SB 3391 — SCH CD-CHARTER SCHOOL-CLOSURE

and (2) a financial statement that discloses the costs of administration, instruction, and other spending categories for the charter school that is understandable to the general public and that will allow comparison of those costs to other schools or other comparable organizations, in a format required by the State Board.

(c) A charter may be revoked or not renewed if the local school board or the State Board, as the chartering entity, clearly demonstrates that the charter school did any of the following, or otherwise failed to comply with the requirements SB3391 Engrossed - 7 - LRB104 20151 LNS 33602 b of this law:

(1) Committed a material violation of any of the conditions, standards, or procedures set forth in the charter.

(2) Failed to meet or make reasonable progress toward achievement of the content standards or pupil performance standards identified in the charter.

(3) Failed to meet generally accepted standards of fiscal management.

(4) Violated any provision of law from which the charter school was not exempted.

(5) Failed to execute a charter contract after good faith negotiations in accordance with Section 27A-9.5.

In the case of revocation, the local school board or the State Board, as the chartering entity, shall notify the charter school in writing of the reason why the charter is subject to revocation.

The charter school shall submit a written plan to the local school board or the State Board, whichever is applicable, to rectify the problem.

The plan shall include a timeline for implementation, which shall not exceed 2 years or the date of the charter's expiration, whichever is earlier.

If the local school board or the State Board, as the chartering entity, finds that the charter school has failed to implement the plan of remediation and adhere to the timeline, then the chartering entity shall revoke the charter.

Except in situations of an emergency where the SB3391 Engrossed - 8 - LRB104 20151 LNS 33602 b health, safety, or education of the charter school's students is at risk, the revocation shall take place at the end of a school year.

Nothing in this Section shall be construed to prohibit an implementation timetable that is less than 2 years in duration.

No local school board may arbitrarily or capriciously revoke or not renew a charter.

Except for extenuating circumstances outlined in this Section, if a local school board revokes or does not renew a charter, it must ensure that all students currently enrolled in the charter school are placed in schools that are higher performing than that charter school, as defined in the State's federal Every Student Succeeds Act accountability plan.

In determining whether extenuating circumstances exist, a local school board must detail, by clear and convincing evidence, that factors unrelated to the charter school's accountability designation outweigh the charter school's academic performance.

(d) (Blank).

(e) Notice of a local school board's decision to deny, revoke, or not renew a charter shall be provided to the State Board.

The State Board may reverse a local board's decision to revoke or not renew a charter if the State Board finds that the charter school or charter school proposal (i) is in compliance with this Article and (ii) is in the best interests of the students it is designed to serve.

The State Board may condition the granting of an appeal on the acceptance by the SB3391 Engrossed - 9 - LRB104 20151 LNS 33602 b charter school of funding in an amount less than that requested in the proposal submitted to the local school board.

The State Board must appoint and utilize a hearing officer for any appeals conducted under this subsection.

Final decisions of the State Board are subject to judicial review under the Administrative Review Law.

(f) Notwithstanding other provisions of this Article, if the State Board on appeal reverses a local board's decision or if a charter school is approved by referendum, the State Board shall act as the authorized chartering entity for the charter school and shall perform all functions under this Article otherwise performed by the local school board.

The State Board shall report the aggregate number of charter school pupils resident in a school district to that district and shall notify the district of the amount of funding to be paid by the State Board to the charter school enrolling such students.

The charter school shall maintain accurate records of daily attendance and student enrollment and shall enter data on the students served, their characteristics, their particular needs, the programs in which they participate, and their academic achievement into the statewide student information system established by the State Board.

The State Board shall withhold from funds otherwise due the district the funds authorized by this Article to be paid to the charter school and shall pay such amounts to the charter school in quarterly installments, calculated as follows:

SB3391 Engrossed - 10 - LRB104 20151 LNS 33602 b (1) The amount of the first quarterly payment shall be based on the projected number of students who will be enrolled in the charter school in the upcoming school year, multiplied by one-fourth of the resident district's per capita tuition amount.

Each charter school shall submit its projected enrollment by no later than August 1 of each year on a form provided by the State Board for this purpose.

(2) The amount of the second quarterly payment shall be calculated such that the aggregate amount of the first and second quarterly installments is equal to the number of students reported as enrolled at the charter school on October 1 in the State Board's student information system, multiplied by one-half of the resident district's per capita tuition amount.

(3) The amount of the third quarterly payment shall be based on the number of students enrolled in the charter school on January 1, multiplied by one-fourth of the resident district's per capita tuition amount.

Each charter school shall submit its January 1 enrollment by no later than January 5 of each year on a form provided by the State Board for this purpose.

(4) The amount of the fourth quarterly payment shall be calculated such that the aggregate amount of the third and fourth installments is equal to the number of students reported as enrolled at the charter school on March 1 in SB3391 Engrossed - 11 - LRB104 20151 LNS 33602 b the State Board's student information system, multiplied by one-half of the resident district's per capita tuition amount.

(g) (Blank).

(h) The State Board shall pay directly to a charter school it authorizes any federal or State funding attributable to a student with a disability attending the school.

(Source:

P.A.

103-175, eff.

6-30-23.) (105 ILCS 5/27A-9.5 new) Sec.

(b) UponFor approvalan ofinitial aagreement, charterno renewalpublic byfunds anmay authorizer,be thedisbursed to a charter operator shallunless executeand theuntil renewala charter agreement nohas laterbeen thanfully 90executed daysby afterboth the datecharter ofoperator and the authorizer'sauthorizer. final renewal approval.

(c)After Failurethe ofinitial aagreement, the charter operator toand executethe anauthorizer approvedshall negotiate the terms of the charter renewal agreement within 90 days after the 90-dayauthorizer's periodpassage shallof constitute:a renewal resolution consistent with applicable State law and district policy.

(1)In ano refusalcircumstance may the charter operator operate under an expired agreement at the start of a school year that begins more than 90 days after the renewalauthorizer's bySB3391 Engrossed - 12 - LRB104 20151 LNS 33602 b passage of the charterrenewal operator;resolution.

andNo (2)public afunds nonrenewalmay ofbe thedistributed charterafter for90 alldays purposesuntil underan thisagreement Article,is withoutreached. further action required by the authorizer.

(d) A charter schooloperator's thatrefusal is deemed nonrenewed under subsection (c) is ineligible to receiveexecute anyor paymentsnegotiate, fromin agood schoolfaith, district, including a schoolcharter districtrenewal organizedagreement underthat Articleincorporates 34, after the expirationrequirements of theState existinglaw charteror term,district SB3391signed-agreement -requirements 6constitutes -grounds LRB104for 20151nonrenewal. LNS 33602 b including, but not limited to:

(1) per-pupil tuition or payments;

(2) supplemental, categorical, or grant funding administered by the district;

and (3) any pass-through or discretionary funds controlled by the district.

The school district shall cease payments upon expiration of the charter term if a renewal agreement has not been executed as required by subsection (b).

(e) A charter operator's refusal to execute a renewal agreement under subsection (b) due to disagreement with the terms approved by the authorizer, including labor-related, governance, or accountability provisions, may not delay, toll, or suspend the 90-day execution requirement under subsection (b) or the funding consequences under subsection (d).

(f) A charter operator that fails to execute a renewal agreement within the period specified in subsection (b) may not continue to operate the charter school beyond the expiration of the existing charter term and is subject to the closure procedures under this Article.

(g) At the time an authorizer grants approval of a charter renewal, the authorizer shall provide written notice to the charter operator of the execution deadline under subsection (b) and the funding consequences of a failure to execute under subsection (d).

(h) Nothing in this Section shall be construed to impair SB3391 - 7 - LRB104 20151 LNS 33602 b the rights of employees or labor organizations under the Illinois Educational Labor Relations Act.

or (3) a segregated reserve fund reflected on the charter school's audited financial statements and held in a manner acceptable to the authorizerauthorizer. and the State Board.

A charter schooloperator in operation on the effective date of this amendatory Act of the 104th General Assembly must comply with this Section within 2 fiscal years after the effective date of this amendatory Act of the 104th General Assembly.

(b) The closure security under subsection (a) for a SB3391 Engrossed - 13 - LRB104 20151 LNS 33602 b charter school in operation for at least one fiscal year must equal 3 months of the charter school's average operating expenditures based on its last audited fiscal year.

If the closure security is below the required amount, the authorizer SB3391may - 8 - LRB104 20151 LNS 33602 b shall require a remediation plan to reach compliance within 2 fiscal years.

For a charter schooloperator in operation for less than one fiscal year, the closure security must equal 3 months of the charter school's projected annual budget, as approved by the charter's authorizer.

The closure security for such a charter schooloperator must be established and funded to at least 50% of the required amount, based on the charter school'soperator's projected budget, at the time the charter is granted or, for a charter granted before the effective date of this amendatory Act of the 104th General Assembly, within 30 days after the effective date of this amendatory Act of the 104th General Assembly and must reach the full required amount by the end of the charter's second full fiscal year.

SB3391 Engrossed - 14 - LRB104 20151 LNS 33602 b (2) any outstanding payroll for employees for time worked through the closure date, including legally required benefits, and severance if contractually required under the charter school'soperator's collective bargaining SB3391 - 9 - LRB104 20151 LNS 33602 b agreements or employment contracts;

and (5) any reasonable administrative costs incurred by the authorizer or the State Board to supervise and execute the closure and student transition.transition;

and (6) any costs related to emergency expenditures not created by the negligence or mismanagement of the charter operator and agreed to by the authorizer.

(d)Any Aremaining charterclosure operatorsecurity mustfunds provideafter thesatisfaction authorizerof and the Stateobligations Boarddescribed writtenin noticethis ofsubsection theshall charterbe operator'sreturned intent to close a charter school no fewer than 90 days before the plannedauthorizer closure and mustshall provideremain immediatepublic noticefunds uponin anyaccordance involuntarywith closureState action,and insolvencyfederal event,law. or cessation of operations.

(d) A charter operator must provide the authorizer and the SB3391 Engrossed - 15 - LRB104 20151 LNS 33602 b State Board written notice of the charter operator's intent to close a charter school no fewer than 90 days before the planned closure and must provide immediate notice upon any involuntary closure action, insolvency event, or cessation of operations.

and SB3391 - 10 - LRB104 20151 LNS 33602 b (2) consideration in denying a charter renewal or revoking the charter or ineligibility to operate additional charter campuses.

For purposes of this Section, the State Board may act in its regulatory oversight capacity for all authorizers and in its capacity as an authorizer for charter schools it directly authorizes under this Article.

SB3391 Engrossed - 16 - LRB104 20151 LNS 33602 b In cases in which a closure results from gross negligence, willful misconduct, or intentional misappropriation of public funds by the charter operator or its officers or directors, the authorizer or State Board may seek recovery from individual officers, directors, or persons who knowingly caused the gross negligence, willful misconduct, or intentional misappropriation, including civil penalties not to exceed $50,000 per violation and reasonable attorney's fees.

(f) Upon closure, any public assets purchased with public funds mustshall be returned to the authorizer or otherwise disposed of accordingin toaccordance procedureswith establishedapplicable byState theand Statefederal Boardlaw orgoverning theproperty authorizer.acquired with public funds.

(g) The State Board shall adopt rules to implement this SB3391 - 11 - LRB104 20151 LNS 33602 b Section within 180one daysyear after the effective date of this amendatory Act of the 104th General Assembly, including acceptable forms of closure security, procedures for claims on closure security, and documentation standards for authorizers to approve closure security.

(a) If an authorizer determines that a charter school is SB3391 Engrossed - 17 - LRB104 20151 LNS 33602 b in financial distress, the authorizer may require the charter operator to submit a financial remediation plan for approval within 30 days after that determination.

(b) If the authorizer determines that (i) the charter school has failed to implement an approved remediation plan or (2)(ii) the financial distress presents an immediate risk to SB3391 - 12 - LRB104 20151 LNS 33602 b students, employees, or public funds, the authorizer may initiate financial interventionintervention. by appointing an independent fiscal manager approved by the authorizer and the State Board.

(c) The fiscalauthorizer manager may exercise authority, limited to financial matters, over the charter school, including:

SB3391 Engrossed - 18 - LRB104 20151 LNS 33602 b (4) protection, inventory, and preservation of public assets;

The fiscal manager may not exercise authority over curriculum, instruction, educational programming, or personnel matters unrelated to financial administration.

(e) Prior to initiating financial intervention, the authorizer shall provide written notice to the charter SB3391 - 13 - LRB104 20151 LNS 33602 b operator describing the basis for the intervention and provide an opportunity to respond, except in cases in which immediate action is required to protect students or public funds.

(g) Financial intervention under this Section does not preclude charter revocation, nonrenewal, or closure and may be used to stabilize operations pending an orderly closure SB3391 Engrossed - 19 - LRB104 20151 LNS 33602 b pursuant to this Article.Article, consistent with paragraph (2) of subsection (c) of Section 27A-9.