Report Title:

Charter Schools; Funding; Standards; Personnel; Idea

 

Description:

Makes clarifying amendments to the new century charter school statutes. Establishes and provides funding for a per pupil allocation funding mechanism. Allows charter school employees to participate in the State's workers' compensation system. Enables charter schools to receive federal grant moneys under the Individuals with Disabilities Education Act. Appropriates funds for these various purposes. (SD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

1136

TWENTY-THIRD LEGISLATURE, 2005

H.D. 3

STATE OF HAWAII

S.D. 2


 

A BILL FOR AN ACT

 

RELATING TO EDUCATION.

 

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

PART I

PURPOSE

SECTION 1. The legislature finds that the State has made a commitment to public education and public schools through its constitution and numerous laws. Until recently, all public education was established, financially supported, and controlled by the board of education and the department of education. However, the creation of new century charter schools outside of the department of education, chartered directly by the board of education, has in effect created two groups of schools. Although they share a wide variety of common objectives, there has been an ongoing debate among the stakeholders as to which operational similarities should, in the interests of parity, be clarified in statute as legally comparable as well.

There are nevertheless some important differences between the two groups, particularly with regards to their target populations, approaches to education, legal mandates, and funding structures. The flexibility that generates many of these differences is at the heart of the vitality of charter schools as an educational reform model in Hawaii and should be retained. However, this flexibility must never be construed to allow charter schools to be held to a lower standard of educational and administrative accountability than that of department of education schools. While the accountability provisions for department of education schools expressed in section 302A-1004, Hawaii Revised Statutes, are rather specific, the accountability provisions for charter schools included in sections 302A-1186, 302A-1187, and elsewhere in the Hawaii Revised Statutes are somewhat less specific. This is intended to preserve the capacity for innovation so critical to the vibrancy of charter schools as an educational reform model.

However, two key elements of accountability for charter schools that have been ambiguous include the authority of the board of education to reject applications for new charters and to revoke existing charters. The attorney general has recently opined that the board has the authority to do neither. As the elected body mandated by the Constitution of the State of Hawaii to "formulate policy and to exercise control over the public school system," the board of education should have these powers in unequivocal terms.

As the charter school movement in Hawaii has built capacity and gained momentum over time, it has encouraged creativity and excellence in public education, with a specialized niche in serving those students who do not find department of education schools an optimal environment for learning and development. Hawaii's charter schools have also demonstrated increased enrollment, higher academic achievement, and greater fiscal accountability. Presently, twenty-seven new century charter schools employ approximately five hundred public employees and educate approximately five thousand five hundred students.

While many of Hawaii's education laws were enacted at a time when all public schools were department of education schools, the creation of new century charter schools requires clarifications of applicable law. Furthermore, effective implementation of the ambitious reform initiatives included in Act 51, Session Laws of Hawaii 2004, also known as the "Reinventing Education Act of 2004," also require some additional fine tuning of existing provisions. These necessary modifications center primarily on the issues of:

(1) Accountability, personnel, and weighted student formula;

(2) Funding;

(3) Workers' compensation; and

(4) The federal Individuals with Disabilities Education Act.

PART II

ACCOUNTABILITY, PERSONNEL, AND WEIGHTED STUDENT FORMULA

SECTION 2. The state auditor's report no. 05-01 has reported discrepancies regarding the exemptions contained in section 302A-1184(a), Hawaii Revised Statutes. Initially, the attorney general advised the board of education that the exemption did not include state laws relating to collective bargaining, discriminatory employment practices, and health and safety requirements. However, most recently, the attorney general stated that the exemption only applied to state laws relating to public schools. This ambiguity, as well as various issues relating to personnel and the weighted student formula, suggests a need for further clarification of the law.

The purpose of this part is to facilitate the ongoing improvement of new century charter school laws by:

(1) Clarifying certain aspects of Hawaii's charter school laws and updating the definition of "new century charter schools";

(2) Creating a more rigorous standard for the chartering of additional new century charter schools;

(3) Allowing local school boards to participate in the department of education listings;

(4) Ensuring that qualified personnel may move more freely between the department schools and charter schools;

(5) Enabling the charter schools to propose their own weighted student formula;

(6) Requiring collective bargaining increases allocated by the department of budget and finance to the charter school administrative office;

(7) Exempting the charter school administrative office from the state procurement code;

(8) Clarifying that the charter school administrative office is attached to the department;

(9) Allowing the executive director to be hired through a multi-year contract;

(10) Allowing nonprofit organizations to submit a letter of intent to the board of education to convert a department school to a charter school;

(11) Requiring the charter school administrative office to have the same relationship with a newly converted new century conversion charter school as with any local charter school board;

(12) Prohibiting any chief executive officer, chief administrative officer, executive director, or otherwise from serving as an officer of the local school board; and

(13) Convening a working group to review the state auditor's recommendations regarding the charter schools' exemptions from state laws.

SECTION 3. Section 302A-101, Hawaii Revised Statutes, is amended by amending the definition of "new century charter schools" to read as follows:

""New century charter schools" means [the implementation of] schools chartered by the board of education with the flexibility to implement alternative frameworks with regard to curriculum, facilities management, instructional approach, length of the school day, week, or year, and personnel management[, formed under section 302A-1182]."

SECTION 4. Section 302A-1182, Hawaii Revised Statutes, is amended to read as follows:

"§302A-1182 New century charter schools; establishment. (a) Up to a total of twenty-three schools may be established as new century charter schools. These new century charter schools may be established by:

(1) The creation of a new school[;] pursuant to subsections (b) and (c); or

(2) The creation of a new school, comprising programs or sections of existing public school populations and using existing public school facilities, pursuant to [subsection] subsections (b)[.] and (c).

(b) Any community, group of teachers, group of teachers and administrators, entity recognized as a nonprofit organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or any program within an existing school may submit a letter of intent to the board to form a new century charter school, establish a local school board as its governing body, and develop a detailed implementation plan pursuant to subsection (c).

(c) The local school board, with the support and guidance of the executive director, shall formulate and develop a detailed implementation plan that meets the requirements of this subsection and section 302A-1184. The plan shall include the following:

(1) A description of employee rights and management issues and a framework for addressing those issues that protect the rights of employees;

(2) A plan for identifying, recruiting, and retaining highly qualified instructional faculty;

[(2)] (3) A plan for identifying, recruiting, and selecting students that is not exclusive, elitist, or segregationist;

[(3)] (4) The curriculum and instructional framework to be used to achieve student outcomes, including an assessment plan;

[(4)] (5) A comprehensive plan for the assessment of student, administrative support, and teaching personnel performance, that:

(A) Recognizes the interests of the general public;

(B) Incorporates or exceeds state educational content and performance standards;

(C) Includes a system of faculty and staff accountability that holds faculty and staff both individually and collectively accountable for their performance, and that is at least equivalent to the average system of accountability in public schools throughout the State; and

(D) Provides for program audits and annual financial audits.

[(5)] (6) The governance structure of the school[;] that incorporates a conflict of interest policy for school employees serving on the local school board and a plan for periodic board training;

(7) A financial plan based on the most recent fiscal year's per pupil charter school allocation that demonstrates the ability to meet the financial obligations of one-time start-up costs and ongoing costs such as monthly payrolls, faculty recruitment, professional development, and facilities costs; and

[(6)] (8) A plan for any necessary design, construction, renovation, and management of facilities that is consistent with the state facilities plan; provided that:

(A) If the facilities management plan includes use of existing school facilities, the new century charter school shall receive authorization from the administrator responsible for the facilities; and

(B) The final determination of use shall fall within the board's discretion.

(d) The detailed implementation plan shall be submitted to the new century charter school review panel, which shall be composed of seven members as follows:

(1) [Four] Two of the members shall be board of education members or their designees appointed by the chairperson of the board of education;

(2) Two of the members shall be members of the new century charter school community approved by the chairperson of the board of education from a list submitted by existing new century charter schools; [and]

(3) One member shall be the executive director or the executive director's designee[.];

(4) One member shall be the dean of the University of Hawaii's college of education or the dean's designee; and

(5) One member shall be a representative of the business community appointed by the executive director.

Panel review procedures shall be as provided in this section. The board may adopt rules pursuant to chapter 91 to further guide the panel's review process.

(e) The new century charter school review panel shall have sixty working days to review the completed implementation plan for a proposed new century charter school to ensure that it meets the requirements of subsection (c) and section 302A-1184. Within forty-five working days, the panel shall issue a report of its preliminary findings to the board of education and the local school board. If the panel subsequently determines that the implementation plan:

(1) Meets the requirements of subsection (c) and section 302A-1184, the panel [shall], by the sixtieth working day, shall submit a recommendation to the board of education to issue a charter to the proposed new century charter school. Upon receipt of the panel's recommendation, the board [shall] may issue a charter, and the implementation plan shall be converted to a written performance contract between the school and the board; [or] provided that if the board does not issue a charter, the board shall:

(A) Clearly identify its reasons for not issuing the charter; and

(B) Allow the local school board to revise its plan, in accordance with the board's reasons for rejecting the plan, and resubmit the amended plan; or

(2) Fails to meet the requirements of subsection (c) or section 302A-1184, the panel:

(A) Shall notify the local school board of the finding in writing to enable the local school board to appropriately amend the plan to address the findings; and

(B) May submit a recommendation to the board to issue a provisional approval for a charter if the panel determines that the applicant may reasonably be expected to expeditiously resolve any remaining findings impeding the issuance of a charter. The provisional approval shall be effective for one year. The board may extend the provisional approval beyond a period of one year. If a charter is subsequently issued, the amended implementation plan shall be converted to a written performance contract between the school and the board.

(f) An amended implementation plan shall be submitted within thirty working days of notification pursuant to subsection (e)(2)(A). The board shall deny the issuance of a charter if the local school board does not submit an amended implementation plan within the thirty working day period. The panel shall have thirty working days to review the amended implementation plan. If the amended implementation plan:

(1) Meets the requirements of subsection (c) and section 302A-1184, the panel [shall] by the thirtieth working day shall submit a recommendation to the board of education to issue a charter to the proposed new century charter school. If a charter is issued, the amended implementation plan shall be converted to a written performance contract between the school and the board; or

(2) Fails to address the findings to the panel's satisfaction the panel shall deny issuance of a charter.

(g) A local school board may file an appeal of the denial of an application for a charter with the panel. Upon filing an appeal, the panel shall forward the implementation plan and appropriate documentation of the appeal to the board of education. Within thirty working days, the board of education shall issue a report of its findings and final determination to the local school board. If the implementation plan is approved, the board of education shall issue a charter and the implementation plan shall be converted to a written performance contract between the school and the board of education.

(h) The State shall afford the local school board of any new century charter school the same protections as the State affords to the board of education.

(i) The State shall afford the local school board of any new century charter school full participation in department of education and other department personnel position listings for informational purposes.

(j) The department shall facilitate and encourage the movement of personnel between the department and new century charter schools, including providing credit for service to administrative, support, and instructional staff in charter schools equal to service in department schools; provided that:

(1) Comparable and verifiable professional development and employee evaluation standards and practices are in place in new century charter schools;

(2) New century charter school employees who are not yet tenured in the department and are entering or returning to the department shall be subject to no more than one year of probationary status; and

(3) Tenured department employees who transfer to new century charter schools shall not be required to serve a probationary period.

[(i)] (k) Any new century [conversion] charter school [may], prior to the beginning of the school year, may enter into an annual contract with [the] any department [of education] for centralized services to be provided by the department."

SECTION 5. Section 302A-1182.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-1182.5[]] New century charter schools and new century conversion charter schools; weighted student formula. (a) Notwithstanding section 302A-1185 and beginning on September 1, 2006, new century charter schools and new century conversion charter schools shall elect whether to receive allocations according to the department's weighted student formula adopted pursuant to section 302A-1303.6 by the board of education; provided that:

(1) All new century charter schools and new century conversion charter schools, as a group, with each local school board authorized one vote, shall elect, by greater than two-thirds agreement among the local school boards, whether to receive allocations through the department's weighted student formula;

(2) Any election by new century charter schools and new century conversion charter schools to receive department allocations, or not to receive allocations, through the department's weighted student formula shall be made by September 1 of each even-numbered year, and [such] the election shall apply to the fiscal biennium beginning July 1 of the following year; and

(3) The election to receive allocations, or not to receive allocations, through the department's weighted student formula shall be communicated to the department through the charter school administrative office.

(b) The new century charter schools, working through the charter school administrative office, may propose to the board of education an alternative weighted student formula, approved of by more than two-thirds of the local school boards, with each local school board being accorded one vote, to be administered by the charter school administrative office and to apply to the per pupil allocation for charter schools."

SECTION 6. Section 302A-1184, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Schools designated as new century charter schools shall be exempt from all applicable state laws, except those regarding:

(1) Collective bargaining under chapter 89; provided that:

(A) The exclusive representatives defined in chapter 89 may enter into agreements that contain cost and noncost items to facilitate decentralized decisionmaking;

(B) The exclusive representatives and the local school board of the new century charter school may enter into agreements that contain cost and noncost items;

(C) The agreements shall be funded from the current allocation or other sources of revenue received by the new century charter school; [and] provided that collective bargaining increases shall be allocated by the department of budget and finance to the charter school administrative office for distribution to charter schools; and

(D) These agreements may differ from the master contracts;

(2) Discriminatory practices under section 378-2; and

(3) Health and safety requirements.

New century charter schools and the charter school administrative office shall be exempt from the state procurement code, chapter 103D, but shall develop internal policies and procedures for the procurement of goods, services, and construction, consistent with the goals of public accountability and public procurement practices. However, where possible, the new century charter school is encouraged to use [the provisions of] chapter 103D; provided that the use of one or more provisions of chapter 103D shall not constitute a waiver of the exemption of chapter 103D and shall not subject the new century charter school to any other provision of chapter 103D. New century charter schools shall account for funds expended for the procurement of goods and services, and this accounting shall be available to the public. In addition, notwithstanding any law to the contrary, as public schools and entities of the State, new century public charter schools shall not bring suit against any other entity or agency of the State of Hawaii."

SECTION 7. Section 302A-1186, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The board shall initiate an annual independent evaluation of each new century charter school for the first two years after its establishment and every four years thereafter to assure organizational viability and compliance with applicable state laws, statewide student content and performance standards, and fiscal accountability; provided that each new century charter school established prior to July 1, 1998, shall be evaluated four years after July 1, 1998, and every four years thereafter. Upon a determination by the board that student achievement within a new century charter school does not meet the student performance standards, or that the new century charter school is not fiscally responsible, a new century charter school shall be placed on probationary status [and shall have one year] to bring student performance into compliance with statewide standards [and], improve the school's fiscal accountability[. If a new century charter school fails to meet its probationary requirements, or fails to comply with any of the requirements of this section, the], and conform with the components of the charter. The board, upon a two-thirds majority vote, may [then] revoke the charter of [the] a new century charter school.

For the purposes of this subsection, "organizational viability" means that a new century charter school:

(1) Has been duly constituted in accordance with its charter;

(2) Has a local school board established in accordance with law and its charter;

(3) Employs sufficient faculty and staff to provide the necessary educational program and support services and to operate the facility in accordance with its charter; and

(4) Maintains comprehensive records regarding students, employees, and complies with federal and state health and safety requirements."

SECTION 8. Section 302A-1187, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is established a charter school administrative office, which shall be attached to the department [of education] for administrative purposes only. The office shall be administered by an executive director, who shall be appointed without regard to chapters 76 and 89 by the board of education based upon the recommendations of an organization of charter schools operating within the State or from a list of nominees submitted by the charter schools. The board of education may offer the executive director a multi-year contract. The executive director may hire necessary staff without regard to chapters 76 and 89 to assist in the administration of the office."

SECTION 9. Section 302A-1191, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) As used in this section:

"New century conversion charter school" means:

(1) Any existing department school that converts to a charter school and is managed and operated in accordance with subsection (d); or

(2) Any existing department school that converts to a charter school and is managed and operated by a nonprofit organization in accordance with this section, excluding subsection (d).

"Nonprofit organization" means a private, nonprofit, tax-exempt entity that:

(1) Is recognized as a tax exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended;

(2) Is domiciled in this State; and

(3) Makes a minimum annual contribution of $1 per pupil toward the operation of a new century conversion charter school for every $4 per pupil allocated by the charter school administrative office for the operation of the charter school.

(b) A nonprofit organization may submit a letter of intent to the board of education to convert a department of education school to a charter school and to operate and manage [an existing public school as a new century conversion charter school], establish a local school board as its governing body, and develop a detailed implementation plan pursuant to section 302A-1182(c); provided that:

(1) The local school board as the governing body of the new century conversion charter school shall be composed of the board of directors of the nonprofit organization and not the participants specified in subsection (d)(1). The nonprofit organization may also appoint advisory panels of community representatives for each school managed by the organization, with whom the organization may consult; provided that these panels shall not have governing authority over the school and shall serve only in an advisory capacity to the nonprofit organization;

(2) The detailed implementation plan for each new century conversion charter school to be operated by the nonprofit organization shall be formulated, developed, and submitted by the local school board. The detailed implementation plan shall be approved by a majority of the votes cast by existing administrative, support, and teaching personnel, and parents; provided that the school personnel may request their bargaining unit representative to certify and conduct the elections for their respective bargaining units;

(3) After the detailed implementation plan for a new century conversion charter school operated and managed by the nonprofit organization has been approved by the new century charter school review panel and the board of education as provided in section 302A-1182(d) to (g), the board of education shall issue a charter, and the implementation plan shall be converted to a written performance contract between the nonprofit organization and the board of education, under which the new century conversion charter school shall be managed and operated as a division of the nonprofit organization[;] and shall have the same relationship with the charter school administrative office as any other local school board for a charter school;

(4) The board of directors of the nonprofit organization, as the governing body for the new century conversion charter school that it operates and manages, shall have the same protections that are afforded to the state board of education;

(5) Any new century conversion charter school that is managed and operated by a nonprofit organization shall be eligible for the same federal and state funding as other public schools; provided that the nonprofit organization may allocate federal and state funds among two or more of the new century conversion charter schools that it operates and manages to the extent permitted by law; and

(6) If, at any time, the new century conversion charter school dissolves or the charter is revoked, the State of Hawaii shall have first right, at no cost to the State, to all the assets and facilities of the new century conversion charter school, except as provided in the detailed implementation plan."

2. By amending subsections (d) and (e) to read:

"(d) As an alternative to subsection (b), any public

school or schools may submit a letter of intent to the board of

education to form a new century conversion charter school,

establish a local school board as its governing body, and

develop a detailed implementation plan pursuant to section

302A-1182(c); provided that:

(1) The local school board as its governing body shall be composed of, at a minimum, one representative from each of the following participant groups:

(A) Principals;

(B) Instructional staff members selected by the school instructional staff;

(C) Support staff selected by the support staff of the school;

(D) Parents of students attending the school selected by the parents of the school;

(E) Student body representatives selected by the students of the school; and

(F) The community at-large; [and]

(2) No chief executive officer, chief administrative officer, executive director, or otherwise designated head of a school may serve as an officer of the local school board; and

[(2)] (3) The detailed implementation plan shall be approved by a majority of the votes cast by existing administrative, support, and teaching personnel, and parents; provided that the school personnel may request their bargaining unit representative to certify and conduct the elections for their respective bargaining units.

(e) [Up to a total of twenty-five schools may be established as new century conversion charter schools.] Any new century conversion charter school [may], prior to the beginning of the school year, may enter into an annual contract with the department of education for centralized services to be provided by the department."

SECTION 10. (a) There is established a working group to review, assess, and make recommendations regarding the applicability of state laws to new century charter schools and to define specific legal exemptions that may be appropriate and conducive to a balance between accountability and effective educational service delivery. The working group shall specifically address the concerns arising out of the state auditors report no. 05-01, which reported conflicting views between the attorney general and the office of information practices.

(b) The working group shall be composed of the following members:

(1) The chairperson of the board of education or a designee;

(2) The superintendent of education or a designee;

(3) The executive director of the charter school administrative office or a designee;

(4) An individual appointed by the senate president;

(5) An individual appointed by the speaker of the house of representatives; and

(6) Two representatives of the new century charter schools appointed by the executive director of the charter school administrative office.

(c) The working group shall submit its findings and recommendations, including proposed legislation, to the legislature not later than twenty days before the convening of the regular session of 2006.

(d) Members of the working group shall serve without compensation but shall be reimbursed for necessary expenses, including travel expenses, incurred in the performance of their duties.

(e) The working group may request assistance from the department of education and other state agencies as necessary to provide staff support.

SECTION 11. There is appropriated out of the general revenues of the State of Hawaii the sum of $        , or so much thereof as may be necessary for fiscal year 2005-2006, and the same sum, or so much thereof as may be necessary for fiscal year 2006-2007, for the purposes of this part.

The sums appropriated shall be expended by the department of education for the purposes of this part.

PART III

FUNDING

SECTION 12. Hawaii's charter schools receive their operational and facility funding through a per pupil allocation as determined by a statutory formula. In 2004, instead of receiving approximately $5,700 per pupil in accordance with the statutory funding formula, charter schools received approximately $4,600 per pupil. Due to inappropriate figures reported at the department of budget and finance, inadvertent reductions of the appropriations were made to the charter school's allocations. As a result, charter schools did not receive funding for fringe benefits and increases in collective bargaining. The department of education's most recent consolidated expenditure report (2003-2004) indicated that department of education students were financially supported with over $8,000 for every student.

The purpose of this part is to bring new century charter schools closer to a more equitable and stable funding level for basic operations by:

(1) Making additional appropriations for known, quantifiable supplemental requirements;

(2) Providing charter schools with access to all federal education funds that are received by the State and authorizing the charter school administration office to manage the federal funds; and

(3) Establishing a per pupil allocation funding mechanism based on the consolidated annual financial report including known, quantifiable supplemental requirements.

SECTION 13. Section 302A-1185, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) Beginning with the fiscal year [2004-2005 supplemental] 2005-2006 budget request, and each budget request thereafter, the charter school administrative office shall submit a request for general fund appropriations for each new century charter school based upon:

(1) The actual and projected enrollment figures in the current school year for each charter school; and

(2) A per pupil amount for each regular education and special education student, which shall be equivalent to the total per pupil cost based upon average enrollment in all cost categories, including comprehensive school support services but excluding special education services, and for all means of financing except federal funds, as reported in the most recently published department of education consolidated annual financial report, provided that the legislature may make an adjustment to the per pupil allocation for the purposes of this section. No deductions from this allocation shall be made without the written approval of the executive director of the charter school administrative office.

The legislature shall make an appropriation based upon the budget request; provided that the legislature [may] shall make additional appropriations for known, quantifiable supplemental requirements such as collective bargaining increases for charter school employee members of collective bargaining units, and fringe and other employee benefits, [facility costs, and for] and may include other requested amounts[.] including facility costs. The governor, pursuant to chapter 37, may impose restrictions or reductions on charter school appropriations similar to those imposed on other public schools.

(b) All federal financial support for new century charter schools shall be no less than all other public schools; provided that if administrative services related to federal grants and subsidies are provided to the charter school by the department, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the charter school's federal grants and subsidies. The department shall provide the charter school administrative office with all federal grant proposals that include charter schools as potential recipients and timely reports on federal grants received for which charter schools may apply. Federal funds received by the department for charter schools shall be transferred to the charter school administrative office for distribution to charter schools in accordance with federal requirements.

Any new century charter school shall be eligible to receive any supplementary financial grant or award for which any other public school may submit a proposal, or any supplemental federal grants limited to new century charter schools; provided that if department administrative services, including funds management, budgetary, fiscal accounting, or other related services, are provided with respect to these supplementary grants, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the supplementary grant for which the services are used.

All additional funds that are generated by the local school boards, not from a supplementary grant, shall be separate and apart from allotted funds and may be expended at the discretion of the local school boards."

2. By amending subsection (f) to read:

"(f) The department shall transfer, no later than November 15, additional funds from EDN 100 to EDN 600 for new century charter schools whose student enrollment, verified on or immediately prior to October 15 as provided for by subsection (c), exceeds the new century charter schools' projected student enrollment, in an amount corresponding to the number of additional students and the per pupil allocation. The charter school administrative office shall transfer from EDN 600 to EDN 100 any excess per pupil allocations for new century charter schools whose verified student enrollment is lower than their projected student enrollment in an amount corresponding to the lower number of students and the per pupil allocation."

SECTION 14. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2005-2006 and $          , or so much thereof as may be necessary for fiscal year 2006-2007, for the per pupil allocations to new century charter schools.

The sums appropriated shall be expended by the department of education for the purposes of this part.

PART IV

WORKERS' COMPENSATION

SECTION 15. The workers' compensation law is established in chapter 386 of the Hawaii Revised Statutes and is granted to all employees suffering injuries arising out of and in the course of their employment. It is not a "benefit" per se but an entitlement arising from the employment relationship. The legislature finds that the State operates a self insured workers' compensation system where claims are investigated and processed by state workers. These claims are then paid from legislative appropriations. Meanwhile, public schools are not required to reduce their operational funds to pay for workers' compensation claims for state workers at their schools. Charter school employees deserve the right to participate in this same system as public employees without having the funding for this coverage come from charter school operational funds.

The legislature further finds that the department of human resources development administers a majority of the State's agencies' workers' compensation claims, and it would be appropriate for them to extend this service to charter schools. In fairness to the department of human resources development, however, they should be compensated for this additional workload but not more than an amount nearly equivalent to that paid by the charter school administrative office to the department of education for performing comparable worker's compensation services under the terms of a memorandum of understanding. To arrive at an reasonable figure, the legislature finds that the current memorandum of understanding between the charter school administrative office and the department of education specifies $25,000 for the processing of the workers' compensation claims. By comparison, the current appropriation amount to charter schools is $37,190,080, under the state budget category of EDN 600. $25,000 is 0.067 per cent of $37,190,080. Thus, the legislature finds that 0.07 per cent of the charter school budget is a reasonable amount to enable the department of human resources development to process the charter schools' workers' compensation claims.

The purpose of this part is to allow charter school employees to participate in the State's workers' compensation system, provided that the department of human resources development shall administer the claims and the individual new century charter schools shall be responsible for compiling the preliminary claim form.

SECTION 16. Chapter 302A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§302A-   New century charter schools; administration of workers' compensation. The department of human resources development shall administer workers' compensation claims for employees of new century charter schools, who shall be covered by the same self-insured workers' compensation system offered to other public employees and administrative state units, including the processing, investigation, and payment of claims; provided that:

(1) New century charter schools shall compile the preliminary claim form and forward it to the department of human resources development; and

(2) The department of human resources development shall receive no more than 0.07 per cent of the EDN 600 appropriation to process these workers' compensation claims."

SECTION 17. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2005-2006, and the same sum, or so much thereof as may be necessary for fiscal year 2006-2007, for the purposes of this part.

The sums appropriated shall be expended by the department of human resources development for the purposes of this part.

PART V

Federal Individuals with Disabilities Education Act

SECTION 18. The legislature finds an inconsistency between the Hawaii revised statutes and the Individuals with Disabilities Education Act. In order to ensure federal funding for students enrolled in public charter schools who are eligible for special education, section 302A-1188, Hawaii Revised Statutes, must be amended to comply with Part B regulations of the Individuals with Disabilities Education Act.

The purpose of this part is to:

(1) Comply with federal regulations to enable the department of education charter schools to receive federal grant moneys under the Individuals with Disabilities Education Act; and

(2) Clarify the administrative hearing procedures relating to the federal Act.

SECTION 19. Section 302A-1188, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The department shall be responsible for the provision of a free appropriate public education. Any new century charter school that enrolls special education students or identifies one of its students as eligible for special education shall be responsible for providing the educational and related services required by a student's individualized education [plan; provided that if] program. The programs and services for the student shall be determined collaboratively by the student's individualized education program team and the student's parents or legal guardians. If the new century charter school is unable to provide all of the required services [due to limited resources within its control, then services to the student shall be determined and provided by the department of education.] then services to the student shall be provided by the department according to services determined by the student's individualized educational program team. The department [of education] shall collaborate with the charter school administrative office to develop guidelines related to the provision of special education services and resources to each new century charter school. [In making the determination about the provision of services to a special education student enrolled in a charter school, the] The department shall review all of the current individualized education [plans] programs of special education students enrolled in a new century charter school[,] and may offer staff or funding, or both, to the new century charter school based upon a per pupil weighted formula implemented by the department and used to allocate resources for special education students in the public schools. [The department may also offer services to the special education student at a public school within the same school complex that the charter school is located.]"

SECTION 20. Section 302A-443, Hawaii Revised Statutes, is amended to read as follows:

"[[]§302A-443[]] Administrative hearing procedures and subpoena power relating to the education of handicapped children. (a) An impartial hearing may be requested by any parent or guardian of a handicapped child, or by the department, on any matter relating to the identification, evaluation, program, or placement of a handicapped child[.]:

(1) Within two years of the date the parent, guardian, or department knew or should have known about the alleged action that forms the basis of the request for a hearing; and

(2) Notwithstanding paragraph (1), within ninety days of a unilateral special education placement, where the request is for reimbursement of the costs of that placement.

(b) The timelines described in subsection (a) shall not apply to a parent or legal guardian if the parent or legal guardian was prevented from requesting the hearing due to:

(1) Specific misrepresentations by the department that it had resolved the problem forming the basis of the complaint; or

(2) The department's withholding of information from the parent that was required by state or federal laws and regulations relating to the provision of a free appropriate public education to a handicapped child.

(c) The department shall adopt rules that conform to the requirements of any applicable federal statutes or regulations pertaining to the impartial hearing based on the education of a handicapped child. The rules shall require that any party may be present at the proceeding, be accompanied and advised by counsel or individuals with special knowledge or training with respect to the problems of handicapped children, may require witnesses to be under oath, cross-examine witnesses, and obtain a written or electronic verbatim record of the proceedings.

[(b)] (d) Any party to these hearings or the hearings officer shall have the right to compel the attendance of witnesses upon subpoena issued by the hearings officer. The fees for attendance shall be the same as for the fees of witnesses before circuit court. In case of the failure of any person to comply with a subpoena, a circuit court judge of the judicial circuit in which the witness resides, upon application of the hearings officer, shall compel attendance of the person."

Part VI

MISCELLANEOUS

SECTION 21. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 22. This Act shall take effect on July 1, 2005.