INITIATIVE 1240

To the People

Chapter 2, Laws of 2013

Regular Session

Public Charter Schools

EFFECTIVE DATE: December 6, 2012

Approved by the

People of the State of Washington

in the General Election on

November 6, 2012

ORIGINALLY FILED

May 31, 2012

Secretary of State

 1AN ACT Relating to public charter schools; amending RCW

 228A.150.010, 28A.315.005, and 41.05.011; adding a new section to

 3chapter 41.32 RCW; adding a new section to chapter 41.35 RCW; adding a

 4new section to chapter 41.40 RCW; adding a new section to chapter 41.56

 5RCW; adding a new section to chapter 41.59 RCW; and adding a new

 6chapter to Title 28A RCW.

 7BE IT ENACTED BY THE PEOPLE OF THE STATE OF WASHINGTON:

 8PART I

 9INTENT, PURPOSE, AND FINDINGS

10NEW SECTION. Sec. 101. (1) The people of the state of Washington

11in enacting this initiative measure find:

12(a) In accordance with Article IX, section 1 of the state

13Constitution, "it is the paramount duty of the state to make ample

14provision for the education of all children residing within its

15borders, without distinction or preference on account of race, color,

16caste, or sex";

17(b) All students deserve excellent educational opportunities and

18the highest quality standards of public education available;

 1(c) Many of our public schools are failing to address inequities in

 2educational opportunities for all students, including academic

 3achievement, drop-out rates, and other measures of educational success

 4for students across all economic, racial, ethnic, geographic, and other

 5groups;

 6(d) It is a priority of the people of the state of Washington to

 7improve the quality of our public schools and the education and

 8academic achievement of all students throughout our state;

 9(e) Forty-one states have public charter schools with many ranked

10higher in student performance than Washington's schools;

11(f) Allowing public charter schools in Washington will give parents

12more options to find the best learning environment for their children;

13(g) Public charter schools free teachers and principals from

14burdensome regulations that limit other public schools, giving them the

15flexibility to innovate and make decisions about staffing, curriculum,

16and learning opportunities to improve student achievement and outcomes;

17(h) Public charter schools are designed to find solutions to

18problems that affect chronically underperforming schools and to better

19serve at-risk students who most need help;

20(i) Public charter schools have cost-effectively improved student

21performance and academic achievement for students throughout the

22country, especially for students from the lowest-performing public

23schools;

24(j) Public charter schools serving low-income, urban students often

25outperform traditional public schools in improving student outcomes and

26are closing the achievement gap for at-risk students;

27(k) The Washington supreme court recently concluded, in McLeary v.

28State, that "The State has failed to meet its duty under Article IX,

29section 1 [to amply provide for the education of all children within

30its borders] by consistently providing school districts with a level of

31resources that falls short of the actual costs of the basic education

32program";

33(l) The opportunity to provide education through public charter

34schools will create efficiencies in the use of the resources the state

35provides to school districts;

36(m) Public charter schools, as authorized in chapter . . ., Laws of

372013 (this act), are "common schools" and part of the "general and

 1uniform system of public schools" provided by the legislature as

 2required by Article IX, section 2 of the state Constitution; and

 3(n) This initiative will:

 4(i) Allow a maximum of up to forty public charter schools to be

 5established over a five-year period as independently managed public

 6schools operated only by qualified nonprofit organizations approved by

 7the state;

 8(ii) Require that teachers in public charter schools be held to the

 9same certification requirements as teachers in other public schools;

10(iii) Require that there will be annual performance reviews of

11public charter schools created under this measure, and that the

12performance of these schools be evaluated to determine whether

13additional public charter schools should be allowed;

14(iv) Require that public charter schools be free and open to all

15students just like traditional public schools are, and that students be

16selected by lottery to ensure fairness if more students apply than a

17school can accommodate;

18(v) Require that public charter schools be subject to the same

19academic standards as existing public schools;

20(vi) Require public charter schools to be authorized and overseen

21by a state charter school commission, or by a local school board;

22(vii) Require that public charter schools receive funding based on

23student enrollment just like existing public schools;

24(viii) Allow public charter schools to be free from many

25regulations so that they have more flexibility to set curriculum and

26budgets, hire and fire teachers and staff, and offer more customized

27learning experiences for students; and

28(ix) Give priority to opening public charter schools that serve at-

29risk student populations or students from low-performing public

30schools.

31(2) Therefore, the people enact this initiative measure to

32authorize a limited number of public charter schools in the state of

33Washington, to be operated by qualified nonprofit organizations with

34strong accountability and oversight, and to evaluate the performance of

35these schools and potential benefits of new models for improving

36academic achievement for all students.

 1PART II

 2AUTHORIZING CHARTER SCHOOLS

 3NEW SECTION. Sec. 201. DEFINITIONS--CHARTER SCHOOLS. The

 4definitions in this section apply throughout this chapter unless the

 5context clearly requires otherwise.

 6(1) "Applicant" means a nonprofit corporation that has submitted an

 7application to an authorizer. The nonprofit corporation must be either

 8a public benefit nonprofit corporation as defined in RCW 24.03.490, or

 9a nonprofit corporation as defined in RCW 24.03.005 that has applied

10for tax exempt status under section 501(c)(3) of the internal revenue

11code of 1986 (26 U.S.C. Sec. 501(c)(3)). The nonprofit corporation may

12not be a sectarian or religious organization and must meet all of the

13requirements for a public benefit nonprofit corporation before

14receiving any funding under section 222 of this act.

15(2) "At-risk student" means a student who has an academic or

16economic disadvantage that requires assistance or special services to

17succeed in educational programs. The term includes, but is not limited

18to, students who do not meet minimum standards of academic proficiency,

19students who are at risk of dropping out of high school, students in

20chronically low-performing schools, students with higher than average

21disciplinary sanctions, students with lower participation rates in

22advanced or gifted programs, students who are limited in English

23proficiency, students who are members of economically disadvantaged

24families, and students who are identified as having special educational

25needs.

26(3) "Authorizer" means an entity approved under section 209 of this

27act to review, approve, or reject charter school applications; enter

28into, renew, or revoke charter contracts with applicants; and oversee

29the charter schools the entity has authorized.

30(4) "Charter contract" means a fixed term, renewable contract

31between a charter school and an authorizer that outlines the roles,

32powers, responsibilities, and performance expectations for each party

33to the contract.

34(5) "Charter school" or "public charter school" means a public

35school governed by a charter school board and operated according to the

36terms of a charter contract executed under this chapter and includes a

37new charter school and a conversion charter school.

 1(6) "Charter school board" means the board of directors appointed

 2or selected under the terms of a charter application to manage and

 3operate the charter school.

 4(7) "Commission" means the Washington charter school commission

 5established in section 208 of this act.

 6(8) "Conversion charter school" means a charter school created by

 7converting an existing noncharter public school in its entirety to a

 8charter school under this chapter.

 9(9) "New charter school" means any charter school established under

10this chapter that is not a conversion charter school.

11(10) "Parent" means a parent, guardian, or other person or entity

12having legal custody of a child.

13(11) "Student" means any child eligible under RCW 28A.225.160 to

14attend a public school in the state.

15NEW SECTION. Sec. 202. LEGAL STATUS. A charter school

16established under this chapter:

17(1) Is a public, common school open to all children free of charge;

18(2) Is a public, common school offering any program or course of

19study that a noncharter public school may offer, including one or more

20of grades kindergarten through twelve;

21(3) Is governed by a charter school board according to the terms of

22a renewable, five-year charter contract executed under section 216 of

23this act;

24(4) Is a public school to which parents choose to send their

25children;

26(5) Functions as a local education agency under applicable federal

27laws and regulations and is responsible for meeting the requirements of

28local education agencies and public schools under those federal laws

29and regulations, including but not limited to compliance with the

30individuals with disabilities education improvement act (20 U.S.C. Sec.

311401 et seq.), the federal educational rights and privacy act (20

32U.S.C. Sec. 1232g), and the elementary and secondary education act (20

33U.S.C. Sec. 6301 et seq.).

34NEW SECTION. Sec. 203. CHARTER SCHOOL BOARDS--POWERS. (1) To

35carry out its duty to manage and operate the charter school and carry

36out the terms of its charter contract, a charter school board may:

 1(a) Hire, manage, and discharge any charter school employee in

 2accordance with the terms of this chapter and that school's charter

 3contract;

 4(b) Receive and disburse funds for the purposes of the charter

 5school;

 6(c) Enter into contracts with any school district, educational

 7service district, or other public or private entity for the provision

 8of real property, equipment, goods, supplies, and services, including

 9educational instructional services and including for the management and

10operation of the charter school to the same extent as other noncharter

11public schools, as long as the charter school board maintains oversight

12authority over the charter school. Contracts for management operation

13of the charter school may only be with nonprofit organizations;

14(d) Rent, lease, purchase, or own real property. All charter

15contracts and contracts with other entities must include provisions

16regarding the disposition of the property if the charter school fails

17to open as planned or closes, or if the charter contract is revoked or

18not renewed;

19(e) Issue secured and unsecured debt, including pledging,

20assigning, or encumbering its assets to be used as collateral for loans

21or extensions of credit to manage cash flow, improve operations, or

22finance the acquisition of real property or equipment: PROVIDED, That

23the public charter school may not pledge, assign, or encumber any

24public funds received or to be received pursuant to section 222 of this

25act. The debt is not a general, special, or moral obligation of the

26state, the charter school authorizer, the school district in which the

27charter school is located, or any other political subdivision or agency

28of the state. Neither the full faith and credit nor the taxing power

29of the state or any political subdivision or agency of the state may be

30pledged for the payment of the debt;

31(f) Solicit, accept, and administer for the benefit of the charter

32school and its students, gifts, grants, and donations from individuals

33or public or private entities, excluding from sectarian or religious

34organizations. Charter schools may not accept any gifts or donations

35the conditions of which violate this chapter or other state laws; and

36(g) Issue diplomas to students who meet state high school

37graduation requirements established under RCW 28A.230.090. A charter

38school board may establish additional graduation requirements.

 1(2) A charter school board may not levy taxes or issue tax-backed

 2bonds. A charter school board may not acquire property by eminent

 3domain.

 4NEW SECTION. Sec. 204. CHARTER SCHOOLS--APPLICABILITY OF STATE

 5LAWS. (1) A charter school must operate according to the terms of its

 6charter contract and the provisions of this chapter.

 7(2) All charter schools must:

 8(a) Comply with local, state, and federal health, safety, parents'

 9rights, civil rights, and nondiscrimination laws applicable to school

10districts and to the same extent as school districts, including but not

11limited to chapter 28A.642 RCW (discrimination prohibition) and chapter

1228A.640 RCW (sexual equality);

13(b) Provide basic education, as provided in RCW 28A.150.210,

14including instruction in the essential academic learning requirements

15and participate in the statewide student assessment system as developed

16under RCW 28A.655.070;

17(c) Employ certificated instructional staff as required in RCW

1828A.410.025: PROVIDED, That charter schools may hire noncertificated

19instructional staff of unusual competence and in exceptional cases as

20specified in RCW 28A.150.203(7);

21(d) Comply with the employee record check requirements in RCW

2228A.400.303;

23(e) Adhere to generally accepted accounting principles and be

24subject to financial examinations and audits as determined by the state

25auditor, including annual audits for legal and fiscal compliance;

26(f) Comply with the annual performance report under RCW

2728A.655.110;

28(g) Be subject to the performance improvement goals adopted by the

29state board of education under RCW 28A.305.130;

30(h) Comply with the open public meetings act in chapter 42.30 RCW

31and public records requirements in chapter 42.56 RCW; and

32(i) Be subject to and comply with legislation enacted after the

33effective date of this section governing the operation and management

34of charter schools.

35(3) Public charter schools must comply with all state statutes and

36rules made applicable to the charter school in the school's charter

37contract and are subject to the specific state statutes and rules

 1identified in subsection (2) of this section. Charter schools are not

 2subject to and are exempt from all other state statutes and rules

 3applicable to school districts and school district boards of directors,

 4for the purpose of allowing flexibility to innovate in areas such as

 5scheduling, personnel, funding, and educational programs in order to

 6improve student outcomes and academic achievement. Charter schools are

 7exempt from all school district policies except policies made

 8applicable in the school's charter contract.

 9(4) No charter school may engage in any sectarian practices in its

10educational program, admissions or employment policies, or operations.

11(5) Charter schools are subject to the supervision of the

12superintendent of public instruction and the state board of education,

13including accountability measures, to the same extent as other public

14schools, except as otherwise provided in chapter . . ., Laws of 2013

15(this act).

16NEW SECTION. Sec. 205. ADMISSION AND ENROLLMENT OF STUDENTS. (1)

17A charter school may not limit admission on any basis other than age

18group, grade level, or capacity and must enroll all students who apply

19within these bases. A charter school is open to any student regardless

20of his or her location of residence.

21(2) A charter school may not charge tuition, but may charge fees

22for participation in optional extracurricular events and activities in

23the same manner and to the same extent as do other public schools.

24(3) A conversion charter school must provide sufficient capacity to

25enroll all students who wish to remain enrolled in the school after its

26conversion to a charter school, and may not displace students enrolled

27before the chartering process.

28(4) If capacity is insufficient to enroll all students who apply to

29a charter school, the charter school must select students through a

30lottery to ensure fairness. However, a charter school must give an

31enrollment preference to siblings of already enrolled students.

32(5) The capacity of a charter school must be determined annually by

33the charter school board in consultation with the charter authorizer

34and with consideration of the charter school's ability to facilitate

35the academic success of its students, achieve the objectives specified

36in the charter contract, and assure that its student enrollment does

 1not exceed the capacity of its facility. An authorizer may not

 2restrict the number of students a charter school may enroll.

 3(6) Nothing in this section prevents formation of a charter school

 4whose mission is to offer a specialized learning environment and

 5services for particular groups of students, such as at-risk students,

 6students with disabilities, or students who pose such severe

 7disciplinary problems that they warrant a specific educational program.

 8Nothing in this section prevents formation of a charter school

 9organized around a special emphasis, theme, or concept as stated in the

10school's application and charter contract.

11NEW SECTION. Sec. 206. CHARTER SCHOOL STUDENTS. (1) School

12districts must provide information to parents and the general public

13about charter schools located within the district as an enrollment

14option for students.

15(2) If a student who was previously enrolled in a charter school

16enrolls in another public school in the state, the student's new school

17must accept credits earned by the student in the charter school in the

18same manner and according to the same criteria that credits are

19accepted from other public schools.

20(3) A charter school is eligible for state or district-sponsored

21interscholastic programs, awards, scholarships, or competitions to the

22same extent as other public schools.

23NEW SECTION. Sec. 207. AUTHORIZERS. The following entities are

24eligible to be authorizers of charter schools:

25(1) The Washington charter school commission established under

26section 208 of this act, for charter schools located anywhere in the

27state; and

28(2) School district boards of directors that have been approved by

29the state board of education under section 209 of this act before

30authorizing a charter school, for charter schools located within the

31school district's own boundaries.

32NEW SECTION. Sec. 208. WASHINGTON CHARTER SCHOOL COMMISSION. (1)

33The Washington charter school commission is established as an

34independent state agency whose mission is to authorize high quality

35public charter schools throughout the state, particularly schools

 1designed to expand opportunities for at-risk students, and to ensure

 2the highest standards of accountability and oversight for these

 3schools. The commission shall, through its management, supervision,

 4and enforcement of the charter contracts, administer the portion of the

 5public common school system consisting of the charter schools it

 6authorizes as provided in this chapter, in the same manner as a school

 7district board of directors, through its management, supervision, and

 8enforcement of the charter contracts, and pursuant to applicable law,

 9administers the charter schools it authorizes.

10(2) The commission shall consist of nine members, no more than five

11of whom shall be members of the same political party. Three members

12shall be appointed by the governor; three members shall be appointed by

13the president of the senate; and three members shall be appointed by

14the speaker of the house of representatives. The appointing

15authorities shall assure diversity among commission members, including

16representation from various geographic areas of the state and shall

17assure that at least one member is a parent of a Washington public

18school student.

19(3) Members appointed to the commission shall collectively possess

20strong experience and expertise in public and nonprofit governance;

21management and finance; public school leadership, assessment,

22curriculum, and instruction; and public education law. All members

23shall have demonstrated an understanding of and commitment to charter

24schooling as a strategy for strengthening public education.

25(4) Members shall be appointed to four-year, staggered terms, with

26initial appointments from each of the appointing authorities consisting

27of one member appointed to a one-year term, one member appointed to a

28two-year term, and one member appointed to a three-year term, all of

29whom thereafter may be reappointed for a four-year term. No member may

30serve more than two consecutive terms. Initial appointments must be

31made no later than ninety days after the effective date of this

32section.

33(5) Whenever a vacancy on the commission exists, the original

34appointing authority must appoint a member for the remaining portion of

35the term within no more than thirty days.

36(6) Commission members shall serve without compensation but may be

37reimbursed for travel expenses as authorized in RCW 43.03.050 and

3843.03.060.

 1(7) Operational and staff support for the commission shall be

 2provided by the office of the governor until the commission has

 3sufficient resources to hire or contract for separate staff support,

 4who shall reside within the office of the governor for administrative

 5purposes only.

 6(8) Sections 209 and 212 of this act do not apply to the

 7commission.

 8NEW SECTION. Sec. 209. AUTHORIZERS--APPROVAL. (1) The state

 9board of education shall establish an annual application and approval

10process and timelines for entities seeking approval to be charter

11school authorizers. The initial process and timelines must be

12established no later than ninety days after the effective date of this

13section.

14(2) At a minimum, each applicant must submit to the state board:

15(a) The applicant's strategic vision for chartering;

16(b) A plan to support the vision presented, including explanation

17and evidence of the applicant's budget and personnel capacity and

18commitment to execute the responsibilities of quality charter

19authorizing;

20(c) A draft or preliminary outline of the request for proposals

21that the applicant would, if approved as an authorizer, issue to

22solicit charter school applicants;

23(d) A draft of the performance framework that the applicant would,

24if approved as an authorizer, use to guide the establishment of a

25charter contract and for ongoing oversight and evaluation of charter

26schools;

27(e) A draft of the applicant's proposed renewal, revocation, and

28nonrenewal processes, consistent with sections 219 and 220 of this act;

29(f) A statement of assurance that the applicant seeks to serve as

30an authorizer in fulfillment of the expectations, spirit, and intent of

31this chapter, and that if approved as an authorizer, the applicant will

32fully participate in any authorizer training provided or required by

33the state; and

34(g) A statement of assurance that the applicant will provide public

35accountability and transparency in all matters concerning charter

36authorizing practices, decisions, and expenditures.

 1(3) The state board of education shall consider the merits of each

 2application and make its decision within the timelines established by

 3the board.

 4(4) Within thirty days of making a decision to approve an

 5application under this section, the state board of education must

 6execute a renewable authorizing contract with the entity. The initial

 7term of an authorizing contract shall be six years. The authorizing

 8contract must specify each approved entity's agreement to serve as an

 9authorizer in accordance with the expectations of this chapter, and may

10specify additional performance terms based on the applicant's proposal

11and plan for chartering. No approved entity may commence charter

12authorizing without an authorizing contract in effect.

13NEW SECTION. Sec. 210. AUTHORIZERS--POWERS AND DUTIES. (1)

14Authorizers are responsible for:

15(a) Soliciting and evaluating charter applications;

16(b) Approving quality charter applications that meet identified

17educational needs and promote a diversity of educational choices;

18(c) Denying weak or inadequate charter applications;

19(d) Negotiating and executing sound charter contracts with each

20authorized charter school;

21(e) Monitoring, in accordance with charter contract terms, the

22performance and legal compliance of charter schools including, without

23limitation, education and academic performance goals and student

24achievement; and

25(f) Determining whether each charter contract merits renewal,

26nonrenewal, or revocation.

27(2) An authorizer may delegate its responsibilities under this

28section to employees or contractors.

29(3) All authorizers must develop and follow chartering policies and

30practices that are consistent with the principles and standards for

31quality charter authorizing developed by the national association of

32charter school authorizers in at least the following areas:

33(a) Organizational capacity and infrastructure;

34(b) Soliciting and evaluating charter applications;

35(c) Performance contracting;

36(d) Ongoing charter school oversight and evaluation; and

37(e) Charter renewal decision making.

 1(4) Each authorizer must submit an annual report to the state board

 2of education, according to a timeline, content, and format specified by

 3the board, which includes:

 4(a) The authorizer's strategic vision for chartering and progress

 5toward achieving that vision;

 6(b) The academic and financial performance of all operating charter

 7schools overseen by the authorizer, including the progress of the

 8charter schools based on the authorizer's performance framework;

 9(c) The status of the authorizer's charter school portfolio,

10identifying all charter schools in each of the following categories:

11Approved but not yet open, operating, renewed, transferred, revoked,

12not renewed, voluntarily closed, or never opened;

13(d) The authorizer's operating costs and expenses detailed in

14annual audited financial statements that conform with generally

15accepted accounting principles; and

16(e) The services purchased from the authorizer by the charter

17schools under its jurisdiction under section 211 of this act, including

18an itemized accounting of the actual costs of these services.

19(5) Neither an authorizer, individuals who comprise the membership

20of an authorizer in their official capacity, nor the employees of an

21authorizer are liable for acts or omissions of a charter school they

22authorize.

23(6) No employee, trustee, agent, or representative of an authorizer

24may simultaneously serve as an employee, trustee, agent,

25representative, vendor, or contractor of a charter school under the

26jurisdiction of that authorizer.

27NEW SECTION. Sec. 211. AUTHORIZERS--FUNDING. (1) The state board

28of education shall establish a statewide formula for an authorizer

29oversight fee, which shall be calculated as a percentage of the state

30operating funding allocated under section 222 of this act to each

31charter school under the jurisdiction of an authorizer, but may not

32exceed four percent of each charter school's annual funding. The

33office of the superintendent of public instruction shall deduct the

34oversight fee from each charter school's allocation under section 222

35of this act and transmit the fee to the appropriate authorizer.

36(2) The state board of education may establish a sliding scale for

37the authorizer oversight fee, with the funding percentage decreasing

 1after the authorizer has achieved a certain threshold, such as after a

 2certain number of years of authorizing or after a certain number of

 3charter schools have been authorized.

 4(3) An authorizer must use its oversight fee exclusively for the

 5purpose of fulfilling its duties under section 210 of this act.

 6(4) An authorizer may provide contracted, fee-based services to

 7charter schools under its jurisdiction that are in addition to the

 8oversight duties under section 210 of this act. An authorizer may not

 9charge more than market rates for the contracted services provided. A

10charter school may not be required to purchase contracted services from

11an authorizer. Fees collected by the authorizer under this subsection

12must be separately accounted for and reported annually to the state

13board of education.

14NEW SECTION. Sec. 212. AUTHORIZERS--OVERSIGHT. (1) The state

15board of education is responsible for overseeing the performance and

16effectiveness of all authorizers approved under section 209 of this

17act.

18(2) Persistently unsatisfactory performance of an authorizer's

19portfolio of charter schools, a pattern of well-founded complaints

20about the authorizer or its charter schools, or other objective

21circumstances may trigger a special review by the state board of

22education.

23(3) In reviewing or evaluating the performance of authorizers, the

24board must apply nationally recognized principles and standards for

25quality charter authorizing. Evidence of material or persistent

26failure by an authorizer to carry out its duties in accordance with the

27principles and standards constitutes grounds for revocation of the

28authorizing contract by the state board, as provided under this

29section.

30(4) If at any time the state board of education finds that an

31authorizer is not in compliance with a charter contract, its

32authorizing contract, or the authorizer duties under section 210 of

33this act, the board must notify the authorizer in writing of the

34identified problems, and the authorizer shall have reasonable

35opportunity to respond and remedy the problems.

36(5) If an authorizer persists after due notice from the state board

37of education in violating a material provision of a charter contract or

 1its authorizing contract, or fails to remedy other identified

 2authorizing problems, the state board of education shall notify the

 3authorizer, within a reasonable amount of time under the circumstances,

 4that it intends to revoke the authorizer's chartering authority unless

 5the authorizer demonstrates a timely and satisfactory remedy for the

 6violation or deficiencies.

 7(6) In the event of revocation of any authorizer's chartering

 8authority, the state board of education shall manage the timely and

 9orderly transfer of each charter contract held by that authorizer to

10another authorizer in the state, with the mutual agreement of each

11affected charter school and proposed new authorizer. The new

12authorizer shall assume the existing charter contract for the remainder

13of the charter term.

14(7) The state board of education must establish timelines and a

15process for taking actions under this section in response to

16performance deficiencies by an authorizer.

17NEW SECTION. Sec. 213. CHARTER APPLICATIONS--CONTENT. (1)(a)

18Each authorizer must annually issue and broadly publicize a request for

19proposals for charter school applicants by the date established by the

20state board of education under section 214 of this act.

21(b) Each authorizer's request for proposals must:

22(i) Present the authorizer's strategic vision for chartering,

23including a clear statement of any preferences the authorizer wishes to

24grant to applications that employ proven methods for educating at-risk

25students or students with special needs;

26(ii) Include or otherwise direct applicants to the performance

27framework that the authorizer has developed for charter school

28oversight and evaluation in accordance with section 217 of this act;

29(iii) Provide the criteria that will guide the authorizer's

30decision to approve or deny a charter application; and

31(iv) State clear, appropriately detailed questions as well as

32guidelines concerning the format and content essential for applicants

33to demonstrate the capacities necessary to establish and operate a

34successful charter school.

35(2) A charter school application must provide or describe

36thoroughly all of the following elements of the proposed school plan:

37(a) An executive summary;

 1(b) The mission and vision of the proposed charter school,

 2including identification of the targeted student population and the

 3community the school hopes to serve;

 4(c) The location or geographic area proposed for the school and the

 5school district within which the school will be located;

 6(d) The grades to be served each year for the full term of the

 7charter contract;

 8(e) Minimum, planned, and maximum enrollment per grade per year for

 9the term of the charter contract;

10(f) Evidence of need and parent and community support for the

11proposed charter school;

12(g) Background information on the proposed founding governing board

13members and, if identified, the proposed school leadership and

14management team;

15(h) The school's proposed calendar and sample daily schedule;

16(i) A description of the academic program aligned with state

17standards;

18(j) A description of the school's proposed instructional design,

19including the type of learning environment; class size and structure;

20curriculum overview; and teaching methods;

21(k) Evidence that the educational program is based on proven

22methods;

23(l) The school's plan for using internal and external assessments

24to measure and report student progress on the performance framework

25developed by the authorizer in accordance with section 217 of this act;

26(m) The school's plans for identifying, successfully serving, and

27complying with applicable laws and regulations regarding students with

28disabilities, students who are limited English proficient, students who

29are struggling academically, and highly capable students;

30(n) A description of cocurricular or extracurricular programs and

31how they will be funded and delivered;

32(o) Plans and timelines for student recruitment and enrollment,

33including targeted plans for recruiting at-risk students and including

34lottery procedures;

35(p) The school's student discipline policies, including for special

36education students;

37(q) An organization chart that clearly presents the school's

38organizational structure, including lines of authority and reporting

 1between the governing board, staff, any related bodies such as advisory

 2bodies or parent and teacher councils, and any external organizations

 3that will play a role in managing the school;

 4(r) A clear description of the roles and responsibilities for the

 5governing board, the school's leadership and management team, and any

 6other entities shown in the organization chart;

 7(s) A staffing plan for the school's first year and for the term of

 8the charter;

 9(t) Plans for recruiting and developing school leadership and

10staff;

11(u) The school's leadership and teacher employment policies,

12including performance evaluation plans;

13(v) Proposed governing bylaws;

14(w) An explanation of proposed partnership agreement, if any,

15between a charter school and its school district focused on facilities,

16budgets, taking best practices to scale, and other items;

17(x) Explanations of any other partnerships or contractual

18relationships central to the school's operations or mission;

19(y) Plans for providing transportation, food service, and all other

20significant operational or ancillary services;

21(z) Opportunities and expectations for parent involvement;

22(aa) A detailed school start-up plan, identifying tasks, timelines,

23and responsible individuals;

24(bb) A description of the school's financial plan and policies,

25including financial controls and audit requirements;

26(cc) A description of the insurance coverage the school will

27obtain;

28(dd) Start-up and five-year cash flow projections and budgets with

29clearly stated assumptions;

30(ee) Evidence of anticipated fundraising contributions, if claimed

31in the application; and

32(ff) A sound facilities plan, including backup or contingency plans

33if appropriate.

34(3) In the case of an application to establish a conversion charter

35school, the applicant must also demonstrate support for the proposed

36conversion by a petition signed by a majority of teachers assigned to

37the school or a petition signed by a majority of parents of students in

38the school.

 1(4) In the case of an application where the proposed charter school

 2intends to contract with a nonprofit education service provider for

 3substantial educational services, management services, or both, the

 4applicant must:

 5(a) Provide evidence of the nonprofit education service provider's

 6success in serving student populations similar to the targeted

 7population, including demonstrated academic achievement as well as

 8successful management of nonacademic school functions if applicable;

 9(b) Provide a term sheet setting forth the proposed duration of the

10service contract; roles and responsibilities of the governing board,

11the school staff, and the service provider; scope of services and

12resources to be provided by the service provider; performance

13evaluation measures and timelines; compensation structure, including

14clear identification of all fees to be paid to the service provider;

15methods of contract oversight and enforcement; investment disclosure;

16and conditions for renewal and termination of the contract; and

17(c) Disclose and explain any existing or potential conflicts of

18interest between the charter school board and proposed service provider

19or any affiliated business entities.

20(5) In the case of an application from an applicant that operates

21one or more schools in any state or nation, the applicant must provide

22evidence of past performance, including evidence of the applicant's

23success in serving at-risk students, and capacity for growth.

24(6) Applicants may submit a proposal for a particular public

25charter school to no more than one authorizer at a time.

26NEW SECTION. Sec. 214. CHARTER APPLICATIONS--DECISION PROCESS.

27(1) The state board of education must establish an annual statewide

28timeline for charter application submission and approval or denial,

29which must be followed by all authorizers.

30(2) In reviewing and evaluating charter applications, authorizers

31shall employ procedures, practices, and criteria consistent with

32nationally recognized principles and standards for quality charter

33authorizing. Authorizers shall give preference to applications for

34charter schools that are designed to enroll and serve at-risk student

35populations: PROVIDED, That nothing in this chapter may be construed

36as intended to limit the establishment of charter schools to those that

37serve a substantial portion of at-risk students or to in any manner

 1restrict, limit, or discourage the establishment of charter schools

 2that enroll and serve other pupil populations under a nonexclusive,

 3nondiscriminatory admissions policy. The application review process

 4must include thorough evaluation of each application, an in-person

 5interview with the applicant group, and an opportunity in a public

 6forum including, without limitation, parents, community members, local

 7residents, and school district board members and staff, to learn about

 8and provide input on each application.

 9(3) In deciding whether to approve an application, authorizers

10must:

11(a) Grant charters only to applicants that have demonstrated

12competence in each element of the authorizer's published approval

13criteria and are likely to open and operate a successful public charter

14school;

15(b) Base decisions on documented evidence collected through the

16application review process;

17(c) Follow charter-granting policies and practices that are

18transparent and based on merit; and

19(d) Avoid any conflicts of interest whether real or apparent.

20(4) An approval decision may include, if appropriate, reasonable

21conditions that the charter applicant must meet before a charter

22contract may be executed.

23(5) For any denial of an application, the authorizer shall clearly

24state in writing its reasons for denial. A denied applicant may

25subsequently reapply to that authorizer or apply to another authorizer

26in the state.

27NEW SECTION. Sec. 215. NUMBER OF CHARTER SCHOOLS. (1) A maximum

28of forty public charter schools may be established under this chapter,

29over a five-year period. No more than eight charter schools may be

30established in any single year during the five-year period, except that

31if in any single year fewer than eight charter schools are established,

32then additional charter schools equal in number to the difference

33between the number established in that year and eight may be

34established in subsequent years during the five-year period.

35(2) To ensure compliance with the limits for establishing new

36charter schools, certification from the state board of education must

37be obtained before final authorization of a charter school. Within ten

 1days of taking action to approve or deny an application under section

 2214 of this act, an authorizer must submit a report of the action to

 3the applicant and to the state board of education, which must include

 4a copy of the authorizer's resolution setting forth the action taken,

 5the reasons for the decision, and assurances of compliance with the

 6procedural requirements and application elements under sections 213 and

 7214 of this act. The authorizer must also indicate whether the charter

 8school is designed to enroll and serve at-risk student populations.

 9The state board of education must establish, for each year in which

10charter schools may be authorized as part of the timeline to be

11established pursuant to section 214 of this act, the last date by which

12the authorizer must submit the report. The state board of education

13must send notice of the date to each authorizer no later than six

14months before the date.

15(3) Upon the receipt of notice from an authorizer that a charter

16school has been approved, the state board of education shall certify

17whether the approval is in compliance with the limits on the maximum

18number of charters allowed under subsection (1) of this section. If

19the board receives simultaneous notification of approved charters that

20exceed the annual allowable limits in subsection (1) of this section,

21the board must select approved charters for implementation through a

22lottery process, and must assign implementation dates accordingly.

23(4) The state board of education must notify authorizers when the

24maximum allowable number of charter schools has been reached.

25NEW SECTION. Sec. 216. CHARTER CONTRACTS. (1) The purposes of

26the charter application submitted under section 213 of this act are to

27present the proposed charter school's academic and operational vision

28and plans and to demonstrate and provide the authorizer a clear basis

29for the applicant's capacities to execute the proposed vision and

30plans. An approved charter application does not serve as the school's

31charter contract.

32(2) Within ninety days of approval of a charter application, the

33authorizer and the governing board of the approved charter school must

34execute a charter contract by which, fundamentally, the public charter

35school agrees to provide educational services that at a minimum meet

36basic education standards in return for an allocation of public funds

37to be used for such purpose all as set forth in this and other

 1applicable statutes and in the charter contract. The charter contract

 2must clearly set forth the academic and operational performance

 3expectations and measures by which the charter school will be judged

 4and the administrative relationship between the authorizer and charter

 5school, including each party's rights and duties. The performance

 6expectations and measures set forth in the charter contract must

 7include but need not be limited to applicable federal and state

 8accountability requirements. The performance provisions may be refined

 9or amended by mutual agreement after the charter school is operating

10and has collected baseline achievement data for its enrolled students.

11(3) The charter contract must be signed by the president of the

12school district board of directors if the school district board of

13directors is the authorizer or the chair of the commission if the

14commission is the authorizer and by the president of the charter school

15board. Within ten days of executing a charter contract, the authorizer

16must submit to the state board of education written notification of the

17charter contract execution, including a copy of the executed charter

18contract and any attachments.

19(4) A charter contract may govern one or more charter schools to

20the extent approved by the authorizer. A single charter school board

21may hold one or more charter contracts. However, each charter school

22that is part of a charter contract must be separate and distinct from

23any others and, for purposes of calculating the maximum number of

24charter schools that may be established under this chapter, each

25charter school must be considered a single charter school regardless of

26how many charter schools are governed under a particular charter

27contract.

28(5) An initial charter contract must be granted for a term of five

29operating years. The contract term must commence on the charter

30school's first day of operation. An approved charter school may delay

31its opening for one school year in order to plan and prepare for the

32school's opening. If the school requires an opening delay of more than

33one school year, the school must request an extension from its

34authorizer. The authorizer may grant or deny the extension depending

35on the school's circumstances.

36(6) Authorizers may establish reasonable preopening requirements or

37conditions to monitor the start-up progress of newly approved charter

 1schools and ensure that they are prepared to open smoothly on the date

 2agreed, and to ensure that each school meets all building, health,

 3safety, insurance, and other legal requirements for school opening.

 4(7) No charter school may commence operations without a charter

 5contract executed in accordance with this section.

 6NEW SECTION. Sec. 217. CHARTER CONTRACTS--PERFORMANCE FRAMEWORK.

 7(1) The performance provisions within a charter contract must be based

 8on a performance framework that clearly sets forth the academic and

 9operational performance indicators, measures, and metrics that will

10guide an authorizer's evaluations of each charter school.

11(2) At a minimum, the performance framework must include

12indicators, measures, and metrics for:

13(a) Student academic proficiency;

14(b) Student academic growth;

15(c) Achievement gaps in both proficiency and growth between major

16student subgroups;

17(d) Attendance;

18(e) Recurrent enrollment from year to year;

19(f) Graduation rates and postsecondary readiness, for high schools;

20(g) Financial performance and sustainability; and

21(h) Board performance and stewardship, including compliance with

22all applicable laws, rules, and terms of the charter contract.

23(3) Annual performance targets must be set by each charter school

24in conjunction with its authorizer and must be designed to help each

25school meet applicable federal, state, and authorizer expectations.

26(4) The authorizer and charter school may also include additional

27rigorous, valid, and reliable indicators in the performance framework

28to augment external evaluations of the charter school's performance.

29(5) The performance framework must require the disaggregation of

30all student performance data by major student subgroups, including

31gender, race and ethnicity, poverty status, special education status,

32English language learner status, and highly capable status.

33(6) Multiple schools operating under a single charter contract or

34overseen by a single charter school board must report their performance

35as separate schools, and each school shall be held independently

36accountable for its performance.

 1NEW SECTION. Sec. 218. CHARTER CONTRACTS--OVERSIGHT. (1) Each

 2authorizer must continually monitor the performance and legal

 3compliance of the charter schools it oversees, including collecting and

 4analyzing data to support ongoing evaluation according to the

 5performance framework in the charter contract.

 6(2) An authorizer may conduct or require oversight activities that

 7enable the authorizer to fulfill its responsibilities under this

 8chapter, including conducting appropriate inquiries and investigations,

 9so long as those activities are consistent with the intent of this

10chapter, adhere to the terms of the charter contract, and do not unduly

11inhibit the autonomy granted to charter schools.

12(3) In the event that a charter school's performance or legal

13compliance appears unsatisfactory, the authorizer must promptly notify

14the school of the perceived problem and provide reasonable opportunity

15for the school to remedy the problem, unless the problem warrants

16revocation in which case the revocation procedures under section 220 of

17this act apply.

18(4) An authorizer may take appropriate corrective actions or

19exercise sanctions short of revocation in response to apparent

20deficiencies in charter school performance or legal compliance. Such

21actions or sanctions may include, if warranted, requiring a school to

22develop and execute a corrective action plan within a specified time

23frame.

24NEW SECTION. Sec. 219. CHARTER CONTRACTS--RENEWAL. (1) A charter

25contract may be renewed by the authorizer, at the request of the

26charter school, for successive five-year terms, although the authorizer

27may vary the term based on the performance, demonstrated capacities,

28and particular circumstances of a charter school and may grant renewal

29with specific conditions for necessary improvements to a charter

30school.

31(2) No later than six months before the expiration of a charter

32contract, the authorizer must issue a performance report and charter

33contract renewal application guidance to that charter school. The

34performance report must summarize the charter school's performance

35record to date based on the data required by the charter contract, and

36must provide notice of any weaknesses or concerns perceived by the

37authorizer concerning the charter school that may jeopardize its

 1position in seeking renewal if not timely rectified. The charter

 2school has thirty days to respond to the performance report and submit

 3any corrections or clarifications for the report.

 4(3) The renewal application guidance must, at a minimum, provide an

 5opportunity for the charter school to:

 6(a) Present additional evidence, beyond the data contained in the

 7performance report, supporting its case for charter contract renewal;

 8(b) Describe improvements undertaken or planned for the school; and

 9(c) Detail the school's plans for the next charter contract term.

10(4) The renewal application guidance must include or refer

11explicitly to the criteria that will guide the authorizer's renewal

12decisions, which shall be based on the performance framework set forth

13in the charter contract.

14(5) In making charter renewal decisions, an authorizer must:

15(a) Ground its decisions in evidence of the school's performance

16over the term of the charter contract in accordance with the

17performance framework set forth in the charter contract;

18(b) Ensure that data used in making renewal decisions are available

19to the school and the public; and

20(c) Provide a public report summarizing the evidence basis for its

21decision.

22NEW SECTION. Sec. 220. CHARTER CONTRACTS--NONRENEWAL OR

23REVOCATION. (1) A charter contract may be revoked at any time or not

24renewed if the authorizer determines that the charter school did any of

25the following or otherwise failed to comply with the provisions of this

26chapter:

27(a) Committed a material and substantial violation of any of the

28terms, conditions, standards, or procedures required under this chapter

29or the charter contract;

30(b) Failed to meet or make sufficient progress toward the

31performance expectations set forth in the charter contract;

32(c) Failed to meet generally accepted standards of fiscal

33management; or

34(d) Substantially violated any material provision of law from which

35the charter school is not exempt.

36(2) A charter contract may not be renewed if, at the time of the

37renewal application, the charter school's performance falls in the

 1bottom quartile of schools on the accountability index developed by the

 2state board of education under RCW 28A.657.110, unless the charter

 3school demonstrates exceptional circumstances that the authorizer finds

 4justifiable.

 5(3) Each authorizer must develop revocation and nonrenewal

 6processes that:

 7(a) Provide the charter school board with a timely notification of

 8the prospect of and reasons for revocation or nonrenewal;

 9(b) Allow the charter school board a reasonable amount of time in

10which to prepare a response;

11(c) Provide the charter school board with an opportunity to submit

12documents and give testimony challenging the rationale for closure and

13in support of the continuation of the school at a recorded public

14proceeding held for that purpose;

15(d) Allow the charter school board to be represented by counsel and

16to call witnesses on its behalf; and

17(e) After a reasonable period for deliberation, require a final

18determination to be made and conveyed in writing to the charter school

19board.

20(4) If an authorizer revokes or does not renew a charter, the

21authorizer must clearly state in a resolution the reasons for the

22revocation or nonrenewal.

23(5) Within ten days of taking action to renew, not renew, or revoke

24a charter contract, an authorizer must submit a report of the action to

25the applicant and to the state board of education, which must include

26a copy of the authorizer's resolution setting forth the action taken,

27the reasons for the decision, and assurances of compliance with the

28procedural requirements established by the authorizer under this

29section.

30NEW SECTION. Sec. 221. CHARTER SCHOOL TERMINATION OR DISSOLUTION.

31(1) Before making a decision to not renew or to revoke a charter

32contract, authorizers must develop a charter school termination

33protocol to ensure timely notification to parents, orderly transition

34of students and student records to new schools, as necessary, and

35proper disposition of public school funds, property, and assets. The

36protocol must specify tasks, timelines, and responsible parties,

 1including delineating the respective duties of the charter school and

 2the authorizer.

 3(2) In the event that the nonprofit corporation applicant of a

 4charter school should dissolve for any reason including, without

 5limitation, because of the termination of the charter contract, the

 6public school funds of the charter school that have been provided

 7pursuant to section 222 of this act must be returned to the state or

 8local account from which the public funds originated. If the charter

 9school has comingled the funds, the funds must be returned in

10proportion to the proportion of those funds received by the charter

11school from the public accounts in the last year preceding the

12dissolution. The dissolution of an applicant nonprofit corporation

13shall otherwise proceed as provided by law.

14(3) A charter contract may not be transferred from one authorizer

15to another or from one charter school applicant to another before the

16expiration of the charter contract term except by petition to the state

17board of education by the charter school or its authorizer. The state

18board of education must review such petitions on a case-by-case basis

19and may grant transfer requests in response to special circumstances

20and evidence that such a transfer would serve the best interests of the

21charter school's students.

22NEW SECTION. Sec. 222. FUNDING. (1) Charter schools must report

23student enrollment in the same manner and based on the same definitions

24of enrolled students and annual average full-time equivalent enrollment

25as other public schools. Charter schools must comply with applicable

26reporting requirements to receive state or federal funding that is

27allocated based on student characteristics.

28(2) According to the schedule established under RCW 28A.510.250,

29the superintendent of public instruction shall allocate funding for a

30charter school including general apportionment, special education,

31categorical, and other nonbasic education moneys. Allocations must be

32based on the statewide average staff mix ratio of all noncharter public

33schools from the prior school year and the school's actual full-time

34equivalent enrollment. Categorical funding must be allocated to a

35charter school based on the same funding criteria used for noncharter

36public schools and the funds must be expended as provided in the

 1charter contract. A charter school is eligible to apply for state

 2grants on the same basis as a school district.

 3(3) Allocations for pupil transportation must be calculated on a

 4per student basis based on the allocation for the previous school year

 5to the school district in which the charter school is located. A

 6charter school may enter into a contract with a school district or

 7other public or private entity to provide transportation for the

 8students of the school.

 9(4) Amounts payable to a charter school under this section in the

10school's first year of operation must be based on the projections of

11first-year student enrollment established in the charter contract. The

12office of the superintendent of public instruction must reconcile the

13amounts paid in the first year of operation to the amounts that would

14have been paid based on actual student enrollment and make adjustments

15to the charter school's allocations over the course of the second year

16of operation.

17(5) For charter schools authorized by a school district board of

18directors, allocations to a charter school that are included in RCW

1984.52.0531(3) (a) through (c) shall be included in the levy planning,

20budgets, and funding distribution in the same manner as other public

21schools in the district.

22(6) Conversion charter schools are eligible for local levy moneys

23approved by the voters before the conversion start-up date of the

24school as determined by the authorizer, and the school district must

25allocate levy moneys to a conversion charter school.

26(7) New charter schools are not eligible for local levy moneys

27approved by the voters before the start-up date of the school unless

28the local school district is the authorizer.

29(8) For levies submitted to voters after the start-up date of a

30charter school authorized under this chapter, the charter school must

31be included in levy planning, budgets, and funding distribution in the

32same manner as other public schools in the district.

33(9) Any moneys received by a charter school from any source and

34remaining in the school's accounts at the end of any budget year shall

35remain in the school's accounts for use by the school during subsequent

36budget years.

 1NEW SECTION. Sec. 223. FACILITIES. (1) Charter schools are

 2eligible for state matching funds for common school construction.

 3(2) A charter school has a right of first refusal to purchase or

 4lease at or below fair market value a closed public school facility or

 5property or unused portions of a public school facility or property

 6located in a school district from which it draws its students if the

 7school district decides to sell or lease the public school facility or

 8property pursuant to RCW 28A.335.040 or 28A.335.120.

 9(3) A charter school may negotiate and contract with a school

10district, the governing body of a public college or university, or any

11other public or private entity for the use of a facility for a school

12building at or below fair market rent.

13(4) Public libraries, community service organizations, museums,

14performing arts venues, theaters, and public or private colleges and

15universities may provide space to charter schools within their

16facilities under their preexisting zoning and land use designations.

17(5) A conversion charter school as part of the consideration for

18providing educational services under the charter contract may continue

19to use its existing facility without paying rent to the school district

20that owns the facility. The district remains responsible for major

21repairs and safety upgrades that may be required for the continued use

22of the facility as a public school. The charter school is responsible

23for routine maintenance of the facility including, but not limited to,

24cleaning, painting, gardening, and landscaping. The charter contract

25of a conversion charter school using existing facilities that are owned

26by its school district must include reasonable and customary terms

27regarding the use of the existing facility that are binding upon the

28school district.

29NEW SECTION. Sec. 224. YEARS OF SERVICE. Years of service in a

30charter school by certificated instructional staff shall be included in

31the years of service calculation for purposes of the statewide salary

32allocation schedule under RCW 28A.150.410. This section does not

33require a charter school to pay a particular salary to its staff while

34the staff is employed by the charter school.

35NEW SECTION. Sec. 225. ANNUAL REPORTS. (1) By December 1st of

36each year beginning in the first year after there have been charter

 1schools operating for a full school year, the state board of education,

 2in collaboration with the commission, must issue an annual report on

 3the state's charter schools for the preceding school year to the

 4governor, the legislature, and the public at-large.

 5(2) The annual report must be based on the reports submitted by

 6each authorizer as well as any additional relevant data compiled by the

 7board. The report must include a comparison of the performance of

 8charter school students with the performance of academically,

 9ethnically, and economically comparable groups of students in

10noncharter public schools. In addition, the annual report must include

11the state board of education's assessment of the successes, challenges,

12and areas for improvement in meeting the purposes of this chapter,

13including the board's assessment of the sufficiency of funding for

14charter schools, the efficacy of the formula for authorizer funding,

15and any suggested changes in state law or policy necessary to

16strengthen the state's charter schools.

17(3) Together with the issuance of the annual report following the

18fifth year after there have been charter schools operating for a full

19school year, the state board of education, in collaboration with the

20commission, shall submit a recommendation regarding whether or not the

21legislature should authorize the establishment of additional public

22charter schools.

23PART III

24GENERAL PROVISIONS

25Sec. 301. RCW 28A.150.010 and 1969 ex.s. c 223 s 28A.01.055 are

26each amended to read as follows:

27Public schools ((shall)) means the common schools as referred to in

28Article IX of the state Constitution, including charter schools

29established under chapter 28A.--- RCW (the new chapter created in

30section 401 of this act), and those schools and institutions of

31learning having a curriculum below the college or university level as

32now or may be established by law and maintained at public expense.

33Sec. 302. RCW 28A.315.005 and 1999 c 315 s 1 are each amended to

34read as follows:

35(1) Under the constitutional framework and the laws of the state of

 1Washington, the governance structure for the state's public common

 2school system is comprised of the following bodies: The legislature,

 3the governor, the superintendent of public instruction, the state board

 4of education, the Washington charter school commission, the educational

 5service district boards of directors, and local school district boards

 6of directors. The respective policy and administrative roles of each

 7body are determined by the state Constitution and statutes.

 8(2) Local school districts are political subdivisions of the state

 9and the organization of such districts, including the powers, duties,

10and boundaries thereof, may be altered or abolished by laws of the

11state of Washington.

12NEW SECTION. Sec. 303. A new section is added to chapter 41.32

13RCW to read as follows:

14This section designates charter schools established under chapter

1528A.-- RCW (the new chapter created in section 401 of this act) as

16employers and charter school employees as members, and applies only if

17the department of retirement systems receives determinations from the

18internal revenue service and the United States department of labor that

19participation does not jeopardize the status of these retirement

20systems as governmental plans under the federal employees' retirement

21income security act and the internal revenue code.

22NEW SECTION. Sec. 304. A new section is added to chapter 41.35

23RCW to read as follows:

24This section designates charter schools established under chapter

2528A.-- RCW (the new chapter created in section 401 of this act) as

26employers and charter school employees as members, and applies only if

27the department of retirement systems receives determinations from the

28internal revenue service and the United States department of labor that

29participation does not jeopardize the status of these retirement

30systems as governmental plans under the federal employees' retirement

31income security act and the internal revenue code.

32NEW SECTION. Sec. 305. A new section is added to chapter 41.40

33RCW to read as follows:

34This section designates charter schools established under chapter

3528A.-- RCW (the new chapter created in section 401 of this act) as

 1employers and charter school employees as members, and applies only if

 2the department of retirement systems receives determinations from the

 3internal revenue service and the United States department of labor that

 4participation does not jeopardize the status of these retirement

 5systems as governmental plans under the federal employees' retirement

 6income security act and the internal revenue code.

 7Sec. 306. RCW 41.05.011 and 2012 c 87 s 22 are each amended to

 8read as follows:

 9The definitions in this section apply throughout this chapter

10unless the context clearly requires otherwise.

11(1) "Authority" means the Washington state health care authority.

12(2) "Board" means the public employees' benefits board established

13under RCW 41.05.055.

14(3) "Dependent care assistance program" means a benefit plan

15whereby state and public employees may pay for certain employment

16related dependent care with pretax dollars as provided in the salary

17reduction plan under this chapter pursuant to 26 U.S.C. Sec. 129 or

18other sections of the internal revenue code.

19(4) "Director" means the director of the authority.

20(5) "Emergency service personnel killed in the line of duty" means

21law enforcement officers and firefighters as defined in RCW 41.26.030,

22members of the Washington state patrol retirement fund as defined in

23RCW 43.43.120, and reserve officers and firefighters as defined in RCW

2441.24.010 who die as a result of injuries sustained in the course of

25employment as determined consistent with Title 51 RCW by the department

26of labor and industries.

27(6) "Employee" includes all employees of the state, whether or not

28covered by civil service; elected and appointed officials of the

29executive branch of government, including full-time members of boards,

30commissions, or committees; justices of the supreme court and judges of

31the court of appeals and the superior courts; and members of the state

32legislature. Pursuant to contractual agreement with the authority,

33"employee" may also include: (a) Employees of a county, municipality,

34or other political subdivision of the state and members of the

35legislative authority of any county, city, or town who are elected to

36office after February 20, 1970, if the legislative authority of the

37county, municipality, or other political subdivision of the state seeks

 1and receives the approval of the authority to provide any of its

 2insurance programs by contract with the authority, as provided in RCW

 341.04.205 and 41.05.021(1)(g); (b) employees of employee organizations

 4representing state civil service employees, at the option of each such

 5employee organization, and, effective October 1, 1995, employees of

 6employee organizations currently pooled with employees of school

 7districts for the purpose of purchasing insurance benefits, at the

 8option of each such employee organization; (c) employees of a school

 9district if the authority agrees to provide any of the school

10districts' insurance programs by contract with the authority as

11provided in RCW 28A.400.350; (d) employees of a tribal government, if

12the governing body of the tribal government seeks and receives the

13approval of the authority to provide any of its insurance programs by

14contract with the authority, as provided in RCW 41.05.021(1) (f) and

15(g); ((and)) (e) employees of the Washington health benefit exchange if

16the governing board of the exchange established in RCW 43.71.020 seeks

17and receives approval of the authority to provide any of its insurance

18programs by contract with the authority, as provided in RCW

1941.05.021(1) (g) and (n); and (f) employees of a charter school

20established under chapter 28A.--- RCW (the new chapter created in

21section 401 of this act). "Employee" does not include: Adult family

22homeowners; unpaid volunteers; patients of state hospitals; inmates;

23employees of the Washington state convention and trade center as

24provided in RCW 41.05.110; students of institutions of higher education

25as determined by their institution; and any others not expressly

26defined as employees under this chapter or by the authority under this

27chapter.

28(7) "Employer" means the state of Washington.

29(8) "Employing agency" means a division, department, or separate

30agency of state government, including an institution of higher

31education; a county, municipality, school district, educational service

32district, or other political subdivision; charter school; and a tribal

33government covered by this chapter.

34(9) "Faculty" means an academic employee of an institution of

35higher education whose workload is not defined by work hours but whose

36appointment, workload, and duties directly serve the institution's

37academic mission, as determined under the authority of its enabling

 1statutes, its governing body, and any applicable collective bargaining

 2agreement.

 3(10) "Flexible benefit plan" means a benefit plan that allows

 4employees to choose the level of health care coverage provided and the

 5amount of employee contributions from among a range of choices offered

 6by the authority.

 7(11) "Insuring entity" means an insurer as defined in chapter 48.01

 8RCW, a health care service contractor as defined in chapter 48.44 RCW,

 9or a health maintenance organization as defined in chapter 48.46 RCW.

10(12) "Medical flexible spending arrangement" means a benefit plan

11whereby state and public employees may reduce their salary before taxes

12to pay for medical expenses not reimbursed by insurance as provided in

13the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec.

14125 or other sections of the internal revenue code.

15(13) "Participant" means an individual who fulfills the eligibility

16and enrollment requirements under the salary reduction plan.

17(14) "Plan year" means the time period established by the

18authority.

19(15) "Premium payment plan" means a benefit plan whereby state and

20public employees may pay their share of group health plan premiums with

21pretax dollars as provided in the salary reduction plan under this

22chapter pursuant to 26 U.S.C. Sec. 125 or other sections of the

23internal revenue code.

24(16) "Retired or disabled school employee" means:

25(a) Persons who separated from employment with a school district or

26educational service district and are receiving a retirement allowance

27under chapter 41.32 or 41.40 RCW as of September 30, 1993;

28(b) Persons who separate from employment with a school district

29((or)), educational service district, or charter school on or after

30October 1, 1993, and immediately upon separation receive a retirement

31allowance under chapter 41.32, 41.35, or 41.40 RCW;

32(c) Persons who separate from employment with a school district

33((or)), educational service district, or charter school due to a total

34and permanent disability, and are eligible to receive a deferred

35retirement allowance under chapter 41.32, 41.35, or 41.40 RCW.

36(17) "Salary" means a state employee's monthly salary or wages.

37(18) "Salary reduction plan" means a benefit plan whereby state and

38public employees may agree to a reduction of salary on a pretax basis

 1to participate in the dependent care assistance program, medical

 2flexible spending arrangement, or premium payment plan offered pursuant

 3to 26 U.S.C. Sec. 125 or other sections of the internal revenue code.

 4 (19) "Seasonal employee" means an employee hired to work during a

 5recurring, annual season with a duration of three months or more, and

 6anticipated to return each season to perform similar work.

 7(20) "Separated employees" means persons who separate from

 8employment with an employer as defined in:

 9(a) RCW 41.32.010(17) on or after July 1, 1996; or

10(b) RCW 41.35.010 on or after September 1, 2000; or

11(c) RCW 41.40.010 on or after March 1, 2002;

12and who are at least age fifty-five and have at least ten years of

13service under the teachers' retirement system plan 3 as defined in RCW

1441.32.010(33), the Washington school employees' retirement system plan

153 as defined in RCW 41.35.010, or the public employees' retirement

16system plan 3 as defined in RCW 41.40.010.

17(21) "State purchased health care" or "health care" means medical

18and health care, pharmaceuticals, and medical equipment purchased with

19state and federal funds by the department of social and health

20services, the department of health, the basic health plan, the state

21health care authority, the department of labor and industries, the

22department of corrections, the department of veterans affairs, and

23local school districts.

24(22) "Tribal government" means an Indian tribal government as

25defined in section 3(32) of the employee retirement income security act

26of 1974, as amended, or an agency or instrumentality of the tribal

27government, that has government offices principally located in this

28state.

29NEW SECTION. Sec. 307. A new section is added to chapter 41.56

30RCW to read as follows:

31In addition to the entities listed in RCW 41.56.020, this chapter

32applies to any charter school established under chapter 28A.--- RCW

33(the new chapter created in section 401 of this act). Any bargaining

34unit or units established at the charter school must be limited to

35employees working in the charter school and must be separate from other

36bargaining units in school districts, educational service districts, or

37institutions of higher education. Any charter school established under

 1chapter 28A.--- RCW (the new chapter created in section 401 of this

 2act) is a separate employer from any school district, including the

 3school district in which it is located.

 4NEW SECTION. Sec. 308. A new section is added to chapter 41.59

 5RCW to read as follows:

 6This chapter applies to any charter school established under

 7chapter 28A.--- RCW (the new chapter created in section 401 of this

 8act). Any bargaining unit or units established at the charter school

 9must be limited to employees working in the charter school and must be

10separate from other bargaining units in school districts, educational

11service districts, or institutions of higher education. Any charter

12school established under chapter 28A.--- RCW (the new chapter created

13in section 401 of this act) is a separate employer from any school

14district, including the school district in which it is located.

15PART IV

16MISCELLANEOUS PROVISIONS

17NEW SECTION. Sec. 401. Sections 101 and 201 through 225 of this

18act constitute a new chapter in Title 28A RCW.

19NEW SECTION. Sec. 402. If any provision of this act or its

20application to any person or circumstance is held invalid, the

21remainder of the act or the application of the provision to other

22persons or circumstances is not affected.Originally filed in Office of Secretary of State May 31, 2012.

Approved by the People of the State of Washington in the General Election on November 6, 2012.