An Act concerning charter schools, revising various parts of statutory law, supplementing P.L.1995, c.426 (C.18A:36A-1 et seq.), and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) As used in P.L.1995, c.426 (C.18A:36A-1 et seq.):

"Charter school authorizer" means an entity charged with the ongoing monitoring of the charter schools it authorizes, and with granting, renewing, and revoking charters for charter schools established pursuant to the provisions of P.L.1995, c.426 (C.18A:36A-1 et seq.). A charter school authorizer shall include the Commissioner of Education and the charter school authorizing board established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

2. (New section) a. There is hereby established the charter school authorizing board. The board shall consist of nine members as follows: three members appointed by the Governor; one member appointed by the President of the Senate; one member appointed by the Minority Leader of the Senate; one member appointed by the Speaker of the General Assembly; one member appointed by the Minority Leader of the General Assembly; and two ex officio members, the President of the State Board of Education or his designee and the Executive Director of the New Jersey School Boards Association or his designee. Of the appointed members of the board no more than four shall be of the same political party. The appointed members of the board shall have experience in public and nonprofit governance, management, finance, public school leadership, assessment, curriculum, instruction, and public school law. Each member shall have a demonstrated understanding of and commitment to the use of charter schools as a strategy for strengthening public education. The appointments to the board shall be made no later than 90 days after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The term of the first members appointed by the Governor shall be four years, and the term for members subsequently appointed or reappointed by the Governor shall be three years. The term of a member of the board appointed by the President of the Senate or the Speaker of the General Assembly shall be three years. The term of a member of the board appointed by the Minority Leader of the Senate or the Minority Leader of the General Assembly shall be two years. No appointed member of the board shall serve for more than seven consecutive years. A vacancy on the board shall be filled by the original appointment authority for the remainder of the term.

c. The members of the board shall serve without compensation, but may be reimbursed for any necessary expenses incurred in the performance of their duties.

3. (New section) a. The State Board of Education shall be responsible for the ongoing oversight of the performance and effectiveness of the charter school authorizing board. The State board may, at any time, take corrective action against the charter school authorizing board, including suspending the charter school authorizing board's authority, for a period not to exceed three school years, for:

(1) failure to adequately discharge the responsibilities established pursuant to the provisions of P.L.1995, c.426 (C.18A:36A-1 et seq.);

(2) failure to provide adequate oversight of one or more charter schools with which it has entered into a charter contract;

(3) persistent unsatisfactory performance of charter schools monitored by the charter school authorizing board; or

(4) any other good cause as determined by the State board.

b. In the event that the State board suspends the charter school authorizing board's authority, the oversight of its charter schools shall transfer to the commissioner.

4. (New section) No later than 90 days prior to the charter school application submission date set forth in section 4 of P.L.1995, c.426 (C.18A:36A-4), a charter school authorizer shall issue a request for proposals for prospective charter school applicants. The information included in the request for proposal shall include, but need not be limited to, the following:

a. The specific school district or community to be served by any charter school that is granted a charter by the charter school authorizer;

b. The criteria that the charter school authorizer will use to approve or reject a charter school application submitted in response to the request for proposal;

c. The performance framework that the charter school authorizer has developed for the oversight and evaluation of a charter school pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

d. Any preference that the charter school authorizer may have for an applicant that demonstrates the capacity to serve a specific disadvantaged population of students. For the purposes of this subsection "disadvantaged population of students" means students who meet the definition of an "at-risk pupil" pursuant to section 3 of P.L.2007, c.260 (C.18A:7F-45) or students who score in the partially proficient range in the language arts or mathematics subject area of the State assessments.

A charter school applicant shall not submit an application for a particular charter school to more than one charter school authorizer in the same year.

5. (New section) a. When reviewing a charter school application, a charter school authorizer shall employ procedures, practices, and criteria that are consistent with nationally recognized principles and standards for charter school authorization, and ensure that the application review procedures are transparent. The State Board of Education shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), that define the nationally recognized principles and standards pursuant to which a charter school authorizer shall review a charter school application. In evaluating charter school applications, the charter school authorizer shall avoid any real or perceived conflicts of interest. The charter school application review process shall include, but not be limited to, the following:

(1) an in-person interview with each charter school applicant; and

(2) two public meetings at which a single charter school application is discussed, and the residents of the school district that would be served by the charter school would have an opportunity to provide input on the application.

b. (1) A charter school authorizer shall only approve a charter school application if the applicant demonstrates competence in each element of the charter school authorizer's published approval criteria. The State Board of Education shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), that establish criteria by which a charter school authorizer shall determine whether or not an applicant has demonstrated competence in approval criteria.

(2) A charter school authorizer may, when appropriate, establish reasonable conditions that an approved charter school applicant shall meet prior to executing a charter contract pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill). The State Board of Education shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), establishing a list of reasonable conditions which a charter school authorizer may impose on an applicant prior to executing a charter contract.

The charter school authorizer's decision shall be based on information collected during the application process.

c. No later than 30 days after approving or rejecting a charter school application, a charter school authorizer shall publish a report detailing the charter school authorizer's reasons for approving or rejecting the charter school application. Each report shall be posted on the Department of Education's website. In the event that the charter school authorizer is the charter school authorizing board established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall forward a copy of the report to the department no later than 25 days after approving or rejecting a charter school application.

6. (New section) a. Within 60 days of approving a charter school application, the charter school authorizer and the applicant shall enter into a charter contract that details the performance framework by which the charter school's performance will be assessed. The charter contract shall also outline the administrative relationship between the charter school authorizer and the charter school, including each party's rights and responsibilities. The performance framework included in the charter contract shall include, but need not be limited to, annual performance targets for the following:

(1) absolute measures of student academic proficiency;

(2) student academic growth over time;

(3) academic achievement gaps between student subgroups;

(4) student attendance rates;

(5) student attrition rates;

(6) in the case of a charter school that enrolls students in grades 9 through 12, measures of students' readiness for college and careers;

(7) financial viability and sustainability;

(8) performance by the school's board of trustees, including compliance with applicable laws, rules, and regulations, and provisions of the charter contract; and

(9) any additional indicators proposed by the charter school and approved by the charter school authorizer to account for the charter school's specific mission. The charter school authorizer shall only approve additional indicators that are rigorous and valid.

b. The charter contract shall require that any information included in the performance framework that relates to students shall be disaggregated by student subgroups, including racial and ethnic classifications, gender, income groups, students with disabilities, students who are English language learners, and students who are gifted and talented.

c. The annual performance targets included in the performance framework shall be agreed to by the charter school authorizer and the charter school, and shall be designed to ensure that the charter school meets applicable federal and State expectations for student academic performance.

The charter contract shall include a provision that any federal or State accountability requirements shall be applicable to the charter school.

d. The charter contract shall be signed by the authorized representative of the charter school authorizer and the president of the board of trustees of the charter school. In the event that the charter school authorizer is the charter school authorizing board, then the board, within 30 days of entering into the charter contract, shall forward a copy of the contract and any attachments to the commissioner. A copy of all executed charter contracts shall be made available on the department's website.

e. An approved charter school shall not begin operations prior to entering into a charter contract with the charter school authorizer that approved the charter school application. Neither party may delegate or reassign any of the rights or responsibilities included in the charter contract.

f. The applicant may elect to use one year as a planning year prior to entering into a charter contract. The applicant shall be required to obtain the consent of the charter school authorizer to use any additional years as planning years.

7. (New section) A charter school authorizer shall prepare an annual report documenting its operations during the prior school year. The charter school authorizing board shall submit its annual report to the commissioner no later than October 1 of each school year. The commissioner shall forward a copy of each charter school authorizer's annual report to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1) no later than November 1 of each school year. Each charter school authorizer's annual report shall include, but need not be limited to, the following:

a. the performance of each charter school authorized by the charter school authorizer, as measured by the performance framework developed by the charter school authorizer;

b. a listing of charter schools that:

(1) have been approved by the charter school authorizer, but not yet opened;

(2) are currently operating under an initial charter;

(3) are currently operating under a renewed charter;

(4) did not have its charter renewed;

(5) had its charter revoked;

(6) voluntarily relinquished its charter; and

(7) had been approved by the charter school authorizer, but never opened; and

c. a summary of the expenses incurred by the charter school authorizer in performing its responsibilities.

8. (New section) An employee, agent, or representative of a charter school authorizer shall not serve as an employee, agent, representative, vendor, contractor, or board of trustee member of a charter school that is subject to the oversight of the charter school authorizer.

9. (New section) Except as provided pursuant to section 14 of P.L.2007, c.137 (C.18A:7G-45), a school district that intends to sell or lease a school facility shall grant right of first refusal to purchase or lease the property for an amount equal to the fair market value of the school facility to a charter school that, pursuant to its charter, enrolls students who reside in that district. In the event that more than one charter school enrolls students who reside in that district, then the order in which right of first refusal is to be granted shall be determined by lottery.

10. (New section) In the event that a student withdraws from a charter school and enrolls in another public school located in the State, the new school shall accept all credits earned by the student in a uniform and consistent manner, and using the same criteria applied to accept credits from other public schools. The new school shall honor the student's status and grade level achieved at the charter school.

11. (New section) On or before March 1 of each year, the commissioner shall submit a report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), regarding the State's charter school program. The annual report shall be based on information contained in the reports submitted by the charter school authorizers pursuant to section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill) and any other relevant data compiled by the commissioner. The annual report shall include a summary of the performance measures included in charter contracts entered into by the charter school authorizers, an assessment of the successes, challenges, and potential areas of improvement, an assessment of the sufficiency of funding provided to charter schools, and recommendations for changes to State law, regulations, or practices that may promote the objectives of charter schools.

12. (New section) The executive county superintendent of schools and a representative of the regional achievement center of the region in which the county is located shall meet quarterly with a representative of each charter school in the county to discuss the innovations and best practices being implemented by the charter schools which may be adopted in the traditional public school setting. The appropriate regional achievement center shall prepare an annual report no later than January 1 which provides a detailed description of the innovations and best practices discussed in the quarterly meetings. The Department of Education shall make the annual reports available to the public through an Internet website maintained by the department in an easily accessible location.

13. N.J.S.18A:23-1 is amended to read as follow:

18A:23-1. The board of education of every school district and the board of trustees of every charter school shall cause an annual audit of the district's or charter school's accounts and financial transactions to be made by a public school accountant employed by it, which audit shall be completed not later than 5 months after the end of the school fiscal year.

(cf: P.L.2010, c.49)

14. Section 1 of P.L.1995, c.426 (C.18A:36A-1) is amended to read as follows:

1. [This act] P.L.1995, c.426 (C.18A:36A-1 et seq.) shall be known and may be cited as the "Charter School [Program Act of 1995] Accountability and Authorizer Act."

(cf: P.L.1995, c.426, s.1)

15. Section 2 of P.L.1995, c.426 (C.18A:36A-2) is amended to read as follows:

2. The Legislature finds and declares that the establishment of charter schools as part of this State's program of public education can assist in promoting comprehensive educational reform [by providing a mechanism for the implementation of a variety of educational approaches which may not be available in the traditional public school classroom]. Charter schools serve a distinct purpose in supporting innovations and best practices that can be adopted by other public schools to strengthen the performance of all students. Specifically, charter schools offer the potential to improve pupil learning; increase for students and parents the educational choices available when selecting the learning environment which they feel may be the most appropriate; encourage the use of different and innovative learning methods; establish a new form of accountability for schools; require the measurement of learning outcomes; make the school the unit for educational improvement; and establish new professional opportunities for teachers.

The Legislature [further] also finds that the establishment of a charter school program is in the best interests of the students of this State and it is therefore the public policy of the State to encourage and facilitate the development of charter schools.

The Legislature further finds that based on experience since the original enactment of the "Charter School Program Act of 1995," P.L.1995, c.426 (C.18A:36A-1 et seq.), it is necessary to establish additional standards and safeguards to ensure that the charter school program is operated in an effective and accountable manner and contributes to the overall improvement of public education for all students in the districts served by charter schools.

(cf: P.L.1995, c.426, s.2)

16. Section 3 of P.L.1995, c.426 (C.18A:36A-3) is amended to read as follows:

3. [a.] The Commissioner of Education shall establish a charter school program which shall provide for the approval and granting of charters to charter schools pursuant to the provisions of [this act] P.L.1995, c.426 (C.18A:36A-1 et seq.). A charter school shall be a public school operated under a charter granted by [the commissioner] a charter school authorizer, which is operated independently of a local board of education and is managed by a board of trustees. The board of trustees, upon receiving a charter from [the commissioner] and entering into a charter contract with a charter school authorizer, shall be deemed to be public agents authorized by the State Board of Education to supervise and control the charter school.

[b. The program shall authorize the establishment of not more than 135 charter schools during the 48 months following the effective date of this act. A minimum of three charter schools shall be allocated to each county. The commissioner shall actively encourage the establishment of charter schools in urban school districts with the participation of institutions of higher education.]

(cf: P.L.1995, c.426, s.3)

17. Section 4 of P.L.1995, c.426 (C.18A:36A-4) is amended to read as follows:

4. a. A charter school may be established by teaching staff members, parents with children attending the schools of the district, or a combination of teaching staff members and parents. A charter school may also be established by an institution of higher education or a private nonprofit entity located within the State in conjunction with teaching staff members and parents of children attending the schools of the district. If the charter school is established by a private nonprofit entity, representatives of the private nonprofit entity shall not constitute a majority of the trustees of the school, and the charter shall specify the extent to which the private nonprofit entity shall be involved in the operation of the school. The name of the charter school shall not include the name or identification of the private nonprofit entity [, and the private entity shall not realize a net profit from its operation of a charter school]. A private or parochial school shall not be eligible for charter school status.

b. A currently existing public school is eligible to become a charter school if the following criteria are met:

(1) At least 51% of the teaching staff in the school shall have signed a petition in support of the school becoming a charter school; and

(2) At least 51% of the parents or guardians of pupils attending that public school shall have signed a petition in support of the school becoming a charter school.

c. An application to establish a charter school shall be submitted to the [commissioner] charter school authorizer and the local board of education or State district superintendent, in the case of a school district under full State intervention, no later than January 1 in the [school] year preceding the school year in which the charter school will be established. Notice of the filing of the application shall be sent immediately by the [commissioner] charter school authorizer to the members of the State Legislature, school superintendents, and mayors and governing bodies of all legislative districts, school districts, or municipalities in which there are students who will be eligible for enrollment in the charter school. The board of education or State district superintendent shall review the application and forward a recommendation to the [commissioner] charter school authorizer within 60 days of receipt of the application. The [commissioner] charter school authorizer shall have final authority to grant or reject a charter application.

The charter school authorizer shall notify a charter school applicant of the initial approval or rejection of the charter school application no later than September 1 after the submission of the charter school application. The charter school authorizer shall provide for the final granting of a charter, no later than February 1, after:

(1) receiving and approving documentation, as required by the charter school authorizer, that is not available at the time of the application's submission;

(2) assessing the student composition of the charter school and the potential effects that the loss of the students may have on the school district in which the potential charter school students reside; and

(3) conducting a preparedness visit to the prospective charter school.

d. The local board of education or a charter school applicant may appeal the decision of the [commissioner] charter school authorizer to the Appellate Division of the Superior Court.

e. A charter school established during the 48 months following the effective date of this act, other than a currently existing public school which becomes a charter school pursuant to the provisions of subsection b. of section 4 of this act, shall not have an enrollment in excess of 500 students or greater than 25% of the student body of the school district in which the charter school is established, whichever is less.

Any two charter schools within the same public school district that are not operating the same grade levels may petition [the commissioner] their charter school authorizer to amend their charters and consolidate into one school. The [commissioner] charter school authorizer may approve an amendment to consolidate, provided that the basis for consolidation is to accommodate the transfer of students who would otherwise be subject to the random selection process pursuant to section 8 of P.L.1995, c.426 (C.18A:36A-8).

(cf: P.L.2011, c.140, s.2)

18. Section 5 of P.L.1995, c.426 (C.18A:36A-5) is amended to read as follows:

5. The application for a charter school shall include the following information:

a. The identification of the charter applicant;

b. The name of the proposed charter school;

c. The proposed governance structure of the charter school including a list of the proposed members of the board of trustees of the charter school, including background information, or a description of the qualifications and method for the appointment or election of members of the board of trustees;

d. The educational goals of the charter school, the curriculum to be offered, and the methods of assessing whether students are meeting educational goals. Charter school students shall be required to meet the same testing and academic performance standards as established by law and regulation for public school students. Charter school students shall also meet any additional assessment indicators which are included within the charter approved by the [commissioner] charter school authorizer;

e. The admission policy and criteria for evaluating the admission of students which shall comply with the requirements of section 8 of [this act] P.L.1995, c.426 (C.18A:36A-8), including a detailed plan and timeline for student recruitment and the procedure for conducting a public lottery if the number of students seeking admission exceeds the capacity;

f. The age or grade range of students to be enrolled in each year during the term of the charter;

g. The [school] school's proposed calendar and [school day] a sample daily schedule;

h. A description of the charter school staff responsibilities and the proposed qualifications of teaching staff;

i. A description of the [procedures to be implemented to ensure] opportunities for and expectations of significant parental involvement in the operation of the school;

j. A description of, and address for, the physical facility in which the charter school will be located, and a plan for identifying an alternative facility if the need arises ;

k. Information on the manner in which community groups will be involved in the charter school planning process;

l. The financial plan for the charter school and the provisions which will be made for auditing the school pursuant to the provisions of N.J.S.18A:23-1;

m. A description of and justification for any waivers of regulations which the charter school will request; [and]

n. The mission and vision of the proposed charter school, including any specific student population that the charter school would serve;

o. For each grade level and for each year for the term of the charter, the projected student enrollment, the minimum number of students that the charter school may serve while remaining financially viable, and the maximum number of students that the charter school could feasibly serve;

p. An explanation of how the proposed charter school's academic programs will align with standards adopted by the State Board of Education;

q. A description of the proposed charter school's instructional design, including information on the type of learning environment that would be used, class size and structure, and teaching methods that will be employed;

r. The proposed charter school's plan for using assessments to measure and report student progress on the performance framework developed by the charter school authorizer pursuant to section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill);

s. The proposed charter school's plan for identifying and successfully serving students with disabilities, English language learners, students who are currently not performing on grade level in one or more academic areas, and students who are gifted and talented;

t. A description of extracurricular and co-curricular activities that will be offered at the school, including the method by which the costs of such programs will be supported;

u. The proposed charter school's policy on student discipline. The policy shall be consistent with the student discipline policy of the school district in which the charter school is located;

v. An organization chart that clearly presents the proposed charter school's organizational structure, including lines of authority among the board of trustees, staff, and any other related entities;

w. A clear description of the roles and responsibilities of the board of trustees, the school's leadership and management team, and any other entities included in the organization chart;

x. A detailed plan for recruiting and developing the proposed charter school's leadership and management team and staff;

y. The school's proposed employment policy, including the plan for conducting performance evaluations;

z. The board of trustee's proposed bylaws;

aa. A description or explanation of any partnerships or contractual arrangements that will be a significant component of the school's operations or mission;

bb. The plan for providing food services and other operational services;

cc. A detailed start-up plan that includes tasks to be completed, a timeline during which the identified tasks will be completed, and a list of individuals who will be responsible for completing the tasks;

dd. A description of the insurance coverage the school will obtain;

ee. Projected budgets for any start-up period and the first five years of the school's operations, including a description of relevant assumptions used in developing the budget;

ff. A cash flow analysis for any start-up period and the first year of the school's operations, including a description of relevant assumptions used in developing the cash flow analysis;

gg. An explanation of any anticipated revenues from fundraising that are included in the projected budgets; and

hh. Such other information as the [commissioner] charter school authorizer may require.

(cf: P.L.1995, c.426, s.5)

19. Section 6 of P.L.1995, c.426 (C.18A:36A-6) is amended to read as follows:

6. A charter school established pursuant to the provisions of [this act] P.L.1995, c.426 (C.18A:36A-1 et seq.) shall be a body corporate and politic with all powers necessary or desirable for carrying out its charter program, including, but not limited to, the power to:

a. Adopt a name and corporate seal; however, any name selected shall include the words "charter school;"

b. Sue and be sued, but only to the same extent and upon the same conditions that a public entity can be sued;

c. Acquire real property from public or private sources, by purchase, lease, lease with an option to purchase, or by gift, for use as a school facility;

d. Receive and disburse funds for school purposes;

e. Make contracts and leases for the procurement of services, equipment and supplies;

f. Incur temporary debts in anticipation of the receipt of funds;

g. Solicit and accept any gifts or grants for school purposes; [and]

h. Purchase appropriate insurance; and

i. Have such other powers as are necessary to fulfill its charter and which are not inconsistent with [this act] P.L.1995, c.426 (C.18A:36A-1 et seq.) or the requirements of the [commissioner] charter school authorizer which granted its charter.

The board of trustees of a charter school shall comply with the provisions of the "Open Public Meetings Act," P.L.1975, c.231 (C.10:4-6 et seq.).

(cf: P.L.1995, c.426, s.6)

20. Section 8 of P.L.1995, c.426 (C.18A:36A-8) is amended to read as follows:

8. a. Preference for enrollment in a charter school shall be given to students who reside in the school district [in which] specified in the approved charter school [is located] application; except that in the case of a charter school located in a school facility which is being leased or has been purchased from a school district, the first preference for enrollment in the charter school shall be given to students who reside in the attendance area established by the district for that facility. If there are more applications to enroll in the charter school than there are spaces available, the charter school shall select students to attend using a [random selection process] certified public lottery. The charter school authorizer shall develop a procedure for publicizing and certifying a lottery conducted by a charter school to which it has granted a charter.

A charter school shall not charge tuition [to students who reside in the district] and may only charge fees that may also be charged by other public schools in the State.

b. A charter school shall allow any student who was enrolled in the school in the immediately preceding school year to enroll in the charter school in the appropriate grade unless the appropriate grade is not offered at the charter school.

c. A charter school may give enrollment priority to a sibling of a student enrolled in the charter school.

d. If available space permits, a charter school may enroll non-resident students. The terms and condition of the enrollment shall be outlined in the school's charter contract and approved by the [commissioner] charter school authorizer.

e. The admission policy of the charter school shall, to the maximum extent practicable, seek the enrollment of a cross section of the community's school age population including racial and academic factors.

(cf: P.L.1995, c.426, s.8)

21. Section 9 of P.L.1995, c.426 (C.18A:36A-9) is amended to read as follows:

9. A student may withdraw from a charter school at any time. A student may be expelled from a charter school based on criteria determined by the board of trustees, which are consistent with the provisions of N.J.S.18A:37-2, and approved by the [commissioner] charter school authorizer as part of the school's charter contract. Any expulsion shall be made upon the recommendation of the charter school principal, in consultation with the student's teachers.

(cf: P.L.1995, c.426, s.9)

22. Section 10 of P.L.1995, c.426 (C.18A:36A-10) is amended to read as follows:

10. A charter school may be located in part of an existing public school building, in space provided on a public work site, in a public building, or any other suitable location. [In the case of a nonpublic school that converts to a charter school pursuant to the provisions of section 1 of P.L.2011, c.140 (C.18A:36A-4.1), the charter school may be located in the same school building in which the nonpublic school was located.] The facility shall be exempt from public school facility regulations except those pertaining to the health or safety of the pupils. A charter school shall not construct a facility with public funds other than federal funds.

(cf: P.L. 2011, c.140, s.3)

23. Section 11 of P.L.1995, c.426 (C.18A:36A-11) is amended to read as follows:

11. a. A charter school shall operate in accordance with its charter and the provisions of law and regulation which govern other public schools; except that, upon the request of the board of trustees of a charter school, the commissioner may exempt the school from State regulations concerning public schools, except those pertaining to assessment and accountability, testing, civil rights and student health and safety, if the board of trustees satisfactorily demonstrates to the commissioner that the exemption will advance the educational goals and objectives of the school.

b. A charter school shall comply with the provisions of chapter 46 of Title 18A of the New Jersey Statutes concerning the provision of services to handicapped students; except that the fiscal responsibility for any student currently enrolled in or determined to require a private day or residential school shall remain with the district of residence.

Within 15 days of the signing of the individualized education plan, a charter school shall provide notice to the resident district of any individualized education plan which results in a private day or residential placement. The resident district may challenge the placement within 30 days in accordance with the procedures established by law.

c. A charter school shall comply with applicable State and federal anti-discrimination statutes.

d. A charter school shall not engage in any sectarian practices in its educational programs, admission or employment policies, or any of its operations.

e. The board of trustees of a charter school shall adopt and implement a nepotism policy that is in accordance with the provisions of law and regulation regarding nepotism policies which govern other public schools.

f. The provisions of section 7 of P.L.1996, c.138 (C.18A:7F-7) shall be applicable to a charter school.

(cf: P.L.2007, c.260, s.57)

24. Section 14 of P.L.1995, c.426 (C.18A:36A-14) is amended to read as follows:

14. a. The board of trustees of a charter school shall have the authority to decide matters related to the operations of the school including budgeting, curriculum, and operating procedures, subject to the school's charter. The board shall provide for appropriate insurance against any loss or damage to its property or any liability resulting from the use of its property or from the acts or omissions of its officers and employees.

b. In the case of a currently existing public school which becomes a charter school pursuant to the provisions of subsection b. of section 4 of [this act] P.L.1995, c.426 (C.18A:36A-4), all school employees of the charter school shall be deemed to be members of the bargaining unit defined in the applicable agreement and shall be represented by the same majority representative organization as the employees covered by that agreement. In the case of other charter schools, the board of trustees of a charter school shall have the authority to employ, discharge and contract with necessary teachers and nonlicensed employees subject to the school's charter. The board of trustees may choose whether or not to offer the terms of any collective bargaining agreement already established by the school district for its employees, but the board shall adopt any health and safety provisions of the agreement. The charter school and its employees shall be subject to the provisions of the "New Jersey Employer-Employee Relations Act," P.L.1941, c.100 (C.34:13A-1 et seq.). A charter school shall not set a teacher salary lower than the minimum teacher salary specified pursuant to section 7 of P.L.1985, c.321 (C.18A:29-5.6) nor higher than the highest step in the salary guide in the collective bargaining agreement which is in effect in the district in which the charter school is located.

c. All classroom teachers and professional support staff shall hold appropriate New Jersey certification. The commissioner shall make appropriate adjustments in the alternate route program in order to expedite the certification of persons who are qualified by education and experience. All classroom teachers shall demonstrate that the teacher is highly qualified. To be considered highly qualified, a teacher shall possess, at a minimum, a bachelor's degree from a regionally accredited institution of higher education, and demonstrate mastery of the subject matter taught through a combination of teaching experience, professional development, other related work experience, and subject matter knowledge garnered during prior employment experience.

d. A public school employee, tenured or non-tenured, may request a leave of absence of up to three years from the local board of education or State district superintendent in order to work in a charter school. Approval for a leave of absence shall not be unreasonably withheld. Employees on a leave of absence as provided herein shall remain in, and continue to make contributions to, their retirement plan during the time of the leave and shall be enrolled in the health benefits plan of the district in which the charter school is located. The charter school shall make any required employer's contribution to the district's health benefits plan.

e. Public school employees on a leave shall not accrue tenure in the public school system but shall retain tenure, if so applicable, and shall continue to accrue seniority, if so applicable, in the public school system if they return to their non-charter school when the leave ends. An employee of a charter school shall not accrue tenure pursuant to N.J.S.18A:17-2, N.J.S.18A:17-3, or N.J.S.18A:28-5, but shall acquire streamline tenure pursuant to guidelines promulgated by the commissioner, and the charter shall specify the security and protection to be afforded to the employee in accordance with the guidelines.

f. Any public school employee who leaves or is dismissed from employment at a charter school within three years shall have the right to return to the employee's former position in the public school district which granted the leave of absence, provided the employee is otherwise eligible for employment in the public school.

(cf: P.L.1995, c.426, s.14)

25. Section 16 of P.L.1995, c.426 (C.18A:36A-16) is amended to read as follows:

16. a. The charter school authorizer shall continually monitor the performance and legal compliance of each charter school to which it has granted a charter. The charter school authorizer shall have the authority to conduct any reasonable oversight activities necessary to fulfill its responsibilities that are consistent with the provisions of P.L.1995, c.426 (C.18A:36A-1 et seq.) and do not diminish the autonomy provided to the charter school. In the event that a charter school authorizer determines that a charter school's performance is unsatisfactory or that the charter school is not in compliance with a legal requirement, the charter school authorizer shall promptly notify the charter school of the deficiency and shall provide a reasonable opportunity for the charter school to address the deficiencies. The charter school authorizer may require that the charter school develop and implement a corrective action plan to address any deficiency.

The [commissioner] charter school authorizer shall annually assess whether each charter school to which it has granted a charter is meeting the goals of its charter contract, and shall conduct a comprehensive review prior to granting a renewal of the charter. The [county superintendent of schools of the county in which the charter school is located] charter school authorizer shall have on-going access to the records and facilities of the charter school to ensure that the charter school is in compliance with its charter and that State board regulations concerning assessment and accountability, testing, civil rights, and student health and safety are being met.

b. In order to facilitate the [commissioner's] charter school authorizer's review, each charter school shall submit an annual report to the [local board of education, the county superintendent of schools, and the commissioner in the form prescribed by the commissioner. The report shall be received annually by the local board, the county superintendent, and the commissioner] charter school authorizer no later than August 1.

The report shall also be made available to the [parent or guardian of a student enrolled in the charter school] public.

c. [By April 1, 2001, the commissioner shall hold public hearings in the north, central, and southern regions of the State to receive input from members of the educational community and the public on the charter school program.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

d. [The commissioner shall commission an independent study of the charter school program. The study shall be conducted by an individual or entity identified with expertise in the field of education and the selection shall be approved by the Joint Committee on the Public Schools. The individual or entity shall design a comprehensive study of the charter school program.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

e. [The commissioner shall submit to the Governor, the Legislature, and the State Board of Education by October 1, 2001 an evaluation of the charter school program based upon the public input required pursuant to subsection c. of this section and the independent study required pursuant to subsection d. of this section. The evaluation shall include, but not be limited to, consideration of the following elements:

(1) the impact of the charter school program on resident districts' students, staff, parents, educational programs, and finances;

(2) the impact of the charter school program and the increased number of schools on the economics of educational services on a Statewide basis;

(3) the fairness and the impact of the reduction of available resources on the ability of resident districts to promote competitive educational offerings;

(4) the impact of the shift of pupils from nonpublic schools to charter schools;

(5) the comparative demographics of student enrollments in school districts of residence and the charter schools located within those districts. The comparison shall include, but not be limited to, race, gender, socioeconomic status, enrollment of special education students, enrollment of students of limited English proficiency, and student progress toward meeting the core curriculum content standards as measured by student results on Statewide assessment tests;

(6) the degree of involvement of private entities in the operation and financial support of charter schools, and their participation as members of charter school boards of trustees;

(7) verification of the compliance of charter schools with applicable laws and regulations;

(8) student progress toward meeting the goals of the charter schools;

(9) parent, community and student satisfaction with charter schools;

(10) the extent to which waiting lists exist for admission to charter schools and the length of those lists;

(11) the extent of any attrition among student and faculty members in charter schools; and

(12) the results of the independent study required pursuant to subsection d. of this section.

The evaluation shall include a recommendation on the advisability of the continuation, modification, expansion, or termination of the program. If the evaluation does not recommend termination, then it shall include recommendations for changes in the structure of the program which the commissioner deems advisable. The commissioner may not implement any recommended expansion, modification, or termination of the program until the Legislature acts on that recommendation.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)

(cf: P.L.2000, c.142, s.3)

26. Section 17 of P.L.1995, c.426 (C.18A:36A-17) is amended to read as follows:

17. A charter granted by the [commissioner] charter school authorizer pursuant to the provisions of [this act] P.L.1995, c.426 (C.18A:36A-1 et seq.), shall be granted for a [four-year] five-year period and may be renewed for up to a [five-year] ten-year period, as determined by the charter school authorizer. The [commissioner] charter school authorizer may revoke a school's charter if the school has not fulfilled [any condition imposed by the commissioner in connection with the granting of the charter or if the school has violated] any provision of its charter contract. The [commissioner] charter school authorizer may place the charter school on probationary status to allow the implementation of a remedial plan after which, if the plan is unsuccessful, the charter may be summarily revoked. The [commissioner] charter school authorizer shall develop procedures and guidelines for the revocation and renewal of a school's charter.

a. No later than September 1 of each school year, the charter school authorizer shall provide a charter renewal application and guidance to each charter school whose charter with the charter school authorizer will expire at the end of that school year. The guidance shall include the criteria that the charter school authorizer will use in determining whether to renew a charter. These criteria shall be based on the charter contract entered into by the charter school authorizer and the charter school.

b. In order to determine whether a charter that it has granted should be renewed, no later than September 1 of each school year, a charter school authorizer shall issue a charter school performance report for each charter school whose charter with the charter school authorizer will expire at the end of the current school year. The charter school performance report shall provide a summary of the charter school's performance record, based on data required in the charter contract, and shall identify any matters that the charter school authorizer believes may jeopardize the renewal of the charter. The charter school shall have 30 days to issue a response to the performance report. The response shall include, but need not be limited to:

(1) comments that relate to the annual reports that were issued by the charter school authorizer;

(2) information not included in the performance report that may support the case for the charter's renewal; and

(3) a description of improvements that are currently being undertaken or are planned to be implemented during the next term upon the charter's renewal.

c. No later than October 15 of the school year in which its charter will expire, a charter school board of trustees shall submit a complete charter school renewal application to its original charter school authorizer. The charter school authorizer shall not renew a charter if the renewal application is not received within this timeframe.

d. No later than 90 days after the receipt of a complete charter school renewal application, a charter school authorizer shall make a determination to renew or not to renew a charter. In making this determination, a charter school authorizer shall ensure that the decision is based on evidence of the charter school's performance during the term of its charter in accordance with the charter contract, and that any data used in making the determination is available to the public.

e. No later than 30 days after a determination to renew or not to renew a charter, a charter school authorizer shall publish a report detailing the charter school authorizer's reasons for the determination. Each report shall be posted on the Department of Education's website. In the event that the charter school authorizer is the charter school authorizing board established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall forward a copy of each report to the department no later than 25 days after making the determination to renew or not to renew the charter.

f. A charter school authorizer may, at any time, revoke a charter or place a charter school in probationary status if the charter school authorizer determines that a charter school has:

(1) committed a material and substantial violation of any of the terms, conditions or procedures required under P.L.1995, c.426 (C.18A:36A-1 et seq.) or included in the charter contract;

(2) failed to meet or make sufficient progress towards the performance expectations established in its charter contract;

(3) failed to meet generally accepted standards of fiscal management; or

(4) violated any material provision of a law, rule, or regulation from which a charter school is not exempt.

g. A charter school authorizer shall develop a procedure for revoking a charter. At a minimum, the procedure shall include the following:

(1) the provision of timely notification to the charter school board of trustees, including the reasons why revocation is being considered;

(2) a reasonable amount of time for the charter school board of trustees to develop a response to the concerns raised by the charter school authorizer; and

(3) an orderly proceeding, which may be recorded, at which the board of trustees may present information, through documents and testimony, challenging the stated rationale for the possible revocation of the charter. The board of trustees shall be allowed to have legal representation and call witnesses at the proceedings.

h. No later than 30 days after a determination to revoke or not to revoke a charter, a charter school authorizer shall publish a report detailing the charter school authorizer's reasons for the determination. Each report shall be posted on the Department of Education's website. In the event that the charter school authorizer is the charter school authorizing board established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), the board shall forward a copy of each report to the department no later than 25 days after making the determination to revoke or not to revoke the charter.

(cf: P.L.1995, c.426, s.17)

27. Section 4 of P.L.2000, c.142 (C.18A:36A-17.1) is amended to read as follows:

4. a. If at any time [the commissioner] a charter school authorizer determines that a board of trustees is in jeopardy of losing its charter or an applicant is in jeopardy of not being granted a charter, the [commissioner] charter school authorizer shall so notify the board of trustees or the applicant. The board of trustees or the applicant shall, within 48 hours of receipt of such notification, provide to the [commissioner] charter school authorizer, in writing, a complete list of the names and addresses of all students and staff currently enrolled and working in the school, or in the case of an applicant, a complete list of the names and addresses of all students and staff intending to enroll or work at the school, so the [commissioner] charter school authorizer may send the appropriate notice to the parents or guardians and staff.

b. Prior to closing a charter school, either through non-renewal or revocation of the charter, a charter school authorizer shall develop a protocol to ensure the orderly transition of students and their records to the new school of attendance, and the proper disposition of school funds, property, and assets. The protocol shall establish specific tasks to be performed, the timeframe in which the tasks shall be performed, and the individuals responsible for performing the tasks. In the event that a charter school closes for any reason, the charter school authorizer shall manage the closure to ensure an orderly transition for students and parents.

(cf: P.L.2000, c.142, s.4)

28. R.S.52:14-7 is amended to read as follows:

52:14-7. a. Every person holding an office, employment, or position

(1) in the Executive, Legislative, or Judicial Branch of this State, or

(2) with an authority, board, body, agency, commission, or instrumentality of the State including any State college, university, or other higher educational institution, and, to the extent consistent with law, any interstate agency to which New Jersey is a party, or

(3) with a county, municipality, or other political subdivision of the State or an authority, board, body, agency, district, commission, or instrumentality of the county, municipality, or subdivision, or

(4) with a school district or an authority, board, body, agency, commission, or instrumentality of the district,

shall have his or her principal residence in this State and shall execute such office, employment, or position.

This residency requirement shall not apply to any person (a) who is employed on a temporary or per-semester basis as a visiting professor, teacher, lecturer, or researcher by any State college, university, or other higher educational institution, or county or community college, or in a full or part-time position as a member of the faculty, the research staff, or the administrative staff by any State college, university, or other higher educational institution, or county or community college, that the college, university, or institution has included in the report required to be filed pursuant to this subsection, or (b) who is employed full-time by the State who serves in an office, employment, or position that requires the person to spend the majority of his or her working hours in a location outside of this State.

For the purposes of this subsection, a person may have at most one principal residence, and the state of a person's principal residence means the state (1) where the person spends the majority of his or her nonworking time, and (2) which is most clearly the center of his or her domestic life, and (3) which is designated as his or her legal address and legal residence for voting. The fact that a person is domiciled in this State shall not by itself satisfy the requirement of principal residency hereunder.

A person, regardless of the office, employment, or position, who holds an office, employment, or position in this State on the effective date of P.L.2011, c.70 but does not have his or her principal residence in this State on that effective date shall not be subject to the residency requirement of this subsection while the person continues to hold office, employment, or position without a break in public service of greater than seven days.

Any person may request an exemption from the provisions of this subsection on the basis of critical need or hardship from a five-member committee hereby established to consider applications for such exemptions. The committee shall be composed of three persons appointed by the Governor, a person appointed by the Speaker of the General Assembly, and a person appointed by the President of the Senate, each of whom shall serve at the pleasure of the person making the appointment and shall have a term not to exceed five years. A vacancy on the committee shall be filled in the same manner as the original appointment was made. The Governor shall make provision to provide such clerical, secretarial and administrative support to the committee as may be necessary for it to conduct its responsibilities pursuant to this subsection.

The decision on whether to approve an application from any person shall be made by a majority vote of the members of the committee, and those voting in the affirmative shall so sign the approved application. If the committee fails to act on an application within 30 days after the receipt thereof, no exemption shall be granted and the residency requirement of this subsection shall be operative. The head of a principal department of the Executive Branch of the State government, a Justice of the Supreme Court, judge of the Superior Court and judge of any inferior court established under the laws of this State shall not be eligible to request from the committee an exemption from the provisions of this subsection.

The exemption provided in this subsection for certain persons employed by a State college, university, or other higher educational institution, or a county or community college, other than those employed on a temporary or per-semester basis as a visiting professor, teacher, lecturer, or researcher, shall apply only to those persons holding positions that the college, university, or institution has included in a report of those full or part-time positions as a member of the faculty, the research staff, or the administrative staff requiring special expertise or extraordinary qualifications in an academic, scientific, technical, professional, or medical field or in administration, that, if not exempt from the residency requirement, would seriously impede the ability of the college, university, or institution to compete successfully with similar colleges, universities, or institutions in other states. The report shall be compiled annually and shall also contain the reasons why the positions were selected for inclusion in the report. The report shall be compiled and filed within 60 days following the effective date of P.L.2011, c.70. The report shall be reviewed, revised as necessary, and filed by January 1 of each year thereafter. Each report shall be filed with the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), with the Legislature, and a report may be revised at any time by filing an amendment to the report with the Governor and Legislature.

As used in this section, "school district" means any local or regional school district established pursuant to chapter 8 or chapter 13 of Title 18A of the New Jersey Statutes and any jointure commission, county vocational school, county special services district, educational services commission, educational research and demonstration center, environmental education center, and educational information and resource center. The term "school district" shall include a charter school established pursuant to P.L.1995, c.426 (C.18A:36A-1 et seq.), except as otherwise provided pursuant to section 9 of P.L.2013, c.149 (C.18A:36C-18).

b. If any person holding any office, employment, or other position in this State shall attempt to let, farm out or transfer such office, employment, or position or any part thereof to any person, he shall forfeit the sum of fifteen hundred dollars ($1,500.00), to be recovered with costs by any person who shall sue for the same, one-half to the prosecutor and the other half to the treasurer for the use of the State.

c. No person shall be appointed to or hold any position in this State who has not the requisite qualifications for personally performing the duties of such position in cases where scientific engineering skill is necessary to the performance of the duties thereof.

d. Any person holding or attempting to hold an office, employment, or position in violation of this section shall be considered as illegally holding or attempting to hold the same; provided that a person holding an office, employment, or position in this State shall have one year from the time of taking the office, employment, or position to satisfy the requirement of principal residency, and if thereafter such person fails to satisfy the requirement of principal residency as defined herein with respect to any 365-day period, that person shall be deemed unqualified for holding the office, employment, or position. The Superior Court shall, in a civil action in lieu of prerogative writ, give judgment of ouster against such person, upon the complaint of any officer or citizen of the State, provided that any such complaint shall be brought within one year of the alleged 365-day period of failure to have his or her principal residence in this State.

(cf: P.L.2011, c.70, s.2)

29. There is appropriated from the General Fund to the Department of Education the sum of $250,000 for the purpose of supporting the operations of the charter school authorizing board.

30. Section 1 of P.L.2011, c.140 (C.18A:36A-4.1) is repealed.

31. This act shall take effect immediately.

STATEMENT

This bill provides a new short title, the "Charter School Accountability and Authorizer Act," for the law governing charter schools in New Jersey, and makes various changes to the State's charter school program.

The bill establishes the charter school authorizing board that will, in addition to the Commissioner of Education, serve as a charter school authorizer. The board will include nine members, including three members who will be appointed by the Governor, four members, one of whom will be appointed by the President of the Senate, one by the Speaker of the General Assembly, one by the Minority Leader of the Senate, and one by the Minority Leader of the General Assembly, and two ex officio members, the President of the State Board of Education, and the Executive Director of the New Jersey School Boards Association. The State Board of Education would provide oversight of the charter school authorizing board, and would have the authority to suspend the charter school authorizing board's activities, for up to three years, if the State board determines that the charter school authorizing board is deficient in performing its duties. The bill also makes an appropriation of $250,000 to support the operations of the charter school authorizing board.

Under the provisions of the bill, the process by which charter school applications are approved is modified. Each charter school authorizer would annually issue a request for proposal that would detail, among other things, the school districts or communities in which a new charter school would be approved, the criteria that the authorizer will use when evaluating applications, and any preference the authorizer may have for an applicant that demonstrates the capacity to serve a specific disadvantaged population of students.

The bill requires that the charter school authorizer and any charter school that it approves enter into a charter contract. The charter contract will specify the performance framework on which the authorizer will evaluate a charter school's performance.

The bill requires that a school district that intends to sell or lease a school facility must grant right of first refusal to purchase or lease the property to a charter school that, pursuant to its charter, enrolls students who reside in that district.

The bill includes provisions to require that a charter school: refrain from engaging in any sectarian practices; conduct an annual audit of the charter school's accounts and financial transactions; and adopt and implement a nepotism policy that is in accordance with the nepotism policy requirements that apply to other public schools.

The bill makes a number of other statutory changes, including:

� lengthens the term of an initial charter, from four years to five years, and a renewed charter from five years to, at the discretion of the charter school authorizer, up to 10 years;

� requires that a charter school teacher demonstrate that he is highly qualified according to criteria set forth in the bill;

� requires that a charter school makes admission decisions through a certified public lottery if the number of students seeking admission exceeds the number of available spaces;

� clarifies that a person holding an office, employment, or position at a charter school must have his principal residence in New Jersey;

� requires that when a student withdraws from a charter school and enrolls in another public school, the new school accept any credits earned by the student when the student was enrolled in the charter school;

� provides that a charter school must comply with the same requirements that apply to school districts regarding the retention of an undesignated general fund balance for use in subsequent school years; and

� repeals the authorization for the conversion of high-performing nonpublic schools located in failing school districts into charter schools.