Fiscal Note
Fiscal Services Division
HF 813 – Charter School Programs (LSB2241HV.2)
Staff Contact: Lora Vargason (515.725.2249) lora.vargason@legis.iowa.gov
Michael Guanci (515.725.1286) michael.guanci@legis.iowa.gov
Fiscal Note Version – Final Action
Description
House File 813 establishes Iowa Code chapter 256E, which creates a new charter school
program and provides for two pathways to establish a charter school in the State. A charter
school can be established through application by a founding group created by a local school
board, thereby creating a new attendance center that would be part of a public school district. A
charter school can also be established through application by a founding group not created by a
local school board, thereby creating a charter school independent of a public school district and
having no boundary lines within the State. The charter school’s governing board is subject to
open meetings in accordance with Code section 21, and membership requirements for the
governing board of the charter school are detailed. Funding for each student attending a
charter school will flow through the district of residence, similar to open enrollment, and includes
the State cost per pupil, the teacher leadership supplement, and additional weightings as
detailed in the Bill. For students attending a charter school who had not been included in the
previous year’s enrollment count, the Bill establishes a General Fund standing unlimited
appropriation to the Department of Education to be paid to the charter school for the students’
initial year of enrollment in the charter school.
Background
Under Iowa Code section 256F.1, a charter school may be established by creating a new school
within an existing public school or converting an existing public school attendance center to
charter school status. Storm Lake/Iowa Central/Buena Vista Early College Charter High School
and West Central Charter High School are the two public charter schools in the State of Iowa.
For additional information on these charter school programs, please read the Department of
Education (DE) report Legislative Report: Charter and Innovation Zone Schools in Iowa.
According to a 2016-2017 school year report published by the National Alliance for Public
Charter Schools, 65.0% of public charter schools nationwide are freestanding and operate
independently and apart from any management organization. The remaining 35.0% of public
charter schools belong to some type of management organization or education service provider.
The two types of education service providers are charter management organizations (CMOs),
which hold a nonprofit tax status, or education management organizations (EMOs), which are
for-profit tax entities. For the 2016-2017 school year, 23.0% of public charter schools
contracted with a CMO and 12.0% of charter schools contracted with an EMO. Table 1
provides the top CMOs and Table 2 provides the top EMOs by enrollment for the 2016-2017
school year.
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Fiscal Impact
The LSA anticipates an increase of DE administration costs and the potential need for full-time
equivalent (FTE) positions to fulfill the oversight requirements in this Bill, but the number of new
charter school applications the State board may receive is unknown.
Federal fiscal and nonfiscal reporting requires inclusion of data for public charter schools. If a
charter school is independent from a school district, determinations will be needed regarding
eligibility and allocation methods used for federal funds.
There is a potential for double counting of students for State funding. For the initial year of
funding for a charter school, State funding is based on an estimate of enrolled students. The
potential students included in the charter school estimate may not actually attend the charter
school and would in turn be funded at the school where they are actually enrolled. A
reconciliation, based on actual enrollment, is to be completed during the subsequent payment to
the charter school. It is unclear if the initial year of funding will be provided to the charter school
through advance funding by the Department of Management, be provided through payments
from the student’s district of residence which through open enrollment protocols are typically
paid in February and July, or be provided through some other means.
It is unknown the number of students who would be included in the General Fund standing
unlimited appropriation for initial year enrollment in a charter school. Therefore, the
appropriation cannot be estimated at this time. The appropriation would include funding for any
student not included in the previous year’s enrollment count including students attending
nonpublic schools, private instruction students, or students entering kindergarten.
Sources
Iowa Department of Education
National Alliance for Public Charter Schools
/s/ Holly M. Lyons
June 8, 2021
Doc ID 1220089
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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Statutes affected:
Introduced: 256E.9, 257.6, 257.31, 282.9, 275.55A
Reprinted: 256E.7, 257.6, 257.31, 282.9, 275.55A
Enrolled: 256E.7, 257.6, 257.31, 282.9, 275.55A