school district boards of directors except those statutes and rules as provided for and made applicable to optional schools in accordance with this chapter and in the school's approved contractual performance agreement.

(3) An optional school's board of directors is encouraged to implement a quality management system and to conduct an annual self- assessment.

(4) All approved optional schools shall:

(a) Comply with state and federal health, safety, parents' rights, civil rights, and nondiscrimination laws, including, but not limited to, chapter 28A.640 RCW (sexual equality) and Title IX of the education amendments of 1972 (20 U.S.C. Sec. 1681 et seq.) applicable to school districts, and to the same extent as school districts;

(b) Participate in nationally normed standardized achievement tests as required in RCW 28A.230.190, 28A.230.193, and 28A.230.230 and the elementary, middle school, and high school standards, requirements, and assessment examinations as required in chapter 28A.655 RCW;

(c) Employ certificated instructional staff as required in RCW 28A.410.010, however optional schools may hire noncertificated instructional staff of unusual competence and in exceptional cases as specified in RCW 28A.150.260;

(d) Comply with the employee record check requirements in RCW 28A.400.303;

(e) Be subject to the same financial and audit requirements as a school district, as determined by the state auditor, including annual audits for legal and fiscal compliance;

(f) Be subject to periodic independent performance audits conducted by or at the direction of a competent state authority to the same extent as other public agencies, however, an optional school is not required to bear the expense of such a performance audit;

(g) Comply with the annual performance report under RCW 28A.655.110;

(h) Follow the performance improvement goals and requirements adopted by the academic achievement and accountability commission by rule under RCW 28A.655.030;

(i) Be subject to the accountability requirements of the federal no child left behind act of 2001, including Title I requirements;

(j) Comply with and be subject to the requirements under the individuals with disabilities education act, as amended in 1997;

(k) Report at least annually to the board of directors of the school district in which the optional school is located, to the school's alternate sponsor if the school is not sponsored by a school district, and to parents of children enrolled at the optional school on progress toward the student performance goals specified in the contractual performance agreement;

(l) Comply with the open public meetings act in chapter 42.30 RCW and open public records requirements in RCW 42.17.250; and

(m) Be subject to and comply with legislation enacted after the effective date of this section governing the operation and management of optional schools.

(5) A member of a board of directors of an optional school shall be considered the equivalent of a board member of a school district for the purposes of public disclosure requirements and must comply with the reporting requirements in RCW 42.17.240.

NEW SECTION. Sec. 6. ADMISSION REQUIREMENTS. (1) To effectuate the primary purpose for which the legislature established optional schools, an optional school must be willing to enroll educationally disadvantaged students and may not limit admission on any basis other than age group and grade level. Consistent with the legislative intent of this chapter, an optional school shall conduct timely outreach and marketing efforts to educationally disadvantaged students in the school district in which the optional school will be located.

(2) A conversion optional school must be structured to provide sufficient capacity to enroll all students who wish to remain enrolled in the school after its conversion to an optional school, and may not displace students enrolled before its conversion. If, after enrollment of these students, capacity is insufficient to enroll all other students remaining who have submitted a timely application, the optional school must give enrollment priority to siblings of students who are currently enrolled in the school. Students selected to fill any remaining spaces must be selected only through an equitable selection process, such as a lottery.

(3) A new optional school must enroll all students who submit a timely application if capacity is sufficient. If capacity is insufficient to enroll all students who apply, students must be selected to fill any remaining spaces only through an equitable selection process, such as a lottery. Siblings of enrolled students and of students selected through an equitable selection process must be given priority in enrollment if requested by a parent.

NEW SECTION. Sec. 7. OPTIONAL SCHOOL APPLICATION. (1) An applicant may apply to a sponsor or an alternate sponsor to establish an optional school in accordance with this section.

(2) An application for an optional school must be submitted first to the board of directors of the school district in which the proposed optional school will be located, allowing for the board's consideration of the application in accordance with subsections (3) and (4) of this section, before the application may be submitted to an alternate sponsor.

(3) The school district board of directors must decide, within forty-five days of receipt of the application, whether to hold a public hearing in the school district for the purpose of taking public comment on the application and, if a hearing is to be held, must schedule such a hearing within seventy-five days of receipt of the application. If the school board intends to accept the application, one or more public hearings must be held prior to the granting of a contractual performance agreement; however a school board is not required to hold a public hearing prior to rejecting an application. The school board must either accept or reject the application within one hundred five days after receipt of the application. The one hundred five-day deadline for acceptance or rejection of the optional school application may be extended for an additional thirty days if both parties agree in writing.

(4) If the school board elects not to hold a public hearing or rejects the application after holding one or more public hearings, the school board must notify the applicant in writing of the reasons for that decision. The applicant may submit a revised application for the school board's reconsideration and the school board may provide assistance to improve the application. If the school board rejects the application after submission of a revised application, the school board must notify the applicant in writing of the reasons for the rejection.

(5) Applications for the conversion of a public school to an optional public school may not be submitted to an alternate sponsor without the prior consent of the school district board of directors. At the request of the applicant, the sponsor, or the alternate sponsor, the superintendent of public instruction may review the contractual performance agreement and provide technical assistance.

(6) Alternate sponsors must comply with the procedures in subsections (1) through (4) of this section for consideration of the contractual performance agreement. An alternate sponsor is not bound by a school district's or another alternate sponsor's findings or decision to deny the application.

(7) The superintendent of public instruction shall maintain copies of all approved contractual performance agreements. An applicant may obtain copies of those applications from the office of the superintendent of public instruction.

(8) Educational service districts and the superintendent of public instruction are encouraged to assist schools and school districts in which significant numbers of students persistently fail to meet state standards with completing the conversion process. Assistance from an educational service district or from the superintendent of public instruction may include, but is not limited to, identifying potential eligible applicants and assisting with the optional school application and approval processes.

(9) Consistent with the corrective action provisions in the federal no child left behind act of 2001, the superintendent of public instruction may use the conversion process as an intervention strategy for the purpose of meeting federal student achievement and accountability requirements. The superintendent may require a local school district board of directors to convert a public school to an optional public school or, if the superintendent determines it would be more appropriate, may require a local school district board of directors to consent to conversion of the school to an optional school by the board of directors of the local educational service district.

NEW SECTION. Sec. 8. APPLICATION REQUIREMENTS. The optional school application is a proposed contract and must include:

(1) The identification and description of the nonprofit corporation submitting the application, including the names, descriptions, curriculum vitae, and qualifications, which shall be subject to verification and review, of the individuals who will operate the school;

(2) The nonprofit corporation's proposed articles of incorporation, bylaws, and most recent financial statement and balance sheet;

(3) A mission statement for the proposed school, consistent with the description of legislative intent in this chapter, including a statement of whether the proposed optional school's primary purpose is to serve educationally disadvantaged students;

(4) A description of the school's educational program, curriculum, and instructional strategies, including but not limited to how the optional school will assist its students, including educationally disadvantaged students, in meeting the state's academic standards;

(5) A description of the school's admissions policy and marketing program, and its deadlines for applications and admissions, including its program for community outreach to families of educationally disadvantaged students;

(6) A description of the school's student performance standards and requirements that must meet those determined under chapter 28A.655 RCW, and be measured according to the assessment system determined under chapter 28A.655 RCW;

(7) A description of the school's plan for evaluating student performance and the procedures for taking corrective action in the event that student performance at the optional school falls below standards established in its contractual performance agreement;

(8) A description of the financial plan for the school. The plan shall include: (a) A proposed five-year budget of projected revenues and expenditures; (b) a plan for starting the school; (c) a five-year facilities plan; (d) evidence supporting student enrollment projections of at least twenty students; and (e) a description of major contracts planned for administration, management, equipment, and services, including consulting services, leases, improvements, purchases of real property, and insurance;

(9) A description of the proposed financial management procedures and administrative operations, which shall meet or exceed generally accepted standards of management and public accounting;

(10) An assessment of the school's potential legal liability and a description of the types and limits of insurance coverage the nonprofit corporation plans to obtain. For purposes of this subsection, a liability insurance policy of five million dollars is required;

(11) A description of the procedures to discipline, suspend, and expel students;

(12) A description of procedures to assure the health and safety of students, employees, and guests of the school and to comply with applicable federal and state health and safety laws and regulations;

(13) A description of the school's program for parent involvement in the optional school; and

(14) The supporting documentation for any additional requirements a sponsor or alternate sponsor may impose as a condition of approving the contractual performance agreement, including but not limited to the posting of a security bond.

NEW SECTION. Sec. 9. APPROVAL CRITERIA. A sponsor or alternate sponsor may approve an application for an optional school, if in the sponsor's or alternate sponsor's reasonable judgment, after exercising due diligence and good faith, the sponsor or alternate sponsor finds:

(1) The applicant is an eligible public benefit nonprofit corporation and the individuals it proposes to manage and operate the school are qualified to operate an optional school and implement the proposed educational program that is free from religious or sectarian influence;

(2) The public benefit nonprofit corporation has been approved or conditionally approved by the internal revenue service for tax exempt status under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3));

(3) The mission statement is consistent with the description of legislative intent and restrictions on optional school operations in this chapter. The sponsor or alternate sponsor must make a finding of whether or not the optional school's primary purpose is to serve educationally disadvantaged students;

(4) The school's educational program, including its curriculum and instructional strategies, is likely to assist its students, including its educationally disadvantaged students, in meeting the state's academic standards;

(5) The school's admissions policy and marketing program is consistent with state and federal law, and includes community outreach to families of educationally disadvantaged students;

(6) The school's proposed educational program includes student academic performance standards and requirements that meet those determined under chapter 28A.655 RCW and are measured according to the assessment system determined under chapter 28A.655 RCW;

(7) The application includes a viable plan for evaluating pupil performance and procedures for taking appropriate corrective action in the event that pupil performance at the optional school falls below standards established in its contractual performance agreement;

(8) The financial plan for the school is designed to reasonably support the optional school's educational program based on a review of the proposed five-year budget of projected revenues, expenditures, and facilities;

(9) The school's financial and administrative operations, including its audits, meet or exceed generally accepted standards of accounting and management;

(10) The assessment of the school's potential legal liability, and the types and limits of insurance coverage the school plans to obtain, are adequate. For purposes of this subsection, a liability insurance policy of five million dollars is required;

(11) The procedures the school plans to follow for discipline, suspension, and expulsion of students are reasonable and comply with state and federal law;

(12) The procedures the school plans to follow to assure the health and safety of students, employees, and guests of the school comply with applicable state and federal health and safety laws and regulations;

(13) The school has developed a program for parent involvement in the optional school; and

(14) The applicant has provided sufficient documentation demonstrating it has met additional requirements for approval of the contractual performance agreement, including but not limited to the posting of a security bond.

NEW SECTION. Sec. 10. CONTRACTUAL PERFORMANCE AGREEMENT-- AMENDMENT. (1) A contractual performance agreement approved by a sponsor or an alternate sponsor with any changes or additions, including performance standards or benchmarks established by the sponsor, and signed by an authorized representative of the applicant and the sponsor or alternate sponsor, constitutes a contractual performance agreement. A contractual performance agreement for the conversion of a public school must include provisions for the disposition, including assignment or reassignment, of the employees of the school prior to its conversion and after conversion.

(2) A contractual performance agreement may be amended during its term at the request of the optional school board of directors and on the approval of the sponsor or alternate sponsor.

(3) A contractual performance agreement may not prohibit and must provide for application of laws applicable to optional schools or to optional school boards of directors enacted after the effective date of this section.

NEW SECTION. Sec. 11. OPTIONAL SCHOOL RENEWAL AND REVOCATION.

(1) An approved plan to establish an optional school is effective for five years from the first day of operation. At the conclusion of the first three years of operation, the optional school may apply to the original sponsor or alternate sponsor for renewal. A request for renewal must be submitted no later than six months before the expiration of the contractual performance agreement.

(2) An optional school renewal application must include:

(a) A report on the progress of the optional school in achieving the goals; student performance standards, including the student performance standards adopted by rule by the academic achievement and accountability commission in accordance with RCW 28A.655.030; the number and percentage of educationally disadvantaged students served; and other terms of the contractual performance agreement;

(b) A financial statement that discloses the costs of administration, instruction, and other expenditure objects and activities of the optional school; and

(3) The sponsor or alternate sponsor shall reject the application for renewal if the academic progress of students in the optional school, as measured by the standards and assessments in chapter 28A.655 RCW, is inferior, for the most recent two consecutive years, to the average progress of students in the district in which the optional school is located when similar student populations are compared.

(4) The sponsor or alternate sponsor may reject the application for renewal if any of the following occurred:

(a) The optional school materially violated its contractual performance agreement with the sponsor or alternate sponsor;

(b) The students enrolled in the optional school failed to meet student performance standards identified in the contractual performance agreement, including the student performance standards adopted by rule by the academic achievement and accountability commission in accordance with RCW 28A.655.030;

(d) The optional school violated provisions in law that have not been waived in accordance with this chapter.

(5) A sponsor or alternate sponsor shall give written notice of its intent not to renew the optional school's request for renewal to the optional school within three months of the request for renewal to allow the optional school an opportunity to correct identified deficiencies in its operation. At the request of the board of directors of the optional school, the sponsor or alternate sponsor shall review its decision for nonrenewal within forty-five days of receiving a request for review and supporting documentation sufficient to demonstrate that any deficiencies have been corrected from the board of directors of the optional school.

(6)(a) The sponsor or alternate sponsor may revoke a previously approved contractual performance agreement before the expiration of the term of the contractual performance agreement, and before application for renewal, if any of the following occurred:

(i) The optional school materially violated its contractual performance agreement with the sponsor or alternate sponsor;

(ii) The optional school failed to meet generally accepted standards of fiscal management; or

(iii) The optional school violated provisions in law that have not been waived in accordance with this chapter.

(b) Except in cases of emergency where the health and safety of children are at risk, a contractual performance agreement may not be revoked unless the sponsor or alternate sponsor first provides:

(i) Written notice to the optional school of the specific violations alleged;

(ii) One or more public hearings in the school district in which the optional school is located; and

(iii) A reasonable opportunity and a sufficient period of time for the optional school to correct the identified deficiencies.

(c) If, after following the procedures in (b) of this subsection, the sponsor or alternate sponsor determines that revocation of the contractual performance agreement is necessary to further the intent of this chapter, the sponsor or alternate sponsor may revoke the contractual performance agreement. The sponsor or alternate sponsor shall provide for an appeal process upon such a determination.

(d) If a sponsor or alternate sponsor elects to revoke the contractual performance agreement, the sponsor or alternate sponsor, upon a request by the optional school, shall provide technical assistance to the optional school in completing the plan required and carrying out the tasks identified in subsection (7) of this section.

(7) An optional school planning to close or anticipating revocation or nonrenewal of its contractual performance agreement shall provide a plan setting forth a timeline and the responsible parties for disposition of students and student records and disposition of finances.

(a) Immediately following the decision to close a school, the school must:

(i) Submit to the sponsor or alternate sponsor a list of parent addresses and proof that the school has communicated the impending closure of the school to all parents and staff;

(ii) Assign staff responsible for transition of student records and for providing assistance to students and parents in transferring from the optional school to the district public, private, or home school chosen by the family;

(iii) Provide the names and contact information for staff responsible for transfer of student records, as well as the projected transition tasks and timelines to the sponsor or alternate sponsor, and upon completion of student transition, provide a list of students and a brief description of the disposition of their student records to the sponsor or alternate sponsor.

(b) Prior to closing the optional school the optional school board of directors shall:

(i) Identify a trustee who will, through the process of closing the school and for a term of ten years thereafter, assume responsibility for school and student records, and notify the sponsor or alternate sponsor of the name and contact information for the trustee;

(ii) Determine the amount of anticipated revenue due to the school as well as anticipated liabilities, and provide a complete asset and liability report to the sponsor or alternate sponsor;

(iii) Create a current and projected payroll and payroll benefits commitment;

(iv) List each employee, job, and the funds necessary to complete the educational calendar balance of the year, the transition of students and records, and the administrative close-down tasks;

(v) Determine the total moneys required to complete contracts;

(vi) Schedule an audit and set aside funds to cover costs; and

(vii) Provide the sponsor or alternate sponsor with a plan for the closure of the school and final disposition of all property owned by the optional school.

NEW SECTION. Sec. 12. FUNDING. (1) For optional schools sponsored by a school district:

(a) For purposes of funding, students in optional schools shall be considered students of the sponsoring district for state apportionment purposes. Without violating section 13 of this act, the sponsoring school district shall provide prompt and timely funding for optional schools in amounts the schools would have generated if the students were enrolled in a nonoptional public school in the district except that an optional school shall not generate eligibility for small school assistance. Funding for optional schools shall include regular apportionment, categorical, student achievement, and nonbasic education moneys, as appropriate and shall be based on enrollment, staffing, and other financial information submitted by the optional school to the school district as required to determine state apportionment amounts;

(b) Local levy moneys approved by the voters before the effective date of a contractual performance agreement between a school district and an applicant shall not be allocated to a new optional school; however, the school district shall allocate levy moneys to a conversion optional school. For levies approved after the effective date of a contractual performance agreement, optional schools shall be included in levy planning, budgets, and funding distribution in the same manner as other district-sponsored public schools in the district; and

(c) An optional school is eligible for state matching funds for common school construction if a sponsoring school district determines it has received voter approval of local capital funds for the project.

(2) For optional schools sponsored by an educational service district or an institution of higher education:

(a) For purposes of funding, the optional school shall be considered a separate school district for state apportionment purposes only. Without violating section 13 of this act, the superintendent of public instruction shall provide prompt and timely funding for optional schools through the apportionment funding formulas in amounts the schools would have generated if the students were enrolled in a school district except that an optional school shall not generate eligibility for small school assistance. The funding shall include regular apportionment, categorical, student achievement, and nonbasic education moneys and shall be based on enrollment, staffing, and other financial information submitted by the optional school to the superintendent of public instruction, as required to determine state apportionment amounts. Those allocations to optional schools that are included in RCW 84.52.0531(3) (a) through (c) shall be included in the levy base of the district in which the optional school is located.

(b) No local levy money may be allocated to an optional school if the optional school is sponsored by an educational service district or an institution of higher education.

(3) To be eligible to receive state categorical program funding, an optional school must serve students who would be eligible for program funding if served by the school district.

(4) Sponsors and alternate sponsors shall submit, by November 1st of each year, to the office of the superintendent of public instruction annual year-end financial information, as prescribed by the superintendent, for each optional school sponsored in the previous school year.

(5) A conversion optional school shall be entitled to the continued rent-free use of its existing facility, regardless of whether the conversion school is sponsored by the local school district, or by an alternate sponsor if the district has consented to such alternate sponsorship. The district shall remain responsible for major repairs and safety upgrades that may be required for the continued use of the facility as a public school. The optional school shall be responsible for routine maintenance of the facility, including but not limited to cleaning, painting, gardening, and landscaping.

NEW SECTION. Sec. 13. ADMINISTRATION FEE. To offset costs of oversight and administering the contractual performance agreement, a sponsor or an alternate sponsor may retain three percent of state funding and local excess levy funding, if applicable, that is being driven to the optional school. Except for the administration fee in this section, no other offsets or deductions are allowed, whether for central administration or other off-site support services, from an optional school's per-pupil share of state appropriations, local levies, or other funds, unless the optional school has contracted with a school district to obtain specific additional services.

NEW SECTION. Sec. 14. LEAVES OF ABSENCE. If a school district employee makes a written request for an extended leave of absence to work at an optional school, the school district shall grant the request. The school district may require that the request for a leave be made up to ninety days before the employee would otherwise have to report for duty. The leave shall be granted for up to three years. If the employee returns to the school district within the three-year period, the employee shall be hired before the district hires anyone else with fewer years of service, with respect to any position for which the returning employee is certificated or otherwise qualified.

NEW SECTION. Sec. 15. STUDY OF OPTIONAL SCHOOLS. Subject to funding, the Washington institute for public policy shall study the implementation and effectiveness of this act. The institute shall report to the legislature on the effectiveness of optional schools in raising student achievement and the impact of optional schools. The institute also shall examine and discuss whether and how optional schools have enhanced education reform efforts and recommend whether relaxing or eliminating certain regulatory requirements for other public schools could result in improved school performance at those schools. The institute shall recommend changes to this chapter including improvements that could be made to the application and approval process. A preliminary report of the study is due to the legislature by March 1, 2006, and a final report is due September 1, 2007.

NEW SECTION. Sec. 16. NUMBER OF OPTIONAL SCHOOLS. (1) Applications for optional schools may begin on the effective date of this section. The maximum number of new optional schools that may be established under a contractual performance agreement approved in accordance with this chapter is:

(a) In the first year commencing July 1, 2003, and in the second year commencing July 1, 2004, not more than five per year; and

(b) In each of the next four years, commencing July 1st of each year beginning in 2005 and ending in 2008, not more than fifteen per year.

(2) These annual allocations shall be cumulative so that if the maximum number of allowable new contractual performance agreements is not reached in any given year the maximums shall be increased accordingly for the successive years.

(3) Consistent with the legislative intent of this chapter, a majority of the annual allowable new optional schools that may be established under subsection (1) of this section shall be reserved until the 31st day after the effective date of this section, and until April 1st of each year beginning in 2004 and ending in 2008, for the implementation of optional schools established for the primary purpose of serving educationally disadvantaged students, and that are located in, or accessible to students who live in, geographic areas in which a large proportion of the students have difficulty meeting state academic content and student achievement standards, or geographic areas, including urban and rural areas, in which a large proportion or number of public schools have been identified for improvement, corrective action, or restructuring under the federal no child left behind act of 2001.

(4) Sponsors and alternate sponsors shall promptly notify the superintendent of public instruction when a contractual performance agreement is approved, and shall indicate whether the optional school's primary purpose is to serve educationally disadvantaged students. In order to ensure compliance with the annual limits for the establishment of new optional schools, authorization from the superintendent of public instruction must be obtained before implementing an approved contractual performance agreement for a new school. If the maximum number of new contractual performance agreements under subsections (1) and (3) of this section has not been reached when the sponsor notifies the superintendent of the approval, the superintendent shall authorize the implementation of the approved contractual performance agreement and the establishment of the school. If the contractual performance agreements reserved under subsection (3) of this section are not authorized within thirty days of the effective date of this section, or by March 31st of each year thereafter and ending in 2008, the superintendent of public instruction shall notify the sponsors and alternate sponsors of any other approved contractual performance agreements for which authorization has not been granted, and shall authorize the implementation of those contractual performance agreements within the annual limits, regardless of whether those contractual performance agreements meet the requirements of subsection (3) of this section.

(5) The superintendent of public instruction shall notify eligible sponsors and eligible alternate sponsors when the maximum allowable number of new contractual performance agreements is approved each year. If the maximum number is not reached by the 31st day after the effective date of this section, or by March 31st of each year thereafter, the superintendent shall report on the number of contractual performance agreements approved.

(6) If the superintendent receives simultaneous notification of approved contractual performance agreements that exceed the annual allowable limits in subsections (1) and (3) of this section, the superintendent shall select approved contractual performance agreements for authorization under subsection (4) of this section through a lottery process, and shall assign implementation dates accordingly.

(7) The maximum number of optional schools allowed under this section does not include public schools converting to optional public schools; however, conversion optional schools shall be considered optional schools for the purpose of notice to the superintendent of public instruction required under subsection (4) of this section.

NEW SECTION. Sec. 17. A new section is added to chapter 41.56 RCW to read as follows:

This section applies to optional schools as defined in section 2 of this act and the optional school's employees included in the bargaining unit. The bargaining unit of employees of optional schools must be limited to the employees of the optional school and must be separate from other bargaining units in the school district or educational service district unless the optional school is a public school that has converted to an optional school. The employees of public schools that have converted to an optional school shall remain members of the bargaining units in the school district.

This section, designating optional schools as employers and optional school employees as members under the teachers' retirement systems, the school employees' retirement systems, and the public employees' retirement systems, applies only if the department of retirement systems receives determinations from the internal revenue service and the United States department of labor that such participation does not jeopardize the status of these retirement systems as governmental plans under the federal employees' retirement income security act and the internal revenue code.

NEW SECTION. Sec. 18. A new section is added to chapter 41.59 RCW to read as follows:

(1) This section applies to collective bargaining agreements between optional schools and the employees of optional schools included in the bargaining unit.

(a) The bargaining unit of employees of conversion optional schools must be limited to the employees of the optional school and must be separate from other bargaining units in the school district or educational service district for at least the first five years of operation of the optional school, after which the employees of a conversion optional school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the optional school is located.

(b) The bargaining unit of employees of new optional schools must be limited to the employees of the optional school and must be separate from other bargaining units in the school district or educational service district for at least the first five years of operation of the optional school, after which the employees of a new optional school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the optional school is located.

(2) This section, designating optional schools as employers and optional school employees as members under the teachers' retirement systems, the school employees' retirement systems, and the public employees' retirement systems, takes effect only if the department of retirement systems receives determinations from the internal revenue service and the United States department of labor that such participation does not jeopardize the status of these retirement systems as governmental plans under the federal employees' retirement income security act and the internal revenue code.

Sec. 19. RCW 41.59.080 and 1998 c 244 s 11 are each amended to read as follows:

The commission, upon proper application for certification as an exclusive bargaining representative or upon petition for change of unit definition by the employer or any employee organization within the time limits specified in RCW 41.59.070(3), and after hearing upon reasonable notice, shall determine the unit appropriate for the purpose of collective bargaining. In determining, modifying or combining the bargaining unit, the commission shall consider the duties, skills, and working conditions of the educational employees; the history of collective bargaining; the extent of organization among the educational employees; and the desire of the educational employees; except that:

(1) A unit including nonsupervisory educational employees shall not be considered appropriate unless it includes all such nonsupervisory educational employees of the employer; and

(2) A unit that includes only supervisors may be considered appropriate if a majority of the employees in such category indicate by vote that they desire to be included in such a unit; and

(3) A unit that includes only principals and assistant principals may be considered appropriate if a majority of such employees indicate by vote that they desire to be included in such a unit; and

(4) A unit that includes both principals and assistant principals and other supervisory employees may be considered appropriate if a majority of the employees in each category indicate by vote that they desire to be included in such a unit; and

(5) A unit that includes supervisors and/or principals and assistant principals and nonsupervisory educational employees may be considered appropriate if a majority of the employees in each category indicate by vote that they desire to be included in such a unit; and

(6) A unit that includes only employees in vocational-technical institutes or occupational skill centers may be considered to constitute an appropriate bargaining unit if the history of bargaining in any such school district so justifies; and

(7) Notwithstanding the definition of collective bargaining, a unit that contains only supervisors and/or principals and assistant principals shall be limited in scope of bargaining to compensation, hours of work, and the number of days of work in the annual employment contracts; and

(8) The bargaining unit of certificated employees of school districts, educational service districts, or institutions of higher education that are education providers under chapter 28A.193 RCW must be limited to the employees working as education providers to juveniles in each adult correctional facility maintained by the department of corrections and must be separate from other bargaining units in school districts, educational service districts, or institutions of higher education; and

(9) Except as provided in sections 17 and 18 of this act, the bargaining unit for employees of optional schools as defined in section 2 of this act must be limited to the employees of the optional school and must be separate from other bargaining units in the school district or educational service district.

Sec. 20. RCW 28A.150.010 and 1969 ex.s. c 223 s 28A.01.055 are each amended to read as follows:

Public schools shall mean the common schools as referred to in Article IX of the state Constitution and those schools and institutions of learning having a curriculum below the college or university level as now or may be established by law and maintained at public expense, including optional schools under chapter 28A.-- RCW (sections 1 through 16 and 21 of this act).

NEW SECTION. Sec. 21. CAPTIONS NOT LAW. Captions used in this chapter do not constitute any part of the law.

NEW SECTION. Sec.22. Sections 1 through 16 and 21 of this act constitute a new chapter in Title 28A RCW.

NEW SECTION. Sec. 23. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."

Correct the title.

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