S1868

SENATE, No. 1868

STATE OF NEW JERSEY

INTRODUCED MARCH 10, 1997

By Senator RICE

An Act concerning State-operated school districts, amending and repealing various parts of the statutory law and supplementing chapter 7A of Title 18A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1995, c.294 (C.18A:6-31.3) is amended to read as follows:

1. As used in this act, "new school district" means a local school district, regional school district, a county vocational school district, a jointure commission, a county special services school district, or an educational services commission. [A new school district shall not include a State-operated school district established by the State Board of Education pursuant to P.L.1987, c.399 (C.18A:7A-34 et seq.).]

In the event that the school district of a municipality or districts in a group of municipalities are abolished and a subsequent district formed, the district subsequently formed shall constitute a new school district under this act and the previously existing school district or districts shall be considered the affected or constituent districts under this act.

(cf: P.L.1995, c.294 ,s.1)

2. Section 14 of P.L.1975, c.212 (C.18A:7A-14) is amended to read as follows:

14. a. (1) The commissioner shall review the results of the evaluations conducted and reports submitted pursuant to sections 10 and 11 of P.L.1975, c.212 (C.18A:7A-10 and 18A:7A-11). The commissioner shall establish a mechanism for parent, school employee and community resident input into the review process. If the commissioner shall find that a school district or county vocational school district satisfies the evaluation criteria, the commissioner shall recommend that the State board certify the school district for a period of seven years as providing a thorough and efficient system of education, contingent on continued progress in meeting the standards. If the commissioner finds that a school district can correct the deficiency or deficiencies without additional diagnostic monitoring or technical assistance, the commissioner may certify the school district with the condition that the district correct the deficiency within a period of time to be determined by the commissioner. If the commissioner shall find that a school district has failed to show sufficient progress toward achieving the thoroughness and efficiency standards established pursuant to section 4 of P.L.1996,c.138 (C.18A:7F-4), the commissioner shall advise the local board of education of that determination, and shall direct that the district enter level II monitoring, as defined pursuant to law and regulation. Nothing herein shall preclude the commissioner from taking the steps set forth in section 6 of P.L.1996, c.138 (C.18A:7F-6) upon a finding that the district is failing to meet core curriculum content standards.

(2) The board of education of a school district which is directed to enter level II monitoring may appeal that decision to the State Board of Education. The State board may refer the hearing of that appeal to a committee of not less than three of its members, which committee shall hear the appeal and report thereon, recommending its conclusions, to the board and the board shall decide the appeal by resolution in open meeting. A determination of the appeal by the State board shall be considered final.

b. (1) When a district enters level II monitoring, the commissioner shall establish procedures whereby parents, school employees and community residents may meet with the commissioner or the commissioner's designee to discuss their concerns and the county superintendent shall appoint an external review team whose members shall be qualified by training and experience to examine the conditions in the specific district. In conjunction with the Department of Education, the team, at the direction of the commissioner, shall either examine only those aspects of the district's operations bearing on the areas of deficiency, or shall examine all aspects of the district's operation, including but not limited to education, governance, management and finance. In addition, the team shall examine conditions in the community which may adversely affect the ability of the pupils to learn and the team may recommend measures to mitigate the effects of those conditions. The team shall report its findings and conclusions, including directives to be utilized by the district in the preparation of a corrective action plan to achieve certification and recommendations as to the technical assistance which the district will require in order to effectively implement the corrective action plan, to the commissioner. The commissioner shall direct the district to respond to the report of the external review team in establishing a corrective action plan. The corrective action plan shall be submitted to and approved by the commissioner. The commissioner shall assure that the local district's budget provides the resources necessary to implement the approved plan, including the necessary technical assistance. The entire cost of those activities associated with the review team shall be paid by the Department of Education. The commissioner shall also have the authority to order necessary budgetary reallocations within the district, or such other measures as he deems necessary and appropriate. Further, nothing herein shall preclude the commissioner from taking the steps set forth in section 6 of P.L.1996, c.138 (C.18A:7F-6) upon a finding that the district is failing to meet core curriculum content standards.

(2) If the commissioner finds that the district is unsuccessful in correcting the deficiencies noted in the evaluation process, the commissioner shall direct that the district enter level III monitoring, as defined pursuant to law and regulation. However, if the commissioner determines that a district is making reasonable progress toward correcting deficiencies, the commissioner may grant an extension for a specific period of time. During this extension the district will remain under level II monitoring. At the end of the extension the commissioner shall determine whether the district is eligible for certification or if the district must be directed to enter level III monitoring.

c. (1) When a district which has had a comprehensive examination of all aspects of the district's operations by an external review team pursuant to subsection b. of this section is directed to enter level III monitoring the commissioner shall prepare an administrative order directing the corrective actions which shall be taken by the district based upon the findings and conclusions of the level II external review team and the department's monitoring of the level II plan. The commissioner shall insure that technical assistance is provided to the district in order to implement those actions. The commissioner shall also have the power to order necessary budgetary reallocations within the district, or such other measures as the commissioner deems necessary and appropriate. Further, nothing herein shall preclude the commissioner from taking the steps set forth in section 6 of P.L.1996, c.138 (C.18A:7F-6) upon a finding that the district is failing to meet core curriculum content standards.

(2) When a district which has not had a comprehensive examination of all aspects of the district's operations by an external review team pursuant to subsection b. of this section is directed to enter level III monitoring, the commissioner shall designate the county superintendent to appoint an external review team whose members shall be qualified by training and experience to examine the conditions in the specific district. In conjunction with the Department of Education, the team shall examine all aspects of the district's operations including but not limited to education, governance, management and finance. The team shall report its findings and conclusions, including directives to be utilized in the preparation of a corrective action plan to achieve certification, to the commissioner. The commissioner shall prepare an administrative order directing the corrective actions which shall be taken by the district based upon the findings and conclusions of the level III external review team and the department's monitoring of the level II plan. The commissioner shall insure that technical assistance is provided to the district in order to implement those actions. The commissioner shall also have the power to order necessary budgetary reallocations within the district, or such other measures as the commissioner deems necessary and appropriate. Further, nothing herein shall preclude the commissioner from taking the steps set forth in section 6 of P.L.1996, c.138 (C.18A:7F-6) upon a finding that the district is not meeting core curriculum content standards.

(3) The board of education of a school district which is directed to enter level III monitoring may appeal that decision to the State Board of Education. The State board may refer the hearing of that appeal to a committee of not less than three of its members, which committee shall hear the appeal and report thereon, recommending its conclusions, to the board and the board shall decide the appeal by resolution in open meeting. A determination of the appeal by the State board shall be considered final.

(4) If the commissioner finds, based upon the findings and directives of the level II or level III review team and the Department of Education, that conditions within the district may preclude the successful implementation of a corrective action plan or that the district has failed to make reasonable progress in the implementation of a corrective action plan to achieve certification, the commissioner shall direct that a comprehensive compliance investigation be conducted by the Department of Education. If the commissioner directs that a comprehensive compliance investigation be conducted, the commissioner may order any necessary action to insure the security of the books, papers, vouchers and records of the district.

d. Whenever a district in level II monitoring is directed to establish a corrective action plan or whenever a district in level III monitoring shall be required to implement an approved corrective action plan pursuant to this section, the commissioner shall determine the cost to the district of implementation of those portions of the corrective action plan which are directly responsive to the district's deficiencies as identified in the report of the external review team or, where applicable, by the commissioner. In making this fiscal assessment, the commissioner shall identify those aspects of the corrective action plan which are already contained in the district's current expense budget. Where appropriate, the commissioner shall reallocate funds within the district's budget to support the corrective action plan. Once reallocated, any transfers among line items of the district's budget may occur only with the commissioner's approval. The commissioner shall further determine the amount of additional revenue, if any, needed to implement the corrective action plan and shall recertify a budget for the district.

e. A comprehensive compliance investigation shall entail a thorough and detailed examination of a district's educational programs, fiscal practices, governance and management. Based on the investigation, the commissioner shall issue a report which will document any irregularities and list all those aspects of the corrective action plan established pursuant to subsections b. and c. of this section which have not been successfully implemented by the district or the conditions which would preclude the district from successfully implementing a plan. A copy of this report shall be given to the district. [The commissioner shall also order the local board to show cause why an administrative order, subject to the provisions of section 15 of P.L.1975, c.212 (C.18A:7A-15) and section 1 of P.L.1987, c.399 (C.18A:7A-34) should not be implemented. The plenary hearing before a judge of the Office of Administrative Law, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), upon said order to show cause shall be conducted in the manner prescribed by subdivision B of article 2 of chapter 6 of Title 18A of the New Jersey Statutes.

In the proceeding the State shall have the burden of showing that the recommended administrative order is not arbitrary, unreasonable or capricious.]

(cf: P.L.1996, c.138, s.37)

3. Section 15 of P.L.1975, c.212 (C.18A:7A-15) is amended to read as follows:

15. If [, after a plenary hearing,] the commissioner determines that it is necessary to take corrective action, the commissioner shall have the power to order necessary budgetary changes within the district or other measures the commissioner deems appropriate to establish a thorough and efficient system of education [with the exception of the creation of a State-operated school district]. The commissioner shall assure that the local district's budget provides the resources necessary to implement the order. [If the commissioner determines that the district has failed to take or is unable to take the corrective actions necessary to establish a thorough and efficient system of education, the commissioner shall recommend to the State board that it issue an administrative order creating a State-operated school district. Notwithstanding any other provision of law to the contrary and upon its determining that the school district is not providing a thorough and efficient system of education, the State board may direct the removal of the district board of education and the creation of a State-operated school district whose functions, funding and authority are defined in P.L.1987, c.399 (C.18A:7A-34 et seq.). No order for the creation of a State-operated school district shall issue solely on the basis of a district's failure to correct substandard physical facilities. Nothing herein shall limit the right of any party to appeal the State board's order to the Superior Court.]

(cf: P.L.1987, c.398, s.3)

4. Section 6 of P.L.1996, c.138 (C.18A:7F-6) is amended to read as follows:

6. a. The commissioner shall not approve any budget submitted pursuant to subsection c. of section 5 of this act unless he is satisfied that the district has adequately implemented within the budget the thoroughness and efficiency standards set forth pursuant to section 4 of this act. In those instances in which a district submits a budget set at less than its minimum T&E budget, the commissioner may, when he deems it necessary to ensure implementation of standards, direct additional expenditures, in specific accounts and for specific purposes, up to the district's T&E budget. A district which submits a budget set at less than its minimum T&E budget and which fails to meet core curriculum content standards in any school year shall be required to increase expenditures so as to meet at least the minimum T&E budget within the next two budget years. In those instances in which a district submits a budget at or above its minimum T&E budget, the commissioner may likewise, when he deems it necessary to ensure implementation of standards, direct additional expenditures, in specific accounts and for specific purposes, up to the T&E budget. In all cases, including those instances in which a district submits a budget above its T&E budget, up to and including its maximum T&E budget, the commissioner may direct such budgetary reallocations and programmatic adjustments, or take such other measures, as he deems necessary to ensure implementation of the required thoroughness and efficiency standards.

b. In addition, whenever the commissioner determines, through the results of Statewide assessments conducted pursuant to law and regulation, or during the course of an evaluation of school performance conducted pursuant to section 10 of P.L.1975, c.212 (C.18A:7A-10), that a district, or one or more schools within the district, is failing to achieve the core curriculum content standards, the commissioner may summarily take such action as he deems necessary and appropriate, including but not limited to:

(1) directing the restructuring of curriculum or programs;

(2) directing staff retraining or reassignment;

(3) conducting a comprehensive budget evaluation;

(4) redirecting expenditures;

(5) enforcing spending at the full per pupil T&E amount; and

(6) notwithstanding any provisions of the "New Jersey Employer-Employee Relations Act," P.L.1941, c.100 (C.34:13A-1 et seq.), to the contrary, reviewing the terms of future collective bargaining agreements.

For the purpose of evaluating a district's results on Statewide assessments pursuant to this subsection, the commissioner shall limit the use of these actions to those instances in which a school in a district has experienced at least three consecutive years of failing test scores.

The commissioner shall report any action taken under this subsection to the State board within 30 days. A board of education may appeal a determination that the district is failing to achieve the core curriculum content standards and any action of the commissioner to the State board.

Nothing in this section shall be construed to limit such general or specific powers as are elsewhere conferred upon the commissioner pursuant to law.

Nothing in this act shall be deemed to restrict or limit any rights established pursuant to the "New Jersey Employer-Employee Relations Act," P.L.1941, c.100 (C.34:13A-1 et seq.), nor shall the commissioner's powers under this act be construed to permit the commissioner to restrict, limit, interfere with, participate, or be directly involved in collective negotiations, contract administration, or processing of grievances, or in relation to any terms and conditions of employment. [This provision shall apply to a State-operated school district only after the terms and conditions of a contract have been finalized.]

c. Each Abbott district shall submit its proposed budget for the next school year to the commissioner seven days prior to the submission date for all other school district budgets. The review of the budget shall include, but not be limited to, an assessment of efforts to reduce class sizes, increase the breadth of program offerings, and direct funds into the classroom. If the commissioner determines during the review of an Abbott district budget that funds are not appropriately directed so that students in the districts are provided the educational opportunity to meet the core curriculum content standards, the commissioner shall direct the reallocation of funds within the budget. The commissioner shall approve any transfer of funds from instructional accounts to non-instructional accounts. In addition, if the commissioner directs the reallocation of funds from or between instructional accounts or from or between non-instructional accounts in the proposed budget, the district shall not transfer any funds to or from those accounts that were subject to reallocation without the prior approval of the commissioner. The commissioner shall, for any Abbott district, when he deems it necessary to ensure implementation of the thoroughness standards, direct additional expenditures above the T&E budget in specific accounts and for specific purposes, up to the maximum T&E budget without approval of the local voters or board of school estimate, as applicable.

d. In addition to the audit required of school districts pursuant to N.J.S.18A:23-1, the accounts and financial transactions of any school district in which the State aid equals 80% or more of its net budget for the budget year shall be directly audited by the Office of the State Auditor on an annual basis.

e. Notwithstanding any provision of law to the contrary, in the review of a school district's budget pursuant to subsection c. or e. of section 5 of this act, the commissioner shall not eliminate, reduce, or reallocate funds contained within the budget for pupil transportation services provided pursuant to N.J.S.18A:39-1.1 nor require the district to eliminate these funds from the base budget and to submit a separate proposal to the voters or board of school estimate pursuant to paragraph (9) of subsection d. of section 5 of this act for the inclusion of the funds within the proposed budget. The decision to provide such pupil transportation services shall be made by the board of education of the school district. In the case of a school budget that is defeated by the voters or a budget that is not approved by the board of school estimate, that decision shall be made in consultation with the municipal governing body or board of school estimate, as appropriate, or, in the case of a regional district, the municipal governing bodies.

(cf: P.L.1996, c.138, s.6)

5. N.J.S.18A:9-1 is amended to read as follows:

18A:9-1. School districts shall be classified as type I and type II school districts [, except that the State board may, by administrative order pursuant to its authority under section 15 of P.L.1975, c.212 (C.18A:7A-15), create a State-operated school district].

(cf: P.L.1987, c.399, s.20)

6. N.J.S.18A:10-1 is amended to read as follows:

18A:10-1. The schools of each school district shall be conducted, by and under the supervision of a board of education, which shall be a body corporate and which shall be constituted and governed, as provided by this title, for a type I, type II or regional school district, as the case may be [, but the State board pursuant to an administrative order issued by authority of section 15 of P.L.1975, c.212 (C.18A:7A-15) may create a State-operated school district which shall be conducted by a State district superintendent].

(cf: P.L.1987, c.399, s.21)

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

4. a. A charter school may be established by teaching staff members, parents with children attending the schools of the district, or a combination of teaching staff members and parents. A charter school may also be established by an institution of higher education or a private entity located within the State in conjunction with teaching staff members and parents of children attending the schools of the district. If the charter school is established by a private entity, representatives of the private entity shall not constitute a majority of the trustees of the school, and the charter shall specify the extent to which the private entity shall be involved in the operation of the school. The name of the charter school shall not include the name or identification of the private entity, and the private entity shall not realize a net profit from its operation of a charter school. A private or parochial school shall not be eligible for charter school status.

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

(1) At least 51% of the teaching staff in the school shall have signed a petition in support of the school becoming a charter school; and

(2) At least 51% of the parents or guardians of pupils attending that public school shall have signed a petition in support of the school becoming a charter school.

c. An application to establish a charter school shall be submitted to the commissioner and the local board of education [or State superintendent, in the case of a State-operated school district,] in the school year preceding the school year in which the charter school will be established. The board of education [or State superintendent] shall review the application and forward a recommendation to the commissioner within 60 days of receipt of the application. The commissioner shall have final authority to grant or reject a charter application.

d. The local board of education or a charter school applicant may appeal the decision of the commissioner to the State Board of Education. The State board shall render a decision within 30 days of the date of the receipt of the appeal. If the State board does not render a decision within 30 days, the decision of the commissioner shall be deemed final.

e. A charter school established during the 48 months following the effective date of this act, other than a currently existing public school which becomes a charter school pursuant to the provisions of subsection b. of section 4 of this act, shall not have an enrollment in excess of 500 students or greater than 25% of the student body of the school district in which the charter school is established, whichever is less.

(cf: P.L.1995, c.426, s.4)

8. (New section) No later than one year after the effective date of P.L. , c. (C. )(now pending before the Legislature as this bill), the Commissioner of Education shall establish a program to deal with fraud and mismanagement in school districts. The program shall include, but not be limited to, the monitoring of school districts for fraud and mismanagement, the prosecution of persons responsible for fraud and the removal of persons responsible for mismanagement, and provision for the establishment and oversight of a corrective plan to eliminate fraud and mismanagement in school districts.

9. The following acts and parts of acts are hereby repealed:

Section 5 of P.L.1987, c.398 (C.18A:7A-15.1);

Section 16 of P.L.1975, c.212 (C.18A:7A-16);

Sections 3 through 5 of P.L.1987, c.400 (C.18A:7A-31.2 through 18A:7A-31.4); and

P.L.1987, c.399 (C.18A:7A-34 through 18A:7A-52).

10. This act shall take effect immediately.

STATEMENT

This bill repeals the statutes which provide for the establishment of a State-operated school district. Under the current law, the Commissioner of Education may recommend to the State Board of Education, following a comprehensive compliance investigation, that an administrative order creating a State-operated school district be issued. The bill also requires the commissioner, within one year, to establish a program to deal with fraud and mismanagement in school districts.

Eliminates provisions for a State-operated school district and establishes program to deal with fraud and mismanagement.