S2640

An Act concerning charter schools, amending various parts of the statutory law, and supplementing P.L.1995, c.426 (C.18A:36A-1 et seq.) and chapter 12 of Title 18A of the New Jersey Statutes.

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 management organization” means a nonprofit organization that is exempt from federal taxation pursuant to section 501(c)(3) of the federal Internal Revenue Code, 26 U.S.C. s.501(c)(3), which operates or manages one or more charter schools linked by centralized support and operations.

“Charter school” means a school established pursuant to P.L.1995, c.426 (C.18A:36A-1 et seq.). A charter school does not include a renaissance school project approved pursuant to provisions of the “Urban Hope Act,” P.L.2011, c.176 (C.18A:36C-1 et seq.).

“Compensation study” means a review by the board of trustees of a charter school, or a third-party organization contracted by the board of trustees to conduct the review, of the proposed total remuneration for the top three salaried employees of the charter school compared to compensation for similar positions in school districts in the State and any other information the Commissioner of Education deems necessary.

2. 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 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 entity, representatives of the private entity shall not constitute a majority of the trustees of the school, and the charter shall specify the extent to which the private 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 entity, and the private entity shall not realize a net profit from its operation of a charter school.

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

(1) At least [51%] 51 percent 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%] 51 percent 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 and the local board of education or State district superintendent, in the case of a school district under full State intervention, 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 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 commissioner shall post the notice of the filing, along with instructions and a link for the public to submit comments concerning the application, on the department’s Internet website where the notice shall remain until the commissioner makes a final decision on the application. Any other agency or governing body that receives notice of the filing pursuant to this subsection may post the notice on the agency’s or governing body’s Internet website.

The commissioner shall cause notice of the filing to be published in the county or counties where the charter school is to be located on three occasions. The notices shall be published in accordance with R.S.35:1-2.2 or any other requirements for issuing or publishing a public notice.

Each notice provided to the public, a school district, and a municipality pursuant to this section shall include instructions for the public to submit comments on the application to the commissioner within 30 days of the date of the first notice.

The board of education or State district superintendent shall review the application and forward a recommendation to the commissioner within 60 days of receipt of the application. The commissioner shall have final authority to grant or reject a charter application.

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

e. A charter school established during the 48 months following the effective date of [this act] P.L.1995, c.426 (C.18A:36A-1 et seq.), 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] this section, shall not have an enrollment in excess of 500 students or greater than [25%] 25 percent 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] or within contiguous public school districts that demonstrate a need to consolidate may petition the commissioner to amend their charters and consolidate into one school[ The commissioner 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)] pursuant to a process that shall be determined by the commissioner.

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

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

5. The commissioner shall develop an application for the establishment of a charter school. 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 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;

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);

f. The age or grade range of students to be enrolled;

g. The school calendar and school day 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 significant parental involvement in the operation of the school;

j. A description of, and address for, the physical facility in this State in which the charter school will be located;

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, including the anticipated administrative costs of 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. As used in this subsection, “administrative costs” means administrative costs as defined by State Board of Education regulations adopted under chapter 23A of Title 6A of the New Jersey Administrative Code;

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

n. [Such] Any other information as the commissioner may require; and

o. A demonstration of need and an explanation of how the need is not currently being met by existing public schools or charter schools in the school district. An applicant shall, at a minimum, be required to include information confirming that there are no existing, open seats in other charter schools within geographic proximity of the applicant charter school. Unaudited waitlist data shall not qualify as a demonstration of need.

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

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

10. a. A charter school [may] shall be physically located, and provide all instruction, 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 school district in the State in which the charter school has been authorized to operate. 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 in the State. 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.

b. The Commissioner of Education shall deny a charter school application that proposes to operate a charter school, or provide instruction, in a physical location outside of the State.

c. The commissioner shall deny a charter school application submitted after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) that proposes to operate or provide instruction primarily online.

d. This section shall not be construed to limit the ability or discretion of a teaching staff member to utilize technological tools as an aide to in-person instruction. Technological tools shall include, but not be limited to: online learning applications; educational software; third party websites; Internet-based educational resources; online data and assessment platforms; and any other software program or application used to assist with curricular or education specific needs.

e. This section shall not be construed to limit the ability of a charter school to utilize virtual or remote instruction as permitted pursuant to Title 18A of the New Jersey Statutes or State Board of Education regulations.

f. The Department of Education, in consultation with school districts throughout the State, shall maintain and publish on its Internet website a searchable list of all public school facilities that have been closed, are unused, unoccupied, or advertised for sale or for lease.

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

5. 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 not contract with a for-profit entity to operate or manage the charter school. The board may contract with a charter management organization for these services.

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.) and the "Conscientious Employee Protection Act," P.L.1986, c.105 (C.34:19-1 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.

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)

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

16. a. The commissioner shall annually assess whether each charter school is meeting the goals of its charter[, and] . The commissioner shall also conduct a comprehensive review prior to granting a renewal of the school’s charter. Notice of a charter school’s renewal application shall be provided in accordance with the provisions of subsection c. of section 4 of P.L.1995, c.426 (C.18A:36A-4).

The executive county superintendent of schools of the county in which the charter school is located 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, testing, civil rights, and student health and safety are being met.

b. In order to facilitate the commissioner's review, each charter school shall submit an annual report to the local board of education, the executive 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 executive county superintendent, and the commissioner no later than August 1.

The report shall also be made available on the charter school’s Internet website and to the parent or guardian of a student enrolled in the charter school, and shall be presented to the public at a regularly scheduled board of trustees meeting.

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.

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.

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.

f. Every five years the commissioner shall publicly report on the state of charter schools in New Jersey based on measures contained in the Performance Framework developed by the State Board of Education pursuant to regulations adopted under chapter 11 of Title 6A of the New Jersey Administrative Code to evaluate the academic, financial, and organizational performance of charter schools.

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

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

17. a. A charter granted by the commissioner 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 period and may be renewed for a five-year period. The commissioner may review the charter of a school that has been granted a renewal at any time during the renewal period. The commissioner shall provide the charter school with reasonable notice of the commissioner’s intent to review the school’s charter.

b. The commissioner may place a 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 may place a charter school on probationary status if, on two occasions, the school:

(1) has not fulfilled any condition imposed by the commissioner in connection with granting the charter;

(2) violates any provision of its charter;

(3) violates any of the financial operations requirements established for the charter schools by the State board;

(4) fails to make reasonable and appropriate efforts to serve a cross section of the community’s school age population;

(5) engages in a practice and pattern of discrimination in violation of federal or State law; or

(6) violates any federal or State law.

c. The commissioner 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. [The commissioner 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 shall revoke a school's charter if the school is determined by the commissioner, after notice and opportunity for a hearing in accordance with N.J.S.18A:6-9 and the procedures set forth in State Board of Education regulations, to have committed or engaged in any of the criteria listed in paragraphs (1) through (6) of subsection b. of this section while on probationary status, except that in the case of violations that are administrative or technical in nature, the commissioner shall afford the school an opportunity to correct the deficiencies prior to initiating revocation proceedings.

d. The commissioner shall develop procedures and guidelines for the revocation and renewal of a school's charter.

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

8. (New section) a. Prior to approving a charter school application and granting a charter, the Commissioner of Education shall review:

(1) the application material submitted by the proposed charter school pursuant to section 5 of P.L.1995, c.426 (C.18A:36A-5);

(2) the proposed charter school’s anticipated financial impact on the school district in which the charter school is to be located, including the impact to the bond ratings of the school district; and

(3) any other information the commissioner deems necessary.

b. The commissioner shall give equal consideration to the information reviewed pursuant to the provisions of subsection a. of this section when determining whether to grant or deny an application for a charter school established after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

9. (New section) The Commissioner of Education shall consider the most recent compensation study submitted by the charter school and the charter school’s administrative costs over the past three years when reviewing an application to renew a charter school and as part of the annual review conducted by the commissioner pursuant to section 16 of P.L.1995, c.426 (C.18A:36A-16).

10. (New section) a. The Department of Education shall maintain, in a manner that is consistent with applicable federal law, a webpage on its Internet website for charter school transparency. The purpose of the webpage shall be to provide increased public access to the operations and activities of charter schools in the State.

b. The following information shall be posted on the webpage:

(1) a current list of each charter management organization that operates or manages a charter school;

(2) each executed contract between a charter school and charter management organization;

(3) each charter school’s plain language budget summary submitted pursuant to section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(4) each Form 990 received by the department pursuant to section 20 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(5) each annual report submitted by a charter school pursuant to section 16 of P.L.1995, c.426 (C.18A:36A-16);

(6) each renewal application submitted by a charter school;

(7) a list of charter schools on probationary status and any remedial plan put in place to assist a charter school on probationary status;

(8) each application by a charter school to establish a charter school, amend a school’s charter, renew a school’s charter, and consolidate two or more charter schools; and

(9) each public notice concerning charter school applications issued pursuant to the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), along with instructions and a link for the public to submit comments concerning the application to the commissioner.

c. The webpage shall be updated on a regular basis.

11. (New section) a. A charter school shall maintain an Internet website. The purpose of the website shall be to provide increased public access to the operations and activities of the charter school.

b. The following information shall be posted on the homepage of the charter school’s website:

(1) the budget adopted by the charter school for the school year pursuant to section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(2) all meeting notices required pursuant to the provisions of the “Senator Byron M. Baer Open Public Meetings Act,” P.L.1975, c.231 (C.10:4-6 et seq.) in accordance with section 15 of P.L. , c. (C. ) (pending before the Legislature as this bill);

(3) each annual report submitted by a charter school pursuant to section 16 of P.L.1995, c.426 (C.18A:36A-16);

(4) a list of the members of the board of trustees;

(5) a list, and location, of the facilities operated by the charter school; and

(6) any other information required by State or federal law.

c. The website shall be updated on a regular basis.

12. (New section) a. The budget adopted by a charter school for the school year shall be provided for public inspection on the homepage of the charter school’s Internet website and made available in print in a “user-friendly” format using plain language. The Commissioner of Education shall promulgate a “user-friendly,” plain language budget summary form for the use of charter schools for this purpose. The commissioner shall also promulgate a procedure and timeline for the submission by each charter school of the required budget summary form to the Department of Education.

b. The plain language budget summary shall provide the public with information in summary form about the budget of the charter school and shall include, in addition to an abbreviated version of the formal budget adopted by the charter school, any statistical information as the commissioner determines to be useful for the public’s understanding of the charter school’s fiscal matters and condition, and shall also include, but not be limited to, the following information for both the budget year and prebudget year:

(1) all line items of appropriation aggregated by item type;

(2) revenues by major category, including private donation;

(3) the amount of available surplus;

(4) a description of unusual revenues or appropriations, with a description of the circumstances of the revenues or appropriations;

(5) a list of shared service agreements in which the charter school is participating;

(6) the salary of the lead person and the school business administrator employed by the charter school; and

(7) if either the lead person or school business administrator is a contracted service provider, each executed contract between the lead person or school business administrator and charter school.

c. The plain language budget summary shall be submitted to the department in a form as determined by the commissioner, and, upon its receipt of the summary, the department shall make the summary available to the public through an Internet website maintained by the department in an easily accessible location. The information on the website shall be presented as data that can be downloaded by the public for comparative purposes using commonly-used software.

d. Upon the preparation of its budget, each board of trustees shall fix a date, place, and time for the holding of a public hearing upon the budget and the amounts of money necessary for the use of the charter school for the ensuing school year and the various items and purposes for which the funds will be used. The hearing shall be held at a time and place accessible to the public. The board of trustees shall cause notice of the public hearing and the statement annexed to the budget to be:

(1) published in the county or counties where the charter school is to be located on three occasions; and

(2) sent to the board of education of each school district of residence of the students enrolled in the charter school not less than four days prior to the date fixed for the public hearing.

13. (New section) An individual appointed to a board of trustees of a charter school following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), other than a student representative appointed pursuant to section 2 of P.L.2021, c.446 (C.18A:36A-11.2), shall possess legal, fiscal, educational, community, or board leadership or governance experience.

14. (New section) a. A minimum of 33 percent of the members of the board of trustees of a charter school shall maintain their principal residence in the county in which the charter school is located or within a 30 mile radius of the charter school.

b. A member of the board of trustees of a charter school shall maintain the member’s principal residence in the State.

c. A person who holds membership on the board of trustees of a charter school on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), but does not maintain principal residence in accordance with the provisions of subsections a. and b. of this section on that effective date, shall not be subject to the residency requirements of this section while the person continues to hold membership on the board without a break in service of greater than seven days.

15. (New section) a. As required by the provisions of the “Senator Byron M. Baer Open Public Meetings Act,” P.L.1975, c.231 (C.10:4-6 et seq.), the board of trustees of a charter school shall post a copy of all meeting notices, including a calendar of all meeting dates, and the minutes of each meeting on the charter school’s website.

b. The board shall hold all meetings in a physical building in the school district in which the charter school is located except that a meeting may be held by means of communications or other electronic equipment during a period declared pursuant to the laws of this State as a state of emergency, public health emergency, or state of local disaster emergency.

16. (New section) a. As used in this section:

“Non-disclosure agreement” means an agreement between the board of trustees of a charter school and an employee of the charter school arising out of an existing or anticipated employment relationship, or an agreement between the board and an employee with respect to severance pay, under which the employee or expected employee agrees not to disclose information that may be exchanged or acquired during the course of employment at the charter school. A non-disclosure agreement may include a confidentiality clause or any other language limiting the ability of an employee to discuss their employment with the charter school.

“Restrictive covenant” means an agreement between the board of trustees of a charter school and an employee of the charter school arising out of an existing or anticipated employment relationship, or an agreement between the board and an employee with respect to severance pay, under which the employee or expected employee agrees not to engage in certain specified activities competitive with the charter school after the employment relationship has ended.

b. The board of trustees of a charter school, or any employee acting on behalf of the board, shall not require or request that an employee enter into a non-disclosure agreement or restrictive covenant as a condition of employment or with respect to severance pay as provided in an employment contract.

c. Nothing in this section shall be construed to prohibit a board of trustees from entering into a non-disparagement agreement with an employee.

17. (New section) a. A board of trustees of a charter school shall submit a compensation study to the commissioner:

(1) in any school year during which a charter school enters into, renews, or substantially modifies a contract with the lead person of the charter school, as part of the charter school’s annual report required pursuant to subsection b. of section 16 of P.L.1995, c.426 (C.18A:36A-16); and

(2) at any other time the commissioner deems necessary.

b. A board of trustees of a charter school may utilize a compensation study completed in any of the immediately preceding three school years to comply with the provisions of this section.

18. (New section) A board of trustees of a charter school shall not renegotiate, extend, amend, or otherwise alter the terms of a contract with a lead person or school business administrator, unless notice is provided to the public at least 30 days prior to the scheduled action by the board. The board shall also hold a public hearing and shall not take any action on the matter until the hearing has been held. The board shall provide the public with at least 10 days’ notice of the public hearing.

19. (New section) A board of trustees of a charter school shall not renegotiate, extend, amend, or otherwise alter the terms of a contract with a charter management organization unless notice is provided to the public at least 30 days prior to the scheduled action by the board. The board shall also hold a public hearing and shall not take any action on the matter until the hearing has been held. The board shall provide the public with at least 10 days’ notice of the public hearing.

20. (New section) a. A charter management organization that receives payment for operating or managing a charter school, the source of which is State or local funds, shall annually file with the Department of Education the most recent public inspection copy of its Internal Revenue Service Form 990 and all schedules and supporting documentation required to be submitted to the Internal Revenue Service in conjunction with Form 990, and post the Form 990 at an easily accessible location on its Internet website. The Form 990, as well as the schedules and supporting documentation required to be submitted to the Internal Revenue Service in conjunction with the form, shall only be made available for public inspection by the Department of Education in accordance with applicable federal law.

b. A charter management organization found to be in violation of this section by the commissioner shall have 90 days from the date of the determination to come into compliance with the provisions of this section.

21. (New section) Any executive of a charter management organization including, but not limited to, the chief executive officer, chief operating officer, chief financial officer, executive director, president, and general counsel, that receives payment for operation or management services from a charter school, the source of which is State or local funds, shall be required to comply with the provisions of sections 5 and 6 of P.L.1991, c.393 (C.18A:12-25 and C.18A:12-26).

22. (New section) a. As used in this section:

“Administrator” means any officer or employee of a school district, charter school, or renaissance school project who: (1) holds a position that requires a certificate authorizing the holder to serve as a school administrator, principal, or school business administrator; (2) holds a position that requires a certificate authorizing the holder to serve as supervisor who is responsible for making recommendations regarding hiring or purchasing or acquiring any property or services of a school district, charter school, or renaissance school project; or (3) holds a position that does not require the person to hold any type of certificate, but is responsible for making recommendations regarding hiring or purchasing or acquiring any property or services by a school district, charter school, or renaissance school project. “Administrator” includes a chief school administrator and a lead person of a charter school, but does not include a member of a board of education or board of trustees of a charter school or renaissance school project.

“Immediate family member” means the person’s spouse, partner in a civil union as defined in section 92 of P.L.2006, c.103 (C.37:1-33), domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), or dependent child, residing in the same household.

b. Notwithstanding any other law, rule, or regulation to the contrary, as a condition of receiving State aid, a nepotism policy adopted by the board of education of a school district or the board of trustees of a charter school or renaissance school project shall include, in addition to any other requirements adopted by the State Board of Education, provisions prohibiting:

(1) any immediate family member of an administrator, board of education member, or board of trustees member of a charter school or renaissance school project from being employed in a leadership or governance position in the school district, charter school and any school facility operated by the charter school, or renaissance school project, during the tenure of the administrator, board of education member, or board of trustees member; and

(2) any immediate family member of the officers and members of the management team, board, or other governing body of a charter management organization from being employed in a leadership or governance position in any charter school that contracts with the charter management organization for operation or management services.

23. Section 13 of P.L.1991, c.393 (C.18A:12-33) is amended to read as follows:

13. a. Each newly elected or appointed board member shall complete during the first year of the member's first term a training program to be prepared and offered by the New Jersey School Boards Association, in consultation with the New Jersey Association of School Administrators, the New Jersey Principals and Supervisors Association, and the Department of Education, regarding the skills and knowledge necessary to serve as a local school board member. The training program shall include information regarding the school district monitoring system established pursuant to P.L.2005, c.235, the New Jersey Quality Single Accountability Continuum, and the five key components of school district effectiveness on which school districts are evaluated under the monitoring system: instruction and program; personnel; fiscal management; operations; and governance.

The board member shall complete a training program on school district governance in each of the subsequent two years of the board member's first term.

b. Within one year after each re-election or re-appointment to the board of education, the board member shall complete an advanced training program to be prepared and offered by the New Jersey School Boards Association. This advanced training program shall include information on relevant changes to New Jersey school law and other information deemed appropriate to enable the board member to serve more effectively.

c. The New Jersey School Boards Association shall examine options for providing training programs to school board members through alternative methods such as on-line or other distance learning media or through regional-based training.

d. Within one year after being newly elected or appointed or being re-elected or re-appointed to the board of education, a board member shall complete a training program on harassment, intimidation, and bullying in schools, including a school district's responsibilities under P.L.2002, c.83 (C.18A:37-13 et seq.). A board member shall be required to complete the program only once.

e. Training on harassment, intimidation, and bullying in schools shall be provided by the New Jersey School Boards Association, in consultation with recognized experts in school bullying from a cross section of academia, child advocacy organizations, nonprofit organizations, professional associations, and government agencies.

f. The training provided by the New Jersey School Boards Association to a member of the board of trustees of a charter school pursuant to this section shall:

(1) be prepared in consultation with representatives and stakeholders from the New Jersey charter school community, which may include, but not be limited to, the New Jersey Public Charter Schools Association , or its successor;

(2) include information on best practices for charter school governance and oversight, school leader evaluations, and charter school compensation for leadership; and

(3) include guidelines for conducting a compensation study prepared pursuant to section 17 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.2010, c.122, s.6)

24. Sections 4, 5, 7, 14, 16, and 22 shall take effect immediately; sections 10, 11, 12, 15, 20, 21, and 23 shall take effect six months from the date of enactment; and sections 1, 2, 3, 6, 8, 9, 13, 17, 18, and 19 shall take effect when the Commissioner of Education next reviews applications to establish or renew charter schools, but no later than three years from the date of enactment; except that the Commissioner of Education may take any anticipatory administrative action, in advance of the effective dates, as may be necessary to implement the provisions of this act.

STATEMENT

This bill modifies certain parts of the “Charter School Program Act of 1995” and other sections of New Jersey law to establish various new requirements for charter schools, charter school boards of trustees, and charter school management organizations.

Public Notice and Hearing of Charter School Applications and Renewals

The bill requires three public notices of an application to establish or renew a charter school, as applicable, to be published in a newspaper having a substantial circulation in the county or counties where the charter school is to be located and in accordance with current law’s requirements for issuing or publishing a public notice. Each public notice is to include instructions for the public to submit comments on the application to the Commissioner of Education within 30 days of the date of the first notice.

The bill requires the commissioner to post notice of the filing on the Department of Education’s Internet website where it is to remain until the commissioner makes a final determination on the application.

Charter School Applications and Consolidation

The bill adds new requirements to current law regarding the application for the establishment of a charter school. Pursuant to the bill, the application would require the submission of a financial plan for the charter school, which is to include the anticipated administrative costs of the charter school, and a demonstration of need and an explanation of how the need is not currently being met by existing public schools or charter schools in the school district. An applicant is required to, at a minimum, include information confirming that there are no existing, open seats in other charter schools within geographic proximity of the applicant charter school.

Under the bill, prior to approving a charter school application and granting a charter, the commissioner is required to review: (1) the application material submitted by the proposed charter school; (2) the proposed charter school’s anticipated financial impact on the school district in which the charter school is to be located, including the impact to the bond ratings of the school district; and (3) any other information the commissioner deems necessary. The commissioner is directed to give equal consideration to this information when determining whether to grant or deny an application to establish a charter school.

The bill permits any two charter schools within the same public school district or within contiguous public school districts that demonstrate a need to consolidate to petition the commissioner to consolidate into one school pursuant to a process that would be determined by the commissioner. Under current law, any two charter schools within the same public school district that are not operating the same grade levels may petition the commissioner to amend their charters and consolidate into one school under certain circumstances.

Physical Location Requirements for Charter Schools

Under the bill, a charter school is required to be physically located, and provide all instruction, in the State. The bill directs the commissioner to deny a charter school application that proposes to operate a charter school, or provide instruction, in a physical location outside of the State and to deny a charter school application that proposes to operate or provide instruction primarily online.

The bill clarifies that its provisions are not to be construed to limit a charter school’s ability to utilize technological tools as an aide to in-person instruction, or virtual or remote instruction as permitted under current law or regulation.

Charter School Reporting

Current law requires each charter school to submit an annual report to the local board of education, the county superintendent of schools, and the commissioner. This bill requires the annual report to be made available on the charter school’s Internet website and be presented to the public at a regularly scheduled board of trustees meeting.

This bill requires the commissioner to report on the state of charter schools in New Jersey every five years based on measures contained in the Performance Framework developed by the State Board of Education to evaluate the academic, financial, and organizational performance of charter schools.

The bill requires a charter school to maintain an Internet website that includes certain listed information in an effort to provide increased public access to the operations and activities of the charter school.

The bill also requires the Department of Education to maintain, and include certain listed information on, a webpage on its Internet website for charter school transparency.

Charter School Renewals and Revocations

Pursuant to current law, a charter granted by the commissioner is granted for a four-year period and may be renewed for a five-year period.

The bill permits the commissioner to review any charter school that has been granted a renewal at any time during the renewal period. The commissioner is to provide the charter school with reasonable notice of the commissioner’s intent to review the school’s charter.

Pursuant to the bill, the commissioner may place a charter school on probationary status if, on two occasions, the school:

(1) has not fulfilled any condition imposed by the commissioner in connection with granting the charter;

(2) violates any provision of its charter;

(3) violates any of the financial operations requirements established for the charter schools by the State board;

(4) fails to make reasonable and appropriate efforts to serve a cross section of the community’s school age population;

(5) engages in a practice and pattern of discrimination in violation of federal or State law; or

(6) violates any federal or State law.

The bill requires the commissioner to revoke a school’s charter if the commissioner determines, after notice and opportunity for a hearing, the charter school has committed or engaged in any of the six listed criteria while the school is on probationary status, except that in the case of violations that are administrative or technical in nature, the commissioner is to afford the school an opportunity to correct the deficiencies prior to initiating revocation proceedings.

Under the bill, the commissioner is to consider the most recent compensation study submitted by the charter school and the charter school’s administrative costs over the past three years when reviewing an application to renew a charter school and as part of a charter school’s annual review.

Charter School Budget Transparency

The bill requires the budget adopted by a charter school for the school year to be posted for public inspection on the charter school’s Internet website and be made available in print in a “user-friendly” format using plain language. Under the bill, the plain language budget summary is to be submitted to the department and made publicly available on the department’s website. Under current law, school districts are required to post this information. This bill supplements the charter school law to generally require charter schools to disclose and post the same budgetary information as required under current law for school districts, with certain additional information pertaining to the salary, and in certain circumstances the contract, of the lead person and the school business administrator of the charter school

Under the bill, the board of trustees of a charter school is also required to hold a public hearing on the budget, the amounts of money necessary for the ensuing school year, and the various items and purposes for which the funds will be used.

Additional Requirements with Respect to Charter School Boards of Trustees and Board Membership

The bill clarifies that the provisions of the “Conscientious Employee Protection Act” apply to charter schools and charter school employees.

This bill requires an individual appointed to a board of trustees of a charter school to possess legal, fiscal, educational, community, or board leadership or governance experience.

The bill requires the board of trustees of a charter school to submit a compensation study concerning the lead person of the school to the commissioner at various intervals. The board of trustees may utilize a compensation study completed in any of the immediately preceding three years to comply with this submission requirement.

The bill imposes on charter schools certain public notice requirements in relation to modifications to certain administrator contracts, which requirements are similar to those under current law on school districts. Specifically, the bill prohibits the board of trustees of a charter school from renegotiating, extending, amending, or otherwise altering the terms of a contract with a lead person, school business administrator, or charter management organization unless notice is provided to the public at least 30 days prior to the scheduled action by the board. The bill stipulates that the board is to hold a public hearing and may not take any action on the matter until the hearing has been held.

The bill prohibits the board of trustees of a charter school, or any employee acting on behalf of the board, from requiring or requesting an employee to enter into a non-disclosure agreement or restrictive covenant as a condition of employment or with respect to severance pay as provided in an employment contract; except that this provision is not to be construed to prohibit a board of trustees from entering into a non-disparagement agreement with an employee.

Under current law, the board of trustees of a charter school is required to comply with the “Senator Byron M. Baer Open Public Meetings Act.” In accordance with these provisions, the bill requires the board of trustees of a charter school to post a copy of all meeting notices, including a calendar of all meeting dates, and the minutes of each meeting on the charter school’s website. The bill also requires the board of trustees of a charter school to hold all meetings in a physical building in the school district of residence of the charter school, with certain limited exceptions.

Under State Board of Education regulations, the board of education of a school district was required to adopt an anti-nepotism policy by October 1, 2008. Regulations also required each charter school board of trustees to adopt a policy by January 20, 2010. The regulations were amended in 2024 to require the adoption of an anti-nepotism policy by the board of trustees of each renaissance school project. This bill requires these nepotism policies to include provisions prohibiting: (1) any immediate family member of an administrator, board of education member, or board of trustees member of a charter school or renaissance school project from being employed in a leadership or governance position in the school district, charter school and any school facility operated by the charter school, or renaissance school project, during the tenure of the administrator, board of education member, or board of trustees member; and (2) any immediate family member of the officers and members of the management team, board, or other governing body of a charter management organization from being employed in a leadership or governance position in any charter school that contracts with the charter management organization for operation or management services.

The bill requires the training provided to charter school board of trustees members by the New Jersey School Boards Association to: (1) be prepared in consultation with representatives and stakeholders from the New Jersey charter school community, which may include, but not be limited to, the New Jersey Public Charter Schools Association or its successor; (2) include information on best practices for charter school governance and oversight, school leader evaluations, and charter school compensation for leadership; and (3) include guidelines for conducting a compensation study.

This bill requires a charter school board of trustees member to maintain their principal residence in the State. The bill also requires a minimum of 33 percent of the members of the board of trustees of a charter school to maintain their principal residence in the county in which the charter school is located or within a 30 mile radius of the charter school.

Provisions Related to Charter Management Organizations

Under the bill, a charter management organization is defined as a nonprofit organization that is exempt from federal taxation pursuant to section 501(c)(3) of the federal Internal Revenue Code, which operates or manages one or more charter schools linked by centralized support and operations.

The bill prohibits the board of trustees of a charter school from contracting with a for-profit entity to provide any operation or management services, but permits contracting with a charter management organization.

Under the bill, an executive of a charter management organization that receives payment for operation or management services from a charter school, the source of which is State or local funds, is required to comply with the provisions of the “School Ethics Act” pertaining to disclosure of certain employment and financial activities.

The bill requires a charter management organization that receives payment for operating or managing a charter school, the source of which is State or local funds, to annually file with the department the most recent public inspection copy of its Internal Revenue Service Form 990, and in accordance with federal law, all schedules and supporting documentation required to be submitted in conjunction with that form. Form 990 is a tax form the Internal Revenue Service requires 501(c)(3) charitable and nonprofit organizations to submit. Form 990 includes revenue, expenditure, and income data in addition to information used to assess whether a nonprofit aligns with federal requirements for tax-exempt status.