SB4040 104TH GENERAL ASSEMBLY

LRB104 20759 LNS 34263 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB4040

Introduced 2/6/2026, by Sen. Cristina Castro

SYNOPSIS AS INTRODUCED:

105 ILCS 5/27A-7.5
105 ILCS 5/27A-9

Amends the Charter Schools Article of the School Code. Provides that on July 1, 2027, any charter school authorized by the State Board of Education and located outside of the geographical area of a district located in a city of over 500,000 inhabitants shall have its authorization transferred to the local board or boards for each district from which the charter school draws enrollment. Provides that all authorizer powers, duties, contracts, and pending business of the State Board as the school's authorizer must be transferred to the local board or boards. Provides that all charter contract terms shall remain in full force and effect unless amended by mutual agreement of the parties, except that the term of the contract shall be 7 years starting July 1, 2027. Provides that if a State-authorized charter school that is subject to transfer is authorized to enroll students from more than one district, the boards of all districts from which the charter school draws enrollment must establish a joint charter management team that consists of at minimum one administrator from each district. Provides that the joint charter management team must develop and execute a charter oversight plan that is submitted to the State Board as part of the charter certification process. Provides that final decisions of a local school board to deny, revoke, or not renew a charter are subject to judicial review under the Administrative Review Law. Removes language providing that: the State Board of Education may reverse a local board's decision to revoke or not renew a charter if the State Board finds that the charter school or charter school proposal (i) is in compliance with the Article and (ii) is in the best interests of the students it is designed to serve; the State Board may condition the granting of an appeal on the acceptance by the charter school of funding in an amount less than that requested in the proposal submitted to the local school board; and the State Board must appoint and utilize a hearing officer for any appeals. Makes conforming changes. Effective immediately.

A BILL FOR

AN ACT concerning education.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The School Code is amended by changing Sections 27A-7.5 and 27A-9 as follows:

(105 ILCS 5/27A-7.5)

Sec. 27A-7.5. State Charter School Commission; abolition and transfer to State Board; fee.

(a) (Blank).

(a-5) (Blank).

(b) (Blank).

(c) (Blank).

(d) (Blank).

(e) (Blank).

(f) (Blank).

(g) (Blank).

(g-5) (Blank).

(h) (Blank).

(i) (Blank).

(j) The State Board may charge a charter school that it authorizes a fee not to exceed 3% of the revenue provided to the school to be used exclusively for covering the cost of authorizing activities. Authorizing activities may include, but are not limited to: (i) soliciting, reviewing, and taking action on charter school proposals; (ii) hiring, training, and supervising staff engaged in authorizing activities; (iii) developing and conducting oversight, including regular monitoring, of authorized charter schools; (iv) reporting on best practices and performances of charter schools; (v) applying for, managing, and distributing grants and funds appropriated for charter schools and authorizing activities; (vi) training members of the State Board on their authorizing roles; and (vii) training other employees of the State Board on how to work with charter schools as their own local education agencies.

(k) On July 1, 2020, the State Charter School Commission or "Commission" (established by Public Act 97-152 as an independent State agency with statewide chartering jurisdiction and authority) is abolished and the terms of all members end. On that date, all of the powers, duties, assets, liabilities, contracts, property, records, and pending business of the Commission are transferred to the State Board. For purposes of the Successor Agency Act and Section 9b of the State Finance Act, the State Board is declared to be the successor agency of the Commission. Beginning on July 1, 2020, references in statutes, rules, forms, and other documents to the Commission shall, in appropriate contexts, be deemed to refer to the State Board. Standards and procedures of the Commission in effect on July 1, 2020 shall be deemed standards and procedures of the State Board and shall remain in effect until amended or repealed by the State Board.

On July 1, 2020, any charter school authorized by the Commission prior to July 1, 2020 shall have its authorization transferred to the State Board, which shall then become the school's authorizer for all purposes under this Article. On July 1, 2020, all of the powers, duties, assets, liabilities, contracts, property, records, and pending business of the Commission as the school's authorizer must be transferred to the State Board. At the end of its charter term, a charter school may reapply to the board or boards for authorization. On July 1, 2027, any charter school authorized by the State Board and located outside of the geographical area of a school district organized under Article 34 of this Code shall have its authorization transferred to the local board or boards for each district from which the charter school draws enrollment, in accordance with subsection (a-5) of Section 27A-9.

On July 1, 2020, all rules of the State Board applicable to matters falling within the responsibility of the Commission shall be applicable to the actions of the State Board.

(l) In any appeal filed with the State Board under this Article, both the applicant and the authorizing school district of the charter school shall have the right to request a hearing before the State Board. If more than one entity requests a hearing, then the State Board may hold only one hearing, wherein the applicant and the school district shall have an equal opportunity to present their respective positions.

(Source: P.A. 103-175, eff. 6-30-23.)

(105 ILCS 5/27A-9)

Sec. 27A-9. Term of charter; renewal.

(a) An initial charter shall be granted for a period of 5 school years. A charter may be renewed in incremental periods not to exceed 10 school years. Authorizers shall ensure that every charter granted on or after January 1, 2017 includes standards and goals for academic, organizational, and financial performance. A charter must meet all standards and goals for academic, organizational, and financial performance set forth by the authorizer in order to be renewed for a term in excess of 5 years but not more than 10 years. If an authorizer fails to establish standards and goals, a charter shall not be renewed for a term in excess of 5 years. Nothing contained in this Section shall require an authorizer to grant a full 10-year renewal term to any particular charter school, but an authorizer may award a full 10-year renewal term to charter schools that have a demonstrated track record of improving student performance.

(a-5) On July 1, 2027, any charter school authorized by the State Board and located outside of the geographical area of a district organized under Article 34 of this Code shall have its authorization transferred to the local board or boards for each district from which the charter school draws enrollment. On that date, all authorizer powers, duties, contracts, and pending business of the State Board as the school's authorizer must be transferred to the local board or boards. All charter contract terms shall remain in full force and effect unless amended by mutual agreement of the parties, except that the term of the contract shall be 7 years starting July 1, 2027. All references in the charter contract to the State Board shall, in appropriate context, be deemed to refer to the local board or boards for each district from which the charter school draws enrollment. Renewal or nonrenewal decisions of the local school board at the end of the initial 7-year term shall be determined as outlined in Section 27A-9 of this Code.

If a State-authorized charter school that is subject to transfer pursuant to this subsection (a-5) is authorized to enroll students from more than one district, the boards of all districts from which the charter school draws enrollment must establish a joint charter management team that consists of at minimum one administrator from each district. The joint charter management team must develop and execute a charter oversight plan that is submitted to the State Board as part of the charter certification process. The plan must detail the respective roles and responsibilities of each of the local boards that is a party to the agreement, including with respect to those authorizer powers and duties outlined in Section 27A-7.10. A multi-district charter school may only be held accountable to one set of goals, objectives, pupil performance standards, and content standards.

The State Board may adopt such rules as may be necessary to implement this subsection (a-5).

(b) A charter school renewal proposal submitted to the local school board or the State Board, as the chartering entity, shall contain:

(1) 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 proposal; and

(2) 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 those costs to other schools or other comparable organizations, in a format required by the State Board.

(c) A charter may be revoked or not renewed if the local school board or the State Board, as the chartering entity, clearly demonstrates that the charter school did any of the following, or otherwise failed to comply with the requirements of this law:

(1) Committed a material violation of any of the conditions, standards, or procedures set forth in the charter.

(2) Failed to meet or make reasonable progress toward achievement of the content standards or pupil performance standards identified in the charter.

(3) Failed to meet generally accepted standards of fiscal management.

(4) Violated any provision of law from which the charter school was not exempted.

In the case of revocation, the local school board or the State Board, as the chartering entity, shall notify the charter school in writing of the reason why the charter is subject to revocation. The charter school shall submit a written plan to the local school board or the State Board, whichever is applicable, to rectify the problem. The plan shall include a timeline for implementation, which shall not exceed 2 years or the date of the charter's expiration, whichever is earlier. If the local school board or the State Board, as the chartering entity, finds that the charter school has failed to implement the plan of remediation and adhere to the timeline, then the chartering entity shall revoke the charter. Except in situations of an emergency where the health, safety, or education of the charter school's students is at risk, the revocation shall take place at the end of a school year. Nothing in this Section shall be construed to prohibit an implementation timetable that is less than 2 years in duration. No local school board may arbitrarily or capriciously revoke or not renew a charter. Except for extenuating circumstances outlined in this Section, if a local school board revokes or does not renew a charter, it must ensure that all students currently enrolled in the charter school are placed in schools that are higher performing than that charter school, as defined in the State's federal Every Student Succeeds Act accountability plan. In determining whether extenuating circumstances exist, a local school board must detail, by clear and convincing evidence, that factors unrelated to the charter school's accountability designation outweigh the charter school's academic performance.

(d) (Blank).

(e) Notice of a local school board's decision to deny, revoke, or not renew a charter shall be provided to the State Board. Final decisions of a local school board are subject to judicial review under the Administrative Review Law.

The State Board may reverse a local board's decision to revoke or not renew a charter if the State Board finds that the charter school or charter school proposal (i) is in compliance with this Article and (ii) is in the best interests of the students it is designed to serve. The State Board may condition the granting of an appeal on the acceptance by the charter school of funding in an amount less than that requested in the proposal submitted to the local school board. The State Board must appoint and utilize a hearing officer for any appeals conducted under this subsection. Final decisions of the State Board are subject to judicial review under the Administrative Review Law.

(f) Notwithstanding other provisions of this Article, if the State Board on appeal reverses a local board's decision or if a charter school is approved by referendum, the State Board shall act as the authorized chartering entity for any charter school under its authority as of the effective date of this amendatory Act of the 104th General Assembly the charter school and shall perform all functions under this Article otherwise performed by the local school board. The State Board shall report the aggregate number of charter school pupils resident in a school district to that district and shall notify the district of the amount of funding to be paid by the State Board to the charter school enrolling such students. The charter school shall maintain accurate records of daily attendance and student enrollment and shall enter data on the students served, their characteristics, their particular needs, the programs in which they participate, and their academic achievement into the statewide student information system established by the State Board. The State Board shall withhold from funds otherwise due the district the funds authorized by this Article to be paid to the charter school and shall pay such amounts to the charter school in quarterly installments, calculated as follows:

(1) The amount of the first quarterly payment shall be based on the projected number of students who will be enrolled in the charter school in the upcoming school year, multiplied by one-fourth of the resident district's per capita tuition amount. Each charter school shall submit its projected enrollment by no later than August 1 of each year on a form provided by the State Board for this purpose.

(2) The amount of the second quarterly payment shall be calculated such that the aggregate amount of the first and second quarterly installments is equal to the number of students reported as enrolled at the charter school on October 1 in the State Board's student information system, multiplied by one-half of the resident district's per capita tuition amount.

(3) The amount of the third quarterly payment shall be based on the number of students enrolled in the charter school on January 1, multiplied by one-fourth of the resident district's per capita tuition amount. Each charter school shall submit its January 1 enrollment by no later than January 5 of each year on a form provided by the State Board for this purpose.

(4) The amount of the fourth quarterly payment shall be calculated such that the aggregate amount of the third and fourth installments is equal to the number of students reported as enrolled at the charter school on March 1 in the State Board's student information system, multiplied by one-half of the resident district's per capita tuition amount.

(g) (Blank).

(h) The State Board shall pay directly to a charter school it authorizes any federal or State funding attributable to a student with a disability attending the school.

(Source: P.A. 103-175, eff. 6-30-23.)

Section 99. Effective date. This Act takes effect upon becoming law.