READ FIRST TIME 02/04/03.   

     AN ACT Relating to charter schools; amending RCW 41.59.080 and 28A.150.010; adding a new section to chapter 41.56 RCW; adding a new section to chapter 41.59 RCW; and adding a new chapter to Title 28A RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   INTENT. The legislature intends to authorize the establishment of public charter 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 charter schools to function as an integral element of the public school system maintained at public expense, free from discrimination, and open to all students in the state, 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 the chartering process as an optional 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 charter 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 the chartering process 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 charter 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 charter.
     (2) "Applicant" means a nonprofit corporation that has submitted an application to a sponsor or an alternate sponsor to obtain approval to operate a charter 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 charter school.
     (4) "Charter" means a five-year contract between an applicant and a sponsor or an alternate sponsor. The charter establishes, in accordance with this chapter, the terms and conditions for the management, operation, and educational program of the charter school.
     (5) "Charter school" means a public school managed by an applicant's board of directors and operating independently of any school district board under a charter approved in accordance with this chapter.
     (6) "Conversion charter school" means a public school converted to a charter public school through the chartering process in accordance with this chapter.
     (7) "Educationally disadvantaged students" includes students with limited English proficiency; students with special needs, including students with disabilities; economically disadvantaged students, including 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.
     (8) "Sponsor" means the board of directors of the school district in which the proposed charter school will be located, when such board has approved a charter.

NEW SECTION.  Sec. 3   CHARTER SCHOOLS -- POWERS. (1) In carrying out its duty to manage and operate the charter school, the board of directors of a charter school may:
     (a) Hire, manage, and discharge any charter school employee in accordance with the terms of this chapter and that school's charter;
     (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 charters and charter school contracts with other public and private entities must include provisions regarding the disposition of the property if the charter school fails to open as planned, closes, or the charter 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 charter school sponsor, the school district in which the charter 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 charter school sponsor, the school district in which the charter 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 charter school and its students gifts, grants, and donations from other governmental and private entities, excluding sectarian or religious organizations. Charter schools may not accept any gifts or donations the conditions of which violate this chapter.
     (2) A charter school may not charge tuition, levy taxes, or issue tax-backed bonds, however it may charge fees for optional noncredit extracurricular events.
     (3) Neither a charter school sponsor, an alternate sponsor, nor the school district in which the charter school is located is liable for acts or omissions of a charter school, including but not limited to acts or omissions related to the application, the charter, the operation, the performance, and the closure of the charter school.

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

NEW SECTION.  Sec. 5   CHARTER SCHOOLS -- EXEMPTIONS. (1) A charter school shall operate independently of any school district board, under a charter approved by a sponsor or an alternate sponsor under this chapter.
     (2) Charter 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 charter schools in accordance with this chapter and in the school's approved charter.
     (3) A charter school's board of directors is encouraged to implement a quality management system and to conduct an annual self-assessment.
     (4) All approved charter 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 free and reduced priced meal programs to the same extent as is required for other public schools;
     (c) 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;
     (d) Employ certificated instructional staff as required in RCW 28A.410.010, however charter schools may hire noncertificated instructional staff of unusual competence and in exceptional cases as specified in RCW 28A.150.260;
     (e) Comply with the employee record check requirements in RCW 28A.400.303;
     (f) 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;
     (g) 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, a charter school is not required to bear the expense of such a performance audit;
     (h) Comply with the annual performance report under RCW 28A.655.110;
     (i) Follow the performance improvement goals and requirements adopted by the academic achievement and accountability commission by rule under RCW 28A.655.030;
     (j) Be subject to the accountability requirements of the federal no child left behind act of 2001, including Title I requirements;
     (k) Comply with and be subject to the requirements under the individuals with disabilities education act, as amended in 1997;
     (l) Report at least annually to the board of directors of the school district in which the charter 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 charter school on progress toward the student performance goals specified in the charter;
     (m) Comply with the open public meetings act in chapter 42.30 RCW and open public records requirements in RCW 42.17.250; and
     (n) Be subject to and comply with legislation enacted after the effective date of this section governing the operation and management of charter schools.
     (5) A member of a board of directors of a charter 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 charter schools, a charter 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, a charter school shall conduct timely outreach and marketing efforts to educationally disadvantaged students in the school district in which the charter school will be located.
     (2) A conversion charter school must be structured to provide sufficient capacity to enroll all students who wish to remain enrolled in the school after its conversion to a charter school, and may not displace students enrolled before the chartering process. If, after enrollment of these students, capacity is insufficient to enroll all other students remaining who have submitted a timely application, the charter 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 charter 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   CHARTER APPLICATION--CHARTERING PROCESS.
(1) An applicant may apply to a sponsor or an alternate sponsor to establish a charter school in accordance with this section.
     (2) An application for a charter school must be submitted first to the board of directors of the school district in which the proposed charter 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 charter; 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 charter 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 a charter 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 charter application and provide technical assistance.
     (6) Alternate sponsors must comply with the procedures in subsections (1) through (4) of this section for consideration of the charter application. 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 governing board of an institution of higher education that has approved a charter application may, after exercising due diligence, assign authority for the administration of the charter and the oversight and monitoring of the charter school to an agency or official designated by and accountable to the governing board of the institution. In all cases, the governing board of the institution is responsible for ensuring that the duties of the alternate sponsor under this chapter are fulfilled.
     (8) The superintendent of public instruction shall maintain copies of all approved charter applications. An applicant may obtain copies of those applications from the office of the superintendent of public instruction.
     (9) 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 chartering 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 charter application and approval processes.
     (10) Consistent with the corrective action provisions in the federal no child left behind act of 2001, the superintendent of public instruction may use the chartering 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 a charter 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 a charter school by the board of directors of the local educational service district.

NEW SECTION.  Sec. 8   APPLICATION REQUIREMENTS. The charter 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 charter 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 charter 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 charter school falls below standards established in its charter;
     (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 charter school;
     (14) Documentation sufficient to demonstrate that the charter school will have the liquid assets available to operate the school on an ongoing and sound financial basis; and
     (15) Supporting documentation for any additional requirements that are appropriate and reasonably related to the operation of a charter school that a sponsor or alternate sponsor may impose as a condition of approving the charter.

NEW SECTION.  Sec. 9   APPROVAL CRITERIA. A sponsor or alternate sponsor may approve an application for a charter 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 a charter 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 charter school operations in this chapter. The sponsor or alternate sponsor must make a finding of whether or not the charter 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 charter school falls below standards established in its charter;
     (8) The financial plan for the school is designed to reasonably support the charter 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 charter school;
     (14) The charter school will have the liquid assets available to operate the school on an ongoing and sound financial basis; and
     (15) The applicant has met any additional requirements that are appropriate and reasonably related to the operation of a charter school that a sponsor or alternate sponsor imposed as a condition for approval of the charter.

NEW SECTION.  Sec. 10   CHARTER AGREEMENT -- AMENDMENT. (1) A charter application approved by a sponsor or an alternate sponsor with any changes or additions, and signed by an authorized representative of the applicant and the sponsor or alternate sponsor, constitutes a charter. A charter 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 charter may be amended during its term at the request of the charter school board of directors and on the approval of the sponsor or alternate sponsor.
     (3) A charter may not prohibit and must provide for application of laws applicable to charter schools or to charter school boards of directors enacted after the effective date of this section.

NEW SECTION.  Sec. 11   CHARTER RENEWAL AND REVOCATION. (1) An approved plan to establish a charter school is effective for five years from the first day of operation. At the conclusion of the first three years of operation, the charter 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 charter.
     (2) A charter school renewal application must include:
     (a) A report on the progress of the charter 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 charter;
     (b) A financial statement that discloses the costs of administration, instruction, and other expenditure objects and activities of the charter school; and
     (c) All audit information from independent sources regarding the charter school, if available.
     (3) The sponsor or alternate sponsor shall reject the application for renewal if the academic progress of students in the charter 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 charter 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 charter school materially violated its charter with the sponsor or alternate sponsor;
     (b) The students enrolled in the charter school failed to meet student performance standards identified in the charter, including the student performance standards adopted by rule by the academic achievement and accountability commission in accordance with RCW 28A.655.030;
     (c) The charter school failed to meet generally accepted standards of fiscal management; or
     (d) The charter 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 charter school's request for renewal to the charter school within three months of the request for renewal to allow the charter school an opportunity to correct identified deficiencies in its operation. At the request of the board of directors of the charter 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 charter school.
     (6)(a) The sponsor or alternate sponsor may revoke a previously approved charter before the expiration of the term of the charter, and before application for renewal, if any of the following occurred:
     (i) The charter school materially violated its charter with the sponsor or alternate sponsor;
     (ii) The charter school failed to meet generally accepted standards of fiscal management; or
     (iii) The charter 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 charter may not be revoked unless the sponsor or alternate sponsor first provides:
     (i) Written notice to the charter school of the specific violations alleged;
     (ii) One or more public hearings in the school district in which the charter school is located; and
     (iii) A reasonable opportunity and a sufficient period of time for the charter 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 charter is necessary to further the intent of this chapter, the sponsor or alternate sponsor may revoke the charter. 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 charter, the sponsor or alternate sponsor, upon a request by the charter school, shall provide technical assistance to the charter school in completing the plan required and carrying out the tasks identified in subsection (7) of this section.
     (7) A charter school planning to close or anticipating revocation or nonrenewal of its charter 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 charter 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 charter school the charter 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 charter school.

NEW SECTION.  Sec. 12   FUNDING. (1) For charter schools sponsored by a school district:
     (a) For purposes of funding, students in charter 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 charter schools in amounts the schools would have generated if the students were enrolled in a noncharter public school in the district except that a charter school shall not generate eligibility for small school assistance. Funding for charter 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 charter 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 charter between a school district and an applicant shall not be allocated to a new charter school; however, the school district shall allocate levy moneys to a conversion charter school. For levies approved after the effective date of a charter, charter 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) A charter 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 charter schools sponsored by an educational service district or an institution of higher education:
     (a) For purposes of funding, the charter school shall be considered a separate school district only for state apportionment purposes and safety net eligibility. Without violating section 13 of this act, the superintendent of public instruction shall provide prompt and timely funding for charter schools through the apportionment funding formulas in amounts the schools would have generated if the students were enrolled in a school district except that a charter 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 charter school to the superintendent of public instruction, as required to determine state apportionment amounts. Those allocations to charter 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 charter school is located.
     (b) No local levy money may be allocated to a charter school if the charter school is sponsored by an educational service district or an institution of higher education.
     (3) To be eligible to receive state categorical program funding, a charter 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 charter school sponsored in the previous school year.
     (5) A conversion charter 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 charter 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 charter, a sponsor or an alternate sponsor may retain up to three percent of state funding and local excess levy funding, if applicable, that is being driven to the charter 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 a charter school's per-pupil share of state appropriations, local levies, or other funds, unless the charter 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 a charter 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 any request for up to two years. If the employee returns to the school district within the two-year period, the employee shall be hired before the district hires anyone else with fewer years of statewide service, with respect to any position for which the returning employee is certificated or otherwise qualified.

NEW SECTION.  Sec. 15   STUDY OF CHARTER 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 charter schools in raising student achievement and the impact of charter schools. The institute also shall examine and discuss whether and how charter 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 CHARTER SCHOOLS. (1) Applications for charter schools may begin on the effective date of this section. The maximum number of new charter schools that may be established under a charter 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 charters 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 charter 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 charter 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 charter is approved, and shall indicate whether the charter school's primary purpose is to serve educationally disadvantaged students. In order to ensure compliance with the annual limits for the establishment of new charter schools, authorization from the superintendent of public instruction must be obtained before implementing an approved charter for a new school. If the maximum number of new charters 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 charter and the establishment of the school. If the charters 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 charters for which authorization has not been granted, and shall authorize the implementation of those charters within the annual limits, regardless of whether those charters 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 charters 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 charters approved.
     (6) If the superintendent receives simultaneous notification of approved charters that exceed the annual allowable limits in subsections (1) and (3) of this section, the superintendent shall select approved charters for authorization under subsection (4) of this section through a lottery process, and shall assign implementation dates accordingly.
     (7) The maximum number of charter schools allowed under this section does not include public schools converting to charter public schools; however, conversion charter schools shall be considered charter 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 charter schools as defined in section 2 of this act and the charter school's employees included in the bargaining unit. The bargaining unit of employees of charter schools must be limited to the employees of the charter school and must be separate from other bargaining units in the school district or educational service district unless the charter school is a public school that has converted to a charter school. The employees of public schools that have converted to a charter school shall remain members of the bargaining units in the school district.
     This section, designating charter schools as employers and charter 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 charter schools and the employees of charter schools included in the bargaining unit.
     (a) The bargaining unit of employees of conversion charter schools must be limited to the employees of the charter 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 charter school, after which the employees of a conversion charter school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the charter school is located.
     (b) The bargaining unit of employees of new charter schools must be limited to the employees of the charter 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 charter school, after which the employees of a new charter school may indicate by a majority vote they desire to become members of the bargaining unit in the school district in which the charter school is located.
     (2) This section, designating charter schools as employers and charter 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 charter schools as defined in section 2 of this act must be limited to the employees of the charter 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 charter 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.