A complete overhaul of the state’s charter school system is poised for passage Thursday at the state Legislature, along with $500,000 to help smooth the transition.

"I definitely feel that this legislation is going to help to create a much stronger charter school system here in Hawaii," said Senate Education Chairwoman Jill Tokuda. "I believe that it really does have that balance of autonomy that charter schools need to be innovative while still ensuring accountability, because these are public schools students and they are taxpayer dollars."

Senate Bill 2115 is the culmination of months of effort that began in July with a task force co-chaired by Tokuda (D, Kaneohe-Kailua) and Rep. Della Au Belatti (D, Tantalus-Makiki) that worked with national experts and local stakeholders to rewrite the state’s charter school law. A companion bill, SB 2116, would provide $500,000 for the transition to the new system.

The legislation is expected to pass easily. It moved through the Capitol relatively smoothly, except for a furor when the House Education Committee moved to exempt charter schools from the state Ethics Code, an amendment that triggered spirited opposition on the House floor and was dropped in conference committee.

The proposed law would put charter schools on performance contracts and strengthen monitoring of the charter system as a whole. The school contracts would measure academic proficiency and growth as well as governance issues like finances, and set annual targets for performance. A new Public Charter School Commission would authorize and oversee the schools, and would report annually on outcomes at them.

"It’s better than what we have going on right now," said Gene Zarro, school board chairman for Kihei Charter School. "The reason I think it’s better is there is some clarity, and it does seem to put the focus on the student."

"There are a lot of people who are going to have a lot to do, and a learning curve that is pretty steep, with accountability markers along the way that volunteers are held to," Zarro said. "I think the big workload is going to come when the new commission members have to come up with 32 performance contracts for 32 existing charter schools, plus the 15 charter school applicants that are in the hopper."

The commission’s nine members would be appointed by the Board of Education and chosen based on qualifications, such as commitment to education and experience governing complex organizations, rather than selected to represent specific constituencies, such as teachers, as is now the case.

"I hope they consider including teachers," said Al Naga­sako, executive director of the Hawaii State Teachers Association. "Their voices are so critical to the decisions that are going to be made. It’s not just about finance; it’s not just about running a tight ship. It’s really talking about curriculum and programs that impact kids."

In an effort to ensure independent oversight, no more than 30 percent of each school’s governing board could be school employees or their relatives. The bill also would prevent an employee or relative of an employee from chairing that school’s governing board, unless an authorizer determines that it would be "in the best interest of the charter school."

The impetus behind the recodification of charter law came after reports of possible favoritism in hiring of relatives at a few charter schools, questions about their use of public funds and the academic performance of students at some campuses. In December the state auditor issued a critical report on the charter system, concluding that in many cases the schools are "free to spend public funds with little or no oversight."

The legislation was patterned largely after model charter school law, with input from the National Association of Charter School Authorizers, the National Governors Association and the National Alliance for Public Charter Schools. "Nationally, we were told you’ve got great autonomy but no accountability," Tokuda said. "There was no balance."

Curtis Muraoka, co-director of West Hawaii Explorations Academy, said the performance contracts will help bring clarity and avoid confusion from mixed expectations that cropped up under the previous system.

"It’s been this really long and difficult road for this kind of school and this kind of governance," Mura­oka said. "For the most part, the great majority of the schools are really resilient and doing all the right things. That’s why we’re still here, because so many of the schools have been doing all the right things."

The legislation would phase out the Charter School Administrative Office by July 2013 and shift some of its functions to charter schools themselves, some to the Department of Education and others to the commission, which will have its own staff. Roger McKeague, executive director of the Charter Office, said the transition year will be crucial.

"A whole lot of stakeholders will have a whole lot of work to do," he said. "We’re trying to hit the ground running so that the minute this bill is signed, we’re already preparing to make it effective. I’m just happy to see that the transition bill got funded."