HLS 14RS-76 ORIGINAL
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Regular Session, 2014
HOUSE BILL NO. 89
BY REPRESENTATIVE MILLER
SCHOOLS/FINANCE: Provides relative to the payment of accrued liabilities of retirement
systems and other retirement obligations from minimum foundation program funds
allocated to charter schools
AN ACT1
To amend and reenact R.S. 17:3995(A), relative to public funds for education; to provide2
relative to the amount of funds transferred to charter schools by school districts; to3
provide for definitions; to provide for calculations; and to provide for related matters.4
Notice of intention to introduce this Act has been published5
as provided by Article X, Section 29(C) of the Constitution6
of Louisiana.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 17:3995(A) is hereby amended and reenacted to read as follows: 9
ยง3995. Charter school funding10
A.(1) For the purpose of funding, a Type 1, 3, 3B, or 4 charter school the11
employees of which participate in the Teachers' Retirement System of Louisiana and12
the Louisiana School Employees' Retirement System Type 1, Type 3, Type 3B, and13
Type 4 charter school shall be considered an approved public school of the local14
school board entering into the charter agreement and shall receive a per pupil amount15
each year from the local school board based on the October first membership count16
of the charter school. Type 1B and Type 2 charter schools the employees of which17
participate in the Teachers' Retirement System of Louisiana and the Louisiana18
School Employees' Retirement System shall receive a per pupil amount each year19 HLS 14RS-76 ORIGINAL
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authorized by the state board each year as provided in the minimum foundation1
program approved formula. The per pupil amount provided to a such a Type 1, 1B,2
2, 3, 3B, or 4 charter school shall be computed annually and shall be equal to no less3
than the per pupil amount received by the school district in which the charter school4
is located from the following sources based on the district's October first5
membership count:6
(a) The state-funded per pupil allocation received by the district pursuant to7
the most recent legislatively approved minimum foundation program formula8
resolution, including all levels.9
(b)(i) Local revenues received during the prior year by the school district10
from the following sources:11
(aa) Sales and use taxes, less any tax collection fee paid by the school12
district.13
(bb) Ad valorem taxes, less any tax collection fee paid by the school district.14
(cc) Earnings from sixteenth section lands owned by the school district.15
(ii) For the purposes of this Subparagraph, local revenues shall exclude any16
portion which has been specifically dedicated by the legislature or by voter approval17
to capital outlay or debt service.18
(iii) For the purposes of this Subparagraph, local revenues of the Orleans19
Parish School Board also shall exclude the amounts set forth in R.S.20
17:1990(C)(2)(a)(iii) until such provisions relative to the specified amounts expire.21
(c) The provisions of this Paragraph permitting the calculation of the per22
pupil amount to be provided to a Type 1, 1B, 2, 3, 3B, or 4 charter school to exclude23
any portion of local revenues specifically dedicated by the legislature or by voter24
approval to capital outlay or debt service, shall be applicable only to a charter school25
housed in a facility or facilities provided by the district in which the charter school26
is located.27
(2) For the purpose of funding, a Type 1, 3, 3B, or 4 charter school the28
employees of which do not participate in either the Teachers' Retirement System of29 HLS 14RS-76 ORIGINAL
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Louisiana or the Louisiana School Employees' Retirement System shall be1
considered an approved public school of the local school board entering into the2
charter agreement and shall receive a per pupil amount each year from the local3
school board based on the October first membership count of the charter school.4
Type 1B and 2 charter schools the employees of which do not participate in either5
the Teachers' Retirement System of Louisiana or the Louisiana School Employees'6
Retirement System shall receive each year a per pupil amount authorized each year7
by the state board as provided in the minimum foundation program approved8
formula. The per pupil amount provided to such a Type 1, 1B, 2, 3, 3B, or 4 charter9
school shall be computed annually from the following sources based on the district's10
October first membership count:11
(a)(i) The state-funded per pupil allocation received by the district pursuant12
to the most recent legislatively approved minimum foundation program formula13
resolution, including all levels; however, this amount shall not include employer14
retirement costs. For the purposes of this Subparagraph, "employer retirement costs"15
means the per pupil cost of retirement expenses paid by the school district including16
the normal cost and unfunded accrued liability payments paid by the school district17
to the Teachers' Retirement System of Louisiana and the Louisiana School18
Employees' Retirement System as well as costs paid by the school district to cover19
health care or health insurance for retired teachers and school employees.20
(ii) The per pupil employer normal cost shall be calculated by multiplying21
the salary amount of the employees of the school district who are members of the22
applicable state retirement system by the employer's normal cost rate for that system23
as contained in the most recently approved system valuation and then dividing the24
resulting figure by the district's October first membership count. The resulting25
amount shall be multiplied by the number of pupils in the applicable charter school,26
and the total resulting therefrom shall be retained by the school district.27
(iii) The per pupil unfunded accrued liability cost shall be calculated by28
subtracting from the employer's contribution rate for the applicable system the29 HLS 14RS-76 ORIGINAL
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normal cost percentage for the applicable retirement system and multiplying the1
resulting figure by the salary amount of the employees of the school district who are2
members of such system. The resulting figure shall then be divided by the district's3
October first membership count. The resulting amount shall be multiplied by the4
number of pupils in the applicable charter school, and the total resulting therefrom5
shall be remitted directly to the applicable retirement system by the chartering6
authority.7
(iv) The per pupil cost of providing healthcare or health insurance for retired8
teachers and school employees shall be calculated by summing the applicable costs9
and dividing the resulting figure by the district's October first membership count.10
The resulting amount shall be multiplied by the number of pupils in the applicable11
charter school, and the total resulting therefrom shall be retained by the school12
district.13
(b)(i) Local revenues received during the prior year by the school district14
from the following sources:15
(aa) Sales and use taxes, less any tax collection fee paid by the school16
district.17
(bb) Ad valorem taxes, less any tax collection fee paid by the school district.18
(cc) Earnings from sixteenth section lands owned by the school district.19
(ii) For the purposes of this Subparagraph, local revenues shall exclude any20
portion which has been specifically dedicated by the legislature or by voter approval21
to capital outlay or debt service.22
(iii) For the purposes of this Subparagraph, local revenues of the Orleans23
Parish School Board also shall exclude the amounts set forth in R.S.24
17:1990(C)(2)(a)(iii) until such provisions relative to the specified amounts expire.25
(c) The provisions of this Paragraph permitting the calculation of the per26
pupil amount to be provided to a Type 1, 1B, 2, 3, 3B, or 4 charter school to exclude27
any portion of local revenues specifically dedicated by the legislature or by voter28
approval to capital outlay or debt service shall be applicable only to a charter school29 HLS 14RS-76 ORIGINAL
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housed in a facility or facilities provided by the district in which the charter school1
is located.2
(3) For the purpose of funding, a Type 1, 3, 3B, or 4 charter school the3
employees of which participate in either the Teachers' Retirement System of4
Louisiana or the Louisiana School Employees' Retirement System, but not both5
systems shall be considered an approved public school of the local school board6
entering into the charter agreement and shall receive a per pupil amount each year7
from the local school board based on the October first membership count of the8
charter school. Type 1B and 2 charter schools the employees of which participate9
in either the Teachers' Retirement System of Louisiana or the Louisiana School10
Employees' Retirement System, but not both systems, shall receive each year a per11
pupil amount authorized each year by the state board as provided in the minimum12
foundation program approved formula. The per pupil amount provided to such a13
Type 1, 1B, 2, 3, 3B, or 4 charter school shall be computed annually from the14
following sources based on the district's October first membership count:15
(a)(i) The state-funded per pupil allocation received by the district pursuant16
to the most recent legislatively approved minimum foundation program formula17
resolution, including all levels; however, this amount shall not include employer18
retirement costs. For the purposes of this Subparagraph,"employer retirement costs"19
means the cost per pupil of retirement expenses paid by the school district and20
includes the normal cost and unfunded accrued liability payments paid by the school21
district to the Teachers' Retirement System of Louisiana or the Louisiana School22
Employees' Retirement System as well as costs paid by the school district to cover23
health care or health insurance for retired teachers and school employees.24
(ii) The per pupil employer normal cost shall be calculated by multiplying25
the salary amount of the employees of the school district who would have been26
members of the applicable state retirement system if they were employees of the27
school board but are not members of the system by the employer's normal cost rate28
for that system as contained in the most recently approved system valuation and then29 HLS 14RS-76 ORIGINAL
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dividing the resulting figure by the district's October first membership count. The1
resulting amount shall be multiplied by the number of pupils in the applicable charter2
school, and the total resulting therefrom shall be retained by the school district.3
(iii) The per pupil unfunded accrued liability cost shall be calculated by4
subtracting from the employer's contribution rate for the system not being5
participated in by the charter school the normal cost percentage for the applicable6
retirement system not being participated in and multiplying the resulting figure by7
the salary amount of the employees of the school district who are members of such8
system. The resulting figure shall then be divided by the district's October first9
membership count. The resulting amount shall be multiplied by the number of pupils10
in the applicable charter school, and the total resulting therefrom shall be remitted11
directly to the applicable system by the chartering authority.12
(iv) The per pupil cost of providing healthcare or health insurance for retired13
teachers and school employees shall be calculated by summing the applicable costs14
and dividing the resulting figure by the district's October first membership count.15
The resulting amount shall be multiplied by the number of pupils in the applicable16
charter school, and the total resulting therefrom shall be retained by the school17
district.18
(b)(i) Local revenues received during the prior year by the school district19
from the following sources:20
(aa) Sales and use taxes, less any tax collection fee paid by the school21
district.22
(bb) Ad valorem taxes, less any tax collection fee paid by the school district.23
(cc) Earnings from sixteenth section lands owned by the school district.24
(ii) For the purposes of this Subparagraph, local revenues shall exclude any25
portion which has been specifically dedicated by the legislature or by voter approval26
to capital outlay or debt service.27 HLS 14RS-76 ORIGINAL
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(iii) For the purposes of this Subparagraph, local revenues of the Orleans1
Parish School Board also shall exclude the amounts set forth in R.S.2
17:1990(C)(2)(a)(iii) until such provisions relative to the specified amounts expire.3
(c) The provisions of this Paragraph permitting the calculation of the per4
pupil amount to be provided to a Type 1, 1B, 2, 3, 3B, or 4 charter school to exclude5
any portion of local revenues specifically dedicated by the legislature or by voter6
approval to capital outlay or debt service shall be applicable only to a charter school7
housed in a facility or facilities provided by the district in which the charter school8
is located.9
(4)(a) Initial allocation of the per pupil amount required in Paragraph (1)10
Paragraphs (1), (2), and (3) of this Subsection shall be based on estimates provided11
by the state Department of Education using the most recent projected prior year local12
revenue data and projected pupil counts available. Allocations shall be adjusted13
during the year to reflect actual pupil counts and actual prior year local revenue14
collections.15
(b) In order to provide for adjustments in allocations made to Type 2 charter16
schools as a result of changes in enrollment, the State Board of Elementary and17
Secondary Education may provide annually for a February fifteenth pupil18
membership count to reflect any changes in pupil enrollment that may occur after19
October first of each year. Any allocation adjustment made pursuant to this20
Subparagraph shall not be retroactive and shall be applicable for the period from21
March first through the end of the school year. The provisions of this Subparagraph22
relative to an allocation adjustment shall not be applicable to any Type 2 charter23
school that has had an increase or decrease in student enrollment of five percent or24
less in any school year for which the February fifteenth membership count occurs.25
(3) (5) Notwithstanding Paragraph (1) of this Subsection, a district with one26
or more Type 3B charter schools shall distribute minimum foundation program27
formula funds to each Type 1, 3, 3B, and 4 charter school using the weighted28
allocations provided for in the most recently adopted minimum foundation program29 HLS 14RS-76 ORIGINAL
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formula, except that any school board in a parish that contains a municipality with1
a population of three hundred thousand or more persons according to the latest2
federal decennial census shall use the allocation method provided for in this3
Paragraph no earlier than the 2018-2019 fiscal year for all Type 1 and 3 charter4
schools authorized by the school board and in operation prior to the 2013-20145
school year. Until that time, those schools shall be funded as provided in Paragraph6
(1) of this Subsection. For all other Type 1, 3, and 4 charter schools in such a parish,7
the school board may request the use of a differentiated distribution methodology to8
be approved by the state Department of Education prior to implementation.9
(4) (6)(a)(i) The state board, a local school board, and a local charter10
authorizer may annually charge each charter school they authorize a fee in an amount11
equal to two percent of the total per pupil amount as defined by this Subsection that12
is received by a charter school for administrative overhead costs incurred by the13
chartering authority for considering the charter application and any amendment14
thereto, providing monitoring and oversight of the school, collecting and analyzing15
data of the school, and for reporting on school performance. Such fee amount shall16
be withheld from the per pupil amount in monthly increments and shall not be17
applicable to any federal money or grants received by the charter school.18
Administrative overhead costs shall not include any cost incurred by the chartering19
authority to provide purchased services to the charter school. As provided by20
Subparagraph (b) of this Paragraph, a chartering authority or the Recovery School21
District, if applicable, may provide other services for a charter school and charge the22
actual cost of providing such services, but no such arrangement shall be required as23
a condition for authorizing the charter school.24
(ii) The state Department of Education may withhold and retain from state25
funds otherwise allocated to a local public school system through the minimum26
foundation program formula an amount equal to one quarter of one percent of the fee27
amount charged to a Type 3B charter school pursuant to Item (i) of this28 HLS 14RS-76 ORIGINAL
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Subparagraph for administrative costs incurred by the department for providing1
financial oversight and monitoring of such charter schools.2
(b) A charter school may contract with the chartering authority, or with the3
Recovery School District for a Type 5 charter school, for the direct purchase of4
specific services in addition to those included in administrative overhead costs,5
including but not limited to food services, special education services, transportation6
services, custodial and maintenance services, media services, technology services,7
library services, health services, and health benefits for active and retired employees.8
Such services shall be provided to the charter school at the actual costs incurred by9
the chartering authority or the Recovery School District as applicable. The amount10
paid by a charter school for such purchased services shall be in accordance with a11
written agreement entered into for this purpose by the charter school and the12
chartering authority or the Recovery School District as applicable. Such agreement13
shall be negotiated and executed prior to the beginning of each school year. Absent14
such an agreement as provided by this Subparagraph, the chartering authority or, if15
applicable, the Recovery School District shall have no authority to withhold from the16
charter school any funds relative to providing such services.17
(c) At least thirty days prior to the beginning of each fiscal year, each charter18
school shall be provided by its chartering authority with a projected budget detailing19
anticipated administrative overhead costs and planned uses for fees charged for such20
costs. By not later than ninety days following the end of each fiscal year, each21
charter school shall be provided by its chartering authority an itemized accounting22
of all administrative overhead costs. Additionally, by not later than ninety days23
following the end of each fiscal year, each charter school shall be provided by its24
chartering authority or the Recovery School District, if applicable, an itemized25
accounting of the actual cost of each purchased service provided to the charter26
school.27
(5) (7) Within fifteen days of the receipt of any state, local, or other funding28
to which the charter school is entitled or which came as a result of students enrolled29 HLS 14RS-76 ORIGINAL
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in the charter school, the chartering authority shall ensure that those funds are1
available for use by such charter schools.2
(6) (8)(a) A Type 2 school that participates in a state retirement system3
which has been renewed as provided in R.S. 17:3992(A) annually shall be funded in4
the full amount calculated as provided for in Paragraph (1) of this Subsection, as5
applicable. Such full funding shall be provided as a priority prior to the allocation6
of state funding to any other charter school funded by the state.7
(b) The full funding required in this Subsection shall include in any8
calculation all pupils enrolled pursuant to any authority of a renewed Type 2 charter9
to increase the enrollment of such school whether caused by increasing the number10
of pupils in authorized grades or by adding sequential grades pursuant to the school's11
charter or other authority granted by the state board.12
* * *13
Section 2. The Louisiana State Law Institute shall redesignate any citations in the14
law affected by the renumbering by this Act of Paragraphs in R.S. 17:3995(A), including15
changing the citation to "R.S. 17:3995(A)(2)" in R.S. 39:75(C)(1)(c) to "R.S. 17:3995(A)(3)"16
and the citation to "R.S. 17:3995(A)(6)" in R.S. 17:3992(A)(3) to "R.S. 17:3995(A)(8)".17
Section 3. This Act shall become effective on July 1, 2014; if vetoed by the governor18
and subsequently approved by the legislature, this Act shall become effective on July 1,19
2014, or on the day following such approval by the legislature, whichever is later.20
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Miller HB No. 89
Abstract: Provides for calculation and distribution of certain public funds for charter
schools.
Present law (R.S. 17:3995) provides generally for the funding of charter schools.
Present law provides for two sources of funding for charter schools: (1) the state-funded per
pupil allocation the school district receives from the minimum foundation program (MFP)
and (2) certain local revenues generated for supporting education. Proposed law retains
present law relative to local revenues. Proposed law modifies present law relative to the HLS 14RS-76 ORIGINAL
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state-funded portion of charter school funds. Under present law a charter school is entitled
to receive, per pupil enrolled, an amount not less than the full state-funded amount per pupil
the district receives. Proposed law removes "employer retirement costs" from the state-
funded portion the charter school is entitled to receive per pupil. Proposed law further
defines "employer retirement costs" as the cost per pupil of retirement expenses paid by the
school district and includes the normal cost and unfunded accrued liability costs paid by the
district to the Teachers' Retirement System of La. (TRSL) and the La. School Employees'
Retirement System (LSERS), as well as costs paid by the district to cover health insurance
and health care for retired teachers and school employees.
Proposed law establishes a calculation for determining the "employer retirement cost" as
applicable to each charter school and retirement system involved. The sum of the
calculation is the amount subtracted from the state-funded portion of the charter school
monies.
Effective July 1, 2014.
(Amends R.S. 17:3995(A))