HOUSE Amended 2nd Reading March 8, 2004Second Regular Session Sixty-fourth General Assembly STATE OF COLORADO ENGROSSED This Version Includes All Amendments Adopted on Second Reading in the House of Introduction LLS NO. 04-0027.01 Julie Pelegrin HOUSE BILL 04-1141 HOUSE SPONSORSHIP King, Briggs, Cadman, Carroll, Clapp, Cloer, Crane, Decker, Fairbank, Frangas, Hall, Harvey, Hefley, Jahn, Johnson R., Lee, Lundberg, May M., Miller, Mitchell, Rhodes, Rose, Schultheis, Sinclair, Spence, Spradley, Stafford, Welker, White, Wiens, and Witwer SENATE SPONSORSHIP Andrews, Arnold, Chlouber, Dyer, Evans, Groff, Hagedorn, Hillman, Johnson S., Jones, Kester, Lamborn, May R., McElhany, Owen, and Teck House Committees Senate Committees Education Appropriations A BILL FOR AN ACT Concerning charter schools, and, in connection therewith, providing for the creation of state charter schools, and making an appropriation therefor. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Sections 1 to 18: Authorizes creation of state charter schools. Identifies a state charter school as a public school of the state that operates under a charter contract between the state board of education ("state board") and the state charter school and that is not a school of a school district, but is under the general supervision of the state board. Amends the "Charter Schools Act" as necessary to distinguish between district charter schools and state charter schools. Directs the state board to identify, by rule, the state statutes and state rules that are automatically waived for all charter schools, and clarifies that a charter school may apply for waiver of additional state statutes and rules. Requires each district charter contract and state charter contract to include a statement specifying the manner in which the charter school will comply with the intent of the waived statutes and rules. Instructs the state board to review waivers of state statutes and rules periodically, rather than every 2 years. Authorizes a state charter school to join a board of cooperative services ("BOCES") or, in association with other state charter schools, school districts, or institutions of higher education, to form a BOCES. With regard to the charter application contents:  Requires specification of measurable annual achievement goals that are based on the state accreditation indicators;  Repeals the requirement that the application include a plan for the displacement of pupils, teachers, and other employees;  Repeals the requirement that the application include evidence that the terms and conditions of employment have been addressed with affected employees and their representatives. Repeals the provision that prohibits a charter application to convert a private school or a nonpublic home-based education program into a charter school. Clarifies that, if a local board of education ("local board") does not review a charter application, the refusal to review is deemed a denial of the application and is appealable. If a school district chooses to unilaterally impose conditions on a charter applicant or a district charter school, requires the board of education of the school district to adopt a resolution imposing the conditions. Makes the following changes in the time line for a local board's review and approval of charter applications:  Changes the deadline for filing a charter application to September 1;  Requires a local board to request additional information concerning a charter application by October 15;  Reduces the time period during which the local board must either approve or deny the charter application to 60 days after filing;  Reduces the time period during which the local board and the charter applicant must complete the charter contract to 60 days after the local board approves the charter application;  Directs the local board to notify the state board within 15 days after denying a charter application;  If the local board approves the charter application after remand from the state board, requires the local board and the charter applicant to complete the charter contract within 45 days after remand. Requires the applicant to provide notice of appeal within 15 days after the local board's decision. Requires a person who files an appeal with intent to apply for a state charter to pay an appeal fee in an amount set by rule of the state board, not to exceed $5,000. On such appeal, allows the state board to conduct a full, de novo review of the charter application and any supporting information. If the local board denies the application after remand or if the local board and the charter applicant are unable to complete the charter contract, allows the charter applicant to apply directly to the state board for a state charter if the applicant, with the notice of appeal, gave notice of the intent to apply for a state charter. Prohibits such a charter applicant from seeking a second review by the state board. Repeals the provisions allowing a person to appeal a local board's decision to approve a charter application. Allows a charter applicant to submit the application to the state board if the local board denies the application on remand from the state board or fails to complete the charter contract within 45 days, so long as the charter applicant previously gave notice of the intent to apply for a state charter. Requires a charter applicant to pay an application fee in an amount set by rule of the state board, not to exceed $15,000. If a charter applicant submits the application to the state board, requires the state board to approve the charter application and requires the state board and the charter applicant to complete the state charter contract within 45 days after submittal. At any time after completion of a state charter contract, allows the state board, the state charter school, and the school district that originally denied the charter application to agree to convert the state charter school to a district charter school. Allows a district charter school, with the approval of the chartering district, to submit to the state board an application for conversion from a district charter school to a state charter school. Requires the district charter school to pay a conversion application fee in an amount set by rule of the state board, not to exceed $15,000. Requires the district charter school and the chartering district to enter an agreement regarding issues arising as a result of the conversion. Establishes time frames by which the state board shall decide whether to allow the conversion. If the state board allows the conversion, requires the state board and the district charter school to enter into a state charter school contract within 45 days after the decision allowing conversion. If a charter applicant or a conversion applicant and the state board are unable to complete the state charter contract within 45 days, requires the parties to participate in alternative dispute resolution. Authorizes the state board to appoint an advisory committee to assist in reviewing appeals and applications for conversion and to make recommendations to the state board concerning approval of state charter applications and state charter conversions. Specifies that a state charter school is under the general supervision of the state board, is subject to accreditation, and is a local education agency. Instructs the state board to adopt rules identifying the statutory duties imposed on school districts that shall also apply to state charter schools. Allows the state board to direct the department of education ("department") to provide necessary administration, oversight, and management services to a state charter school or to contract with a third party to provide the services. Encourages the department to apply federal funds and to seek and accept gifts, grants, and donations to offset the costs incurred, and creates the state charter school cash fund for deposit of said moneys. Authorizes the department to withhold a percentage of the funding payable to the state charter school to offset the costs incurred, and provides that any portion of the amount withheld remaining at the end of a fiscal year shall remain in the fund and shall not revert to the general fund. Allows a state charter applicant, a state charter school, a district charter school seeking to convert to a state charter school, or the state board to initiate a dispute resolution process to resolve differences between the parties concerning the state charter contract. Establishes procedures for the dispute resolution process. Allows the parties to agree to be bound by the outcome of the dispute resolution process. Allows the parties to appeal the outcome of the dispute resolution process to the district court if they do not agree to be bound or if one of the parties fails to comply with the outcome of the dispute resolution process. Instructs the district court to find in favor of the aggrieved party if the other party did not participate in good faith in the resolution process or refused to comply with the outcome. Repeals the provision that allows a local board to limit the number of charter schools in the school district. Requires each local board and each state charter school to annually report to the department such information as the department requests to evaluate the effectiveness of charter schools. Repeals provisions limiting the number of charter schools. Prohibits a chartering authority from restricting the number of pupils a charter school may enroll. Repeals the 5-year cap on the term of a charter. Directs the department to conduct accreditation reviews in all state charter schools in accordance with rules of the state board. Adds failure to meet the requirements of an accreditation contract to the grounds for revocation or nonrenewal of a state charter. Repeals the provision that allows nonrenewal or revocation of a charter on the grounds that operation of the charter school is not in the interest of pupils residing within the school district. Clarifies that the district charter contract between a district charter school and the authorizing school district shall provide funding to the district charter school in the amount of 100% of the district per pupil revenues and 100% of the district per pupil on-line funding; except that the school district may withhold the actual amount of overhead administrative costs applicable to the district charter school, up to 5% of the per pupil funding. Repeals language stating that funding and service agreements shall be neither a financial incentive nor a financial disincentive to establishment of a charter school. Repeals the requirement that the department provide technical assistance to charter applicants. Requires a charter school to comply with all of the state financial budgeting and reporting requirements that apply to school districts. Allows a school district to withhold a portion of the funding due to a district charter school if the district charter school fails to comply with financial reporting requirements and such failure causes the department to withhold funding from the school district. Allows a district charter school to seek a determination from the state board regarding whether the chartering district has improperly withheld funding from the district charter school. Establishes procedures for making the determination. Upon request of the district charter school, allows the department to withhold funding from the chartering school district and pay it directly to the district charter school if the school district continues to improperly withhold funding from the district charter school following a determination by the state board. Allows a district charter school to seek a determination from the state board regarding whether a school district has improperly failed to pay the district charter school the tuition charged for the excess costs incurred in educating a child with disabilities. Establishes procedures for making the determination. If the state board determines the school district failed to pay the excess costs and the school district does not pay within 30 days after the determination, allows the department to withhold the amount of the excess costs from the funding due to the school district and pay it directly to the district charter school. Requires a state charter school to certify annually to the department the state charter school's pupil enrollment and on-line pupil enrollment and to notify the department concerning whether the state charter school qualifies for capital construction moneys. Directs the department to add the pupil enrollment and on-line pupil enrollment of the state charter school to the funded pupil count of the school district that denied the state charter school's charter application or that agreed to the conversion of the state charter school. Following calculation of the school district's total program and the amount of the state's share of total program payable to the school district, instructs the department to withhold from said school district's state share the amount due to the state charter school and to pay that amount directly to the state charter school. Specifies how to calculate the amount due to the state charter school, and caps the amount payable to a state charter school at the amount of said school district's state share. Directs the state charter school and the state board, in the terms of the state charter contract, to agree to the services to be provided to the state charter school by the state board, the department, or a third-party with whom the state board has contracted. Directs the department to provide to the state charter an itemized accounting of all its costs for services provided to the state charter school. Requires the state charter school to set aside moneys for instructional supplies and materials and capital reserve or risk management purposes. Requires each state charter school to provide federally required educational services to the students enrolled in the state charter school. Allows a state charter school to be an administrative unit for purposes of providing special education services. Directs the department to forward to the state charter school the school's proportionate share of the state and federal funding for educating children with disabilities and the school's proportionate share of other federal or state categorical aid programs. States that the school district of residence of a child with disabilities is responsible for paying the tuition charge for excess costs incurred by a state charter school in educating the child. Allows a state charter school to seek a determination from the state board regarding whether a school district has improperly failed to pay the state charter school the tuition charged for the excess costs incurred in educating a child with disabilities. Establishes procedures for making the determination. If the state board determines the school district failed to pay the excess costs and the school district does not pay within 30 days after the determination, allows the department to withhold the amount of the excess costs from the funding due to the school district and pay it directly to the state charter school. Requires each state charter school to comply with federal reporting requirements to receive federal aid. Requires a state charter school to comply with the state financial and budget rules and reporting requirements that apply to school districts. Authorizes the governing board of a state charter school to accept and expend gifts, grants, and donations. Specifies that any moneys received by a state charter school that remain at the end of a budget year shall remain in the state charter school's accounts for use in the following budget year. Specifies that a state charter school may qualify to receive capital construction moneys appropriated by the general assembly on the same grounds as a district charter school. Beginning in 2004-05 and every 3 years thereafter, requires the department to prepare a report and evaluation for the governor and the house and senate education committees concerning the success or failure of charter schools. Directs the state board to compile evaluations of district charter schools received from the chartering school districts and evaluations of state charter schools received from the department. Directs the state board to review the waivers of statutes and rules to determine their effectiveness. Sections 19 to 25: Makes conforming amendments to allow the Colorado educational and cultural facilities authority to issue bonds on behalf of a state charter school. Changes the name of the state charter school debt reserve fund to the charter school debt state reserve fund. Changes the name of the state charter school interest savings account to the charter school state interest savings account. Section 26: Specifies the term "charter school", as used in the education statutes includes district, state, and independent charter schools. Sections 27 to 33: Allows state charter schools to form and participate in BOCES. Sections 34 to 42: Makes conforming amendments to include state charter schools in the "Educational Accreditation Act of 1998", and to allow state charter schools to participate in the Colorado school awards program. Sections 43 to 49: Includes state charter schools in the "Exceptional Children's Educational Act". Sections 50 to 54: Includes state charter schools in the "English Language Proficiency Act". Section 55: Includes state charter schools in the provision concerning siting of school facilities. Prohibits a local government from denying access to a proposed charter school facility unless the entity that provides fire protection services for the local government recommends denial of access for fire and safety reasons. Gives a request of a charter school pertaining to a facility precedence over local zoning regulations. Section 56: Includes state charter schools in the "In-school Suspension Act". Sections 57 to 63: Includes state charter schools in the statutory provisions governing payment of state financial aid for the transportation of pupils. Sections 64 to 77: Includes state charter schools in the "Public School Finance Act of 1994", including but not limited to, allowing a state charter school to receive moneys from the contingency reserve; allowing a state charter school to qualify for small attendance center aid; allowing a state charter school to qualify for school lunch and breakfast program moneys; and allowing a state charter school to qualify for construction moneys appropriated by the general assembly. Allows the department to withhold moneys due to a state charter school or a school district if the state charter school or the school district fails to comply with the requirements for reporting financial information to the department. Sections 78 to 80: Includes state charter schools in statutory provisions allowing state assistance for vocational education courses. Section 81: Makes a conforming amendment to include state charter schools in the definition of "educational institution" for purposes of the "Colorado Educational and Cultural Facilities Authority Act". Section 82: Specifies that the statutory provision allowing a local government to refuse to comply with an unfunded state mandate does not apply to an order from the state board pertaining to a charter school. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 22-30.5-102 (2) (c), (2) (d), (2) (e), (2) (g.5), (2) (h), and (3), Colorado Revised Statutes, are amended, and the said 22-30.5-102 (2) is further amended BY THE ADDITION OF THE FOLLOWING NEW PARAGRAPHS, to read: 22-30.5-102. Legislative declaration. (2) The general assembly further finds and declares that this part 1 is enacted for the following purposes: (c) To encourage diverse approaches to learning and education and the use of different, research-based, or proven or innovative teaching methods; (d) To allow promote the development of different and innovative forms of measuring longitudinal analysis of student progress, in addition to participation in the Colorado student assessment program, to measure pupil learning and achievement; (e) To create new employment options and professional opportunities for teachers and principals, including the opportunity to be responsible for the learning program achievement results of students at the school site; (g.5) To address the formation of research-based charter schools that use programs that are proven to be effective; (h) To hold charter schools accountable for meeting state board and school district content standards and to provide such schools with a method to change accountability systems content standards, as measured in part by the Colorado student assessment program and by longitudinal analysis of student progress, through state accreditation, and by adequate yearly progress as defined by federal law; (i) To provide an avenue for citizens to participate in the educational process and environment; (j) To provide citizens with multiple avenues by which they can obtain authorization for a charter school. (3) In authorizing charter schools, it is the intent of the general assembly to create a legitimate avenue for parents, teachers, and community members to implement new methods of educating children that are proven to be effective and to take responsible risks and create new, innovative, and more flexible research-based ways of educating all children within the public school education system. The general assembly seeks to create an atmosphere in Colorado's public school education system where research and development in developing different learning opportunities is actively pursued. As such, the provisions of this part 1 should be interpreted liberally to support the findings and goals of this section and to advance a renewed commitment by the state of Colorado to the mission, goals, and diversity of public education. SECTION 2. 22-30.5-103, Colorado Revised Statutes, is amended to read: 22-30.5-103. Definitions. (1) For purposes of this part 1 As used in this part 1, unless the context otherwise requires: (a) (1) "At-risk pupil" means a pupil who, because of physical, emotional, socioeconomic, or cultural factors, is less likely to succeed in a conventional educational environment. (2) "Charter school" means a public school that enters into a charter contract pursuant to the provisions of this part 1 and includes both a district charter school and a state charter school. (3) "Chartering authority" means, in the case of a district charter school, the local board of education that enters into a charter contract with the district charter school or, in the case of a state charter school, the state board. (4) "Department" means the department of education created pursuant to section 24-1-115, C.R.S. (5) "District charter school" means a charter school that enters into a charter contract with a local board of education. (b) (6) "Local board of education" means the school district board of education. (7) "Moratorium" means a school district's official policy of refusing to authorize charter schools and an ongoing pattern or practice of refusing to accept or review charter school applications. (b.5) (8) "On-line pupil" means a child who receives educational services predominantly through an on-line program created pursuant to section 22-33-104.6. (c) (9) "State board" means the state board of education. (10) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 3. Part 1 of article 30.5 of title 22, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 22-30.5-103.5. Charter schools - chartering authorities. A person or group that seeks to operate a charter school shall first apply to the local board of education of a school district, as provided in this part 1. If the local board of education denies the charter application following remand from the state board pursuant to section 22-30.5-108 or if the charter applicant and the local board of education cannot enter into a charter contract within the forty-five-day period required in section 22-30.5-108 (3) (b), the charter applicant may submit the charter application to the state board pursuant to the provisions of section 22-30.5-108.1 (1). A charter school that enters into a charter contract with a local board of education is a district charter school; except that, if a district charter school and the chartering local board of education and the state board agree to convert the district charter school to a state charter school and the state board and the district charter school complete a state charter contract, as provided in section 22-30.5-108.1 (2), the district charter school shall be converted to a state charter school. A charter school that enters into a charter contract with the state board is a state charter school; except that, if the state board, the local board of education that denied the charter application, and the state charter school agree to the transfer of chartering authority as provided in section 22-30.5-108.1 (1) (d), the state charter school shall be converted to a district charter school. (2) Notwithstanding any provision of this part 1 to the contrary, the state board shall not enter into a state charter contract with a charter applicant that was denied by, or could not complete a district charter contract with, a local board of education of a school district that enrolls three thousand or fewer students. SECTION 4. 22-30.5-104, Colorado Revised Statutes, is amended to read: 22-30.5-104. Charter school - requirements - authority. (1) A charter school shall be a public, nonsectarian, nonreligious, non-home-based school. which operates within a public school district. (2) (a) A charter school applicant cannot apply to, or enter into a charter contract with, a school district unless a majority of the charter school's pupils, other than on-line pupils, will reside in the chartering school district or in school districts contiguous thereto. (b) A district charter school shall be a public school within of the school district that grants approves its charter and application and enters into a charter contract with the district charter school. The district charter school shall be accountable to the school district's local board of education for purposes of ensuring compliance with applicable laws and charter provisions and the requirement of section 15 of article IX of the state constitution. A charter school cannot apply to, or be granted a charter by, a school district unless a majority of the charter school's pupils, other than on-line pupils, will reside in the chartering school district or in school districts contiguous thereto. (c) A state charter school shall be a public school that is not a school of a school district, but is under the general supervision of the state board and is accountable to the state board for purposes of ensuring compliance with applicable laws and charter provisions and the requirement of section 1 of article IX of the state constitution. (3) A charter school shall be subject to all federal and state laws and constitutional provisions prohibiting discrimination on the basis of disability, race, creed, color, gender, national origin, religion, ancestry, or need for special education services. A district charter school shall be subject to any court-ordered desegregation plan in effect for the chartering school district. Enrollment in a district charter school must be open to any child who resides within the school district; except that no district charter school shall be required to make alterations in the structure of the facility used by the district charter school or to make alterations to the arrangement or function of rooms within the facility, except as may be required by state or federal law. Enrollment decisions shall be made in a nondiscriminatory manner specified by the charter school applicant in the charter school application. (4) A charter school shall be administered and governed by a governing body in a manner agreed to by the charter school applicant and the local board of education its chartering authority. A charter school may organize as a nonprofit corporation pursuant to the "Colorado Nonprofit Corporation Act", articles 121 to 137 of title 7, C.R.S., which shall not affect its status as a public school for any purposes under Colorado law. (4.5) (a) In order to clarify the status of charter schools for purposes of tax-exempt financing, a charter school, as a public school, is a governmental entity. Direct leases and financial obligations of a district charter school shall not constitute debt or financial obligations of the school district unless the school district specifically assumes such obligations. Direct leases and financial obligations of a state charter school shall not constitute debt or financial obligations of the state. (b) Notwithstanding the provisions of section 22-30.5-110 (1) to the contrary, a charter school and the local board of education may agree to extend the length of the charter beyond five years for the purpose of enhancing the terms of any lease or financial obligation. (5) Except as otherwise provided in sections 22-20-109, 22-32-115, and 22-54-109, a charter school shall not charge tuition. (6) (a) Pursuant to contract, a district charter school may operate free from specified school district policies and state regulations; except that a charter school shall not, by contract or otherwise, operate free of the requirements contained in the "Children's Internet Protection Act", article 87 of this title free from state rules, as provided in paragraph (b) of this subsection (6). Pursuant to contract, a local board of education may waive locally imposed school district requirements, without seeking approval of the state board; The state board may waive state statutory requirements or rules promulgated by the state board; except that a district charter school shall not, by contract or otherwise, operate free of the requirements contained in the "Children's Internet Protection Act", article 87 of this title. (b) The state board shall promulgate rules identifying state statutes and state rules that are automatically waived for all charter schools. A school district, on behalf of a district charter school, may apply to the state board for a waiver of a state statute or state rule that is not automatically waived for charter schools by rule. A state charter school may apply to the state board for a waiver of a state statute or state rule that is not automatically waived for charter schools by rule. Notwithstanding any provision of this subsection (6) to the contrary, the state board may not waive any statute or rule relating to the assessments required to be administered pursuant to section 22-7-409, any statute or rule necessary to prepare the school accountability reports pursuant to part 6 of article 7 of this title, or any statute or rule relating to the "Children's Internet Protection Act", article 87 of this title. (c) A state charter school is not subject to the policies or requirements of any school district. (d) Upon request of the a charter applicant, the state board and the local board of education of the school district to which the charter applicant applies shall provide summaries of such regulations the state and district rules and policies to use in preparing a charter school application. The department of education shall prepare the summary of state regulations rules within existing appropriations. Any waiver of state rules or local school district regulations made pursuant to this subsection (6) shall be for the term of the charter for which the waiver is made; except that a waiver of state statutes or regulations state board rules by the state board shall be subject to periodic review every two years as provided by state board rule and may be revoked if the waiver is deemed no longer necessary by the state board. (7) (a) A charter school shall be responsible for its own operation including, but not limited to, preparation of a budget, contracting for services, facilities, and personnel matters. (b) A charter school may negotiate and contract with a school district, the governing body of a state college or university, the state of Colorado, or any third party for the use of a school building and grounds, the operation and maintenance thereof, and the provision of any service, activity, or undertaking that the charter school is required or chooses to perform in order to carry out the educational program described in its charter contract. Any services for which a charter school contracts with a school district its chartering authority shall be provided by the district chartering authority at cost. The charter school shall have standing to sue and be sued in its own name for the enforcement of any contract created pursuant to this paragraph (b). (c) In no event shall a charter school be required to pay rent for space which is deemed available, as negotiated by contract, in school district facilities a facility owned by the charter school's chartering authority. All other costs for the operation and maintenance of the facilities used by the charter school shall be subject to negotiation between the charter school and the school district its chartering authority. (8) A charter school shall be authorized to offer any educational program, including but not limited to an on-line program pursuant to section 22-33-104.6, that may be offered by a school district and that is research based and has been proven to be effective, unless expressly prohibited by its charter or by state law. (9) All decisions regarding the planning, siting, and inspection of charter school facilities shall be made in accordance with section 22-32-124 and as specified by contract with the district charter school's chartering authority. (10) The governing board of a state charter school may elect to form a board of cooperative services in association with the governing boards of other state charter schools, with one or more school districts, or with one or more institutions of higher education, as provided in section 22-5-104. The governing board of a state charter school may elect to join an existing board of cooperative services, with the agreement of the existing board members as provided in section 22-5-104. SECTION 5. 22-30.5-105, Colorado Revised Statutes, is amended to read: 22-30.5-105. Charter schools - contract contents - regulations - repeal. (1) An approved charter application shall serve as the basis for a contract between the a charter school and the local board of education its chartering authority. (2) (a) The contract between the a district charter school and the chartering local board of education shall reflect all agreements regarding the release of the district charter school from school district policies. The contract between a state charter school and the state board shall reflect all agreements regarding the release of the state charter school from state statutes and state rules that are in addition to the statutes and rules automatically waived pursuant to rule, as provided in section 22-30.5-104 (6) (b). Each charter school's contract shall include a statement specifying the manner in which the charter school shall comply with the intent of the state statutes, state board rules, and district rules that are waived for the charter school either automatically or by application. (b) (I) Any contract between the a charter school and the local board of education its chartering authority approved on or after July 1, 2001, but prior to July 1, 2010, shall include a statement specifying how the charter school intends to use the one-percent increase in the statewide base per pupil funding for state fiscal years 2001-02 through 2010-11 required by section 17 of article IX of the state constitution to raise student achievement. (II) This paragraph (b) is repealed, effective July 1, 2011. (c) Any A contract between a district charter school and a the chartering local board of education approved on or after July 1, 2002, shall specify: (I) If the contract is not a renewal of an expiring contract, the manner in which the school district governed by the local board of education will support any start-up facility needs of the district charter school; (II) The manner in which the school district governed by the local board of education will support any long-term facility needs of the district charter school; and (III) The actions that the district charter school must take in order to: (A) Have its capital construction needs included as part of the next ballot question for approval of bonded indebtedness to be submitted by the local board of education of its chartering school district to the voters of the district; or (B) Have the local board of education submit a ballot question for approval of a special mill levy to finance the capital construction needs of the district charter school to the voters of the district pursuant to section 22-30.5-405. (3) The A contract between the a district charter school and the chartering local board of education shall reflect all requests for release of the district charter school from state statutes and regulations state board rules. Within ten days after the contract is approved by the chartering local board of education, any request for release from state statutes and regulations state board rules shall be delivered by the chartering local board of education to the state board. The chartering local board of education shall request the release on a form provided by the department. Within forty-five days after a request for release is received by the state board, the state board shall either grant or deny the request. If the state board grants the request, it may orally notify the chartering local board of education and the district charter school of its decision. If the state board denies the request, it shall notify the chartering local board of education and the district charter school in writing that the request is denied and specify the reasons for denial. If the chartering local board of education and the district charter school do not receive notice of the state board's decision within forty-five days after submittal of the request for release, the request shall be deemed granted. If the state board denies a request for release that includes multiple state statutes or regulations state board rules, the denial shall specify the state statutes and regulations state board rules for which the release is denied, and the denial shall apply only to those state statutes and regulations state board rules so specified. (4) A material revision of the terms of the a charter contract may be made only with the approval of the local board of education chartering authority and the governing body of the charter school. (5) Any term included in a charter contract that would require a charter school to waive or otherwise forego receipt of any amount of operational or capital construction funds provided to the charter school pursuant to the provisions of this article or pursuant to any other provision of law is hereby declared null and void as against public policy and is unenforceable. SECTION 6. 22-30.5-106, Colorado Revised Statutes, is amended to read: 22-30.5-106. Charter application - contents. (1) The charter school application shall be a proposed agreement upon which the charter applicant and the chartering authority negotiate a charter contract, and, at a minimum, shall include: (a) The mission statement of the charter school, which must be consistent with the principles of the general assembly's declared purposes as set forth in section 22-30.5-102 (2) and (3); (b) The goals, objectives, and pupil performance standards to be achieved by the charter school, including but not necessarily limited to accreditation standards and goals and applicable standards and goals specified in federal law; (c) Evidence that an adequate number of parents, teachers, pupils, or any combination thereof support the formation of a charter school; (d) Repealed. (e) A description of the charter school's research-based educational program that has been proven to be effective, pupil performance standards, measurable annual achievement goals that are based on the state accreditation indicators specified in article 11 of this title, and curriculum; which must meet or exceed any content standards adopted by the school district in which the charter school has applied for a charter and must be designed to enable each pupil to achieve such standards; (f) A description of the charter school's plan for evaluating pupil performance, the types of assessments that will be used to measure pupil progress towards achievement of the school's pupil performance standards, the timeline for achievement of such standards, and the procedures for taking corrective action in the event that pupil performance at the charter school falls below such standards the achievement goals approved by the chartering authority in the charter contract; (g) Evidence that the plan for the charter school is economically sound, for both the charter school and the school district, a proposed budget for the term of the charter, a description of the manner in which an annual audit of the financial and administrative operations of the charter school, including any services provided by the state, a school district, or a third party, is to be conducted; and a plan for the displacement of pupils, teachers, and other employees who will not attend or be employed in the charter school; (h) A description of the governance and operation of the charter school, including the nature and extent of parental, professional educator, and community involvement in the governance and operation of the charter school; (i) An explanation of the relationship that will exist between the proposed charter school and its employees; including evidence that the terms and conditions of employment have been addressed with affected employees and their recognized representative, if any; (i.5) The employment policies of the proposed charter school; (j) An agreement between the parties regarding their A proposal regarding the parties' respective legal liability liabilities and applicable insurance coverage; (k) A description of how the charter school plans to meet the transportation needs of its pupils and, if the charter school plans to provide transportation for pupils, a plan for addressing the transportation needs of low-income and academically low-achieving pupils; (l) A description of the charter school's enrollment policy, consistent with the requirements of section 22-30.5-104 (3), and the criteria for enrollment decisions; (m) A dispute resolution process, as provided in section 22-30.5-107.5. (2) No person, group, or organization may submit an application to convert a private school or a nonpublic home-based educational program into a charter school or to create a charter school which is a nonpublic home-based educational program as defined in section 22-33-104.5. (3) A charter applicant is not required to provide personal identifying information concerning any parent, teacher, or prospective pupil prior to the time that the charter is approved contract is approved by both parties and either the charter school actually employs the teacher or the pupil actually enrolls in the charter school, whichever is applicable. A charter school applicant shall provide, upon request of the school district chartering authority, aggregate information concerning the grade levels and schools in which prospective pupils are enrolled. SECTION 7. 22-30.5-107, Colorado Revised Statutes, is amended to read: 22-30.5-107. Charter application - process. (1) A charter applicant cannot apply to, or be granted a charter by enter into a charter contract with, a school district unless a majority of the proposed charter school's pupils, other than on-line pupils, will reside in the chartering school district or in school districts contiguous thereto. The local board of education shall receive and review all applications for charter schools. If the local board of education does not review a charter application, it shall be deemed to have denied the charter application. Applications must be filed with the local board of education by a date determined by the local board of education September 1 to be eligible for consideration for the following school year. The date determined by the local board of education for filing of applications shall not be any earlier than August 15, or any later than October 1. Prior to any change in the application deadline, the local board of education shall notify each charter school applicant in the district of the proposed change by certified letter. The local board of education shall not charge any application fees. If such board finds the charter school application is incomplete, the board shall request the necessary information from the charter applicant prior to October 15 and give the charter applicant reasonable opportunity to provide additional information to the local board of education for review. The charter school application shall be reviewed by the district accountability committee prior to consideration by the local board of education. (1.5) For purposes of reviewing a charter school application, a district accountability committee shall include at least: (a) One person with a demonstrated knowledge of charter schools, regardless of whether that person resides within the school district; and (b) One parent or legal guardian of a child enrolled in a charter school in the school district; except that, if there are no charter schools in the school district, the local board of education shall appoint a parent or legal guardian of a child enrolled in the school district. (2) After giving reasonable public notice, the local board of education shall hold community meetings in the affected areas or the entire school district to obtain information to assist the local board of education in its decision to grant approve a charter school application. The local board of education shall rule by resolution on the application for a charter school in a public hearing, upon reasonable public notice, within seventy-five sixty days after receiving the application filed pursuant to subsection (1) of this section. All negotiations between the charter school and the local board of education on the contract shall be concluded by, and all terms of the contract agreed upon, no later than ninety sixty days after the local board of education rules by resolution on the application for a charter school. (2.5) The charter applicant and the local board of education may jointly waive the deadlines set forth in this section. (3) If a local board of education denies a charter school application, does not review a charter school application, or unilaterally imposes conditions that are unacceptable to the charter applicant, the charter applicant may appeal the decision to the state board pursuant to section 22-30.5-108. (4) If a local board of education denies or does not review a charter school application, it shall state its reasons for the denial or refusal to review. Within fifteen days after denying or refusing to review a charter school application, the local board of education shall notify the department of the denial or refusal and the reasons therefor. If a local board of education grants approves a charter application, it shall send a copy of the approved charter application to the department of education within fifteen days after granting approving the charter application. (5) A school district may unilaterally impose conditions on a charter applicant or on a district charter school only through adoption of a resolution of the local board of education of the school district. If a local board adopts a resolution unilaterally imposing conditions on a charter applicant or on a district charter school, the resolution shall, at a minimum, state the school district's reasons for imposing the conditions unilaterally, despite the objections of the charter applicant or the district charter school. The charter applicant or district charter school may appeal the decision of the local board of education to unilaterally impose the conditions by filing the notice of appeal with the state board within fifteen days after adoption of the resolution, as provided in section 22-30.5-108 (2) (a). SECTION 8. 22-30.5-107.5 (1), (2) (a), (2) (b), and (3) (a), Colorado Revised Statutes, are amended to read: 22-30.5-107.5. Dispute resolution - governing policy provisions - appeal. (1) Except as otherwise provided in section 22-30.5-108, any disputes that may arise between a district charter school and its chartering school district concerning governing policy provisions of the school's charter contract shall be resolved pursuant to this section. (2) (a) A district charter school or its chartering school district may initiate a resolution to any dispute concerning a governing policy provision of the school's charter contract by providing reasonable written notice to the other party of an intent to invoke this section. Such notice shall include, at a minimum, a brief description of the matter in dispute and the scope of the disagreement between the parties. (b) Within thirty days after receipt of the written notice described in paragraph (a) of this subsection (2), the district charter school and the chartering school district shall agree to use any form of alternative dispute resolution to resolve the dispute, including but not limited to any of the forms described in the "Dispute Resolution Act", part 3 of article 22 of title 13, C.R.S.; except that any form chosen by the parties shall result in final written findings by a neutral third party within one hundred twenty days after receipt of such written notice. (3) (a) A district charter school and its chartering school district may agree to be bound by the written findings of the neutral third party resulting from any alternative dispute resolution entered into pursuant to subsection (1) of this section. In such case, such findings shall be final and not subject to appeal. SECTION 9. 22-30.5-108, Colorado Revised Statutes, is amended to read: 22-30.5-108. Appeal - standard of review - procedures. (1) Acting pursuant to its supervisory power as provided in section 1 of article IX of the state constitution, the state board, upon receipt of a notice of appeal or upon its own motion, may review decisions of any local board of education concerning the denial of a charter school application, the nonrenewal or revocation of a district charter school's charter, or the unilateral imposition of conditions on a charter applicant or a district charter school, in accordance with the provisions of this section. Any disputes arising with regard to governing policy provisions of a district charter school's charter contract shall be resolved as provided in section 22-30.5-107.5. A local board of education's refusal to review a charter application constitutes a denial of the charter application and is appealable as a denial pursuant to the provisions of this section. (2) (a) A charter applicant or any other person who wishes to appeal a decision of a local board of education concerning the denial of a charter application or the nonrenewal or revocation of a district charter or the unilateral imposition of conditions on a charter applicant or a district charter school, shall provide the state board and the local board of education with a notice of appeal or of facilitation within thirty fifteen days after the local board's decision. The person bringing the appeal shall limit the grounds of the appeal to the grounds for the denial of a charter application or the nonrenewal or revocation of a district charter, or the unilateral imposition of conditions on a charter applicant or district charter school, whichever is being appealed, specified by the local board of education. The notice shall include a brief statement of the reasons the charter school applicant appealing person contends the local board of education's denial of a charter application or nonrenewal or revocation of a district charter, or imposition of conditions on a charter applicant or district charter school was in error. If the appeal concerns the denial of a charter application or the imposition of conditions on a charter applicant, the notice shall also specify whether the charter applicant intends to apply for a state charter pursuant to the provisions of section 22-30.5-108.1 if the local board of education subsequently denies the charter application or chooses to unilaterally impose the condition on the charter applicant or if the local board of education and the charter applicant are unable to complete the charter contract within the forty-five-day period required in paragraph (b) of subsection (3) of this section. (b) (I) In considering an appeal of the denial of a charter application or of the unilateral imposition of conditions on a charter applicant where the appealing person has given notice of the intent to apply for a state charter, the state board shall first determine whether the local board of education has, within the preceding four years: (A) Imposed a moratorium on approving charter applications or entering into charter contracts; (B) Refused to approve a charter application after a second remand by the state board ordering the local board of education to approve the charter application; (C) Following the itemized accounting of central administrative overhead costs required pursuant to section 22-30.5-112 (2) (a.4), been found on two or more occasions to be owing an amount to a district charter school equal to ten percent or more of the amount of the district charter school's per pupil share of the central administrative overhead costs for services actually provided to the district charter school; (D) Failed to pay to a district charter school an amount found to be owing following the itemized accounting of central administrative overhead costs required pursuant to section 22-30.5-112 (2) (a.4); (E) On two or more occasions, following a review pursuant to the provisions of section 22-30.5-112 (9), been found by the state board to have improperly withheld ten percent or more of the amount due to a district charter school in accordance with the terms of the district charter contract and the provisions of section 22-30.5-112; (F) Failed to pay to a district charter school an amount found to be owing to the charter school pursuant to section 22-30.5-112 (9). (II) If the state board determines that the school district has committed one or more of the acts specified in subparagraph (I) of this paragraph (b), the state board shall declare the school district to be subject to creation of a state charter school and proceed with the appeal as provided in paragraph (c) of this subsection (2). If the state board determines that the school district has not committed any of the acts specified in subparagraph (I) of this paragraph (b), the state board shall declare the school district exempt from the creation of a state charter school and proceed with the appeal as if the charter applicant had not given notice of the intent to apply for a state charter. (c) In considering an appeal of the denial of a charter application or of the unilateral imposition of conditions on a charter applicant where the appealing person has given notice of the intent to apply for a state charter, the state board may conduct a full, de novo review of the charter application and any supporting information submitted to the state board by the charter applicant or the local board of education. In addition, the state board may request additional information from the charter applicant and the local board of education, as may be necessary to determine the appeal. The party from whom the state board requests information shall be responsible for any costs incurred in providing the information. (d) Notwithstanding any provision of this section to the contrary, the state board shall not consider an appeal where the person has given notice of the intent to apply for a state charter unless the state board determines there are sufficient funds in the state charter school cash fund created pursuant to section 22-30.5-108.3 (2) (b) to offset the direct and indirect costs associated with considering the appeal. (2.5) If a district court dismisses a case for lack of jurisdiction and the case involves a charter application, or the nonrenewal or revocation of a district charter, or the unilateral imposition of conditions on a charter applicant or district charter school, the thirty-day fifteen-day period for filing a notice of appeal or of facilitation described in subsection (2) of this section shall be tolled until the date of dismissal by the court. (3) If the notice of appeal, or the motion to review by the state board, relates to a local board's decision to deny a charter application or to refuse to renew or to revoke a district charter or to a local board's unilateral imposition of conditions that are unacceptable to the charter applicant or the district charter school, the appeal and review process shall be as follows: (a) Within sixty days after receipt of the notice of appeal or the making of a motion to review by the state board and after reasonable public notice, the state board at a public hearing which may be held in the school district in which the proposed charter school has applied for a charter, shall review the decision of the local board of education and make its findings. If the state board finds that the local board's decision was contrary to the best interests of the pupils, school district, or community, the state board shall remand such decision to the local board of education with written instructions for reconsideration thereof. Said instructions shall include specific recommendations concerning the matters requiring reconsideration. (b) Within thirty days following the remand of a decision to the local board of education and after reasonable public notice, the local board of education, at a public hearing, shall reconsider its decision and make a final decision. If the local board of education decides to approve the charter application or decides not to unilaterally impose the condition, the local board of education and the charter applicant shall complete the charter contract within forty-five days following the remand of the state board's decision to the local board of education. (c) (I) Following the remand, if the local board of education's final decision is still to deny a charter application or to unilaterally impose the condition on a charter applicant or if the local board of education and the charter applicant are unable to complete the charter contract within the forty-five-day period required in paragraph (b) of this subsection (3), the charter applicant may submit the charter application to the state board for issuance of a state charter as provided in section 22-30.5-108.1 (1), if the appealing party gave notice of the intent to apply for a state charter as provided in paragraph (a) of subsection (2) of this section and if the state board determined that the school district is subject to creation of a state charter school. A charter applicant may not seek a second appeal of the denial of the charter application or of the unilateral imposition of a condition on the charter applicant if the appealing party gave notice of the intent to apply for a state charter and the state board determined that the school district is subject to the creation of a state charter school. (II) If the appealing party did not give notice of the intent to apply for a state charter, or if the state board determined that the school district is exempt from creation of a state charter school, and the local board of education's decision is still to deny a charter application or to unilaterally impose the condition on the charter applicant or if the local board of education's final decision is still to refuse to renew or to revoke a district charter or to unilaterally impose conditions unacceptable to the district charter applicant school, a second notice of appeal may be filed with the state board within thirty days following such final decision. (d) Within thirty days following receipt of the second notice of appeal or the making of a motion for a second review by the state board and after reasonable public notice, the state board, at a public hearing, shall determine whether the final decision of the local board of education was contrary to the best interests of the pupils, school district, or community. If such a finding is made, the state board shall remand such final decision to the local board with instructions to approve the charter application, or to renew or reinstate the charter or to approve or disapprove the conditions imposed on the charter applicant or the district charter school. The decision of the state board shall be final and not subject to appeal. (3.5) In lieu of a first appeal to the state board pursuant to paragraph (a) of subsection (3) of this section, the parties may agree to facilitation. Within thirty days after denial of a charter application or nonrenewal or revocation of a district charter or unilateral imposition of conditions on a charter applicant or a district charter school by the local board of education, the parties may file a notice of facilitation with the state board. The parties may continue in facilitation as long as both parties agree to its continued use. If one party subsequently rejects facilitation, and such rejection is not reconsidered within seven days, the local board of education shall reconsider its denial of a charter application or nonrenewal or revocation of a district charter and make a final decision as provided in paragraph (b) of subsection (3) of this section. The charter applicant may file a notice of appeal with the state board as provided in paragraph (c) of subsection (3) of this section within thirty days after a local board of education's final decision to deny not a charter application, to refuse to renew or to revoke a district charter, or to unilaterally impose conditions on a charter applicant or a district charter school. A charter applicant that agrees to facilitation may not apply for a state charter. (4) If the notice of appeal, or the motion to review by the state board, relates to a local board's decision to grant a charter, the appeal and review process shall be as follows: (a) (I) Within sixty days after receipt of the notice of appeal or the making of a motion to review by the state board and after reasonable public notice, the state board, at a public hearing which may be held in the district in which the proposed charter school has applied for a charter, shall review the decision of the local board of education and determine whether such decision was arbitrary and capricious or whether the establishment or operation of the proposed charter school would: (A) Violate any federal or state laws concerning civil rights; (B) Violate any court order; (C) Threaten the health and safety of pupils in the school district; (D) Violate the provisions of section 22-30.5-109 (2), prescribing the permissible number of charter schools; or (E) Be inconsistent with the equitable distribution of charter schools among school districts. (II) If such a determination is made, the state board shall remand such decision to the local board with instructions to deny the charter application. The decision of the state board shall be final and not subject to appeal. (5) Nothing in this section shall be construed to alter the requirement that a district charter school be a part of the school district that grants approves its charter application and charter contract and be accountable to the local board of education pursuant to section 22-30.5-104 (2). SECTION 10. Part 1 of article 30.5 of title 22, Colorado Revised Statutes, is amended BY THE ADDITION OF THE FOLLOWING NEW SECTIONS to read: 22-30.5-108.1. State charter schools - state board - application - conversion - advisory committee. (1) (a) In accordance with the provisions of section 22-30.5-108 (3) (c), a charter applicant may submit its application to the state board for issuance of a state charter, if the appealing party gave notice of the intent to apply for a state charter as provided in section 22-30.5-108 (2) (a) and the state board determined that the school district is subject to creation of a state charter school. The applicant shall submit the charter application to the state board within fifteen days after the local board issues its final decision to deny the application or to unilaterally impose the condition on the charter applicant or within fifteen days after expiration of the forty-five-day period for completion of the contract, whichever is applicable. The state board shall approve the charter application, and the charter applicant and the state board shall complete the state charter contract within forty-five days after the charter applicant submits the application to the state board. (b) If a state charter applicant and the state board are unable to complete the state charter contract within the forty-five-day period prescribed in paragraph (a) of this subsection (1), the state charter applicant and the state board shall agree to alternative dispute resolution as provided in section 22-30.5-108.5 to resolve the state charter contract issues between the parties. (c) At any time after completion of a state charter school's charter contract, the state board, with the agreement of the state charter school and the local board of education of the school district that denied the charter application, may transfer the chartering authority for the state charter school to that local board of education. Upon transfer of the chartering authority, the state charter school is converted to a district charter school and becomes a public school of the school district that is under the control of the local board of education. Transfer of the chartering authority may not result in or be contingent upon a change in the terms of the state charter school's charter contract, but the local board of education and the charter school, after the transfer of chartering authority, may mutually agree to changes in the terms of the charter contract. (2) (a) A district charter school, with the agreement of the local board of education of its chartering school district, may apply to the state board to convert to a state charter school. The state board shall adopt rules specifying the time frames for submitting and considering an application to convert to a state charter school and the information to be included in the application. Prior to applying to convert to a state charter school, the district charter school and the local board of education of the chartering school district shall enter into a mutual agreement regarding the conversion that, at a minimum, shall include resolution of issues pertaining to asset distribution, property ownership, any outstanding bonded indebtedness of the district charter school, and payment of income received from the issuance of bonds pursuant to section 22-30.5-404 or as a result of imposition of a mill levy by the school district on behalf of the district charter school pursuant to the provisions of section 22-30.5-405. (b) The state board shall review the application for conversion and any supporting information submitted to the state board by the district charter school or the local board of education. In addition, the state board may request additional information from the district charter school and the local board of education, as may be necessary to determine the whether to allow the district charter school to convert to a state charter school. The party from whom the state board requests information shall be responsible for any costs incurred in providing the information. (c) Within sixty days after submittal of the application for conversion, the state board shall determine whether to allow the district charter school to convert to a state charter school. If the state board denies the application for conversion, the district charter school may continue to operate under its district charter contract. If the state board approves the application for conversion, the district charter school and the state board shall complete the state charter contract within forty-five days after the decision to approve the application for conversion. The district charter school shall continue to operate under the provisions of the district charter contract until the state board and the district charter school complete the state charter contract. Upon completion of the state charter contract, the district charter school shall convert to a state charter school. (d) If a district charter school and the state board are unable to complete the state charter contract within the forty-five-day period prescribed in paragraph (c) of this subsection (2), the district charter school and the state board shall agree to alternative dispute resolution as provided in section 22-30.5-108.5 to resolve the state charter contract issues between the parties. (3) The state board may appoint an advisory committee to assist in reviewing appeals of the denial of a district charter application submitted pursuant to section 22-30.5-108 and in reviewing applications for conversion to a state charter school submitted pursuant to subsection (2) of this section and to make recommendations to the state board concerning approval of state charter applications. In appointing persons to the advisory board, the state board shall, at a minimum, include persons with experience in the formation, operation, and evaluation of charter schools and parents of students who are enrolled in charter schools. An advisory board appointed pursuant to this subsection (3) shall serve without compensation, including payment of expenses. (4) Notwithstanding any provision of this section to the contrary, the state board shall not consider a charter application or an application for conversion to a state charter school unless the state board determines there are sufficient funds in the state charter school cash fund created pursuant to section 22-30.5-108.3 (2) (b) to offset the direct and indirect costs associated with considering the application and completing the state charter contract. 22-30.5-108.3. State charter schools - oversight - costs - state charter school cash fund. (1) (a) A state charter school shall be under the general supervision of the state board and shall be subject to accreditation in accordance with the provisions of article 11 of this title. A state charter school shall be a local education agency for purposes of state and federal law. The state board may direct the department to provide the necessary administration, oversight, and management services to the state charter school, or the state board, at its discretion, may contract with a third party, including but not limited to a school district, a board of cooperative services, or a for-profit or nonprofit entity, to provide some or all of the necessary administration, oversight, and management services. (b) The state board shall adopt rules identifying those statutory duties that are applicable to school districts that shall also apply to state charter schools as necessary to exercise general supervision over the state charter schools and to maintain a thorough and uniform statewide system of free public schools. (2) (a) The department is encouraged to apply federal funds where possible to offset the costs incurred by the state board and the department in implementing the provisions of this section and sections 22-30.5-108 (2), 22-30.5-108.1, and 22-30.5-108.5, including the costs incurred in contracting with a third party. In addition, the department may withhold and expend five percent of the funding that is payable to the state charter school pursuant to section 22-30.5-112.1 for payment of the costs incurred by the department in implementing the provisions of this section and any costs incurred in contracting with a third party. Any unexpended and unencumbered moneys remaining at the end of a fiscal year from the moneys withheld pursuant to the provisions of this paragraph (a) shall not revert to the general fund, but may be expended by the department in subsequent fiscal years for payment of the costs incurred in implementing this section, including any costs incurred in contracting with a third party. (b) The department is encouraged to solicit and may accept any public or private gifts, grants, or donations that may be available to assist in offsetting the costs incurred in implementing the provisions of this section and sections 22-30.5-108 (2), 22-30.5-108.1, and 22-30.5-108.5, including the costs incurred in contracting with a third party. The department shall transmit all private and public funds received from gifts, grants, or donations solicited pursuant to this paragraph (b) to the state treasurer, who shall credit the same to the state charter school cash fund, which fund is hereby created and referred to in this section as the "fund". The fund shall consist solely of moneys received by the department as gifts, grants, or donations and credited to the fund pursuant to this paragraph (b). The moneys in the fund shall be subject to annual appropriation by the general assembly for the direct and indirect costs associated with the implementation of this section and sections 22-30.5-108 (2), 22-30.5-108.1, and 22-30.5-108.5. Any moneys in the fund not expended for the purpose of this section may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund shall be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund. 22-30.5-108.5. State charter schools - alternative dispute resolution process - appeals. (1) (a) A state charter applicant, a district charter school that is seeking to convert to a state charter school, a state charter school, or the state board, by providing reasonable written notice to invoke this section, may participate in alternative dispute resolution concerning: (I) Creation of the state charter contract; (II) Implementation of the provisions of the state charter contract; (III) The state board's refusal to renew the state charter; or (IV) Revocation of the state charter. (b) A written notice of dispute resolution provided pursuant to this subsection (1) shall include, at a minimum, a brief description of the matter in dispute and the scope of the disagreement between the parties. (c) Within thirty days after receipt of the written notice described in paragraph (b) of this subsection (1), the state charter applicant, district charter school, or state charter school and the state board shall agree to use any form of alternative dispute resolution to resolve the dispute, including but not limited to any of the forms described in the "Dispute Resolution Act", part 3 of article 22 of title 13, C.R.S.; except that any form chosen by the parties shall result in final written findings and determinations by a neutral third party within one hundred twenty days after receipt of the written notice described in paragraph (a) of this subsection (1). In resolving the dispute between the parties, the neutral third party shall determine the best interests of the pupils and the community in which the state charter school is or would be located. (d) The neutral third party shall apportion all costs reasonably related to the mutually agreed upon dispute resolution process. (2) (a) A state charter applicant, district charter school, or state charter school and the state board may agree to be bound by the written findings and determinations of the neutral third party resulting from any alternative dispute resolution entered into pursuant to subsection (1) of this section. In such case, the written findings and determinations shall be final and not subject to appeal. (b) If the parties do not agree to be bound by the written findings of the neutral third party, the parties may appeal the findings to the district court. A party who wishes to appeal shall file a notice of appeal with the district court within thirty days after the release of the findings. The notice of appeal shall contain a brief description of the grounds for appeal. The party filing the notice of appeal shall also serve the notice of appeal on the other party within thirty days after release of the findings. The district court may consider the written findings or other relevant materials in reaching its decision and may, on its own motion and after sufficient notice, conduct a de novo review of and hearing on the underlying issues. (3) If the parties have agreed to be bound, but one of the parties does not comply with the written findings and determinations, the aggrieved party may sue for enforcement of the written findings arising from the dispute resolution process. (4) If the district court, after motion by one of the parties and sufficient notice and hearing, finds that either of the parties to an alternative dispute resolution process held pursuant to this section has failed to participate in good faith in the process or has refused to comply with the written findings and determinations reached after agreeing to be bound by the result of the dispute resolution process, the district court shall resolve the dispute in favor of the aggrieved party. SECTION 11. 22-30.5-109, Colorado Revised Statutes, is amended to read: 22-30.5-109. Charter schools - reporting. (1) A local board of education may reasonably limit the number of charter schools in the school district. Each local board of education that approves a charter application and enters into a charter contract with a district charter school and each state charter school shall annually report to the department information that the department requests to evaluate the effectiveness of charter schools. The local boards of education and state charter schools shall provide the information on forms provided by the department. The state board shall adopt rules establishing the time lines and procedures for reporting the information required in this subsection (1). (2) (a) No more than sixty charters shall be granted prior to July 1, 1997, and at least sixteen of said sixty charters shall be reserved for charter school applications which are designed to increase the educational opportunities of at-risk pupils, as defined in section 22-30.5-103. (b) Local boards of education which grant charter school applications shall report such action to the state board and shall specify whether or not such school is designed to increase the educational opportunities of at-risk pupils. The state board shall promptly notify the board of education of each school district when the limits specified in paragraph (a) of this subsection (2) have been reached. (3) It is the intent of the general assembly that priority of greater consideration be given to charter school applications designed to increase the educational opportunities of at-risk pupils, as defined in section 22-30.5-103. (4) If otherwise qualified, nothing in this part 1 shall be construed to prohibit any institution certified as an educational clinic pursuant to article 27 of this title, on or before April 1, 1993, from applying to become a charter school pursuant to this part 1. (5) Nothing in this part 1 shall be construed to prevent a school in a school district which is comprised of only one school from applying to become a charter school pursuant to this part 1. (6) A school district shall not discriminate against a charter school or a nonpublic school participating in the Colorado opportunity contract pilot program pursuant to article 56 of this title in publicizing the educational options available to students residing within the district through advertising, direct mail, availability of mailing lists, or other informational activities, provided that the charter or nonpublic school pays for its share of such publicity at cost. (7) On-line pupils enrolled in a charter school shall not be included in the charter school's pupil enrollment for purposes of determining whether the charter school is in compliance with any restrictions the chartering school district may impose on the number of pupils that may enroll in the charter school. A chartering school district authority may not restrict the number of on-line pupils a charter school may enroll. SECTION 12. 22-30.5-110, Colorado Revised Statutes, is amended to read: 22-30.5-110. Charter schools - term - renewal of charter - grounds for nonrenewal or revocation - repeal. (1) A new charter may application shall be approved by a chartering authority for a period of at least three years. but not more than five academic years. A charter may be renewed for a period not to exceed five years successive periods. The department shall conduct accreditation reviews in all state charter schools in accordance with rules of the state board. (1.5) No later than December 1 of the year prior to the year in which the charter expires, the governing body of a charter school shall submit a renewal application to the local board of education charter school's chartering authority. The local board of education chartering authority shall rule by resolution on the renewal application no later than February 1 of the year in which the charter expires, or by a mutually agreed upon date. (2) A charter school renewal application submitted to the local board of education chartering authority shall contain: (a) A report on the progress of the charter school in achieving the goals, objectives, pupil performance standards, content standards, and other terms of the initial approved charter application charter contract, the results achieved by the charter school's students on the assessments administered through the Colorado student assessment program, and, in the case of a state charter school, the status of the state charter school's accreditation plan with the chartering authority; (b) A financial statement that discloses the costs of administration, instruction, and other spending categories for the charter school that is understandable to the general public and that will allow comparison of such costs to other schools or other comparable organizations, in a format required by the state board of education; and (c) (I) For renewal applications submitted on or after July 1, 2001, but prior to July 1, 2010, a statement specifying how the charter school intends to use the one-percent increase in the statewide base per pupil funding for state fiscal years 2001-02 through 2010-11 required by section 17 of article IX of the state constitution to raise student achievement. (II) This paragraph (c) is repealed, effective July 1, 2011. (3) A charter may be revoked or not renewed by the local board of education if such board chartering authority if it determines that the charter school did any of the following: (a) Committed a material violation of any of the conditions, standards, or procedures set forth in the charter application contract; (b) Failed to meet or make reasonable progress toward achievement of the goals, objectives, content standards, or pupil performance standards, applicable federal requirements, or other terms identified in the charter application contract; (b.5) In the case of a state charter school, failed to meet the requirements of the state charter school's accreditation contract; (c) Failed to meet generally accepted standards of fiscal management; or (d) Violated any provision of law from which the charter school was not specifically exempted. (4) In addition, a charter may be not renewed upon a determination by the local board of education that it is not in the interest of the pupils residing within the school district to continue the operation of the charter school. (4.5) If a local board of education chartering authority revokes or does not renew a charter, the board chartering authority shall state its reasons for the revocation or nonrenewal. (5) A decision to revoke or not to renew a district charter may be appealed or facilitation may be sought pursuant to the provisions of section 22-30.5-108. SECTION 13. 22-30.5-111, Colorado Revised Statutes, is amended to read: 22-30.5-111. Charter schools - employee options. (1) During the first year that a teacher employed by a school district is employed by a district charter school, such teacher shall be considered to be on a one-year leave of absence from the school district. Such leave of absence shall commence on the first day of services for the district charter school. Upon the request of the teacher, the one-year leave of absence shall be renewed for up to two additional one-year periods upon the mutual agreement of the teacher and the school district. At the end of three years, the relationship between the teacher and the school district shall be determined by the school district and such district shall provide notice to the teacher of the relationship. (2) The local board of education shall determine by policy or by negotiated agreement, if one exists, the employment status of school district employees employed by the district charter school who seek to return to employment with public schools in the school district. (3) Employees of a charter school shall be members of the public employees' retirement association or the Denver public schools retirement system, whichever is applicable. The charter school and the teacher shall contribute the appropriate respective amounts as required by the funds of such association or system. SECTION 14. 22-30.5-112, Colorado Revised Statutes, is amended to read: 22-30.5-112. District charter schools - financing - guidelines - repeal. (1) (a) For purposes of the "Public School Finance Act of 1994", article 54 of this title, pupils enrolled in a district charter school shall be included in the pupil enrollment, the on-line pupil enrollment, or the preschool enrollment, whichever is applicable, of the chartering school district. that granted its charter. The chartering school district that granted its charter shall report to the department of education the number of pupils included in the school district's pupil enrollment, the school district's on-line pupil enrollment, and the school district's preschool enrollment that are actually enrolled in each district charter school. (b) The school district shall also identify each district charter school that is a qualified charter school as defined in section 22-54-124 (1) (f), (1) (f.5), or (1) (f.6), whichever is applicable, identify each qualified charter school that will be operating in a school district facility and that does not have ongoing financial obligations incurred to repay the outstanding costs of new construction undertaken for the district charter school's benefit, and provide an estimate of the number of pupils expected to be enrolled in each qualified charter school during the budget year following the budget year in which the district makes a report. (2) (a) (I) As part of the charter school contract, the district charter school and the chartering school district shall agree on funding and any services to be provided by the chartering school district to the district charter school. (II) For the 1999-2000 budget year, the district charter school and the chartering school district shall begin discussions on the contract using eighty percent of the district per pupil operating revenues. (III) (A) For budget year 2000-01 and budget years thereafter, except as otherwise provided in paragraph (a.3) of this subsection (2), each district charter school and the authorizing chartering school district shall negotiate funding under the contract. at a minimum of ninety-five percent The district charter school shall receive one hundred percent of the district per pupil revenues for each pupil enrolled in the district charter school who is not an on-line pupil and ninety-five percent one hundred percent of the district per pupil on-line funding for each on-line pupil enrolled in the district charter school; except that the chartering school district may choose to retain the actual amount of the district charter school's per pupil share of the central administrative overhead costs for services actually provided to the district charter school, except that such amount shall not exceed up to five percent of the district per pupil revenues for each pupil who is not an on-line pupil enrolled in the district charter school and up to five percent of the district per pupil on-line funding for each on-line pupil enrolled in the district charter school. (B) For budget years 2001-02 through 2010-11, the minimum amount of funding specified in sub-subparagraph (A) of this subparagraph (III) shall reflect the one-percent increase in the statewide base per pupil funding for state fiscal years 2001-02 through 2010-11 received by the chartering school district as required by section 17 of article IX of the state constitution. (a.3) If the authorizing chartering school district enrolls five hundred or fewer students, the district charter school shall receive funding in the amount of the greater of one hundred percent of the district per pupil on-line funding for each on-line pupil enrolled in the district charter school plus one hundred percent of the district per pupil revenues for each pupil who is not an on-line pupil enrolled in the district charter school, minus the actual amount of the district charter school's per pupil share of the central administrative overhead costs incurred by the chartering school district, based on audited figures, or eighty-five percent of the district per pupil revenues for each pupil enrolled in the district charter school who is not an on-line pupil plus eighty-five percent of the district per pupil on-line funding for each on-line pupil enrolled in the district charter school. (a.4) (I) Within ninety days after the end of each fiscal year, each school district shall provide to each district charter school within its district an itemized accounting of all its central administrative overhead costs. The actual central administrative overhead costs shall be the amount charged to the district charter school. Any difference, within the limitations of subparagraph (III) of paragraph (a) of this subsection (2) and paragraph (a.3) of this subsection (2), between the amount initially charged to the district charter school and the actual cost shall be reconciled and paid to the owed party. (II) Within ninety days after the end of each fiscal year, each school district shall provide to each district charter school within its district an itemized accounting of all the actual costs of district services the district charter school chose at its discretion to purchase from the chartering district calculated in accordance with paragraph (b) of this subsection (2). Any difference between the amount initially charged to the district charter school and the actual cost shall be reconciled and paid to the owed party. (III) If either party disputes an itemized accounting provided pursuant to subparagraphs (I) and (II) of this paragraph (a.4), any charges included in an accounting, or charges to either party, that party is entitled to request a third-party review at the requesting party's expense. The review shall be conducted by the department, of education, and the department's determination shall be final. (a.5) As used in this subsection (2): (I) "Central administrative overhead costs" means indirect costs incurred in providing: (A) Services listed under the heading of support services - general administration in the school district chart of accounts as specified by rule of the state board; and (B) Salaries and benefits for administrative job classifications listed under the headings of support services - business and support services - central in the school district chart of accounts as specified by rule of the state board. (II) "District per pupil revenues" means the chartering district's total program as defined in section 22-54-103 (6) for any budget year divided by the chartering district's funded pupil count as defined in section 22-54-103 (7) for said budget year. (II.5) "District per pupil on-line funding" means the minimum per pupil funding, as defined in section 22-54-104 (3.5), for any budget year. (III) "Per pupil operating revenues" shall have the same meaning as provided in section 22-54-103 (9). (a.7) For the 2000-01 budget year and budget years thereafter, each district charter school shall annually allocate the minimum per pupil dollar amount specified in section 22-54-105 (2) (b), multiplied by the number of students enrolled in the district charter school who are not on-line pupils, to a fund created by the district charter school for capital reserve purposes, as set forth in section 22-45-103 (1) (c) and (1) (e), or solely for the management of risk-related activities, as identified in section 24-10-115, C.R.S., and article 13 of title 29, C.R.S., or among such allowable funds. Said moneys shall be used for the purposes set forth in section 22-45-103 (1) (c) and (1) (e) and may not be expended by the district charter school for any other purpose. (a.8) For the 2000-01 budget year and budget years thereafter, the a chartering school district shall provide federally required educational services to students enrolled in district charter schools on the same basis as such services are provided to students enrolled in other public schools of the chartering school district. Each district charter school shall pay an amount equal to the per pupil cost incurred by the chartering school district in providing federally required educational services, multiplied by the number of students enrolled in the district charter school. At either party's request, however, the district charter school and the chartering school district may negotiate and include in the charter contract alternate arrangements for the provision of and payment for federally required educational services. (a.9) For budget year 2002-03 and budget years thereafter, and in accordance with section 22-30.5-406, the funding provided by a chartering school district to a district charter school pursuant to this subsection (2) shall be reduced by the amount of any direct payments of principal and interest due on bonds issued on behalf of a district charter school by a governmental entity other than a school district for the purpose of financing charter school capital construction that were made by the state treasurer or the chartering school district on behalf of the district charter school. (b) The A district charter school, at its discretion, may contract with the chartering school district for the direct purchase of district services in addition to those included in central administrative overhead costs, including but not limited to food services, custodial services, maintenance, curriculum, media services, and libraries. The amount to be paid by a district charter school in purchasing any district service pursuant to this paragraph (b) shall be determined by dividing the cost of providing the service for the entire school district, as specified in the chartering school district's budget, by the number of students enrolled in the chartering school district and multiplying said amount by the number of students enrolled in the district charter school. (b.5) The A district charter school may agree with the chartering school district to pay any actual costs incurred by the chartering school district in providing unique support services used only by the district charter school. (c) (I) For the 1999-2000 budget year, in no event shall the amount of funding negotiated pursuant to this subsection (2) be less than eighty percent of the district per pupil operating revenues multiplied by the number of pupils enrolled in the district charter school. (II) For budget year 2000-01 and budget years thereafter, the amount of funding received by a district charter school pursuant to this subsection (2) shall not be less than ninety-five percent one hundred percent of the chartering school district's district per pupil revenues, minus up to five percent as provided in subparagraph (III) of paragraph (a) of this subsection (2), multiplied by the number of pupils enrolled in the district charter school or as otherwise provided in paragraph (a.3) of this subsection (2) for any district charter school authorized chartered by a school district that enrolls five hundred or fewer students. (d) It is the intent of the general assembly that funding and service agreements pursuant to this subsection (2) shall be neither a financial incentive nor a financial disincentive to the establishment of a charter school. (e) Fees collected from students enrolled at a district charter school shall be retained by such the district charter school. (3) (a) (I) For the 1999-2000 budget year, notwithstanding subsection (2) of this section, the proportionate share of state and federal resources generated by students with disabilities or staff serving them shall be directed to charter schools enrolling such students by their school districts or administrative units. The proportionate share of moneys generated under other federal or state categorical aid programs shall be directed to charter schools serving students eligible for such aid. (II) For budget year 2000-01 and budget years thereafter, if the a district charter school and the chartering school district have negotiated to allow the district charter school to provide federally required educational services pursuant to paragraph (a.8) of subsection (2) of this section, the proportionate share of state and federal resources generated by students receiving such federally required educational services or staff serving them shall be directed by the chartering school district or administrative unit to the district charter school enrolling such students. (III) For budget year 2000-01 and budget years thereafter, the proportionate share of moneys generated under federal or state categorical aid programs, other than federally required educational services, shall be directed to district charter schools serving students eligible for such aid; except that a chartering school district that receives small attendance center aid pursuant to section 22-54-122 for a small attendance center that is a district charter school shall forward the entire amount of such aid to the district charter school for which it was received. (a.5) Each district charter school that serves students who may be eligible to receive services provided through federal aid programs shall comply with all federal reporting requirements to receive the federal aid. (b) If a student with a disability attends a district charter school, the school district of residence shall be responsible for paying any tuition charge for the excess costs incurred in educating the child in accordance with the provisions of section 22-20-109 (5). (4) The governing body of a district charter school is authorized to accept gifts, donations, or grants of any kind made to the district charter school and to expend or use said gifts, donations, or grants in accordance with the conditions prescribed by the donor; however, no gift, donation, or grant shall be accepted by the governing body if subject to any condition contrary to law or contrary to the terms of the contract between the district charter school and the chartering local board of education. (4.5) Except as provided in section 22-30.5-112.3 (2) (b), any moneys received by a district charter school from any source and remaining in the district charter school's accounts at the end of any budget year shall remain in the district charter school's accounts for use by the district charter school during subsequent budget years and shall not revert to the chartering school district or to the state. (5) The department of education will prepare an annual report and evaluation for the governor and the house and senate committees on education on the success or failure of charter schools, their relationship to other school reform efforts, and suggested changes in state law necessary to strengthen or change the charter school program. (6) The department of education will provide technical assistance to persons and groups preparing or revising charter applications. (7) A district charter school shall comply with all of the state financial and budget rules, regulations, and financial reporting requirements with which the chartering school district is required to comply. (8) (a) Notwithstanding any provision of this section to the contrary, a chartering school district may withhold a portion of a district charter school's monthly payment due pursuant to this section if: (I) The district charter school fails to satisfy its obligation in a contract or other written agreement with the chartering school district to report financial information required by the school district to enable the school district to comply with the requirements specified in this title and in rules promulgated by the state board pertaining to reporting financial information to the department; and (II) The failure to report by the district charter school results in the withholding of money from the chartering school district pursuant to section 22-54-115 (6). (b) The chartering school district may withhold a portion of the payment due to the district charter school only until such time as the district charter school complies with the financial reporting requirements. (c) The amount withheld by a chartering school district pursuant to this subsection (8) shall not exceed the actual amount withheld from the chartering school district pursuant to section 22-54-115 (6) as a direct result of the district charter school's failure to satisfy its obligation in a contract or other written agreement with the chartering school district to report financial information. (9) (a) If, at any time, a district charter school determines that its chartering school district has not forwarded to the district charter school the amount due to the district charter school in accordance with the terms of the district charter contract and the provisions of this section, the district charter school may seek a determination from the state board regarding whether the chartering school district improperly withheld any portion of the amount due to the district charter school. (b) Upon receipt from a district charter school of a request for a determination of whether the chartering school district has improperly withheld any portion of the amount due to the district charter school, the state board shall direct the department to review the terms of the district charter contract and the financial information of the district charter school and the chartering school district and make a recommendation to the state board regarding whether the chartering school district improperly withheld any portion of the amount due to the district charter school. The department shall request, and the chartering school district and the district charter school shall provide within thirty days after the request, all information necessary to make the recommendation. The department shall forward its recommendation to the state board within thirty days after receiving the information from the chartering school district and the district charter school. (c) At the next state board meeting following receipt of the recommendation of the department pursuant to paragraph (b) of this subsection (9), the state board shall issue its decision regarding whether the chartering school district improperly withheld any portion of the amount due to the district charter school. If the state board finds that the chartering school district improperly withheld any portion of the amount due to the district charter school, the chartering school district shall pay to the district charter school, within thirty days after issuance of the decision, the amount improperly withheld. In addition, the chartering school district shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. If the state board finds that the chartering school district did not improperly withhold any portion of the amount due to the district charter school, the district charter school shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. (d) If the chartering school district fails within the thirty-day period to pay the full amount that was improperly withheld, the district charter school may notify the department, and the department shall withhold from the chartering school district's state equalization payment the unpaid portion of the amount improperly withheld by the chartering school district from the district charter school and pay the unpaid portion directly to the district charter school. In addition, the department shall withhold from the chartering school district's future monthly state equalization payments the amount due to the district charter school in accordance with the terms of the district charter contract and the provisions of this section and pay such amounts directly to the district charter school on a monthly basis. (e) Notwithstanding the provisions of paragraph (d) of this subsection (9), a district charter school that receives from the department direct payments of the amounts due to the district charter school in accordance with the terms of the district charter contract and the provisions of this section may notify the department to discontinue the withholding and direct payment of the amounts due to the district charter school. If the department discontinues withholding and direct payment pursuant to this paragraph (e), the chartering school district shall forward to the district charter school the amount due to the district charter school in accordance with the terms of the district charter contract and the provisions of this section. (10) (a) If a district charter school determines that a school district has not paid the tuition charge for the excess costs incurred in educating a child with a disability as required in section 22-20-109 (5), the district charter school may seek a determination from the state board in accordance with the provisions of subsection (9) of this section. (b) If the state board determines that the school district has improperly withheld moneys due to the district charter school, the school district, within thirty days after the state board's determination, shall pay to the district charter school the amount improperly withheld. In addition, the school district shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. If the school district fails, within the thirty-day period, to pay the full amount that was improperly withheld, the district charter school shall notify the department, and the department shall withhold from the school district's state equalization payment the unpaid portion of the amount improperly withheld by the district and pay the unpaid portion directly to the district charter school. (c) If the state board finds that the school district did not improperly withhold any portion of the amount due to the district charter school, the district charter school shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. SECTION 15. Part 1 of article 30.5 of title 22, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 22-30.5-112.1. State charter schools - financing - facilities. (1) As used in this section: (a) "At-risk pupils" shall have the same meaning as provided in section 22-54-103 (1.5). (b) "Denying district" means the school district of the local board of education that denied the state charter school charter application or failed to complete a district charter contract, resulting in creation of the state charter school pursuant to the provisions of section 22-30.5-108.1 (1) or the school district of the local board of education that agreed to the conversion of a district charter school to a state charter school pursuant to the provisions of section 22-30.5-108.1 (2). (c) "District per pupil on-line funding" means the minimum per pupil funding, as defined in section 22-54-104 (3.5), for any budget year. (d) "District per pupil revenues" means the district total program as defined in section 22-54-103 (6) of the denying district for any budget year divided by the denying district's funded pupil count as defined in section 22-54-103 (7) for said budget year. (e) "On-line pupil enrollment" means the number of pupils, on October 1 within the applicable budget year or the school day nearest said date, enrolled in, attending, and actively participating in, an on-line program created pursuant to section 22-33-104.6 by the state charter school, which pupils meet the requirements specified in section 22-33-104.6 (4) (a) or are exempt pursuant to rules adopted by the state board pursuant to section 22-33-104.6 (7). (f) "Pupil enrollment" shall have the same meaning as provided in section 22-54-103 (10). (g) "Qualified charter school" shall have the same meaning as provided in section 22-54-124 (1) (f.6). (2) (a) On or before November 10 of each year, each state charter school shall certify to the state board the state charter school's pupil enrollment and on-line pupil enrollment for that year. In certifying its pupil enrollment to the state board, the state charter school shall specify the number of pupils enrolled in half-day kindergarten; the number of pupils enrolled in full-day kindergarten; the number of pupils enrolled in first grade through twelfth grade, specifying those who are enrolled as full-time students and those who are enrolled as less than full-time students; the number of expelled pupils receiving educational services pursuant to section 22-33-203; the number of pupils receiving educational programs under the "Exceptional Children's Educational Act", article 20 of this title; and the number of at-risk pupils. Each state charter school shall also notify the department as to whether the state charter school is a qualified charter school. (b) For purposes of the "Public School Finance Act of 1994", article 54 of this title, the department shall add the pupils enrolled in a state charter school to the pupil enrollment and the on-line pupil enrollment of the state charter school's denying district, as certified by the denying district pursuant to section 22-54-112. (3) (a) For each state charter school, the department shall withhold from the state equalization payments of the state charter school's denying district an amount equal to the lesser of: (I) One hundred percent of the district per pupil revenues multiplied by the number of pupils enrolled in the state charter school who are not on-line pupils plus one hundred percent of the district per pupil on-line funding multiplied by the number of on-line pupils enrolled in the state charter school; or (II) The total amount of the state share payable to the denying district. (b) The department shall forward to the state charter school the amount withheld, minus five percent of said amount for payment of the costs incurred in implementing section 22-30.5-108.3 and minus the amount agreed to in the state charter contract for any additional services, as provided in paragraph (c) of this subsection (3). Notwithstanding any provision of this section to the contrary, if the department withholds the total amount of the state share payable to the denying district and there is more than one state charter school that receives funding from the denying district's state share, the department shall divide the total amount of the state share payable to the denying district among the state charter schools on a per pupil basis. (c) As part of the state charter school contract, the state charter school and the state board shall agree on the services, other than necessary administration, oversight, and management services, to be provided by the state board, the department, or a third-party with which the state board has contracted, to the state charter school and the costs of the services. (d) For budget years 2004-05 through 2010-11, the amount of funding specified in paragraph (a) of this subsection (3) shall reflect the one-percent increase in the statewide base per pupil funding for state fiscal years 2001-02 through 2010-11 received by the denying school district as required by section 17 of article IX of the state constitution. (4) Within ninety days after the end of each fiscal year, the department shall provide to each state charter school an itemized accounting of all the actual costs of any additional services the state charter school chose at its discretion to purchase as provided in paragraph (a) of subsection (3) of this section. Any difference between the amount initially charged to the state charter school and the actual cost shall be reconciled and paid to the owed party. (5) (a) Each state charter school shall annually budget the minimum per pupil dollar amount specified in section 22-54-105 (1) (b), multiplied by the number of students enrolled in the state charter school who are not on-line pupils, to be allocated, at the discretion of the governing board of the state charter school, to an account for instructional supplies and materials, an account for instructional capital outlay, or an account created for other instructional purposes, or among the accounts. Moneys may be transferred among the three accounts. The moneys in the accounts shall be used for the purposes set forth in section 22-45-103 (1) (a) (II) and may not be expended by the state charter school for any other purpose. Any moneys in the accounts that are not projected to be expended during a budget year shall be budgeted for the purposes set forth in section 22-45-103 (1) (a) (II) in the next budget year. Nothing in this paragraph (a) shall be construed to require that interest on moneys in the accounts be specifically allocated to the accounts. (b) Each state charter school shall annually allocate the minimum per pupil dollar amount specified in section 22-54-105 (2) (b), multiplied by the number of students enrolled in the state charter school who are not on-line pupils, to a fund created by the state charter school for capital reserve purposes, as set forth in section 22-45-103 (1) (c) and (1) (e), or solely for the management of risk-related activities, as identified in section 24-10-115, C.R.S., and article 13 of title 29, C.R.S., or among such allowable funds. Said moneys shall be used for the purposes set forth in section 22-45-103 (1) (c) and (1) (e) and may not be expended by the state charter school for any other purpose. (6) (a) Each state charter school shall provide federally required educational services to students enrolled in the state charter school. For purposes of providing educational services for children with disabilities pursuant to article 20 of this title, each state charter school may operate as its own administrative unit or it may join a board of cooperative services or it may contract with a board of cooperative services or a school district for the delivery of said educational services. (b) The department shall forward to each state charter school the school's proportionate share of the state and federal resources generated by students with disabilities who are enrolled in the state charter school or by staff serving them who are employed by the state charter school. The department shall forward to each state charter school a proportionate share of the moneys generated under other federal or state categorical aid programs for students who are enrolled in the state charter school and are eligible for the aid. (c) When a child with a disability enrolls in and attends a state charter school, the child's school district of residence shall be responsible for paying to the state charter school the tuition charge for the excess costs incurred in educating the child. The amount of the tuition charge shall be determined pursuant to guidelines developed by the department. Under the circumstances described in this paragraph (c), the provisions of section 22-20-108 (8) shall not apply. (7) (a) If a state charter school determines that a school district has not paid the tuition charge for the excess costs incurred in educating a child with a disability as required in subsection (6) of this section and section 22-20-109 (5), the state charter school may seek a determination from the state board concerning whether a school district has improperly failed to pay the tuition charge for excess costs incurred in educating a child with a disability. (b) Upon receipt from a state charter school of a request for a determination of whether a school district has improperly failed to pay the tuition charge for excess costs incurred in educating a child with a disability, the state board shall direct the department to review the terms of the agreement between the school district and the state charter school and the financial information of the state charter school and the school district and make a recommendation to the state board regarding whether the school district has improperly failed to pay the tuition charge for excess costs incurred in educating a child with a disability. The department shall request, and the school district and the state charter school shall provide within thirty days after the request, all information necessary to make the recommendation. The department shall forward its recommendation to the state board within thirty days after receiving the information from the school district and the state charter school. (c) (I) At the next state board meeting following receipt of the recommendation of the department pursuant to paragraph (b) of this subsection (7), the state board shall issue its decision regarding whether the school district has improperly failed to pay the tuition charge for excess costs incurred in educating a child with a disability. (II) If the state board determines that the school district has improperly withheld moneys due to the state charter school, the school district, within thirty days after the state board's determination, shall pay to the state charter school the amount improperly withheld. In addition, the school district shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. If the school district fails, within the thirty-day period, to pay the full amount that was improperly withheld, the state charter school shall notify the department, and the department shall withhold from the school district's state equalization payment the unpaid portion of the amount improperly withheld by the district and pay the unpaid portion directly to the state charter school. (III) If the state board finds that the school district did not improperly withhold any portion of the amount due to the state charter school, the state charter school shall pay the costs incurred by the department in reviewing the necessary information to make its recommendation. (8) (a) Each state charter school that serves students who may be eligible to receive services provided through federal aid programs shall comply with all federal reporting requirements to receive the federal aid. (b) A state charter school shall comply with all of the state financial and budget rules, regulations, and financial reporting requirements with which a school district is required to comply. (9) The governing body of a state charter school is authorized to accept gifts, donations, or grants of any kind made to the state charter school and to expend or use said gifts, donations, or grants in accordance with the conditions prescribed by the donor; however, no gift, donation, or grant shall be accepted by the governing body if subject to any condition contrary to law or contrary to the terms of the state charter contract between the state charter school and the state board. (10) Any moneys received by a state charter school from any source and remaining in the state charter school's accounts at the end of any budget year shall remain in the state charter school's accounts for use by the state charter school during subsequent budget years and shall not revert to the state. SECTION 16. 22-30.5-112.3, Colorado Revised Statutes, is amended to read: 22-30.5-112.3. Charter schools - additional aid from district. (1) (a) (I) For the 2001-02 budget year, a qualified charter school, as defined in section 22-54-124 (1) (f), shall receive state education fund moneys from the its chartering school district that granted its charter in an amount equal to the percentage of the district's certified district charter school pupil enrollment that is attributable to pupils expected to be enrolled in the qualified charter school multiplied by the total amount of state education fund moneys distributed to the district for the same budget year pursuant to section 22-54-124 (3). (II) As used in this paragraph (a), "pupils" means pupils other than on-line pupils enrolled in a district charter school. (a.5) For the 2002-03 budget year, a qualified charter school, as defined in section 22-54-124 (1) (f.5), shall receive state education moneys from the its chartering school district that granted its charter in an amount equal to the amount paid to the school district by the department of education pursuant to section 22-54-124 (4.5). (a.7) (I) For the 2003-04 budget year and each budget year thereafter, a qualified charter school, as defined in section 22-54-124 (1) (f.6), that is a district charter school shall receive state education fund moneys from the its chartering school district that granted approved its charter in an amount equal to the percentage of the district's certified district charter school pupil enrollment that is attributable to pupils expected to be enrolled in the district qualified charter school multiplied by the total amount of state education fund moneys distributed to the district for the same budget year pursuant to section 22-54-124 (3). A qualified charter school that is a state charter school shall receive state education fund moneys from the department in an amount equal to the percentage of the total qualified charter school pupil enrollment that is attributable to pupils expected to be enrolled in the state charter school multiplied by the total amount of state education fund moneys distributed for the same budget year pursuant to section 22-54-124 (3). (II) As used in this paragraph (a.7), "pupils" means pupils other than on-line pupils enrolled in a qualified charter school. (b) Funding received pursuant to paragraph (a), (a.5), or (a.7) of this subsection (1) shall be in addition to any funding provided pursuant to section 22-30.5-112 or 22-30.5-112.1. (c) (I) A district shall provide funding to each district qualified charter school, as defined in section 22-54-124 (1) (f), (1) (f.5), or (1) (f.6), whichever is applicable, by making a single lump-sum payment to the district qualified charter school as soon as possible after the district receives a lump-sum payment of state education fund moneys pursuant to section 22-54-124 (4) or (4.5), whichever is applicable. (II) The department shall provide funding to each state qualified charter school, as defined in section 22-54-124 (1) (f.6), by making a single lump-sum payment to the state qualified charter school as soon as possible after the department receives a lump-sum payment of state education fund moneys pursuant to section 22-54-124. (2) (a) A charter school shall use moneys it receives pursuant to subsection (1) of this section solely for capital construction, as defined in section 22-54-124 (1) (a). (b) Notwithstanding the provisions of section 22-30.5-112 (4.5), any moneys received by a district charter school pursuant to subsection (1) of this section for the 2001-02 budget year that are not expended by January 31, 2003, shall be transferred back to the state education fund created in section 17 (4) of article IX of the state constitution. SECTION 17. 22-30.5-112.5, Colorado Revised Statutes, is amended to read: 22-30.5-112.5. District charter schools - transportation plans. If a district charter school's charter or contract includes provision of transportation services by the chartering school district, the district charter school and the chartering school district shall collaborate in developing a transportation plan to use school district equipment to transport students enrolled in the district charter school to and from the district charter school and their homes and to and from the district charter school and any extracurricular activities. The transportation plan may include, but need not be limited to, development of bus routes and plans for sharing the use of school district equipment for the benefit of students enrolled in district charter schools of the chartering school district and students enrolled in other schools of the chartering school district. SECTION 18. 22-30.5-113, Colorado Revised Statutes, is REPEALED AND REENACTED, WITH AMENDMENTS, to read: 22-30.5-113. State board - department of education - duties - charter schools - evaluation - report. (1) Beginning in the 2004-05 budget year, and at least every three years thereafter, the department shall prepare a report and evaluation for the governor and the house and senate committees on education on the success or failure of charter schools, their relationship to other school reform efforts, and suggested changes in state law necessary to strengthen or change the charter school program. (2) The state board shall compile evaluations of district charter schools received from local boards of education and evaluations of state charter schools prepared by the department. The state board shall review information regarding the statutes, regulations, and policies from which charter schools were released pursuant to section 22-30.5-105 to determine if the releases assisted or impeded the charter schools in meeting their stated goals and objectives. (3) In preparing the report required by this section, the state board shall compare the performance of charter school pupils with the performance of ethnically and economically comparable groups of pupils in other public schools who are enrolled in academically comparable courses. SECTION 19. 22-30.5-403 (3), Colorado Revised Statutes, is amended, and the said 22-30.5-403 is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read: 22-30.5-403. Definitions. As used in this part 4, unless the context otherwise requires: (3) "Charter school" means a district or state charter school as described in section 22-30.5-104 defined in section 22-30.5-103 (2), and also includes a nonprofit corporation exempt from taxation under section 501 (c) (3) of the federal "Internal Revenue Code of 1986", as amended, that owns a facility used for occupancy by pupils enrolled or to be enrolled in a charter school on behalf of a charter school and that was created for the sole purpose of holding title to such facility. (5.5) "District charter school" means a charter school that enters into a charter contract with a board of education. (8) "State charter school" means a charter school that enters into a charter contract with the state board of education pursuant to the provisions of section 22-30.5-108.1. SECTION 20. 22-30.5-404, Colorado Revised Statutes, is amended to read: 22-30.5-404. Needs-based inclusion of district charter schools in district bond elections - eligibility - determination of need - allocation of bond revenues. (1) In enacting this section, it is the intent of the general assembly to respect the principle of school district local control and to encourage school districts and district charter schools to work together to ensure that the capital construction needs of district charter schools can be met. Accordingly, nothing in this section shall be construed to limit in any way the existing ability of any school district to include a district charter school in any local bond elections or to otherwise assist a district charter school in financing its capital construction needs in any legal manner mutually agreed upon by the school district and the district charter school. Each school district that is considering submitting any question of contracting bonded indebtedness to the eligible electors of the district at an upcoming election shall invite each district charter school chartered by the district to participate in discussions regarding the possible submission of such a question at the earliest possible time, and each school district is encouraged to voluntarily include funding for the capital construction needs of district charter schools in the district's questions of contracting bonded indebtedness without requiring a district charter school to comply with the capital construction plan submission process set forth in subsection (3) of this section. (2) A district charter school that has capital construction needs may seek to obtain moneys to fund such capital construction needs by requesting that the board of education of its chartering school district: (a) Include the district charter school's capital construction needs as part of a ballot question for approval of bonded indebtedness to be submitted by the district to the voters of the district; or (b) Submit a ballot question for approval of a special mill levy to the voters of the district pursuant to section 22-30.5-405. (3) A district charter school that seeks to have its capital construction needs included as part of a ballot question to be submitted by the board of education of its chartering school district to the voters of the district or that seeks to obtain funding for its capital construction needs through the imposition of a special mill levy pursuant to section 22-30.5-405 shall submit a capital construction plan to the board of education of its chartering school district. The plan shall include: (a) A statement of reasons why the capital construction to be financed by bonded indebtedness or a special mill levy is necessary; (b) A description of the capital construction to be financed by bonded indebtedness or revenues from a special mill levy; (c) A description of the architectural, functional, and construction standards that meet applicable state building code requirements and are to be applied to each facility that is the subject of the capital construction project; (d) An estimate of the total cost of completing the capital construction to be financed by bonded indebtedness or a special mill levy and, if any moneys other than proceeds of bonded indebtedness or a special mill levy and interest earned on such proceeds are to be used to finance the capital construction, a breakdown of the moneys that will be used to finance the capital construction; (e) An estimate of the amount of time needed to complete the capital construction; (f) A statement addressing whether construction and renovation, payment of overrun costs, and other capital construction project issues are to be managed by the district charter school or the district, with costs for management to be negotiated by the district charter school and the district; (g) A statement of reasons why revenue sources other than bonded indebtedness or a special mill levy are inadequate to fully finance the capital construction; and (h) A statement of the district charter school's preferred means of obtaining moneys. (4) The board of education of a school district shall review a capital construction plan submitted by a district charter school pursuant to subsection (3) of this section and determine whether the district charter school has established a need for the capital construction, a need to incur bonded indebtedness or obtain revenues from a special mill levy to finance the capital construction, and a viable plan for the capital construction. The board shall also determine the priority of the district charter school capital construction need in relation to the capital construction needs of the entire district. If the board determines that: (a) The district charter school has established capital construction needs, a need to incur bonded indebtedness or obtain revenues from a special mill levy to finance the capital construction, and a viable plan, and the board has prioritized the district charter school capital construction needs in relation to the capital construction needs of the entire district, the board shall either include the district charter school's capital construction in a ballot question for approval of bonded indebtedness in accordance with subsection (5) of this section or submit a separate special mill levy question to the voters of the district pursuant to section 22-30.5-405. The board shall have the discretion to choose between the bond or special mill levy options and to determine the amount of bonds that will be needed to be sold or the amount of moneys that will be needed to be raised by a special mill levy, but the board shall first consider any information provided or preferences expressed by the district charter school. (b) The district charter school has not established capital construction needs, a need to incur bonded indebtedness or obtain revenues from a special mill levy to finance the capital construction, or a viable plan: (I) The board shall provide the district charter school with a written statement specifying its reasons for concluding that the district charter school has not established capital construction needs, a need to incur bonded indebtedness or obtain revenues from a special mill levy to finance the capital construction, or a viable plan; and (II) The board need not include the district charter school's capital construction in the district's ballot question for approval of bonded indebtedness but shall submit a special mill levy ballot question to the voters of the district pursuant to section 22-30.5-405 if the district charter school requests that a special mill levy be submitted and the district charter school agrees to pay all of the costs of submitting the special mill levy ballot question. (5) If the board of a school district chooses to include a district charter school's capital construction in a district ballot question seeking approval of bonded indebtedness: (a) The board shall consult with the district charter school in determining the amount of, and repayment schedule for, the bonds proposed to be sold to finance the district charter school's capital construction; (b) The board and the district charter school shall agree to the prioritization of the distribution of bond proceeds between the district charter school and any other public school that will receive bond proceeds before submitting the ballot question to the voters of the school district; (c) The investment and interest earnings on bond proceeds shall be distributed on a pro rata basis to the participating district charter school after management fees have been collected; and (d) The costs of submitting the ballot question shall be borne by both the district and the district charter school in proportion to their respective portions of the total bond proceeds to be received unless the board and the district charter school agree to a different cost-sharing arrangement. Except as otherwise provided in paragraph (b) of subsection (4) of this section, if the board of the district submits a separate special mill levy ballot question on the same ballot as a ballot question for approval of bonded indebtedness, the costs of submitting the special mill levy ballot question shall be borne as agreed upon by the school district and the district charter school. (6) Notwithstanding any other provision of this section, no bonds shall be issued for the purpose of financing district charter school capital construction unless the district charter school that is to receive bond proceeds and the district have entered into a contract specifying that: (a) The ownership of any capital construction financed by bond revenues shall automatically revert to the district if the district charter school loses its charter, fails to pay for the capital construction to be financed by bond revenues, or becomes insolvent and can no longer operate as a charter school; and (b) The district charter school shall not encumber any capital construction financed by bond revenues with any additional debt. SECTION 21. 22-30.5-405, Colorado Revised Statutes, is amended to read: 22-30.5-405. Mill levy for district charter school capital construction. (1) With the agreement of all district charter schools that will receive the revenues generated by a special mill levy, the board of education of any school district shall, at any time at which a ballot issue arising under section 20 of article X of the state constitution may be decided, submit to the eligible electors of the district the question of whether to impose a mill levy of a stated amount for the purpose of financing capital construction for one or more district charter schools chartered by the district, which mill levy shall not exceed one mill in any year or exceed ten years in duration. When a mill levy for more than one year has been approved, the board shall, without calling an election, decrease the amount or duration of the mill levy as necessary to avoid excessive collections as each capital construction project financed by the mill levy is completed. If the board is required to submit the ballot question for a mill levy pursuant to section 22-30.5-404 (4), the board shall consult with all affected district charter schools that will receive the revenues generated by the special mill levy before determining the amount and duration of the special mill levy. (2) Any election called pursuant to subsection (1) of this section shall be conducted pursuant to the provisions of articles 1 to 13 of title 1, C.R.S. The costs of the election shall be borne by each district charter school that is to receive revenues generated by the mill levy in proportion to the amount of revenues it is to receive unless other cost-sharing arrangements are agreed to by the district charter schools and, if the school district submitting the ballot question agrees to bear any of the costs of the election and is not prohibited from bearing such costs by section 22-30.5-404 (4) (b), the district. (3) If the majority of votes cast at an election held pursuant to this section are in favor of the question, the mill levy of the district for district charter school capital construction shall be as so approved by the eligible electors of the district and taxes shall be levied as so approved. (4) Notwithstanding the provisions of section 22-30.5-404 (4) and any other provisions of this section, no mill levy shall be imposed pursuant to this section to benefit a district charter school unless the district charter school and the district have entered into a contract specifying to whom the ownership of any capital construction financed by the mill levy shall revert if the district charter school loses its charter, fails to pay for the capital construction to be financed by revenues from the mill levy, or becomes insolvent and can no longer operate as a district charter school. (5) A school district may impose a total mill levy pursuant to this section in excess of one mill in any year if the voters of the district approve multiple ballot questions, but the mill levy imposed pursuant to any single ballot question submitted pursuant to this section shall not exceed one mill in any year as specified in subsection (1) of this section. The imposition of a second or subsequent mill levy pursuant to this section shall not affect the rights of any district charter school to the revenues generated by any preexisting special mill levy. SECTION 22. 22-30.5-406 (1) (c) and (2), Colorado Revised Statutes, are amended to read: 22-30.5-406. Direct payment of charter school bonds by the state treasurer and school districts - charter school financing administrative cash fund. (1) (c) (I) In the case of a district charter school, the state treasurer shall withhold the amount of any direct payments made on behalf of a district charter school plus administrative costs associated with the making of direct payments in an amount agreed upon by the state treasurer and the district charter school from the payments to the chartering district of the state share of the district's total program made pursuant to article 54 of this title. The state treasurer shall notify the chief financial officers of the chartering district and the district charter school of any amount of moneys withheld and the chartering district shall reduce the amount of funding it provides to the district charter school by said amount. Any administrative costs withheld by the state treasurer pursuant to this paragraph (c) subparagraph (I) shall be credited to the charter school financing administrative cash fund, which fund is hereby created. Moneys in the fund shall be continuously appropriated to the state treasurer for the direct and indirect costs of the administration of this section. Moneys in the charter school financing administrative cash fund shall remain in the fund and shall not revert to the general fund at the end of any fiscal year. (II) In the case of a state charter school, the state treasurer shall withhold the amount of any direct payments made on behalf of a state charter school plus administrative costs associated with the making of direct payments in an amount agreed upon by the state treasurer and the state charter school from the payments to the state charter school made by the department of education pursuant to article 54 of this title. The state treasurer shall notify the department of education and the chief financial officer of the state charter school of any amount of moneys withheld. Any administrative costs withheld by the state treasurer pursuant to this subparagraph (II) shall be credited to the charter school financing administrative cash fund created pursuant to subparagraph (I) of this paragraph (c). (2) (a) If the state treasurer does not agree to make direct payments of principal and interest on bonds on behalf of a district charter school pursuant to subsection (1) of this section because the district charter school is not entitled to receive moneys from the state public school fund pursuant to part 1 of this article or because the state treasurer has concluded that the amount of moneys from the state public school fund that the district charter school will receive pursuant to part 1 of this article for any given budget year will be less than the amount of the direct payment specified by the district charter school that will be due during the budget year, the district charter school may request that its chartering district make direct payments of principal and interest on the bonds on behalf of the district charter school. The district charter school shall specify the amount of each payment to be made. (b) Notwithstanding the provisions of paragraph (a) of this subsection (2), if the board of education of a chartering district concludes that the total amount of moneys that a district charter school will receive for any given budget year from the district pursuant to the operating contract between the district and the district charter school will be less than the amount of the payments specified by the district charter school pursuant to paragraph (a) of this subsection (2) that will be due during the budget year, the chartering district shall not agree to make direct payments on behalf of the district charter school. (c) A chartering district shall withhold the amount of any direct payments made on behalf of a district charter school plus administrative costs associated with the making of direct payments in an amount agreed upon by the chartering district and the district charter school from the funding provided by the district to the district charter school pursuant to part 1 of this article. (d) This subsection (2) shall not be construed to create a debt of any chartering district or any district obligation whatsoever with respect to any lease agreement or installment purchase agreement entered into by a district charter school within the meaning of any state constitutional provision or to create any liability except to the extent provided in this subsection (2). SECTION 23. 22-30.5-407, Colorado Revised Statutes, is amended to read: 22-30.5-407. Charter school state debt reserve fund - creation - use of fund moneys - legislative declaration. (1) The general assembly hereby finds and declares that: (a) The state charter school debt state reserve fund created by this section is intended to enhance the ability of any qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section 23-15-104 (1) (a), C.R.S., to obtain such financing on favorable terms by providing a source of moneys that can be used to make bond payments if the qualified charter school fails to make such payments; (b) It is appropriate for state education fund moneys to be appropriated to the state charter school debt state reserve fund and it is also appropriate for those qualified charter schools that receive more favorable financing terms that result in interest rate savings due to the existence of and reliance upon the state charter school debt state reserve fund and the provisions of section 22-30.5-408 with respect to such bonds to pay a portion of their resulting savings to the state charter school debt state reserve fund and for all charter schools to bear the risk of having charter school per pupil facilities aid program moneys withheld to replenish the state charter school debt state reserve fund in the event that moneys from the state charter school debt state reserve fund are expended to make bond payments. (2) (a) There is hereby created in the state treasury the state charter school debt state reserve fund. The fund shall consist of the following moneys: (I) One million dollars that are hereby appropriated from the state education fund to the state charter school debt state reserve fund on July 1, 2002; (II) Moneys credited to the state charter school state interest savings account of the fund pursuant to subsection (3) of this section; and (III) Moneys transferred from the state education fund to the state charter school debt state reserve fund pursuant to paragraph (d) of subsection (4) of this section. (b) There is hereby created within the state charter school debt state reserve fund the state charter school state interest savings account. The account shall consist of moneys credited to the account by the state treasurer pursuant to subsection (3) of this section and any interest and income derived from the deposit and investment of moneys in the account. (c) All interest and income derived from the deposit and investment of moneys in the state charter school debt state reserve fund shall be credited to the state education fund; except that all interest and income derived from the deposit and investment of moneys in the state charter school state interest savings account shall be credited to the account in accordance with paragraph (b) of this subsection (2). At the end of any fiscal year, all unexpended and unencumbered moneys in the state charter school debt state reserve fund and the account shall remain in the fund and the account respectively. (d) All moneys credited to the state charter school debt state reserve fund or expended from the fund, other than moneys credited to or expended from the state charter school state interest savings account, are moneys originally credited to the state education fund and are therefore, in accordance with section 17 (3) of article IX of the state constitution and section 22-55-103 (5), exempt from: (I) The limitation on state fiscal year spending set forth in section 20 (7) (a) of article X of the state constitution and section 24-77-103, C.R.S.; and (II) The limitation on local government fiscal year spending set forth in section 20 (7) (b) of article X of the state constitution. (3) (a) A qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section 23-15-104 (1) (a), C.R.S., shall pay to the state treasurer, on an annual basis, commencing and calculated on the date of issuance of the bonds and on each one-year anniversary of the issuance of the bonds thereafter while the bonds remain outstanding, an amount equal to ten basis points of the principal amount of the bonds outstanding as of each calculation date, and such amount shall be deemed to be the amount of any interest rate savings resulting from more favorable financing terms attributable to the reliance upon the state charter school debt state reserve fund and the provisions of section 22-30.5-408 with respect to such bonds. Each annual payment of ten basis points shall be prorated and payable in equal installments among the debt service payments required of the qualified charter school, with respect to the qualified charter school bonds issued for its benefit, during the twelve months following the annual computation date. The state treasurer shall credit any payment received pursuant to this paragraph (a) to the state charter school state interest savings account. (b) The state treasurer may require each qualified charter school that makes required payments to the state treasurer pursuant to paragraph (a) of this subsection (3) to pay a fee to the state treasurer to defray any direct and indirect administrative costs incurred by the state treasurer in executing duties required by this section. The state treasurer shall deposit any fees received into the state charter school state interest savings account of the state charter school debt state reserve fund. (4) (a) Moneys in the state charter school debt state reserve fund are hereby continuously appropriated to the state treasurer, who shall expend such moneys solely for the purpose of paying principal and interest on bonds issued on behalf of a qualified charter school by the Colorado educational and cultural facilities authority and only if: (I) The state treasurer has been notified and has confirmed, in accordance with paragraph (b) of this subsection (4), that the qualified charter school has expended all moneys in its own debt service reserve fund or account that has been funded with proceeds derived from the issuance of the bonds and is unable to make bond payments; and (II) The qualified charter school has made payments to the state treasurer as required by subsection (3) of this section. (a.5) Notwithstanding the provisions of paragraph (a) of this subsection (4), fees deposited into the state charter school state interest savings account of the state charter school debt state reserve fund pursuant to paragraph (b) of subsection (3) of this section may be expended by the state treasurer for the purpose of defraying any direct and indirect administrative costs incurred by the state treasurer in executing duties required by this section. (b) Whenever the trustee responsible for making payments to the holders of any qualified charter school bonds, as defined in section 22-30.5-408 (1) (c), issued on behalf of a qualified charter school by the Colorado educational and cultural facilities authority has not received payment of principal or interest on the bonds on the tenth business day immediately prior to the date on which such payment is due and the debt service reserve fund for the qualified charter school has been depleted, the trustee shall so notify the state treasurer and the qualified charter school by telephone, facsimile, or other similar communication, followed by written verification, of such payment status. The state treasurer shall immediately contact the qualified charter school and determine whether the qualified charter school will make the payment by the date on which it is due and, if the state treasurer confirms that the qualified charter school will not make the payment, the state treasurer shall make the payment. (c) The state treasurer shall expend all moneys in the state charter school state interest savings account before expending any other moneys in the state charter school debt state reserve fund. If a qualified charter school defaults on a payment with respect to outstanding qualified charter school bonds, as defined in section 22-30.5-408 (1) (c), and the amounts of such payment defaults exceed the amounts available in the state charter school state interest savings account and the state charter school debt state reserve fund, moneys from the account and the fund shall be allocated pro rata among the qualified charter school bonds that will have a default in the payment of principal or interest based on the ratio that the payment default on each series of such bonds bears to the total payment defaults on all series of such qualified charter school bonds. (d) If the state treasurer expends moneys from the portion of the state charter school debt state reserve fund that is not the state charter school state interest savings account, the state treasurer shall withhold charter school per pupil facilities aid program moneys to the extent necessary to restore that portion of the state charter school debt state reserve fund, by the transfer of all withheld amounts from the state education fund to that portion of the state charter school debt state reserve fund, to a one million dollar balance in accordance with the following requirements: (I) Each qualified charter school that has had bonds issued on its behalf by the Colorado educational and cultural facilities authority that have relied upon the state charter school debt state reserve fund and the provisions of section 22-30.5-408, shall have its payments reduced by the same percentage and by a maximum of fifty percent. (II) If, in any given fiscal year, the state treasurer determines that after withholding the maximum amount of charter school per pupil facilities aid program moneys that may be withheld pursuant to subparagraph (I) of this paragraph (d) the portion of the state charter school debt state reserve fund that is not the state charter school state interest savings account will not be restored to a one million dollar balance, each charter school that is not relying upon the state charter school debt state reserve fund and the provisions of section 22-30.5-408 with respect to bonds issued on its behalf by the Colorado educational and cultural facilities authority shall have its payment reduced by the same percentage and by a maximum of ten percent. (5) This section shall not be construed to create any state debt, to require the state to make any bond payments on behalf of any qualified charter school from any source of state moneys other than the state charter school debt state reserve fund, or to require the state to fully pay off any outstanding bonds of a qualified charter school that cannot make scheduled bond payments. (6) For purposes of this section, "qualified charter school" means a qualified charter school as defined in section 22-30.5-408 (1) (b). (7) A qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section 23-15-104 (1) (a), C.R.S., shall request that the state treasurer make direct payments of principal and interest on the bonds on behalf of the qualified charter school in accordance with section 22-30.5-406 (1). If the state treasurer does not agree to make direct payments and the qualified charter school is a district charter school, the qualified charter school shall request that its chartering district make direct payments in accordance with section 22-30.5-406 (2). (8) This section shall only apply to bonds issued by the Colorado educational and cultural facilities authority in reliance upon the provisions of section 22-30.5-408 (2). (9) This section is in addition to, and not in limitation of, the powers granted to the Colorado educational and cultural facilities authority pursuant to article 15 of title 23, C.R.S., to finance the costs of facilities of charter schools. (10) In accordance with section 11 of article II of the state constitution, the state hereby covenants with the purchasers of any outstanding bonds issued in reliance upon the existence of the state charter school state interest savings account that the state will not repeal, revoke, or rescind the provisions of this part 4 concerning the account or modify or rescind the same so as to limit or impair the rights and remedies granted by this section to the purchasers of such bonds and that any moneys in the account shall not revert to the general fund. SECTION 24. 22-30.5-408 (1) (c), Colorado Revised Statutes, is amended to read: 22-30.5-408. Replenishment of qualified charter school debt service reserve funds. (1) As used in this section: (c) "Qualified charter school bonds" means bonds that are issued by the Colorado educational and cultural facilities authority for the purpose of financing a facility to be used for occupancy by pupils enrolled in a qualified charter school and are secured by the state charter school debt state reserve fund created by section 22-30.5-407 (2) and the provisions of this section. SECTION 25. The introductory portion to 22-30.5-409 (1) and 22-30.5-409 (1) (i), Colorado Revised Statutes, are amended to read: 22-30.5-409. Annual reports on bonds issued on behalf of charter schools - review by state auditor. (1) Prior to January 30, 2003, and prior to January 30 of each year thereafter, the Colorado educational and cultural facilities authority created in section 23-15-104 (1) (a), C.R.S., shall submit a report to the state auditor that includes information concerning the issuance of qualified charter school bonds, as defined in section 22-30.5-408 (1) (c), that have resulted in charter schools obtaining more favorable financing terms by reliance on the existence of the state charter school debt state reserve fund created in section 22-30.5-407 (2) (a) and the potential replenishment of the state charter school debt state reserve fund pursuant to section 22-30.5-408 (2) (a). Such report shall include, but need not be limited to: (i) The total amount, if any, of moneys expended from the state charter school debt state reserve fund during the most recently completed calendar year for the purpose of paying principal and interest on such qualified charter school bonds. SECTION 26. 22-1-101, Colorado Revised Statutes, is amended to read: 22-1-101. Schools defined. (1) A public school is a school that derives its support, in whole or in part, from moneys raised by a general state, county, or district tax. (2) A charter school is a public school that operates pursuant to a charter contract entered into pursuant to the provisions of article 30.5 of this title. As used in this title, unless the context otherwise requires, "charter school" includes any type of charter school created pursuant to the provisions of article 30.5 of this title, including but not limited to a district charter school, a state charter school, and an independent charter school. SECTION 27. 22-5-102, Colorado Revised Statutes, is amended to read: 22-5-102. Legislative declaration. The general assembly declares that this article is enacted for the general improvement and expansion of educational services of the public schools in the state of Colorado; for the creation of boards of cooperative services where feasible for purposes of enabling two or more school districts and state charter schools to cooperate in furnishing services authorized by law if cooperation appears desirable; and for the setting forth of the powers and duties of said boards of cooperative services. SECTION 28. 22-5-103 (1), Colorado Revised Statutes, is amended, and the said 22-5-103 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-5-103. Definitions. As used in this article, unless the context otherwise requires: (1) "Board" means the board of education of a school district or the governing board or governing agency of a postsecondary institution or the governing board of a state charter school. (6) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 29. 22-5-104 (1) and (3), Colorado Revised Statutes, are amended to read: 22-5-104. Creation of board of cooperative services - meetings. (1) Whenever the boards of education of two or more school districts or the board of education of a school district and the governing board or governing agency of a postsecondary institution or the governing boards of two or more state charter schools or the governing board of a state charter school and the board of education of a school district or the governing board or governing agency of a postsecondary institution desire to establish a board of cooperative services for the purpose of providing cooperative services as set forth in this article and have so certified to the commissioner of education and other interested boards by appropriate resolution, the presidents of any two of the interested boards may call a meeting of the duly appointed representatives of the interested boards. The interested boards shall seek from the commissioner of education and the state board for community colleges and occupational education any aid and assistance that may be reasonably required, to the end that a proper plan of organization for the board of cooperative services shall be accomplished. At this meeting the boards which have previously and respectively adopted resolutions so authorizing may enter into a proposed agreement to form a board of cooperative services, which proposed agreement shall set forth the names of the participating districts, state charter schools, and postsecondary institutions and such other items as may be required. The participating school districts, state charter schools, and postsecondary institutions may then proceed to form the board of cooperative services. (3) The agreement to establish a board of cooperative services may be amended to admit one or more additional school districts, state charter schools, or postsecondary institutions if the board of the school district, state charter school, or postsecondary institution seeking admission shall certify by resolution a desire to be admitted to membership in the board of cooperative services and if the board of cooperative services by resolution agrees to the admission of the school district, state charter school, or postsecondary institution. SECTION 30. 22-5-104 (2), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: 22-5-104. Creation of board of cooperative services - meetings. (2) (b.5) Each participating governing board of a state charter school shall then appoint its assigned number of representatives, and one alternate for each, from its membership or the governing board may appoint the chief executive officer of the state charter school as one of its assigned number of representatives. The term of office of each member representing a governing board of a state charter school shall not exceed three years; except that, if any member of a board of cooperative services who represents a governing board of a state charter school ceases to be a member of the governing board or the chief executive officer of the state charter school, a vacancy shall exist on the board of cooperative services. SECTION 31. 22-5-110, Colorado Revised Statutes, is amended to read: 22-5-110. State and federal payments. Any state or federal financial assistance which that would accrue to an individual school district or state charter school if it were performing a service performed under the direction of a board of cooperative services shall be apportioned by the appropriate state or federal agency to the participating school districts and state charter schools on the basis of the proportionality of the contributions of the participating school districts and state charter schools to the performance of the service or upon the basis of proportionality otherwise set forth by law. SECTION 32. 22-5-111 (2), Colorado Revised Statutes, is amended to read: 22-5-111. Buildings and facilities. (2) The boards of education of the school districts or the governing boards of the state charter schools participating in a cooperative service agreement may jointly, separately, or, after approval of each participating board of education or governing board, as a board of cooperative services construct, purchase, or lease sites, buildings, and equipment for the purpose of providing the facilities necessary for the operation of a cooperative service program at any appropriate location, whether within or without a school district providing the money for the facilities. School district moneys and state charter school moneys in any fund from which moneys may be legally expended for such facilities may be used for carrying out the provisions of this section. The provisions of sections 22-32-127 and 22-45-103 (1) shall apply to any installment purchase agreement or any lease or rental agreement entered into by a board of cooperative services or by the boards of education of the school districts participating in a cooperative service agreement. No board of education of a school district participating in a cooperative service agreement shall make any levy for its bond redemption fund, or use any moneys in its bond redemption fund, except in accordance with the provisions of section 22-45-103 (1) (b). SECTION 33. 22-5-118 (2), (3) (a), and (4), Colorado Revised Statutes, are amended to read: 22-5-118. Implementation and financing of regional education and support services - plan - annual report. (2) Beginning fiscal year 1996-97 and for fiscal years thereafter, in addition to any state moneys received pursuant to section 22-5-115, a board of cooperative services may receive state moneys by submitting to the department of education a plan for the provision of education and support services programs, as specified in this section. Any amount appropriated to fund any education or support services program pursuant to this section shall be distributed by the department of education to each board of cooperative services that submits a plan. The amount appropriated shall be divided equally based on the total number of students enrolled in the member school districts and state charter schools of the participating boards and distributed based on the number of students participating in the funded education or support services program from each member school district and each member state charter school of each participating board. (3) (a) To receive funds under this section, a board of cooperative services, in cooperation with its participating school districts and state charter schools, the department of education, the Colorado commission on higher education, the state board for community colleges and occupational education, and postsecondary institutions, shall prepare and submit a plan to increase efficiencies and economies in providing education and support services to the board's participating school districts and state charter schools. (4) A board of cooperative services may contract with a school district or state charter school that is not a member of the board of cooperative services to provide to the school district or state charter school any of the services specified in the plan developed pursuant to this section. SECTION 34. 22-11-102 (3), Colorado Revised Statutes, is amended to read: 22-11-102. Legislative declaration. (3) The general assembly recognizes that under the state constitution the state board of education is vested with the power to provide general supervision over the public schools of the state, and the local boards of education have the power to control instruction in the public schools of the state their respective school districts. Consistent with these powers, the general assembly recommends that the state board of education encourage and promote the adoption of teaching methods and environments in the public schools of the state that will enhance the reading skills of the children in such schools. To that end, the general assembly finds and declares that the use of recognized instructional strategies, including phonics, and emphasis on reading, writing, and mathematics will enhance the basic skills of the children in the public schools of the state. SECTION 35. 22-11-103 (2) and (5), Colorado Revised Statutes, are amended, and the said 22-11-103 is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read: 22-11-103. Definitions. As used in this article, unless the context otherwise requires: (2) "Accreditation contract" means the agreement between the state board of education and a school district that binds the school district to manage the accreditation of public schools within such the school district, consistent with the standards and goals to be met according to the accreditation indicators. "Accreditation contract" also means the agreement between the state board of education and a state charter school that binds the state charter school to meets the standards and goals established in the accreditation contract according to the accreditation indicators. (5) "Corrective action cycle" means the corrective actions described in section 22-11-204 to which a school district or a state charter school shall be subject in the event that it fails to comply with provisions of the accreditation contract. (6.5) "Public school" includes a traditional public school as defined in section 22-1-101, a district charter school, and a state charter school. (9) "State charter school" means a charter school that enters into a contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 36. 22-11-104 (3) (a), Colorado Revised Statutes, is amended to read: 22-11-104. Accreditation indicators. (3) Rules. (a) The state board shall promulgate rules concerning how the school districts and state charter schools shall measure data relating to the accreditation indicators and the form in which the school districts and state charter schools shall provide such data to the state board. SECTION 37. 22-11-201 (2), (3), and (4) (a) (V), the introductory portion to 22-11-201 (4) (b), 22-11-201 (4) (c), and the introductory portion to 22-11-201 (5), Colorado Revised Statutes, are amended to read: 22-11-201. Accreditation contract. (2) Parties. (a) Each school board and each state charter school shall enter into an accreditation contract with the state board of education. (b) The accreditation contract may include a subcontract with a board of cooperative services for the administration of the school district's or state charter school's accreditation process. (3) Goals. The accreditation contract shall define the standards, goals, and requirements to be met by the school district or state charter school over the term of the contract. Failure to achieve the standards, goals, and requirements set forth in the accreditation contract may result in the sanctions and corrective actions set forth in this article. (4) Contract requirements - management. (a) The accreditation contract shall contain, at a minimum, the following terms: (V) Provisions for allowing annual comparisons between the school board or state charter school assessment results and the statewide assessment results. (b) The school district accreditation contract, at a minimum, shall bind a school district to administer the following school district policy and management functions: (c) The accreditation contract shall also contain a plan for the use of revenues distributed to the school district or state charter school pursuant to sections 22-55-106 and 22-55-107 for the term of the contract. If the contract is renegotiated pursuant to paragraph (b) of subsection (6) of this section, the plan shall be updated to reflect any changes in the use of the revenues distributed to the school district or state charter school pursuant to sections 22-55-106 and 22-55-107. (5) Student performance. The accreditation contract shall bind the school board to improve each public school's performance, and shall bind each state charter school to improve its performance, relating to the following: SECTION 38. 22-11-202 (2) (b), Colorado Revised Statutes, is amended to read: 22-11-202. Accreditation levels. (2) Ratings. (b) The ratings shall be based upon student achievement on school district standards or state charter school standards, whichever is applicable, shall be consistent with the ratings for student achievement on the state assessments, and shall indicate the public schools' and school districts' performance on the accreditation indicators. SECTION 39. 22-11-203 (2), Colorado Revised Statutes, is amended to read: 22-11-203. Monitoring of accreditation contracts. (2) The department shall provide technical assistance to any school district of the state or state charter school that requests such assistance in order to improve its performance on the accreditation indicators. SECTION 40. 22-11-204, Colorado Revised Statutes, is amended to read: 22-11-204. Corrective action cycle. (1) Level one: Notice. (a) At any time during the term of the accreditation contract, if a school district or state charter school fails to comply with any of the provisions of the accreditation contract, the department shall notify the school district or state charter school of the nature of the school district's lack of compliance. This notice shall constitute level one in the corrective action cycle. (b) After receipt of the notice pursuant to paragraph (a) of this subsection (1), a school district or state charter school shall submit a plan to remedy its lack of compliance to the department. The plan shall be submitted within a specific time period commencing immediately after the school district's receipt of the notice which shall be established in state board rules. The department shall approve or deny the school district's or state charter school's plan to remedy its lack of compliance within a time period from the date of the plan's submission that shall be established in rules promulgated by the state board. (c) Upon a school district's or state charter school's request, the department shall provide technical assistance to the school district or state charter school in connection with the areas in which the school district or state charter school is out of compliance. (2) Level two: Probation. (a) Pursuant to rules established by the state board, the state board shall place a school district or state charter school on probationary status if the school district or state charter school fails to implement the plan submitted pursuant to paragraph (b) of subsection (1) of this section. Probation shall constitute level two in the corrective action cycle. The rules of the state board shall include a process for a school district's or state charter school's right to a hearing before the board in order to determine whether the school district or state charter school had implemented the plan pursuant to paragraph (b) of subsection (1) of this section. (b) The department shall provide technical assistance to a school district or state charter school that is on probationary status upon the request of the school district or state charter school. (3) Level three: Nonaccreditation status. Pursuant to rules established by the state board, the state board may remove a school district's or state charter school's accreditation if the school district or state charter school fails to remedy its lack of compliance. The rules of the state board shall include a process for a school district's or state charter school's right to a hearing before the board in order to determine whether the school district or state charter school had remedied its lack of compliance. Removal of accreditation may result in reorganization of the school district as provided in section 22-30-105. Removal of accreditation may result in revocation of the state charter school's charter. SECTION 41. 22-11-301 (2), Colorado Revised Statutes, is amended to read: 22-11-301. Colorado school awards program - created - rules. (2) For purposes of this part 3, "public school" means a public school of a school district in this state or a state charter school. SECTION 42. 22-11-303 (2), Colorado Revised Statutes, is amended to read: 22-11-303. Colorado school awards program - distribution of award. (2) Any moneys made available to a public school of a school district in the form of an award pursuant to the provisions of this part 3 shall not supplant moneys made available to such public school from funding received by the school district pursuant to article 54 of this title or pursuant to the taxing authority of the school district. Any moneys made available to a state charter school in the form of an award pursuant to the provisions of this part 3 shall not supplant moneys payable to the state charter school pursuant to article 54 of this title. SECTION 43. 22-20-103 (1) and (5.5), Colorado Revised Statutes, are amended, and the said 22-20-103 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-20-103. Definitions. As used in this article, unless the context otherwise requires: (1) "Administrative unit" means a school district, a state charter school, or a board of cooperative services that is providing educational services to exceptional children and that is responsible for the local administration of this article. (5.5) "Least restrictive environment" means programs used to educate a child with a disability using the delivery system most appropriately meeting the needs of the child, and, to the extent possible, as determined by the local board of education or the governing board of the state charter school, subject to the appeals procedures outlined in section 22-20-108 (3), the term means an environment in which a child with a disability is educated with children without disabilities, unless the nature or severity of the disability is such that education in regular classes with the use of supplementary aids and services cannot be achieved satisfactorily, or, when provided with supplementary aids and services, the nature or severity of the disability is so disruptive that the education of other children in such classes would be significantly impaired. (11) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 44. 22-20-104 (1) and (4), Colorado Revised Statutes, are amended to read: 22-20-104. Administration. (1) This article shall be administered by the department. Administration of this article shall include the recommendation to the state board of reasonable criteria, rules, and regulations; recommended minimum standards for facilities, materials, equipment, and personnel; and recommended assessment criteria for identifying exceptional children, their level of disability or exception, and the special services needed. The state board shall adopt appropriate recommendations following public hearings in several locations throughout the state with respect to the suggested criteria, rules, regulations, and standards. Recommendations adopted by the state board shall be in accord with the legislative declaration set forth in section 22-20-102. Any school district which or state charter school that provides plans, programs, or services which do not reasonably satisfy the criteria, rules, regulations, and standards recommended by the state board will be provided by the department of education with a detailed analysis of any discrepancies noted along with specific recommendations for their correction. Funding will be provided or continued for a reasonable period of time, as determined by the department, to allow the local school district or state charter school opportunity to satisfy the recommended criteria, rules, regulations, and standards, or to establish a claim for variance based upon conditions indigenous to a local school district or state charter school. (4) To comply with this section, the department shall maintain a data and information system on children, personnel, costs, and revenues, and such data and information shall be used to ensure that state moneys provided to districts and state charter schools under the provisions of section 22-20-106 (1) are being spent only on special education services and programs. SECTION 45. 22-20-106 (1), (2), and (3), Colorado Revised Statutes, are amended to read: 22-20-106. Special educational programs. (1) By September 1, 1973, every school district in the state shall be either an administrative unit in itself or in a board of cooperative services which shall be designated as an administrative unit. Each state charter school shall be either an administrative unit in itself or in a board of cooperative services or group of state charter schools that is designated as an administrative unit. An administrative unit shall be a school district, state charter school, or board of cooperative services which that meets criteria established by the state board governing the duties and responsibilities of the director of special education and is either a state charter school or is a board of cooperative services which that conducts special educational programs for all school districts which that are members of the board of cooperative services or is a school district which that meets criteria of geographic size, location, and number of pupils established by the state board to achieve maximum efficiency in administering programs of special education. Although the state board shall define the qualifications and the general duties and responsibilities of directors of special education, such directors shall be regarded for all purposes as employees of their local administrative units and subject to the administrative direction of such units. (2) Each administrative unit shall submit a plan to the department indicating how the school district or state charter school will provide for education of all children with disabilities between the ages of five and twenty-one and, on and after January 1, 1992, between the ages of three and twenty-one. Each unit plan shall include the type and number of children with disabilities in the unit based upon the department's criteria of incidence, the services to be provided, and the estimated resources necessary. An addendum to the administrative unit's plan to cover gifted children may be submitted by January 1, 1980. (3) Administrative units shall make available special educational services for the education of any child with a disability between the ages of five and twenty-one and, on and after January 1, 1992, between the ages of three and twenty-one under jurisdiction of the administrative unit and may serve gifted students. In providing these services, an administrative unit shall pay for salaries and employee benefits of certified special education teachers and special education staff; equipment; in-service training of the staff of an administrative unit who have pupil contact; mileage expenses incurred by staff; the costs of educational services for a child in an eligible facility; or any other expenses related to special education. Special education services may be provided by community centered boards in cooperation with administrative units, and school districts, and state charter schools. SECTION 46. 22-20-108 (1), (3), (4), (4.5) (e), (4.5) (f), (4.7) (b), (4.7) (g), (5) (d), (7) (a), (9), and (10), Colorado Revised Statutes, are amended to read: 22-20-108. Determination of disability - enrollment. (1) The determination that a child has a disability and the recommendation for placement of that child in an individual educational program shall be made by a committee of professionally qualified personnel designated by the board of education of the school district, by the governing board of the state charter school if the administrative unit consists of a state charter school, or by the governing board of the board of cooperative services if the administrative unit encompasses more than a single school district or single state charter school. The composition of the committee shall be prescribed by the state board and may be composed of but not limited to the following: The director of special education for the administrative unit, a psychologist, a social worker, a physician, a school administrator, and a teacher of children with disabilities. The committee shall utilize guidelines recommended by the department to determine the least restrictive environment in which to educate the child. In the event that placement in a community center for the retarded and for persons with serious disabilities is considered appropriate for the needs of a child with a disability, a joint placement committee composed of professional personnel, as described in this section, representing the administrative unit and the community center for the retarded and for persons with serious disabilities, may recommend placement in such center. The committee shall give parents of a child with an alleged disability an opportunity to consult with the committee or a representative thereof prior to determination that their child has a disability. (3) (a) In the event of an appeal of the determination of the disability or of the placement of a child in an individual educational program pursuant to subsection (1) of this section, or an appeal of the program to be offered, the local school district or state charter school shall first appoint an administrative law judge to make findings of fact and a recommendation concerning the matter at issue. The findings of fact and recommendation shall be delivered to the local school district board of education or the governing board of the state charter school. (b) If the local school district board of education or the governing board of the state charter school or the parent or guardian disagrees with the findings of the administrative law judge, either party may appeal to the commissioner of education for review. This review shall be conducted in accordance with procedures and timetables established by the state board of education, and a decision concerning the review shall be returned to the school district or state charter school and the parent or guardian. (4) Each child determined to have a disability by the committee pursuant to subsection (1) of this section shall be provided with an individual educational program which shall be developed in accordance with requirements established by the state board of education and shall be reviewed annually. Such individual educational program shall specify whether such student shall achieve the content standards adopted by the district or state charter school in which such student is enrolled or whether such student shall achieve individualized standards which would indicate the student has met the requirements of such student's individual educational program. When a child with a disability is to be placed outside of the district of residence, the receiving agency, institution, or school district providing the services shall cooperate in the development of the individual educational program. The individual educational program shall be coordinated with all individual plans required by other federal or state programs in order to provide for maximum coordination of service to the child with a disability, which may include the provision of appropriate services for the child with a disability, by agreement or contract with public agencies or nonprofit organizations or residential child care facilities. For children placed without the prior written approval of the school district of residence, the individual educational program shall be the responsibility of the facility providing the individual educational program. (4.5) (e) Nothing in this subsection (4.5) shall require a school district or state charter school to expend additional resources or hire additional personnel to implement the provisions of this section. (f) On or before June 1, 1995, the department of education shall develop guidelines for caseload management for instructors of blind children in the school districts and state charter schools of the state. Such guidelines will evaluate how much instructional time should be allotted for blind children, will reflect the varying levels of severity of such children's needs, and will be renewed and updated on a periodic basis to incorporate current research and practice. (4.7) (b) To enable a parent to make informed decisions concerning which educational options are best suited to the parent's child, all of the educational options provided by the school district or state charter school and available to the child at the time the child's individual educational program is prepared shall be explained to the parent. (g) Nothing in this subsection (4.7) shall require a school district or state charter school to expend additional resources or hire additional personnel to implement the provisions of this subsection (4.7). (5) In formulating recommendations for placement of a child with a disability, the committee shall: (d) Consider the cost to the school district or state charter school when choosing between two or more appropriate placements. (7) (a) When it is recommended by a school district or state charter school that a child be placed in a residential setting operated by a state agency outside of his the child's current district of residence, it is the duty of the current district of residence to notify the agency to which it is recommended that the child be sent, and the school district in which the agency is located, of the child's potential placement in such agency in the school district. The receiving agency and the receiving school district shall provide staff input into the final decision regarding placement. In the event that a disagreement exists between the recommending school district and the agency and school district receiving the child regarding the placement, the commissioner of education and the director of the state agency under which the facility or program in which the child is being placed is operated shall make the final determination of the placement. (9) If a teacher of a child with a disability determines that the child's presence in a general education classroom is so disruptive that other children's learning in the class is significantly impaired, the teacher may utilize the district's or state charter school's regular in-school disciplinary procedure unless it would be inconsistent with the child's individual educational program, or may request a review of the individual educational program or behavior plan or both to consider changes in services or placement. In making any such determination for placement or plan of discipline for the child, the teacher, the principal, and the staffing committee, if applicable, shall use the guidelines recommended by the department. (10) No school, state charter school, school district, or administrative unit that receives funds under article 54 of this title shall implement or enforce any rule or policy of the state department of education that requires or permits an administrative unit to appoint a person to act as an educational surrogate parent for the purpose of making educational decisions regarding a child's placement in special education services or for the purpose of consenting or refusing to consent to assessments prior to placement when the child's parent is unknown, unavailable, or fails to respond after reasonable efforts. SECTION 47. 22-20-109 (5), Colorado Revised Statutes, is amended to read: 22-20-109. Tuition. (5) When a child with a disability enrolls in and attends a district charter school or a state charter school pursuant to the provisions of part 1 of article 30.5 of this title, the district of residence shall be responsible for paying to the district or state charter school the tuition charge for the excess costs incurred in educating the child. The amount of the tuition charge shall be determined pursuant to guidelines developed by the department. Under the circumstances described in this subsection (5), the provisions of section 22-20-108 (8) shall not apply. SECTION 48. 22-20-114 (1) (b.7) and (2), Colorado Revised Statutes, are amended to read: 22-20-114. Funding of programs. (1) (b.7) (I) For the 1997-98 budget year and budget years thereafter, forty-nine million eight hundred thousand seven hundred fifty-six dollars shall be distributed to each administrative unit that maintains and operates special education programs in proportion to the amount of state funding the administrative unit received for the 1994-95 budget year divided by the appropriation for the 1994-95 budget year. (II) For the 1997-98 budget year and budget years thereafter, any increase in the appropriation made to the department over the amount distributed in accordance with subparagraph (I) of this paragraph (b.7) shall be distributed to a school district or a state charter school in proportion to the number of children with disabilities residing in such the district or the number of children with disabilities enrolled in the state charter school, divided by the total number of children with disabilities in the state. The increase in the appropriation to be distributed to school districts and state charter schools pursuant to this paragraph (b.7) shall be distributed as soon as practicable after the beginning of the fiscal year. For purposes of this paragraph (b.7), the number of children with disabilities shall be based upon the count taken in December of the immediately preceding budget year. (2) Payments made under the provisions of this article shall in no way affect the amount of other state aid for which a school district or state charter school may qualify. SECTION 49. 22-20-116 (6) and (7), Colorado Revised Statutes, are amended to read: 22-20-116. Minimum standards for educational interpreters for the deaf in the public schools - committee to recommend standards - rules. (6) After review and study of the recommendations of the interpreter standards committee, the state board, on or before July 1, 1998, shall promulgate rules setting minimum standards for educational interpreters for the deaf employed by or in the public schools in this state. The state board may revise and amend such minimum standards as it deems necessary. The state board shall promulgate rules that set forth the documentation that a person seeking employment as an educational interpreter for the deaf in a public school must submit to the employing school district or state charter school. (7) On or after July 1, 2000, in addition to any other requirements that a school district or a state charter school establishes, any person employed as an educational interpreter for deaf students on a full-time or part-time basis by or in a school district or a state charter school shall meet the minimum standards for educational interpreters for the deaf as established by rules of the state board. SECTION 50. 22-24-102, Colorado Revised Statutes, is amended to read: 22-24-102. Legislative declaration. The general assembly hereby finds, determines, and declares that there are substantial numbers of students in this state whose educational potential is severely restricted because a language other than English is their primary means of communication. The general assembly recognizes the need to provide for transitional programs to improve the English language skills of these students. The general assembly declares that, in order to improve educational and career opportunities for every student in this state, it is the purpose of this article to provide for the establishment of an English language proficiency program in the public schools and to provide for the distribution of moneys to the several school districts and state charter schools to help defray the costs of such program. SECTION 51. 22-24-103 (3) and the introductory portion to 22-24-103 (4), Colorado Revised Statutes, are amended, and the said 22-24-103 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-24-103. Definitions. As used in this article, unless the context otherwise requires: (3) "Program" means the English language proficiency program created by this article. Design and implementation of programs shall be the function of the districts and state charter schools. (3.5) "State charter school" means one or more charter schools that enter into charter contracts with the state board of education pursuant to section 22-30.5-108.1 or a board of cooperative services organized and existing pursuant to law that includes one or more state charter schools. (4) "Student whose dominant language is not English" means a public school student whose academic achievement and English language proficiency are determined by his local the student's school district or state charter school, using instruments and tests approved by the department, to be impaired because of his the student's inability to comprehend or speak English adequately due to the influence of a language other than English and who is one or more of the following: SECTION 52. 22-24-104, Colorado Revised Statutes, is amended to read: 22-24-104. English language proficiency program established - funding. (1) There is hereby established an English language proficiency program for students in kindergarten and grades one through twelve whose dominant language is not English. (2) The purpose of the program is to provide assistance to districts and state charter schools having students whose dominant language is not English. (3) No district or state charter school shall be eligible for more than two fiscal years of state entitlement moneys on behalf of a student identified for inclusion in this state-assisted program. (4) (a) The general assembly shall make an annual appropriation to the department for the implementation of this article. Funding for the program shall be from the department to the districts and state charter schools on a per-student basis. That portion of the annual appropriation scheduled for distribution to the districts and state charter schools shall be paid to the districts and state charter schools upon the determination, pursuant to section 22-24-106 (1) (d), of the number of students in each district or state charter school to be included in the program. (b) The general assembly shall annually make a separate appropriation to the department of education to cover the state's share of the estimated cost pursuant to the provisions of this section. If the amount of the appropriation made is less than the total amount determined to be the state's actual share of support to be provided all eligible students pursuant to the provisions of this section, then the amount to be distributed to any district or state charter school shall be in the same proportion as the amount of the appropriation made bears to such total amount determined to be the state's actual share. (c) (I) An amount equal to seventy-five percent of the appropriation made to the department for the 1998-99 fiscal year plus any increase in the annual appropriation made to the department over the appropriation made for the 1998-99 fiscal year or the amount needed to fully fund the program pursuant to this subparagraph (I), whichever is less, shall be used by the districts and state charter schools for students certified to be within section 22-24-103 (4) (a) or (4) (b). No such student shall be funded for more than an amount equal to four hundred dollars per year or an amount equal to twenty percent of the state average per pupil operating revenues, as defined in section 22-54-103 (12) for the preceding year as annually determined by the department, whichever is greater. (II) The remainder of the annual appropriation shall be used by the districts and state charter schools for students certified to be within section 22-24-103 (4) (c). No such student shall be funded for an amount greater than two hundred dollars per year or an amount equal to ten percent of the state average per pupil operating revenues, as defined in section 22-54-103 (12), for the preceding year as annually determined by the department, whichever is greater. (III) Any appropriated moneys not distributed by the department pursuant to subparagraph (I) of this paragraph (c) may be distributed by the department pursuant to subparagraph (II) of this paragraph (c). Any appropriated moneys not distributed by the department pursuant to subparagraph (II) of this paragraph (c) may be distributed pursuant to subparagraph (I) of this paragraph (c). (5) Each district and each state charter school shall provide the programs for district and state charter school students whose dominant language is not English; except that districts and state charter schools may cooperate in carrying out the provisions of this article. (6) Nothing in this article shall be construed to prohibit use of moneys made available under this article by a district or state charter school for bilingual programs, English-as-a-second-language programs, or any other method of achieving the purposes of this article. Districts and state charter schools conducting such programs shall receive moneys made available under this article only on the basis of the number of students whose dominant language is not English enrolled in such programs. SECTION 53. The introductory portion to 22-24-105 (1) and 22-24-105 (1) (b) (II), (1) (c), and (2), Colorado Revised Statutes, are amended to read: 22-24-105. District - powers and duties - repeal. (1) It is the duty of each district and state charter school to: (b) (II) Notwithstanding the provisions of subparagraph (I) of this paragraph (b), for the school years 2002-03, 2003-04, and 2004-05, a district or state charter school may assess students whose dominant language may not be English using any of the instruments or techniques approved by the department prior to January 1, 2002. This subparagraph (II) is repealed, effective July 1, 2005. (c) Certify each year to the department those students in the district or state charter school whose dominant language is not English, including specification of the number of non-English languages identified as dominant languages and of the number of students who speak each non-English language as their dominant language; (2) The assessment described in paragraph (b) of subsection (1) of this section and the certification described in paragraph (c) of subsection (1) of this section shall be conducted on at least an annual basis and each district and each state charter school shall present the results therefrom to the department for inclusion in the relevant annual report of achievement of accreditation indicators required by section 22-11-105. SECTION 54. 22-24-106 (1) (a), (1) (b), (1) (c), and (1) (d), Colorado Revised Statutes, are amended to read: 22-24-106. Department - powers and duties - advisory commission - repeal. (1) It is the duty of the department to: (a) Develop and approve a single instrument or technique to be used by districts and state charter schools in identifying eligible students; (b) Provide assistance, on request, to districts and state charter schools in the identification and assessment of students; (c) Audit the identification and testing procedures used by the districts and state charter schools and evaluate the effectiveness of the programs conducted by districts and state charter schools; (d) Determine which students are to be counted as eligible for purposes of calculating the district's or state charter school's entitlement; SECTION 55. 22-32-124 (1.5), (2), and (3), Colorado Revised Statutes, are amended, and the said 22-32-124 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-32-124. Building codes - zoning - planning. (1.5) Prior to contracting for a facility, a charter school shall advise in writing the planning commission, or governing body if no planning commission exists, which has jurisdiction over the territory in which the site is proposed to be located. The relevant planning commission or governing body may request the charter school to submit a site development plan for the proposed facility, but must issue such request, if any, within ten days after receiving the written advisement. If requested by the relevant planning commission or governing body, the charter school, acting on behalf of its sponsoring school board chartering authority, shall submit such a site development plan. The relevant planning commission or governing body may review and comment on such plan to the governing body of the charter school, but must do so, if at all, within thirty days after receiving such plan. The relevant planning commission or governing body, if not satisfied with the response to such comments, may request a hearing before the board of education charter school's chartering authority regarding such plan. Such hearing shall be held, if at all, within thirty days after the request of the relevant planning commission or governing body. The charter school then may proceed with its site development plan unless prohibited from doing so by school board resolution of its chartering authority. Nothing in this subsection (1.5) shall be construed to limit the authority of a chartering authority to finally determine the location of charter schools and erect necessary buildings and structures. (2) (a) Notwithstanding the provisions of section 8-20-101 (4), C.R.S., upon request of the division of oil and public safety after consulting with the affected board of education or governing board of a state charter school, the appropriate building department of a county, town, city, or city and county wherein a building or structure has been erected pursuant to subsection (1) of this section may make the necessary inspections to determine that such building or structure has been erected in conformity with the standards of the division of oil and public safety and, if such building or structure is in conformity, shall issue the necessary certificate of occupancy prior to use of the building or structure by the school district or the state charter school. A fee may be charged for such inspections upon approval of the board of education or the governing board of the state charter school, if the amount of the fee is determined on the basis of the direct cost of providing such service. If the division of oil and public safety, after consulting with the affected board of education or governing board of a state charter school, requests inspections by the building department, such inspections shall be in lieu of any inspections made by the division of oil and public safety; except that this subsection (2) shall not be construed to relieve the division of oil and public safety of the responsibility to conduct such inspections if the appropriate county, town, city, or city and county agency does not conduct the inspections. Any county, town, city, or city and county conducting such inspections shall also be authorized to annually reinspect the building or structure to assure that it is maintained and operated in accordance with the fire code adopted by the director of the division of oil and public safety. The inspecting entity shall cooperate with the affected school district or state charter school in carrying out the duties of this section. (b) If the division of oil and public safety conducts the necessary inspection to determine that a building or structure erected pursuant to subsection (1) or (1.5) of this section has been erected in conformity with the standards of the division of oil and public safety, it shall charge a fee of two hundred dollars for such inspection; except that the director of the division of oil and public safety by rule or as otherwise provided by law may reduce the amount of the fee if necessary pursuant to section 24-75-402 (3), C.R.S., to reduce the uncommitted reserves of the fund to which all or any portion of the fee is credited. After the uncommitted reserves of the fund are sufficiently reduced, the director of the division of oil and public safety by rule or as otherwise provided by law may increase the amount of the fee as provided in section 24-75-402 (4), C.R.S. Any fees collected by the division of oil and public safety pursuant to this paragraph (b) shall be transmitted to the state treasurer, who shall credit the same to the public safety inspection fund created pursuant to section 8-1-151, C.R.S. (3) The county, town, city, city and county, or fire protection district providing fire protection service for the buildings and structures of a school district or of a state charter school may annually inspect such buildings and structures to assure that they are maintained in accordance with the fire code adopted by the director of the division of oil and public safety unless the board of education of the district or the governing board of the state charter school has contracted for such inspections to be conducted by a person qualified to conduct such inspections by reason of experience, training, or certification. (4) As used in this section, unless the context otherwise requires: (a) "Charter school" means a public school that enters into a charter contract pursuant to the provisions of part 1 of article 30.5 of this title and includes both a district charter school and a state charter school. (b) "Chartering authority" means, in the case of a district charter school, the local board of education that enters into a charter contract with the district charter school or, in the case of a state charter school, the state board. (c) "District charter school" means a charter school that enters into a charter contract with a local board of education. (d) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 56. 22-37-104 (2) (e), Colorado Revised Statutes, is amended to read: 22-37-104. Qualification. (2) A program shall: (e) Include provisions for the dissemination of the results of the program to the state board, school board or governing board of the participating public school, parents, guardians, or legal custodians with students attending the participating public school, and any other interested persons. SECTION 57. 22-51-101, Colorado Revised Statutes, is amended to read: 22-51-101. Legislative declaration. It is declared to be the policy of this state to furnish financial aid to school districts and state charter schools of the state for the transportation of pupils to and from their places of residence and the public schools which they attend, including transportation for purposes of special education and vocational education, and for board in lieu of transportation. SECTION 58. 22-51-102 (1) (b), (3), and (4), Colorado Revised Statutes, are amended, and the said 22-51-102 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-51-102. Definitions. As used in this article, unless the context otherwise requires: (1) (b) "Current operating expenditures for pupil transportation" shall not be reduced by revenues received by a school district or a state charter school from fees imposed and collected for pupil transportation pursuant to a resolution adopted by the board of education of such district in accordance with the provisions of section 22-32-113 (5) or by the governing board of the state charter school. (3) "Pupil transportation" means the transportation of pupils regularly enrolled in the public schools through grade twelve to and from their places of residence and the public schools in which enrolled, including any site attended for special education or vocational education, and to and from one school of attendance and another in vehicles owned or rented and operated by a school district or state charter school or under contract with a school district or state charter school. (4) "Reimbursement entitlement" means the amount of reimbursement to which a school district or a state charter school is entitled under the provisions of section 22-51-104. (5) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 59. 22-51-104, Colorado Revised Statutes, is amended to read: 22-51-104. Methods of determining reimbursement entitlement. (1) Except as otherwise provided in subsection (1.5) of this section, for financial aid in providing pupil transportation, for entitlement periods ending on June 30, 1988, and thereafter, each school district and state charter school shall have a reimbursement entitlement in an amount determined as follows: (a) Thirty-seven and eighty-seven one-hundredths cents for each mile traveled by vehicles operated by or for the school district or state charter school in providing pupil transportation during the entitlement period. The number of miles traveled shall be determined by the state board of education based upon information submitted pursuant to section 22-51-105. (b) Thirty-three and eighty-seven one-hundredths percent of any amount by which the school district's or state charter school's current operating expenditures for pupil transportation during the entitlement period exceeded the school district's or state charter school's reimbursement entitlement under the provisions of paragraph (a) of this subsection (1); and (c) Not more than sixty percent of the costs of contracts entered into by a school district pursuant to section 22-32-110 (1) (w) or entered into by a state charter school pursuant to section 22-30.5-104 (7) (b), for the purpose of conserving fuel or reducing operating or capital expenditures, or both, for pupil transportation under public transportation programs which comply with the code of federal regulations, Title 49, parts 390 to 397, or successor regulations thereto. Reimbursement entitlements under this paragraph (c) shall not be greater than those the school district or state charter school would otherwise receive if it operated its own vehicles or contracted for the exclusive transportation of pupils. (1.5) (a) Repealed. (b) Notwithstanding the provisions of subsection (1) of this section, for entitlement periods ending on June 30, 1989, and thereafter, no school district or state charter school shall receive a reimbursement entitlement in an amount which is less than its reimbursement entitlement for the preceding entitlement period. For purposes of this paragraph (b), the reimbursement entitlement for the preceding entitlement period shall be the amount to which the school district or state charter school would have been entitled under the formula in subsection (1) of this section, and not the amount it actually received for the preceding entitlement period, if different from the amount under said formula. (2) In no event shall the reimbursement entitlement of any school district or state charter school under the provisions of subsection (1) of this section for any entitlement period exceed ninety percent of the total amount expended by the school district or state charter school during said entitlement period for current operating expenditures for pupil transportation. (3) For financial aid in providing board allowances in lieu of transportation, each school district or state charter school shall have a reimbursement entitlement for an entitlement period for each pupil who is temporarily residing during said entitlement period for the purpose of attending school at a place nearer the school of attendance than his the student's permanent residence, and for whom the district or state charter school has paid a board allowance in lieu of furnishing transportation, in the amount of one dollar for each day such board was paid by the district or state charter school. SECTION 60. 22-51-105, Colorado Revised Statutes, is amended to read: 22-51-105. Certifications by school boards and governing boards. (1) On or before August 15 of each year, the school board of each school district and the governing board of each state charter school, entitled to and desiring reimbursement under this article shall certify to the state board of education, on forms to be provided by the commissioner of education, such information as the board shall deem necessary to determine the reimbursement entitlement of the district or state charter school, including, but not limited to, the total amount of the school district's or state charter school's current operating expenditures for pupil transportation during the preceding entitlement period, the total number of miles traveled and the total number of pupils transported on October 1, or the school day nearest said date, during the preceding entitlement period by vehicles operated by or for the school district or state charter school in providing pupil transportation, and the transportation route descriptions in effect on said date. (2) The department of education shall promulgate rules and regulations to allow for verification of the accuracy and appropriateness of the route mileages submitted by school districts and state charter schools pursuant to subsection (1) of this section. If the department determines that an overpayment has been made due to the submission of inaccurate or inappropriate route mileages, the department shall recover from the school district or state charter school an amount equal to the overpayment plus a penalty of not more than twenty percent of the overpayment. SECTION 61. 22-51-106, Colorado Revised Statutes, is amended to read: 22-51-106. Certification to and payment by state treasurer - deficiency in fund. (1) (a) On or before October 15 of each year, the commissioner of education shall certify to the state treasurer the amount of the advance reimbursement entitlement of each school district and state charter school for the current entitlement period and the amount of the final reimbursement entitlement of each school district and state charter school for the preceding entitlement period. The state treasurer shall thereupon pay from the public school transportation fund directly to the treasurer of each school district which has elected under the law to withdraw its funds from the custody of the county treasurer and directly to the treasurer of each state charter school the amount certified as the total reimbursement entitlement of the school district or state charter school; and, for all other school districts, he the state treasurer shall pay to the county treasurer of the county in which each school district has its headquarters the amount certified as the total reimbursement entitlement of each district, and the county treasurer shall forthwith credit to the general fund of each district in his the county the amount certified therefor. (b) For purposes of this section: (I) "Advance reimbursement entitlement" means an amount which a school district or state charter school is entitled to receive in the current entitlement period as an advance payment of its reimbursement entitlement for such period and which is equal to twenty percent of the reimbursement entitlement of the school district or state charter school for the preceding entitlement period. (II) "Final reimbursement entitlement" means the reimbursement entitlement of a school district or state charter school for the preceding entitlement period less any advance reimbursement entitlement received by said district or state charter school for said period. (III) "Total reimbursement entitlement" means the advance reimbursement entitlement and the final reimbursement entitlement of a school district or state charter school. (2) (a) In the event the amount of money appropriated by the general assembly to the public school transportation fund is less than the amount of the total reimbursement entitlements of all of the school districts and state charter schools authorized by this section, the amount to be distributed to each school district and state charter school shall be in the same proportion as the amount which the appropriation made bears to the total amount of the reimbursement entitlements of all school districts and state charter schools. (b) For the entitlement period beginning on or after July 1, 1993, the calculation in paragraph (a) of this subsection (2) shall be based on the amount of money appropriated by the general assembly to the public school transportation fund. For the entitlement period beginning on or after July 1, 1993, any district subject to a court-ordered desegregation order shall be entitled to reimbursement of one million five hundred thousand dollars, subject to separate appropriation by the general assembly, for pupil transportation in addition to any amount received pursuant to paragraph (a) of this subsection (2). SECTION 62. 22-51-107, Colorado Revised Statutes, is amended to read: 22-51-107. Requirements for participation. Unless otherwise authorized by the commissioner of education, any school district which or state charter school that has not filed the certifications required by section 22-51-105 on or before the date provided in said section or has not complied with the rules and regulations promulgated by the state board of education pursuant to section 22-51-108 shall not be entitled to any reimbursement under this article. SECTION 63. 22-51-108, Colorado Revised Statutes, is amended to read: 22-51-108. Rules and regulations. The state board of education shall promulgate rules and regulations for the administration of this article. Such rules and regulations shall include reasonable and adequate standards of safety in the maintenance and operation of buses, the maintenance of records by school districts and state charter schools, the length of bus routes, the number of children to be transported in the various types of buses, and such other rules and regulations pertaining to pupil transportation as will promote the welfare of the students and afford reasonable protection to the public. SECTION 64. 22-54-102 (1), Colorado Revised Statutes, is amended to read: 22-54-102. Legislative declaration - statewide applicability - intergovernmental agreements. (1) The general assembly hereby finds and declares that this article is enacted in furtherance of the general assembly's duty under section 2 of article IX of the state constitution to provide for a thorough and uniform system of public schools throughout the state; that a thorough and uniform system requires that all school districts and state charter schools operate under the same finance formula; and that equity considerations dictate that all districts and state charter schools be subject to the expenditure and maximum levy provisions of this article. Accordingly, the provisions of this article concerning the financing of public schools for budget years beginning on and after July 1, 1994, shall apply to all school districts and state charter schools organized under the laws of this state. SECTION 65. 22-54-103 (7) (c) and (8.5), Colorado Revised Statutes, are amended, and the said 22-54-103 is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read: 22-54-103. Definitions - repeal. As used in this article, unless the context otherwise requires: (3.5) "Denying district" shall have the same meaning as provided in section 22-30.5-112.1 (1) (b). (7) "Funded pupil count" means: (c) (I) For budget years commencing on and after July 1, 2003, the district's on-line pupil enrollment for the applicable budget year plus the district's preschool enrollment for the applicable budget year plus the greater of: (A) The district's pupil enrollment for the applicable budget year; or (B) The average of the district's pupil enrollment for the applicable budget year and the district's pupil enrollment for the immediately preceding budget year; or (C) The average of the district's pupil enrollment for the applicable budget year and the district's pupil enrollment for the two immediately preceding budget years; or (D) The average of the district's pupil enrollment for the applicable budget year and the district's pupil enrollment for the three immediately preceding budget years. (II) (A) Notwithstanding any provision of law to the contrary, for purposes of subparagraph (I) of this paragraph (c), for any budget year commencing prior to July 1, 2002, the district's pupil enrollment for that budget year shall be the district's pupil enrollment, as defined by paragraph (a) of subsection (10) of this section, as it existed prior to June 7, 2002. (B) This subparagraph (II) is repealed, effective July 1, 2005. (III) (A) Notwithstanding any provision of law to the contrary, for purposes of subparagraph (I) of this paragraph (c), for the 2000-01, 2001-02, and 2002-03 budget years, a district's pupil enrollment shall not include any pupils enrolled in a district preschool program pursuant to article 28 of this title. (B) This subparagraph (III) is repealed, effective July 1, 2006. (IV) Notwithstanding any provision of law to the contrary, for purposes of subparagraph (I) of this paragraph (c) for budget years beginning on or after July 1, 2004, a district's funded pupil count shall include the certified pupil enrollment and on-line pupil enrollment of each operating state charter school for which the district is the denying district. The department of education shall add the state charter school's certified pupil enrollment and on-line pupil enrollment to the funded pupil count of the district prior to calculating the district's total program pursuant to section 22-54-104. (8.5) "On-line pupil enrollment" means the number of pupils, on October 1 within the applicable budget year or the school day nearest said date, enrolled in, attending, and actively participating in, an on-line program created pursuant to section 22-33-104.6 by the district or by a charter school chartered by the district, minus any such pupils who were enrolled in any such on-line programs for the 2001-02 school year. In addition, "on-line pupil enrollment" means the number of pupils who meet the requirements specified in section 22-33-104.6 (4) (a) and transfer to an on-line program after October 1 of a school year. For budget years beginning on or after July 1, 2004, a district's on-line pupil enrollment shall include the certified on-line pupil enrollment of each operating state charter school for which the district is the denying district. The department of education shall add the state charter school's certified on-line pupil enrollment to the on-line pupil enrollment of the district prior to calculating the district's total program pursuant to section 22-54-104. (9.3) "Per pupil revenues" means the district's total program for any budget year divided by the district's funded pupil count for said budget year. (13.5) "State charter school" means a charter school that enters into a charter contract with the state board pursuant to the provisions of section 22-30.5-108.1. SECTION 66. 22-54-104 (1), Colorado Revised Statutes, is amended to read: 22-54-104. District total program. (1) (a) For every budget year, the provisions of this section shall be used to calculate for each district an amount that represents the financial base of support for public education in that district. Such amount shall be known as the district's total program. The district's total program shall be available to the district to fund the costs of providing public education, and, except as otherwise provided in section 22-54-105, the amounts and purposes for which such moneys are budgeted and expended shall be in the discretion of the district. (b) Notwithstanding the provisions of paragraph (a) of this subsection (1), if a district is the denying district of a state charter school, then the calculation of total program pursuant to the provisions of this section shall also represent the financial base of support for the state charter school, even though the state charter school is not a school of the district. The amount of the district's state share of total program that is withheld from the district and paid to the state charter school pursuant to the provisions of section 22-54-115 (1.3), shall not be available to nor under the control of the district, but shall be under the control of the governing board of the state charter school to fund the costs of providing public education to pupils enrolled in the state charter school, and the amounts and purposes for which such moneys are budgeted and expended shall be in the discretion of the state charter school. SECTION 67. 22-54-106 (1) (b) and (4), Colorado Revised Statutes, are amended, and the said 22-54-106 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 22-54-106. Local and state shares of district total program. (1) (b) Except as provided in subsection (8) subsections (8) and (11) of this section, the state's share of a district's total program shall be the difference between the district's total program and the district's share of its total program; except that no district shall receive less in state aid than an amount established by the general assembly in the annual general appropriation act based upon the amount of school lands and mineral lease moneys received pursuant to the provisions of article 41 of this title and section 34-63-102 (2), C.R.S., multiplied by the district's funded pupil count. (4) (a) The general assembly shall make annual appropriations to fund the state's share of the total program of all districts and to fund all state charter schools. (b) In the event that the appropriation for the state's share of the total program of all districts, including funding for state charter schools, under this article for any budget year, as established in the general appropriation act, is not sufficient to fully fund the state's share including funding for state charter schools, the department of education shall submit a request for a supplemental appropriation in an amount which will fully fund the state's share including funding for state charter schools. Such request shall be made to the general assembly during the fiscal year in which such underfunding occurs. (c) If a supplemental appropriation is not made by the general assembly to fully fund the state's share of the total program of all districts including funding for state charter schools or a supplemental appropriation is made to reduce the state's share of the total program of all districts including funding for state charter schools, the state aid of each district and the funding for each state charter school shall be reduced in accordance with the provisions of this paragraph (c). The total program of each district that receives state aid shall be reduced by a percentage determined by dividing the deficit in the appropriation or the reduction in the appropriation, whichever is applicable, by the total program of all districts which receive state aid. The state aid of each district shall be reduced by the amount of the reduction in the district's total program or the amount of state aid, whichever is less. The funding for each state charter school shall be reduced in proportion to the reduction in the total program of the district from which the state charter school's funding is withheld. The department of education shall see that the reduction in state aid required by this paragraph (c) is accomplished prior to the end of the budget year. (11) (a) Pursuant to the provisions of section 22-54-115, for each state charter school, the department of education shall withhold from the state share of the state charter school's denying district the lesser of: (I) An amount equal to one hundred percent of the district per pupil revenues multiplied by the number of pupils enrolled in the state charter school who are not on-line pupils plus one hundred percent of the district per pupil on-line funding multiplied by the number of on-line pupils enrolled in the state charter school; or (II) The total amount of the state share payable to the district. If there is more than one state charter school that receives funding from the district's state share, the department shall divide the total amount of the state share payable to the district among the state charter schools on a per pupil basis. (b) The department shall pay the amount specified in paragraph (a) of this subsection (11), minus the amounts specified in section 22-30.5-112.1 (3), to the state charter school. The amount specified in this subsection (11) shall constitute a reduction in the state share of the state charter school's denying district. SECTION 68. 22-54-109 (1), (3), and (4), Colorado Revised Statutes, are amended to read: 22-54-109. Attendance in district other than district of residence. (1) Districts paying tuition for pupils of residence in the district to attend public schools in other Colorado school districts, in state charter schools, and in school districts of adjoining states shall report and be entitled to support for such pupils; except that no district shall report any pupil who is from another district and whose tuition is paid by the pupil's district of residence. (3) Every school district and state charter school shall report to the department of education, by district of residence, the number of pupils not included in the district's or state charter school's pupil enrollment but who are receiving educational services in residential child care facilities, community centers, regional centers, the school for the deaf and the blind, and other group care facilities or homes designated by the state board within the district's boundaries or in the state charter school. The department of education shall annually withhold an amount equal to the district of residence's per pupil operating revenues for each such child counted by local school districts but not actually attending classes in the district of residence and included on the roll of out-of-district placed children. The department shall forward to the district or state charter school or state institution or facility delivering the education, on a monthly basis, the proportional amount of the state average per pupil operating revenues. (4) For children with disabilities residing in a particular school district but receiving an education in another school district, a state institution or facility, a residential child care facility, or an eligible nonprofit organization within Colorado, the state average per pupil operating revenues shall be the district of residence's total responsibility under this article for the education of that child. The provisions of this subsection (4) shall not apply to children with disabilities enrolled in an interdistrict participating school district pursuant to the provisions of article 36 of this title. SECTION 69. 22-54-112 (2), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: 22-54-112. Reports to the state board. (2) (c) On or before November 10 of each year, the secretary of the governing board of each state charter school shall certify to the state board the pupil enrollment and the on-line pupil enrollment of the state charter school taken in the preceding October. SECTION 70. 22-54-114, Colorado Revised Statutes, is amended to read: 22-54-114. State public school fund. (1) There is hereby created in the office of the state treasurer a fund, separate from the general fund, to be known as the state public school fund. There shall be credited to said fund the net balance of the public school income fund existing as of December 31, 1973, and all distributions from the state public school income fund thereafter made, the state's share of all moneys received from the federal government pursuant to the provisions of section 34-63-102, C.R.S., and such additional moneys as shall be appropriated by the general assembly which are necessary to meet the state's share of the total program of all districts, funding for state charter schools, and the contingency reserve during the budget year. Moneys annually appropriated by the general assembly shall be transferred from the state general fund and credited to the state public school fund in four quarterly installments on July 1, September 30, December 31, and March 31 to assure the availability of funds for the required distribution of state moneys to school districts and state charter schools. Such quarterly installments shall be determined in accordance with estimates prepared by the department of education with respect to the required distribution of state moneys to school districts and state charter schools. (2) No later than thirty days prior to the beginning of the budget year, the department of education shall determine the estimated requirements in order to provide each district and each state charter school the amount it is eligible to receive from the state during the next ensuing fiscal year of the state. The appropriation by the general assembly shall be based on the requirements necessary to provide all districts and state charter schools with the amounts they are each eligible to receive from the state, pursuant to the provisions of this part 1, during the next ensuing fiscal year of the state. (2.5) The general assembly finds that implementation of section 22-7-603.5, including implementation of rules to uniquely identify individual students, has resulted in more accurate determinations of pupil enrollment and a savings in the amount required to fund the state's share of total program funding for school districts and state charter schools. For the 2003-04 budget year and budget years thereafter, the department of education shall allocate a portion of the amount of the in-year cost recovery occurring as a result of the use of unique student identifiers to fund implementation of the academic growth pilot program and the academic growth program pursuant to section 22-7-603.7. The amount allocated to the academic growth pilot program and the academic growth program pursuant to this subsection (2.5) shall not exceed two hundred thousand dollars in any budget year. (3) (a) Fifty percent of any unexpended balance of moneys appropriated by the general assembly in the state public school fund at the end of each fiscal year shall be transferred to the Colorado comprehensive health education fund created in section 22-25-109. The remaining fifty percent and any balances derived from other sources shall remain in said state public school fund and become available for distribution during the following fiscal year. (b) Notwithstanding the provisions of paragraph (a) of this subsection (3), any unexpended balance of moneys in the contingency reserve created pursuant to section 22-54-117 at the end of any fiscal year shall remain in the contingency reserve and shall not be transferred to any other fund. (4) For the 1997-98 fiscal year and fiscal years thereafter, the net amount recovered by the department during the applicable fiscal year, pursuant to school district and state charter school audits, as overpayments made to school districts and state charter schools that would otherwise be transmitted to the state treasurer for deposit in the general fund shall instead be transmitted to the state treasurer for deposit in the state public school fund. Such amount shall be available for appropriation to the department in subsequent fiscal years. SECTION 71. 22-54-115, Colorado Revised Statutes, is amended to read: 22-54-115. Distribution from state public school fund. (1) No later than June 30 of each year, the state board shall determine the amount of the state's share of the district's total program for the budget year beginning on July 1, and the total thereof for all districts, which amount shall be payable in twelve approximately equal monthly payments during such budget year; except that: (a) Such payments shall be adjusted following the certification of pupil enrollments, the certification of valuations for assessment to the state board pursuant to section 22-54-112 (1) and (2), and the certification of the amount of any impact assistance grants on behalf of school districts pursuant to section 30-25-302, C.R.S.; and (b) Such payments shall be adjusted in accordance with any district's instructions given pursuant to subsection (1.5) of this section; and (c) Such payments shall be adjusted in accordance with the provisions of subsection (1.3) of this section. (1.3) (a) In determining the state's share of each district's total program, the state board shall determine whether the district is a denying district of a state charter school. If a district is a denying district of a state charter school, the state board shall instruct the department of education to withhold from the amount of the state share otherwise payable to the district an amount equal to the lesser of: (I) One hundred percent of the district per pupil revenues multiplied by the number of pupils enrolled in the state charter school who are not on-line pupils plus one hundred percent of the district per pupil on-line funding multiplied by the number of on-line pupils enrolled in the state charter school; or (II) The total amount of the state share payable to the district. (b) The amount withheld, minus the amounts specified in section 22-30.5-112.1 (3), shall be payable to the state charter school in twelve approximately equal monthly payments during the budget year. If the department withholds the total amount of the state share payable to the district and there is more than one state charter school that receives funding from the district's state share, the department shall divide the total amount of the state share payable to the district among the state charter schools on a per pupil basis. (1.5) Any school district may give written instructions to the state board directing that a specified portion of a monthly payment or monthly payments that the district is otherwise entitled to receive pursuant to this section shall be transferred to the division of vocational rehabilitation in the department of human services for the district's cost of participating in school to work alliance programs. Such written instructions shall specify the amount to be transferred to the division of vocational rehabilitation from the district's payment for a specified month or months. Such written instructions shall be given to the state board no later than the fifth day of the first month in which such amount is to be transferred to the division of vocational rehabilitation. (2) No later than the fifteenth day of each month, the state board shall certify to the state treasurer the amount payable to each district and to each state charter school in accordance with subsection (1.3) of this section during said month and the amount, if any, to be transferred to the division of vocational rehabilitation during said month in accordance with subsection (1.5) of this section. (3) No later than the twenty-fifth day of each month, the state treasurer shall: (a) Pay the amount certified as payable to each district, less the total amount of any direct payments made by the state treasurer on behalf of charter schools chartered by each school district of any principal and interest due on bonds pursuant to section 22-30.5-406 directly to the treasurer of each district or, in accordance with written instructions from the district, directly to an account designated by the district that allows the district to retain title to the funds; and (b) Transfer the amount certified, if any, to the division of vocational rehabilitation; and (c) Pay the amount certified as payable to each state charter school directly to the treasurer of each state charter school or, in accordance with written instructions from the state charter school, directly to an account designated by the state charter school that allows the state charter school to retain title to the funds. (4) The state board shall take care to avoid overpayment of state moneys. If it is determined that any district or any state charter school has been overpaid in any month, the state board shall adjust the following monthly payment or payments to such district or state charter school so as to recover the amount overpaid. In the event that an overpayment cannot be recovered, the amount thereof shall be refunded to the state public school fund by the district or state charter school receiving the same. (5) (Deleted by amendment, L. 94, p. 800,  2, effective April 27, 1994.) (6) (a) Notwithstanding any provision of this section to the contrary, the department of education may withhold a portion of a state charter school's or a school district's monthly payment under this section if the state charter school or the school district fails to comply with the requirements specified in this title and in rules promulgated by the state board pertaining to reporting financial information to the department, including but not limited to financial reporting required under the statewide financial, student management, and human resource electronic data communications and reporting system implemented pursuant to section 22-44-105 (4) and reporting required for the department of education to conduct an audit pursuant to section 22-2-113 (1) (f). The department of education may withhold a portion of the payment only until such time as the state charter school or the school district complies with the reporting requirement. A school district may not obtain a loan pursuant to the provisions of section 22-54-110 to alleviate any cash flow management issues that may arise due to the withholding of payments pursuant to this subsection (6). (b) The department of education may withhold a portion of a district charter school's monthly payment pursuant to the provisions of paragraph (a) of this subsection (6) if the department of education makes direct monthly payments to the district charter school pursuant to section 22-30.5-112 (9) (d). SECTION 72. 22-54-117 (1), (1.5) (d), (1.6) (a), (2), (3), and (4), Colorado Revised Statutes, are amended to read: 22-54-117. Contingency reserve - capital construction expenditures reserve. (1) An amount to be determined by the general assembly shall be appropriated annually to the state public school fund as a contingency reserve. In deciding the amount to be appropriated to the contingency reserve, the general assembly may take into consideration any recommendations made by the department of education, but nothing in this section shall be construed to obligate the general assembly to provide supplemental assistance to all districts and state charter schools determined to be in need or fully fund the total amount of such need. The state board is authorized to approve and order payments from such contingency reserve for supplemental assistance to districts and state charter schools determined to be in need as the result of any or all of the following circumstances: (a) Financial emergencies caused by an act of God or arising from extraordinary problems in the collection of taxes; (b) Financial emergencies arising from the nonpayment of property taxes pending the outcome of an administrative appeal or litigation or both challenging the inclusion of the value of certain property in a county's abstract of assessment which resulted from a change in the applicable state law; (b.5) The amount of property tax levied and collected pursuant to section 39-10-114, C.R.S., is insufficient for the purpose of making abatements and refunds of property taxes which the district is required to make pursuant to said section; (c) Any contingency which could not have been reasonably foreseen at the time of the adoption of the annual budget, including, but not limited to, reductions in valuation of the district in excess of twenty percent as described in section 39-10-114 (1) (a) (I) (B.5), C.R.S.; (d) Unusual financial burden caused by instruction of children who formerly resided outside the district but have been assigned to live within the district by courts or public welfare agencies. Such supplemental assistance shall not exceed the additional cost for current operations incurred by this circumstance. (e) Unusual financial burden caused by instruction of children who moved into the district following the pupil enrollment count date. Such supplemental assistance shall not exceed the additional cost incurred by the district due to the increase in pupil enrollment. The provisions of this paragraph (e) shall only be available to districts with a funded pupil count of two thousand or less. (f) Unusual financial burden caused by a significant decline in pupil enrollment as a result of detachment and annexation pursuant to a reorganization plan approved pursuant to article 30 of this title. (1.5) (d) Any supplemental assistance granted to a district charter school pursuant to this subsection (1.5) shall be provided to the chartering school district, and the school district shall distribute all such moneys to the district charter school and may not retain any portion of such moneys for any purpose. Any supplemental assistance granted to a state charter school pursuant to this subsection (1.5) shall be provided directly to the state charter school. (1.6) (a) For each quarter including and after the first quarter of the state's fiscal year 2001-02, all moneys that would otherwise be transferred to the general fund pursuant to section 3 (1) (b) (III) of article XXVII of the state constitution shall be transferred to the state public school fund as a contingency reserve exempt from any restriction on spending, revenues, or appropriations, including, without limitation, the restrictions of section 20 of article X of the state constitution. The state board is authorized to approve and order payments from the moneys transferred pursuant to this subsection (1.6) only for supplemental assistance to districts or state charter schools for capital expenditures to address immediate safety hazards or health concerns within existing school facilities either by repairing, remodeling, or refurbishing the existing school facilities or by constructing new school facilities to replace the existing school facilities. (2) Application by a district or a state charter school for supplemental assistance pursuant to either subsection (1) or (1.5) of this section shall set forth fully the grounds upon which it relies for assistance and shall be sworn to under oath by the president and secretary of the district board of the district or by the president and secretary of the state charter school's governing board. (3) The state board shall conduct such investigation as it deems proper, and, if it finds that an application should be approved, it shall determine the amount to be paid. In determining which districts and state charter schools receive payments pursuant to this section and the amount of such payments, the state board shall consider the amount of the supplemental assistance requested by the district as a percentage of the district's total program and the amount of the supplemental assistance requested by the state charter school as a percentage of the state charter school's total operating revenue. By order upon the state treasurer, said board shall direct payment from the contingency reserve or school capital construction expenditures reserve, whichever is applicable, of such amount to the treasurer of the eligible district for credit to the general fund of the district or to the treasurer of the eligible state charter school for credit to the general fund of the state charter school. (4) Notwithstanding the provisions of subsection (1) of this section concerning circumstances under which the state board may approve and order payments from the contingency reserve, the state board may, in cases of extreme emergency, take into consideration such other factors as it may deem necessary and proper in granting supplemental assistance from the contingency reserve to those districts or state charter schools which could not maintain their schools without such additional financial assistance. SECTION 73. 22-54-120 (2), Colorado Revised Statutes, is amended to read: 22-54-120. Rules and regulations. (2) All reports and certifications required from secretaries of boards of education and from state charter schools pursuant to the provisions of this article shall be made in such manner and form as may be prescribed by the state board. SECTION 74. 22-54-122, Colorado Revised Statutes, is amended to read: 22-54-122. Small attendance center aid. (1) For the 1998-99 budget year and budget years thereafter, a district shall be eligible for aid pursuant to this section if: (a) The district has more than one elementary or secondary school attendance center; and (b) The district operates one or more elementary or secondary attendance centers with a pupil enrollment of less than two hundred and that are located twenty or more miles from any similar school attendance center in the same district. (1.5) For the 2004-05 budget year and budget years thereafter, a state charter school shall be eligible for aid pursuant to this section if the state charter school has a pupil enrollment of fewer than two hundred and is located twenty or more miles from any similar school attendance center. (2) (a) A district meeting the eligibility requirements of subsection (1) of this section shall be eligible to receive aid for each small attendance center as calculated by: Multiplying the pupil enrollment of the small attendance center by an amount equal to thirty-five percent of the difference between the district per pupil funding, as calculated pursuant to section 22-54-104, and the district per pupil funding, as calculated pursuant to section 22-54-104 except using the size factor calculated using the funded pupil count of the small attendance center; and then multiplying such amount by the percentage determined by dividing the difference between two hundred and the funded pupil count of the small attendance center by two hundred. (b) A state charter school meeting the eligibility requirements of subsection (1.5) of this section shall be eligible to receive aid as a small attendance center as calculated by: Multiplying the pupil enrollment of the state charter school by an amount equal to thirty-five percent of the difference between the district per pupil funding of the state charter school's denying district, as calculated pursuant to section 22-54-104, and such district per pupil funding, as calculated pursuant to section 22-54-104 except using the size factor calculated using the pupil enrollment of the state charter school; and then multiplying such amount by the percentage determined by dividing the difference between two hundred and the pupil enrollment of the state charter school by two hundred. (3) The general assembly shall appropriate annually an amount for small attendance center aid to be distributed pursuant to the formula formulas in subsection (2) of this section. In the event the amount of money appropriated by the general assembly is less than the amount of aid authorized by this section to all eligible districts and eligible state charter schools, the amount to be distributed to each eligible school district and eligible state charter school shall be in the same proportion as the amount that the appropriation bears to the total amount of aid for all eligible districts and eligible state charter schools. (4) If a school district receives small attendance center aid pursuant to this section for a small attendance center that is a district charter school, the school district shall forward the entire amount of such aid to the district charter school for which it was received. If a state charter school is eligible for small attendance center aid pursuant to this section, the department shall pay the small attendance center aid directly to the eligible state charter school. SECTION 75. 22-54-123, Colorado Revised Statutes, is amended to read: 22-54-123. National school lunch act - appropriation of state matching funds. For the 2001-02 budget year and budget years thereafter, the general assembly shall appropriate by separate line item an amount to comply with the requirements for state matching funds under the "National School Lunch Act", 42 U.S.C. sec. 1751 et seq. The department of education shall develop procedures to allocate and disburse the funds among participating school districts and state charter schools each year in an equitable manner as to comply with the requirements of said act. In any participating school district that, prior to the enactment of this section, subsidized school lunch service with moneys from the school district's general fund, moneys received by such school district pursuant to this section shall be applied in addition to, and not in lieu of, the amount of the school district's subsidy. Any moneys received pursuant to this section shall be used only for the provision of the district's or the state charter school's school lunch program. SECTION 76. 22-54-123.5, Colorado Revised Statutes, is amended to read: 22-54-123.5. School breakfast program - appropriation - low-performing schools. (1) For the 2002-03 budget year and each budget year thereafter, the general assembly may appropriate by separate line item an amount to assist school districts and low-performing state charter schools that are providing a school breakfast program through participation in programs authorized under the "National School Lunch Act", 42 U.S.C. sec. 1751 et seq., or the "Child Nutrition Act of 1966", 42 U.S.C. sec. 1771 et seq. The department shall develop procedures to appropriately allocate and disburse the funds among participating school districts and low-performing state charter schools. Each school district that receives moneys pursuant to this section shall use such moneys to create, expand, or enhance the school breakfast program in each low-performing school of the receiving district with the goal of improving the academic performance of the students attending such schools. Each low-performing state charter school that receives moneys pursuant to this section shall use the moneys to create, expand, or enhance the state charter school's breakfast program with the goal of improving the academic performance of the students attending the school. (2) As used in this section, "low-performing school" and "low-performing state charter school" means a school that received in the preceding school year an academic performance rating of low or unsatisfactory pursuant to section 22-7-604. SECTION 77. 22-54-124 (1) (b), (1) (c), (1) (e), (2), (3) (a) (III), (3) (b), and (4) and the introductory portion to 22-54-124 (6), Colorado Revised Statutes, are amended, and the said 22-54-124 (1) is further amended BY THE ADDITION OF A NEW PARAGRAPH, to read: 22-54-124. State aid for charter schools - use of state education fund moneys. (1) As used in this section: (b) "Charter school" means a district or a state charter school as described in section 22-30.5-104. (c) "District's certified charter school pupil enrollment" means the total number of pupils who are not on-line pupils, as defined in section 22-30.5-103 (1) (b.5) 22-30.5-103 (7), expected to be enrolled in all qualified charter schools that will receive funding from the district pursuant to section 22-30.5-112 for the budget year for which state education fund moneys are to be appropriated and distributed pursuant to subsection (4) of this section, as certified by the department of education pursuant to paragraph (b) of subsection (3) of this section during the budget year that immediately precedes said budget year. (e) "Operating revenues" means the total amount of funding that a charter school receives from a district for a budget year pursuant to section 22-30.5-112 minus the amounts required by section 22-30.5-112 (2) (a.7) to be allocated for capital reserve purposes or the management of risk-related activities. For purposes of a state charter school, "operating revenues" means the total amount of funding that the state charter school receives from the department for a budget year pursuant to section 22-30.5-112.1, minus the amounts required by section 22-30.5-112.1 (5). (g) "State charter schools certified pupil enrollment" means the total number of pupils who are not on-line pupils, as defined in section 22-30.5-103 (7), expected to be enrolled in a qualified state charter school that will receive funding pursuant to section 22-30.5-112.1 for the budget year for which state education fund moneys are to be appropriated and distributed pursuant to subsection (4) of this section, as certified by the department of education pursuant to paragraph (b) of subsection (3) of this section during the budget year that immediately precedes said budget year. (2) (a) For the 2001-02 budget year and budget years thereafter, a district shall be eligible to receive state education fund moneys for district charter school capital construction pursuant to this section if at least one qualified district charter school will be receiving funding from the district pursuant to section 22-30.5-112 during the budget year for which state education fund moneys are to be distributed. (b) For the 2004-05 budget year and budget years thereafter, a state charter school shall be eligible to receive state education fund moneys for state charter school capital construction if the state charter school will be receiving funding from the department pursuant to section 22-30.5-112.1 during the budget year for which state education fund moneys are to be distributed. (3) (a) (III) (A) The total amount of state education fund moneys to be appropriated for all eligible districts for the 2003-04 budget year and each budget year thereafter shall be an amount equal to five million dollars. (B) For the 2003-04 budget year, and each budget year thereafter, the amount of state education fund moneys to be distributed to any eligible district shall be an amount equal to the percentage of the sum of the district's certified charter school pupil enrollment for all eligible districts in the state that is attributable to the eligible district multiplied by the total amount of state education fund moneys distributed to all eligible districts for the same budget year pursuant to sub-subparagraph (A) of this subparagraph (III). (C) For the 2004-05 budget year, and each budget year thereafter, the amount of state education fund moneys to be distributed to any eligible district and any eligible state charter school shall be an amount equal to the percentage of the sum of the district's certified charter school pupil enrollment and the state charter school's certified pupil enrollment for all eligible districts and eligible state charter schools in the state that is attributable to the eligible district or eligible state charter school multiplied by the total amount of state education fund moneys distributed to all eligible districts and eligible state charter schools for the same budget year pursuant to sub-subparagraph (A) of this subparagraph (III). (b) No later than February 1 of each budget year, the department of education shall certify to the education committees of the senate and the house of representatives and the joint budget committee of the general assembly the total number of pupils expected to be enrolled in all qualified charter schools in the state during the next budget year, as derived from reports provided to the department by districts pursuant to section 22-30.5-112 (1) and by state charter schools pursuant to section 22-30.5-112.1 (2) (a). For the purposes of any certification made during the 2003-04 budget year and budget years thereafter, a pupil expected to be enrolled in a qualified charter school as defined in sub-subparagraph (B) of subparagraph (I) of paragraph (f.6) of subsection (1) of this section shall be counted as one-half of one pupil. (4) For the 2001-02 budget year, the 2003-04 budget year, and each budget year thereafter, the general assembly shall annually appropriate from the state education fund created in section 17 (4) of article IX of the state constitution, to the department of education for distribution to eligible school districts and eligible state charter schools in accordance with the formula set forth in paragraph (a) of subsection (3) of this section, an amount equal to the total amount of moneys to be distributed to all districts and state charter schools as determined pursuant to said formula. From the moneys appropriated for a given budget year, the department shall make lump sum payments of all moneys to be distributed to each eligible school district and eligible state charter school during the budget year as soon as possible. (6) Pursuant to section 17 (3) of article IX of the state constitution, any moneys appropriated by the general assembly out of the state education fund, received by any eligible district or eligible state charter school pursuant to this section, and distributed to a qualified charter school by any district pursuant to this section and section 22-30.5-112.3 shall be exempt from: SECTION 78. Article 8 of title 23, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 23-8-101.5. Definitions. As used in this article, unless the context otherwise requires: (1) "State charter school" means a charter school that enters into a charter contract with the state board of education pursuant to the provisions of section 22-30.5-108.1, C.R.S. (2) "State charter school's per pupil operating revenues" means the amount received by a state charter school pursuant to the provisions of section 22-54-115 (1.3), C.R.S., for any budget year, divided by the number of pupils enrolled in the state charter school for that budget year, minus the minimum amount per pupil required by section 22-30.5-112.1 (5) (b), C.R.S., to be allocated for capital reserve or risk management purposes. SECTION 79. 23-8-102 (1), (2), (3), (4), and (5), Colorado Revised Statutes, are amended to read: 23-8-102. School districts and state charter schools conducting vocational education courses - eligibility for state funds. (1) Any school district or state charter school of the state conducting any course of vocational education, approved pursuant to section 23-8-103 by the state board for community colleges and occupational education, referred to in this article as the "board", is entitled to vocational education program support from funds appropriated for the purpose by the general assembly. The amount of vocational education program support which a district or state charter school is entitled to receive pursuant to provisions of this article shall be computed as follows: (a) The cost of providing the approved vocational education programs of the district or state charter school shall be computed in accordance with paragraph (c) of this subsection (1). The cost so computed shall be divided by the number of full-time equivalent students to be served by the programs, and the result shall be designated, for purposes of this article, as the district's or state charter school's vocational education program cost per full-time equivalent student. (b) As vocational education program support, the state shall provide, to each school district and each state charter school conducting an approved vocational education program for each twelve-month period beginning July 1, eighty percent of the first one thousand two hundred fifty dollars, or part thereof, by which the district's or state charter school's approved vocational education program cost per full-time equivalent student exceeds seventy percent of the district's per pupil operating revenues, as defined in section 22-54-103 (9), C.R.S., or seventy percent of the state charter school's per pupil operating revenues, for the school budget year during which such twelve-month period begins. In addition, if the district's or state charter school's approved vocational education cost per full-time equivalent student exceeds seventy percent of its per pupil operating revenues by an additional amount in excess of one thousand two hundred fifty dollars, the state shall provide fifty percent of such additional amount. (c) For the purpose of computing approved vocational education program costs, the following shall be included: (I) The cost of providing the services of instructional personnel for the time involved; (II) The cost of services to be provided by another education agency or institution; (III) The cost of necessary books and supplies; and (IV) The cost of equipment approved for purchase by the board. (V) Repealed. (2) To be eligible to receive such funds, the district or state charter school must assume the obligation of paying the balance of the program costs. (3) The provisions of this section shall not be construed to prevent any school district or state charter school from conducting any course in vocational education with costs in excess of those for which state vocational education program support funds are approved by the board. (4) Funds made available under this article shall be distributed quarterly on the basis of expenditure estimates furnished to the board by participating school districts and state charter schools. As soon as practicable after July 1 of each year, beginning in 1971, each participating school district and each participating state charter school shall file with the board a report comparing estimated and actual expenditures for all vocational education programs financed pursuant to the provisions of this article during the preceding twelve-month period. The board shall determine if such expenditures coincide with the estimates of such school district or state charter school and shall adjust the next quarterly payment as may be necessary to accommodate any underpayment or overpayment of state funds to the school district or state charter school. (5) If the appropriations to implement subsections (1) to (4) of this section are less than the total amount required to pay the vocational education program support for approved vocational education courses, the board shall prorate the amount to be paid each school district and each state charter school in the same proportion that the appropriation bears to such total amount so required for distribution. Any unexpended balance of any such appropriation shall revert to the general fund at the end of the fiscal year for which the appropriation is made. SECTION 80. 23-8-103, Colorado Revised Statutes, is amended to read: 23-8-103. Standards for eligibility for grants. (1) The board shall not approve vocational education program support to be provided under section 23-8-102 unless the courses of vocational education conducted by a school district or state charter school meet the standards prescribed in subsection (2) of this section. (2) Any such course shall: (a) Be designed to provide students with an entry level occupational skill; (b) Be of sufficient duration to provide entry level skills and related knowledge required by business and industry; (c) Have a technical advisory committee which functions at the state, regional, or local level to assist school districts and state charter schools in planning and conducting their vocational education curricula; (d) Be conducted in facilities that are sufficiently equipped to permit adequate training and education; such facilities may be located within or outside the school district, and they may be housed in buildings which are not owned or operated by a school district or a state charter school; (e) Meet an employment potential which is found to exist by any survey of the board concerning economic opportunities. (3) In approving programs and vocational education program support funds under this article, the board shall attempt to avoid unnecessary duplication in either facilities or staffing for vocational education in any school district, state charter school, or area of this state; and, where feasible, sharing of facilities shall be required by the board. (4) The board shall adopt such rules and regulations as may be necessary to administer the provisions of this article. SECTION 81. 23-15-103 (8) (a) (VIII), Colorado Revised Statutes, is amended, and the said 23-15-103 (8) (a) is further amended BY THE ADDITION OF A NEW SUBPARAGRAPH, to read: 23-15-103. Definitions. As used in this article, unless the context otherwise requires: (8) (a) "Educational institution" means any governmental, quasi-governmental, or nonprofit educational institution operating in this state that: (VIII) Is any public school district that qualifies as a growth district, as defined in section 22-2-125 (1) (b), C.R.S.; or (IX) Provides an educational program pursuant to a charter from the state board of education in accordance with applicable laws. SECTION 82. 29-1-304.5 (2), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: 29-1-304.5. State mandates - prohibition - exception. (2) The provisions of subsection (1) of this section shall not apply to: (f) Any order from the state board of education pertaining to the establishment, operation, or funding of a charter school or any modification of the statutory or regulatory responsibilities of school districts pertaining to charter schools. SECTION 83. Appropriation. In addition to any other appropriation, there is hereby appropriated, out of any moneys in the state charter school cash fund created pursuant to section 22-30.5-108.3 (2) (b), Colorado Revised Statutes, not otherwise appropriated, to the department of education, for the fiscal year beginning July 1, 2004, the sum of one hundred thousand dollars ($100,000), or so much thereof as may be necessary, for the implementation of this act. SECTION 84. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.