SB 4040 — CHARTER SCH-CONTRACT TRANSFER

*LRB10420759LNS34263b* SB4040 104THEngrossed GENERALLRB104 ASSEMBLY20759 StateLNS of34263 Illinoisb andAN 2026ACT SB4040concerning Introducededucation. 2/6/2026, by Sen.

Cristina Castro SYNOPSIS AS INTRODUCED:

ILCS 5/27A-7.5 ILCS 5/27A-9 Amends the Charter Schools Article of the School Code.

Provides that on July 1, 2027, any charter school authorized by the State Board of Education and located outside of the geographical area of a district located in a city of over 500,000 inhabitants shall have its authorization transferred to the local board or boards for each district from which the charter school draws enrollment.

Provides that all authorizer powers, duties, contracts, and pending business of the State Board as the school's authorizer must be transferred to the local board or boards.

Provides that all charter contract terms shall remain in full force and effect unless amended by mutual agreement of the parties, except that the term of the contract shall be 7 years starting July 1, 2027.

Provides that if a State-authorized charter school that is subject to transfer is authorized to enroll students from more than one district, the boards of all districts from which the charter school draws enrollment must establish a joint charter management team that consists of at minimum one administrator from each district.

Provides that the joint charter management team must develop and execute a charter oversight plan that is submitted to the State Board as part of the charter certification process.

Provides that final decisions of a local school board to deny, revoke, or not renew a charter are subject to judicial review under the Administrative Review Law.

Removes language providing that:

the State Board of Education 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 the 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 charter school of funding in an amount less than that requested in the proposal submitted to the local school board;

and the State Board must appoint and utilize a hearing officer for any appeals.

Makes conforming changes.

Effective immediately.

LRB104 20759 LNS 34263 b A BILL FOR SB4040 LRB104 20759 LNS 34263 b AN ACT concerning education.

Fee;

fee.local charter authorization pilot program;

appeal hearing fee.

(j) The State Board may charge a charter school that it authorizes a fee not to exceed 3% of the revenue provided to the school to be used exclusively for covering the cost of SB4040 Engrossed - 2 - LRB104 20759 LNS 34263 b authorizing activities.

Authorizing activities may include, SB4040 - 2 - LRB104 20759 LNS 34263 b but are not limited to:

Standards and procedures of the SB4040 Engrossed - 3 - LRB104 20759 LNS 34263 b Commission in effect on July 1, 2020 shall be deemed standards SB4040 - 3 - LRB104 20759 LNS 34263 b and procedures of the State Board and shall remain in effect until amended or repealed by the State Board.

On July 1, 2027, any charter school authorized by the State Board and located outside of the geographical area of a school district organized under Article 34 of this Code shall have its authorization transferred to the local board or boards for each district from which the charter school draws enrollment, in accordance with subsection (a-5) of Section 27A-9.

(k-5) On July 1, 2027, there is established a local charter authorization pilot program under which authorization of some State-authorized charter schools shall be returned to the local school board or boards, in accordance with subsection (a-5) of Section 27A-9.

If more than one entity requests a hearing, then the State Board may hold only one hearing, wherein the applicant and the school district shall SB4040 Engrossed - 4 - LRB104 20759 LNS 34263 b have an equal opportunity to present their respective positions.

transfer of authorization;

(a-5) On July 1, 2027, any charter school (i) that is authorized by the State BoardBoard, and(ii) that is located outside of the geographicalgeographic area of a school district organized under ArticleSB4040 34Engrossed of- this5 Code- shallLRB104 have20759 itsLNS 34263 b Article 34, and (iii) whose authorization transferredallows for the charter school to enroll students who reside within the localgeographic boardboundaries of more than one school district or SB4040to -enroll 5students -who LRB104reside 20759within LNSthe 34263geographic bboundaries boardsof fora eachschool district that has a student enrollment of at least 29,000 students shall have the charter school's authorization transferred to the local school board or boards of the districts from which the charter school draws enrollment.

On thatJuly date,1, 2027, all authorizer powers, duties, contracts, and pending business of the State Board as the charter school's authorizer must be transferred to the local school board or boards.

All references in the charter contract to the State Board shall, in the appropriate context, be deemed to refer to the local school board or boards forof eachthe districtdistricts from which the charter school draws enrollment.

Renewal or nonrenewal decisions of the local school board or boards at the end of the initial 7-year term shall be determined as outlinedprovided in Section 27A-9 of this Code.Section.

If a State-authorized charter school that is subject to transfer pursuantunder to this subsection (a-5) is authorized to enroll students from more than one school district, the local school boards of allthe districts from which the charter school draws enrollment must establish a joint charter management team that SB4040 Engrossed - 6 - LRB104 20759 LNS 34263 b consists ofof, at minimumminimum, one administrator from each school district.

The plan must detail the respective roles and responsibilities of each of the local school boards that is a party to the agreement, including with respect to those authorizer powers and duties outlinedunder in SB4040 - 6 - LRB104 20759 LNS 34263 b Section 27A-7.10.

A multi-district charter school may only be held accountable only to one set of goals, objectives, pupil performance standards, and content standards.

TheNothing Statein Boardthis subsection may adoptbe suchconstrued rules as making a school district liable for any preexisting debt or obligation that a charter school may behave necessaryundertaken prior to implementthe thistransfer subsectionof (a-5).authorization as described in this subsection.

The State Board may adopt any rules that may be necessary to implement this subsection.

and (2) a financial statement that discloses the costs of administration, instruction, and other spending categories SB4040 Engrossed - 7 - LRB104 20759 LNS 34263 b 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.

SB4040 - 7 - LRB104 20759 LNS 34263 b (2) Failed to meet or make reasonable progress toward achievement of the content standards or pupil performance standards identified in the charter.

The plan shall include a timeline for implementation, which shall not SB4040 Engrossed - 8 - LRB104 20759 LNS 34263 b exceed 2 years or the date of the charter's expiration, whichever is earlier.

Except for SB4040 - 8 - LRB104 20759 LNS 34263 b 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.

FinalSB4040 decisionsEngrossed of- 9 - LRB104 20759 LNS 34263 b 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 boardor arecharter subjectschool toproposal judicial(i) reviewis underin compliance with this Article and (ii) is in the Administrativebest Reviewinterests Law.of the students it is designed to serve.