Dear Friends:

        Because of your interest and involvement in charter school issues, we want to bring you up to date on recent changes to federal law. The federal charter bill (the Charter School Expansion Act of 1998) was signed into law by the President on October 22 and went into effect immediately.

        The Center assisted lawmakers throughout the lengthy process to bring about fair and unobtrusive language that would help, not hinder charter schools. We’re happy with the final outcome, and thought you might benefit from a brief summary of the law as it stands.

        The main impetus behind this bill is to reward states with more significant chartering activity (i.e. stronger laws). While stimulus funds will continue to go to all charter schools at the discretion of state education agencies, the following changes are in place:

        Starting in fiscal '99 through 2001, any funds appropriated in excess of $51 million will be distributed according to newly instituted priority criteria. The priorities are: 1) that the state has demonstrated progress toward increasing the number of charters in the state prior to the period in which the applicant applies for a grant; 2) that the state has one authorizer that is not a local educational agency, "such as a state chartering board"; and 3) that the state ensures each charter has a high degree of autonomy over the charter's budget.

        (The Secretary is further encouraged to consider the number of charters operating when making grants, so that states with more charters get more money, etc. While logical, CER has found that this is not the case. States with only a few have received as much as $100,000 for each charter in the past, while states with many have received as little as $15-20K to give to each charter.)

        After 2001, the criteria stipulated above applies to all funds appropriated, not just those in excess of $51 million.

        Other important provisions:

1) SEAs are further encouraged to notify charters of all federal program funds they are entitled to receive.

2) There is established the ability for SEAs to get special Dissemination funds, which would allow an SEA to give money to successful charters that are 3 years or older to help other charters start, to develop partnerships or even curriculum materials, and to help disseminate information to improve student success.

3) National activity money is cut to 5 percent or $5 million, whichever is greater, not to exceed $8 million in any fiscal year. (NOTE of caution: national activities were expanded after heavy lobbying by the U.S. Department of Ed. to include not only the existing studies, but also new studies about demographic and input related data. HOWEVER — the bill includes language that states that NO CHARTER HAS TO GIVE ANY DATA TO ANYONE CONTRACTED UNDER THIS PART TO DO A STUDY). Thus you should advise your schools that data collection for federally sponsored studies is not mandated. While the studies and info collected are often helpful, the sponsors of the bill recognized that participating in studies often create enormous burdens on charter schools.

4) Regarding Title 1: The bill further directs the Secretary and the SEA to "take such measures" no more than 6 months from now to ensure that every charter that is eligible is receiving its federal funding, that not later than 5 months shall eligibility be determined, and that charters expanding enrollment should be duly compensated when eligible.

5) Though just words, the Secretary is encouraged to seek input from people involved directly in the operation of charter when promulgating rules or regs for this new law. (Read: it might be a good idea to send a letter of interest in helping to review).

6) The definition of a charter school was clarified to ensure that non-charter states could not get funds without having real live charter activity. The sponsors did this by requiring that a real "charter" "has a written performance contract with the authorized public chartering agency in the State that includes a description of how student performance will be measured in charter schools pursuant to State assessments that are required of other schools and pursuant to any other assessments mutually agreeable to the authorized public chartering agency and the charter school." This should clarify for legislators that they need an authorized public body to begin with, which means, they need a law to qualify for federal funds.

So, for example, a move recently by Montgomery County, Maryland school board members to accept charter school proposals would not qualify for support under federal law, as no statutory authority for charter schools to exist is in place.

As for weak law states, they risk the diminution of funds now and in the future if they continue to have only the school board in charge of authorizing or have only a handful of schools due to the weak nature of the law.

And on the Nature of Charter Laws:

        The Center has convened its all-star panel again to review and re-rank the state charter laws in light of new laws and several amendments of the past year. The final product is due out at the end of next week. It will be posted on our web site (edreform.com) and in print from our office. Please do not hesitate to call me or Dave DeShryver, senior policy analyst, with your questions.

Best Regards

 Jeanne Allen
President