Court Opinion

ID: 4428358
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:05:07.086577+00
Date Added: 2024-06-11T14:50:58.915316
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-5427-16T2

BOARD OF EDUCATION OF THE
TOWNSHIP OF PISCATAWAY,
MIDDLESEX COUNTY,

          Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT OF
EDUCATION, OFFICE OF SCHOOL
FINANCE,

          Respondent-Respondent,

and

HATIKVAH INTERNATIONAL
ACADEMY CHARTER SCHOOL, INC.,
and COLLEGE ACHIEVE CENTRAL
CHARTER SCHOOL,

     Intervenors-Respondents.
__________________________________

                    Argued May 30, 2019 – Decided June 7, 2019

                    Before Judges Haas, Sumners and Mitterhoff.
            On appeal from the New Jersey Department of
            Education.

            David B. Rubin argued the cause for appellant.

            Thomas O. Johnston argued the cause for respondents
            Hatikvah International Academy Charter School, Inc.
            and College Achieve Central Charter School (Johnston
            Law Firm, LLC, attorneys; Thomas O. Johnston, of
            counsel and on the brief; Rula Alzadon Moor, on the
            brief).

            Geoffrey N. Stark, Deputy Attorney General, argued
            the cause for respondents Commission of Education
            and the State Board of Education (Gurbir S. Grewal,
            Attorney General, attorney; Melissa Dutton Schaffer,
            Assistant Attorney General, of counsel; Geoffrey N.
            Stark, on the brief).

            Turp, Coates, Driggers & White, PC, attorneys for
            amicus curiae East Windsor Regional School District
            (David H. Coates, on the brief).

PER CURIAM

      Appellant Board of Education of the Township of Piscataway, Middlesex

County (Piscataway) appeals from the July 27, 2017 declaratory ruling of the

Commissioner of Education (Commissioner), determining that pursuant to the

Charter School Program Act of 1995, N.J.S.A. 18A:36A-1 to -18 (the Charter

School Act or CSPA), Piscataway was obligated to provide funding for its

students enrolled in charter schools located in other school districts. Piscataway

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argues1 that the regulations implementing the funding requirements of the

Charter School Act, N.J.A.C. 6A:23A-15.2, and -15.3, are ultra vires to the

extent that they impose financial obligations on school districts not in the district

where the charter school is located ("district of residence") or in a contiguous

district to the charter school ("region of residence"). 2 We affirm.

                                         I.

      The Piscataway Township Public School District is located in Middlesex

County. Although there are no charter schools located in Piscataway, a number

of its resident students attend charter schools located in other school districts,

including attendance at intervenors Hatikvah International Academy Charter

School (Hatikvah) in East Brunswick Township, Middlesex County, and College

Achieve Central Charter School (College Achieve) in Union County.

1
   Amicus, East Windsor Regional School District (East Windsor), supports
Piscataway's arguments.
2
   This issue has also been raised in Highland Park Board of Education v.
Harrington (Highland Park II), No. A-3455-16, and in North Brunswick
Township Board of Education v. Harrington (North Brunswick), No. A-3415-
16, which together with In the Matter of the Approval of the Charter Amendment
of Central Jersey College Prep. (Central Jersey), No. A-3074-16, have been
calendared back-to-back, and heard together with this appeal. Because of this
overlap, the reader is encouraged to review all four of our opinions in these
cases, which are being released simultaneously.

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      In December 2015, counsel for Piscataway wrote to then-Commissioner

David Hespe, seeking a determination that the term "school district of

residence," as used in N.J.S.A. 18A:36A-12(b) (the funding provision of the

CSPA), was limited to the charter school's "district of residence," or at most, its

"region of residence."3 Under that interpretation, Piscataway would not be

required to bear the costs for its students to attend any charter schools because

none of the charter schools attended by its students include Piscataway in its

approved "district of residence."

      On January 20, 2016, the New Jersey Department of Education

(Department or DOE) responded that the Commissioner could not grant the

requested relief absent a formal petition for a declaratory ruling, and moreover,

that any determination as to whether to entertain such a petition was "within the

sole discretion of the Commissioner." Piscataway filed an appeal challenging

3
   The term "district of residence" is defined as "the school district in which a
charter school facility is physically located; if a charter school is approved with
a region of residence comprised of contiguous school districts, that region is the
charter school's district of residence." N.J.A.C. 6A:11-1.2. The term "region of
residence" is defined as "contiguous school districts in which a charter school
operates and is the charter school's district of residence." N.J.A.C. 6A:11 -1.2.
See In re Charter Sch. Appeal of Greater Brunswick Charter Sch., 332 N.J.
Super. 409, 424 (App. Div. 1999) ("the regulations allowing regional charter
schools are a legitimate means of effectuating the Act's purpose of encouraging
the establishment of charter schools.")
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the regulations as applied, but subsequently withdrew it based on the

Department's representation that it would entertain its petition for a declaratory

ruling.

      On June 24, 2016, Piscataway filed a verified petition seeking a

declaratory ruling from the Commissioner regarding its funding obligations

under N.J.S.A. 18A:36A-12(b) and the implementing regulations. The Attorney

General filed an answer on behalf of the Department.

      In July 2016, the matter was transmitted to the Office of Administrative

Law (OAL) for disposition as a contested case. The OAL granted Hatikvah's

and College Achieve's motions to intervene.

      In December 2016, Piscataway filed a motion for summary decision

seeking a determination from the Commissioner that under N.J.S.A. 18A:36A-

12(b), "financial responsibility for charter school attendance is limited to school

districts formally designated as the 'district of residence,' or within a 'region of

residence,' in a charter school's approved charter." Piscataway sought relief

from any obligation to fund out-of-district placements and sought restoration of

State aid previously directed to the charter schools. In a certification submitted

in support of the motion, Piscataway's Board Secretary and Business

Administrator stated that for the 2016-2017 school year, its projected payment

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to out-of-district charter schools totaled $247,030.

      The Department cross-moved for summary decision, seeking a

determination that "the language and history of the [CSPA], and its

implementing regulations, clearly demonstrate that resident districts are

responsible for paying for their students to attend charter schools regardless of

the charter school's location." Hatikvah and College Achieve also filed briefs

in opposition to Piscataway's motion for summary decision.

      On June 14, 2017, the ALJ issued an initial decision denying Piscataway's

motion and granting the Department's motion for summary decision. Bd. of

Educ. of Twp. of Piscataway v. N.J. Dep't of Educ., EDU 10995-16, initial

decision (June 14, 2017).     In her comprehensive written decision, the ALJ

reviewed the statutory text, legislative history, and implementing regulations,

and determined that Piscataway was "obligated to provide funding in accordance

with N.J.S.A. 18A:36A-12(b) for each of its residents who enrolled in a charter

school no matter where the charter school is located."

      The ALJ found that the meaning of the term "district of residence" as used

in N.J.S.A. 18A:36A-12(b) was "clearly ambiguous."          For example, if the

regulatory definition of "district of residence," N.J.A.C. 6A:11-1.2, was

"inserted into N.J.S.A. 18A:36A-12(b), that provision would read '[the school

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district in which a charter school facility is physically located] shall pay directly

to the charter school for each student enrolled in the charter school who resides

in the district.'" "Under such a reading, as urged by Piscataway, a school district

would be obligated to pay for its residents to attend [the] charter school only if

the school district is included in the charter school's district of residence or

region of residence."

      However, the ALJ found that the implementing regulations, as challenged

here, "imbue the term 'district of residence' as found in N.J.S.A. 18A:36A-12(b)

with meaning beyond the literal regulatory definition" because the challenged

regulations require both a "district of residence" and a "non-resident district" to

make payments to charter schools.            N.J.A.C. 6A:23A-15.2, -15.3.        The

Department argued that this interpretation made sense because the term "district

of residence" in N.J.S.A. 18A:36A-12(b), referred to the student's district of

residence and thus had a different meaning from the regulatory definition of

"district of residence."

      The ALJ found that despite the confusion caused by the regulatory

definition of "district of residence," a review of the Act as a whole and the

legislative history revealed that the regulations properly implemented the

funding requirements of the CSPA. The legislative history of the Charter School

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Act "supports the conclusion that a school district must pay for its residents to

attend charter schools regardless of the location." Notably, in its fiscal estimate

for S. 1796 (1995), which, combined with A. 592 (1995), became CSPA, the

Office of Legislative Services (OLS) stated that:

            In regard to the funding of charter schools, the bill
            provides that the school district of residence would pay
            directly to the charter school for each student enrolled
            who resides in the district an amount equal to the local
            levy budget per pupil in the district for the specific
            grade level. . . . The cost for out of district pupils would
            be paid by the district of residence of the pupil. . . .

               The Office of Legislative Services (OLS) estimates
            that there will be little or no additional costs to the State
            or local school districts as a result of this bill. The
            charter school would receive the local levy budget per
            pupil (State aid plus local tax levy) for each pupil
            attending the charter school, plus any categorical aid or
            federal funds attributable to that pupil. If out of district
            pupils were admitted, the district of residence would
            pay the costs for that pupil. . . .

            [Legislative Fiscal Estimate to S. 1796 1 (Sept. 14,
            1995) (emphasis added).]

      The ALJ stated that the fiscal estimate, which was apparently not available

to the Senate Budget and Appropriations Committee prior to its Statement , was

"not the perfect extrinsic aid for discerning legislative intent with respect to

N.J.S.A. 18A:36A-12(b)." S. Budget & Approps. Comm. Statement to A. 592

& S. 1796 2 (Dec. 11, 1995). Nonetheless, the fiscal estimate was useful in

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determining legislative intent because there was no indication that the sponsor

of the bill "objected to the OLS's statements regarding a district-of-residence's

funding obligations for all of its residents who are enrolled in charter schools ."

      The ALJ also found that "as originally enacted," the third sentence of

N.J.S.A. 18A:36A-12(b) (subsequently amended), provided, "[t]he per pupil

amount paid to the charter school shall not exceed the [program] budget per

pupil for the specific grade level in the district in which the charter school is

located." (quoting L. 1995, c. 426). The ALJ reasoned that "[t]his suggests that

the Legislature could have written '[t]he school district in which the charter

school is located' instead of '[t]he school district of residence' in the first

sentence of N.J.S.A. 18A:36A-12(b) if that is what the Legislature truly meant

by 'district of residence.'"

      The ALJ concluded that the interpretation that all school districts must

fund their students' attendance at charter schools irrespective of location was

consistent with the "overall purpose of the CSPA, which declares that '[a] charter

school shall be open to all students on a space available basis.'" (quoting

N.J.S.A. 18A:36A-7). Although preference for enrollment in a charter school is

given to "students who reside in the school district in which the charte r school

is located," N.J.S.A. 18A:36A-8(a), if space is available, charter schools may

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enroll non-resident students. N.J.S.A. 18A:36A-8(d). The ALJ reasoned that

"[i]f a school district did not have to pay for all of its residents to attend charter

schools, then charter schools would not truly be 'open to all students.' Instead,

non-resident students presumably would only be able to attend charter schools

if they could afford it themselves."

      The ALJ further explained that:

             This might threaten the financial viability of a charter
             school that is unable to fill its rolls with students who
             reside in the district in which the charter school is
             located. While charter schools may "[s]olicit and
             accept any gifts or grants for school purposes," N.J.S.A.
             18A:36A-6(g), there is no guarantee that a charter
             school that could not attract sufficient numbers of
             resident students could make up the shortfall with gifts
             and grants. And, while the CSPA prohibits a charter
             school from charging tuition to a resident student,
             N.J.S.A. 18A:36A-8(a), but does not specifically
             prohibit a charter school from charging tuition to a non-
             resident student, it is highly unlikely that a charter
             school could fill a sufficient number of available spaces
             with non-resident students whose parents could afford
             to pay tuition.

                By implementing N.J.S.A. 18A:36A-12(b) to
             require both "districts of residence" and "non-resident
             districts" to pay for their children to attend charter
             schools, the State Board of Education met its
             responsibility under N.J.S.A. 18A:36A-18 to effectuate
             the purpose of the CSPA, which is meant to establish a
             charter-school program as an alternative to traditional
             public schools for "all students on a space available
             basis." As the State Board of Education has explained,

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                   [t]he premise of the [CSPA] is that all
                   students in New Jersey are entitled to free
                   education provided by the school district in
                   which they reside in accordance with
                   N.J.S.A. 18A:38-1. This entitlement can be
                   accomplished whether they choose to
                   attend a public school of the district or a
                   charter school as an independent public
                   school.

                   [29 N.J.R. 3492(a) (Aug. 4, 1997).]

            Which district or region a charter school chooses for its
            residence is immaterial for determining a school
            district's funding obligation under N.J.S.A. 18A:36A-
            12(b); what triggers a school district's funding
            obligation is the mere fact that one of its residents is
            enrolled in a charter school, irrespective of location.
            Thus, the Department persuasively argues that the term
            "district of residence" as used in N.J.S.A. 18A:36A-
            12(b) is reasonably interpreted as the student's district
            of residence and not the charter school's district of
            residence.

      Lastly, the ALJ found that "the fact that a school district's transportation -

funding obligations are different for resident and non-resident students under

N.J.S.A. 18A:36A-13 and N.J.A.C. 6A:27-3.1 to -3.7, does not alter the way in

which N.J.S.A. 18A:36A-12(b) should be read." The ALJ reasoned:

            The CSPA provides that "[t]he students who reside in
            the school district in which the charter school is located
            shall be provided transportation to the charter school on
            the same terms and conditions as transportation is
            provided to students attending the schools of the
            district," but that "[n]on-resident students shall receive

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              transportation services pursuant to regulations
              established by the State board." N.J.S.A. 18A:36A-13.

                  Under those regulations, "[t]he expenditure for the
              transportation of charter . . . school students who reside
              outside of the school district or region of residence in
              which the charter . . . school is located is limited to the
              annual nonpublic school maximum statutorily
              established expenditure per student in accordance with
              N.J.S.A. 18A:39-1," and "[i]f the cost of transportation
              exceeds the maximum allowable expenditure, the
              student's parents or legal guardians may pay the amount
              in excess of the annual maximum or they shall be
              entitled to the maximum allowable expenditure as aid
              in lieu of transportation." N.J.A.C. 6A:27-3.1(e), -3.4.
              Thus, non-resident students of charter schools receive
              less favorable transportation treatment than resident
              students of charter schools, but this arrangement should
              be viewed as a reasonable tradeoff for a free education
              at a charter school of one's choice and not as having any
              bearing on a logical interpretation of a school district's
              tuition obligations under N.J.S.A. 18A:36A-12(b).

              [(Footnote omitted).]

      Thus, the ALJ held that Piscataway was "obligated to provide funding in

accordance with N.J.S.A. 18A:36A-12(b) for each of its residents who is

enrolled in a charter school no matter where the charter school is located ." The

ALJ stated:

              Ultimately, the Legislature directed the State Board of
              Education to implement the provisions of the CSPA.
              Through its adoption of N.J.A.C. 6A:23A-15.2 and
              -15.3, the State Board of Education has implemented
              N.J.S.A. 18A:36A-12(b) by requiring both "districts of

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                                         12
            residence" and "non-resident districts" to pay for their
            children to attend charter schools. Here, Piscataway
            has asked for a declaratory ruling regarding the scope
            of its funding obligations under N.J.S.A. 18A:36A-
            12(b). The State Board of Education has made clear
            that Piscataway must, in accordance with N.J.S.A.
            18A:36A-12(b), pay a charter school for each
            Piscataway resident who is enrolled in the charter
            school no matter where the charter school is located. If
            Piscataway wishes to challenge the validity of any of
            the State Board of Education's regulations, the proper
            venue for such a challenge would be the Appellate
            Division in accordance with R. 2:2-3(2).

      In her final decision, then-Commissioner Kimberley Harrington adopted

the initial decision of the ALJ, and stated:

                   Upon      consideration    and    review,     the
            Commissioner is in accord with the ALJ's
            determination that, pursuant to the Act and the
            provisions set forth in N.J.A.C. 6A:23A-15.1-15.4, the
            petitioner is obligated to provide funding for its
            students enrolled in charter schools located in other
            school districts.[]     Furthermore, while petitioner
            [Piscataway] has framed its contentions as an issue with
            the Department's interpretation of the Act—which
            interpretation the Commissioner finds was proper—
            petitioner is, nevertheless, questioning the validity of
            the regulations. It is clear from the submissions that
            petitioner's true contention is with the department's
            regulations, which set forth the specific requirements
            from which petitioner is seeking relief. Therefore,
            petitioner's disagreement with the regulations, and its
            challenges to the requirement imposed upon it, is
            properly addressed before the Appellate Division in
            accordance with R. 2:2-3(2).

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            [(Footnote omitted).]

This appeal followed.

                                        II.

      As noted at the outset, Piscataway contends that "the Department['s] . . .

charter school regulations are ultra vires to the extent they impose financial

obligations on school districts not included in a charter school's 'district of

residence' or 'region of residence.'" We disagree. 4

      The scope of judicial review of a final decision of the Commissioner is

limited. In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp.,

216 N.J. 370, 385 (2013). Further, "[j]udicial review of agency regulations

begins with a presumption that the regulations are both 'valid and reasonable.'"

4
   Initially, Intervenors Hatikvah and College Achieve argue that the appeal is
time-barred because Piscataway had been making payments to charter schools
located outside of its district for years, and waited until 2015 to challenge the
regulations. However, we reject this argument because the Commissioner
agreed to entertain the petition for declaratory ruling on the merits below, and
Piscataway filed an appeal within forty-five days of that final decision. R. 2:4-
1(b). Moreover, in administrative appeals, "[u]nlike quasi-judicial actions, there
is . . . no time limit on . . . direct challenges to the substantive validity of an
agency rule or regulation." Pressler & Verniero, Current N.J. Court Rules, cmt.
3.1 on R. 2:4-1(b) (2019). See In re Six Month Extension of N.J.A.C. 5:91-1,
372 N.J. Super. 61, 87 (App. Div. 2004) ("forty-five-day time limit on appeals
from final decisions of administrative agencies does not generally apply to
challenges to the validity of agency regulations, especially where the challenges
raise constitutional questions or involve important questions implicating the
public interest.")
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N.J. Ass'n of Sch. Adm'rs v. Schundler, 211 N.J. 535, 548 (2012) (quoting N.J.

Soc'y for Prevention of Cruelty to Animals (NJSPCA) v. N.J. Dep't of

Agric.,196 N.J. 366, 385 (2008)). "[T]he party challenging a regulation has the

burden of proving that the agency's action was 'arbitrary, capricious or

unreasonable.'" Ibid. (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-

80 (1980)).     A challenger can meet that burden "by demonstrating an

inconsistency between the regulation and the statute it implements, a violation

of policy expressed or implied by the Legislature, an extension of the statute

beyond what the Legislature intended, or a conflict between the enabling act and

other statutory law that cannot be harmonized.” N.J. Ass'n of Sch. Adm'rs v.

Cerf, 428 N.J. Super. 588, 596 (App. Div. 2012).

      Although an appellate court is not bound by an agency's determination on

a question of law, Hargrove v. Sleepy's, LLC, 220 N.J. 289, 301 (2015),

"[c]ourts afford an agency 'great deference' in reviewing its 'interpretation of

statutes within its scope of authority and its adoption of rules implementing' the

laws for which it is responsible." Schundler, 211 N.J. at 549 (quoting NJSPCA,

196 N.J. at 385). Nevertheless, "courts must invalidate a regulation that is

'inconsistent with the statute it purports to interpret. . . .'" Ibid. (quoting

NJSPCA, 196 N.J. at 385).

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      "[T]he goal of statutory interpretation is to ascertain and effectuate the

Legislature's intent." Cashin v. Bello, 223 N.J. 328, 335 (2015). "[T]he best

indicator of that intent is the statutory language." DiProspero v. Penn, 183 N.J.

477, 492 (2005).       "Accordingly, '[t]he starting point of all statutory

interpretation must be the language used in the enactment.'" Spade v. Select

Comfort Corp., 232 N.J. 504, 515 (2018) (quoting N.J. Div. of Child Prot. &

Permanency v. Y.N., 220 N.J. 165, 178 (2014)).

      Courts "construe the words of a statute 'in context with related provisions

so as to give sense to the legislation as a whole.'" Spade, 232 N.J. at 515

(quoting N. Jersey Media Grp., Inc. v. Twp. of Lyndhurst, 229 N.J. 541, 570

(2017)).   "If the plain language leads to a clear and unambiguous result, then

our interpretative process is over." Johnson v. Roselle EZ Quick LLC, 226 N.J.

370, 386 (2016). Courts "turn to extrinsic tools to discern legislative intent

. . . only when the statute is ambiguous, the plain language leads to a result

inconsistent with any legitimate public policy objective, or it is at odds with a

general statutory scheme." Shelton v. Restaurant.com, Inc., 214 N.J. 419, 429

(2013).

      Charter schools are public schools that operate under a charter granted by

the Commissioner, operate independently of a local board of education, and are

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managed by a board of trustees. N.J.S.A. 18A:36A-3(a). Funding for charter

schools comes from the local school district, and state and federal aid, but is not

equivalent to the per pupil funding that a traditional public school receives.

N.J.S.A. 18A:36A-12(b).

      At issue here, the CSPA funding provision provides that:

             The school district of residence shall pay directly to the
             charter school for each student enrolled in the charter
             school who resides in the district an amount equal to
             90% of the sum of the budget year equalization aid per
             pupil, the prebudget year general fund tax levy per
             pupil inflated by the CPI rate most recent to the
             calculation, and the employer payroll tax per pupil that
             is transferred to the school district pursuant to
             subsection d. of section 1 of P.L.2018, c.68. In
             addition, the school district of residence shall pay
             directly to the charter school the security categorical
             aid attributable to the student and a percentage of the
             district’s special education categorical aid equal to the
             percentage of the district’s special education students
             enrolled in the charter school and, if applicable, 100%
             of preschool education aid. The district of residence
             shall also pay directly to the charter school any federal
             funds attributable to the student.

             [N.J.S.A. 18A:36A-12(b) (emphasis added).]

      The term "school district of residence" is not defined in either the CSPA

or the implementing regulations. The term "district of residence" is, however,

defined in the regulations as "the school district in which a charter school facility

is physically located; if a charter school is approved with a region of residence

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comprised of contiguous school districts, that region is the charter school's

district of residence." N.J.A.C. 6A:11-1.2; N.J.A.C. 6A:23A-15.1. A "resident

student" means "a student who resides in the area served by the district board of

education that is the same as the district of residence of the charter school."

N.J.A.C. 6A:11-1.2; N.J.A.C. 6A:23A-15.1.

      However, a non-resident school district is defined as both "a school

district outside the district of residence of the charter school," N.J.A.C. 6A:11 -

1.2, and as "a school district outside the school district of residence of the charter

school." N.J.A.C. 6A:23A-15.1 (emphasis added). A "'non-resident student'

means a student from a non-resident district attending a charter school."

N.J.A.C. 6A:11-1.2; N.J.A.C. 6A:23A-15.1.

      In 2009, in accordance with the CSPA, the State Board of Education

promulgated the regulations at issue here, N.J.A.C. 6A:23A-15.2 and -15.3. 41

N.J.R. 642(a) (Jan. 20, 2009). The regulations were designed "to assure the

financial accountability of local public school districts through enhanced State

monitoring, oversight and authority, and to ensure that each district board of

education adopts an annual budget that provides adequate resources to meet the

State Constitution's mandate for a thorough and efficient system of free public

schools for all children." 41 N.J.R. 642(a) (Jan. 20, 2009).

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      No commentator objected to the regulations. 41 N.J.R. 642(a) (Jan. 20,

2009); 49 N.J.R. 1038(a) (May 1, 2017). Nor did any commentators object on

that basis to N.J.A.C. 6A:11-1.1 to -6.4, the regulations governing the

application for and operation of a charter school. 29 N.J.R. 3492(a) (Aug. 4,

1997); 32 N.J.R. 3560(a) (Oct. 2, 2000); 49 N.J.R. 1038(a) (May 1, 2017). In

fact, in response to a comment to an amendment to N.J.A.C. 6A:23A-22.4

("Financial Requirements"), the Department explained that "[c]harter school

funding follows the child and, therefore, is only remitted once the school is

operational." 49 N.J.R. 2521(a), 2522 (Aug. 7, 2017).

      The funding regulations, N.J.A.C. 6A:23A-15.1 to -15.4, require both a

"district of residence" and a "non-resident district" to pay for its students to

attend a charter school. N.J.A.C. 6A:23A-15.2 details the per pupil payments

to charter schools:

            (a) The resident and non-resident school districts shall
            use projected charter school aid as established by the
            Commissioner in a report to be distributed no later than
            February 15 of the prebudget year for budget purposes
            and to initiate school district payments to the charter
            school for the subsequent year. The report establishes
            for each resident and non-resident school district a per
            pupil amount for the local and State shares and
            categorical aids per student. Once the per pupil amount
            is established, it is not adjusted. Projected charter
            school aid is based on projected enrollments at the
            charter school. The number of students enrolled in the

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            charter school is adjusted based on average daily
            enrollment for aid purposes throughout the school year
            in accordance with the prescribed adjustments listed in
            N.J.A.C. 6A:23A-15.3.

            (b) The per pupil amount comprises local share as
            defined in (b)1 below and State share as defined in (b)2
            below.

            1. The local share per pupil is the part of the per pupil
            amount that includes the general fund tax levy of the
            school district of residence's or nonresident district(s)'
            budget(s).

            2. The State share per pupil is the part of the per pupil
            amount that includes the equalization aid portion of the
            school district of residence's or nonresident district(s)'
            budget(s) or amounts, if any, contained in the annual
            appropriations act in-lieu-of or to supplement
            equalization aid for the corresponding fiscal year. . . .

            [(Emphasis added).]

      Also at issue, N.J.A.C. 6A:23A-15.3(g) provides that both the district of

residence and non-resident school districts are, under N.J.S.A. 18A:36A-12(b),

obligated to pay charter schools as follows:

            (g) A district board of education shall process
            payment(s) and payment adjustments to a charter
            school during the school year as follows:

            1. The district of residence and non-resident school
            district(s) shall initiate payments to the charter school
            based on projected enrollment, as set forth in this
            section.

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            2. The school district of residence and non-resident
            school district(s) shall pay directly to a charter school
            the local share per pupil at the charter school rate,
            pursuant to N.J.S.A. 18A:36A-12.b, in 12 equal
            installments starting July 15 and thereafter on the 15th
            of each month.

            3. Pursuant to N.J.S.A. 18A:36A-12.b, the school
            district of residence and non-resident school district(s)
            shall pay directly to the charter school the following aid
            in 20 equal installments on the 9th and 23rd of every
            month starting with September 9 and ending with June
            23, or as established by the Legislature:

                  i. The State share per pupil at the charter
                  school rate; and

                  ii. Categorical aid attributable to the
                  student.

            [(Emphasis added).]

      Although the challenged regulations expressly impose an obligation to

fund charter schools on both the resident and non-resident school districts, the

regulations also seem to distinguish between a "school district of residence" and

a "non-resident district" N.J.A.C. 6A:23A-15.2, -15.3.

      Nonetheless, a review of the term both in the context of the CSPA as a

whole and in light of the legislative history of the Act, supports the

Commissioner's interpretation. In this regard, the fact that the Legislature,

which as recently as last year amended N.J.S.A. 18A:36A-12(b), L. 2018, c. 68,

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did not act in response to the agency's adoption of N.J.A.C. 6A:23A -15.1 to -

15.4, eleven years earlier, should be "'granted great weight as evidence of its

conformity with the legislative intent.'" Klumb v. Bd. of Educ. of Manalapan-

Englishtown Reg'l High Sch. Dist., Monmouth Cty., 199 N.J. 14, 24-25 (2009)

(quoting Malone v. Fender, 80 N.J. 129, 137 (1979)).

      Moreover, as discussed in Highland Park II, after the Commissioner's

decision in this case, the Appellate Division, in an unpublished decision,

Highland Park Board of Education v. Hespe (Highland Park I), No. A-3890-14

(App. Div. Jan. 24, 2018) (slip op. at 19), certif. denied, 233 N.J. 485 (2018), 5

addressed this precise issue. In that case, this court rejected Highland Park's

argument that only the charter school's "district of residence" was obligated to

pay for its students to attend the school. Ibid. The court found that the plain

language of N.J.S.A. 18A:36A-12(b) "expressly provides that the 'school district

of residence' must pay the charter school for 'each student' enrolled in the

school." Id. at 16. Thus, we held that "as used in N.J.S.A. 18A:36A-12(b), the

term 'school district of residence' refers to the district where the student reside s,

5
   The appellant in Highland Park I appealed from the Commissioner's final
decision approving Hatikvah's second application to amend its charter.
Although Highland Park I is unpublished, it involved some of the same parties,
and the identical issue raised here, and thus, although not precedential, it is
instructive.
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                                        22
not the district where the charter school is located." Ibid.

      This court found that the CSPA "expressly envisions that students may

enroll in a charter school, even though they reside in a district other than the

district where the charter school is located." Id. at 16-17. There is nothing in

the CSPA "that would allow these students to attend a charter school without a

financial contribution from the school districts in which they reside." Id. at 17.

Thus, under N.J.S.A. 18A:36A-12(b), the obligation of a school district to fund

its student's attendance at a charter school is not limited to the charter school's

"district of residence." Ibid.

      We also found that the implementing regulations were "consistent with

this interpretation of N.J.S.A. 18A:36A-12(b)." Ibid. Specifically, the court

cited to N.J.A.C. 6A:23A-15.3(g)(2), (3), one of the challenged regulations in

this case, noting that "[i]ndeed, the regulations expressly provide that both a

charter school's 'district of residence' and the 'non-resident school districts' must

pay for their students to attend a charter school." Ibid.

      Lastly, the court found that "extrinsic evidence," notably the OLS fiscal

estimate as relied on by the ALJ here, "also supports this interpretation of

N.J.S.A. 18A:36A-12(b)." Ibid. Thus, we concluded that "as used in N.J.S.A.

18A:36A-12(b), the term 'school district of residence' refers to the district where

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                                        23
the student resides, not the district where the charter school is located." Id. at

16.

      On appeal, Piscataway argues that the decision in Highland Park I was

"erroneous and should not be followed." It contends that the more plausible

inference is that the Legislature intended to impose financial responsibility only

on the district where the charter school is located, or at most the region of

residence, because non-resident districts are not entitled to receive notice or

input as to the approval or amendment process. Under that interpretation,

Piscataway would be relieved of any financial responsibility for educating its

students enrolled in charter schools because no charter schools are located in its

district, or in a contiguous district.

      However, the Legislature found that "the establishment of a charter school

program is in the best interests of the students of this State and it is therefore the

public policy of the State to encourage and facilitate the development of charter

schools."   N.J.S.A. 18A:36A-2.          Under that broad policy, the Legislature

mandated that "[a] charter school shall be open to all students on a space

available basis. . . ." N.J.S.A. 18A:36A-7. Significantly, although preference

is given to students who reside in the school district in which the charter school

is located, if available space permits, a charter school may enroll non-resident

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                                          24
students. N.J.S.A. 18A:36A-8(a),(d).

      As this court found in Highland Park I, slip op. at 17, there is nothing in

the Act that would allow non-resident students to attend a charter school without

a financial contribution from the school district in which they reside. In fact, in

order to enroll in a charter school, either in or out of district, the student must

first register "in the school district in which he or she resides," N.J.A.C. 6A:23A-

15.3(a), and thus funding would pass through the Board of Education in that

district before being allocated to the charter school. See In re Grant of Charter

Sch. Application of Englewood on the Palisades Charter Sch., 320 N.J. Super.

174, 224 (App. Div. 1999) (discussing funding provision of CSPA), aff'd as

modified, 164 N.J. 316 (2000).

      To that end, the interpretation of the term "school district of residence"

used in N.J.S.A. 18A:36A-12(b) to refer to the district where the student resides,

and not the district where the charter school is located, is entirely consistent with

the Act and the policy expressed by the Legislature. As the ALJ found, "[i]f a

school district did not have to pay for all of its residents to attend charter schools,

then charter schools would not truly be 'open to all students.'" Students residing

in districts without a charter school, like Piscataway, would be foreclosed from

attending a charter school unless they could afford to pay to attend the public

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                                         25
charter school—a result inconsistent with the Legislature's intent in drafting the

Charter School Act.      See Englewood, 164 N.J. 322 (charter schools were

authorized as an alternate format for providing public education to New Jersey

children).

      In fact, as originally enacted, the Legislature differentiated in N.J.S.A.

18A:36A-12 (subsequently amended), between a school district of residence and

a school district where the charter school was located, to protect a wealthy

district from sending excess revenue to charter schools located in less wealthy

districts, as follows:

             The school district of residence shall pay directly to the
             charter school for each student enrolled in the charter
             school who resides in the district a presumptive amount
             equal to 90% of the local levy budget per pupil for the
             specific grade level in the district. At the discretion of
             the commissioner and at the time the charter is granted,
             the commissioner may require the school district of
             residence to pay directly to the charter school for each
             student enrolled in the charter school an amount equal
             to less than 90% percent, or an amount which shall not
             exceed 100% of the local levy budget per pupil for the
             specific grade level in the district of residence. The per
             pupil amount paid to the charter school shall not exceed
             the local levy budget per pupil for the specific grade
             level in the district in which the charter school is
             located. The district of residence shall also pay directly
             to the charter school any categorical aid attributable to
             the student, provided the student is receiving
             appropriate categorical services, and any federal funds
             attributable to the student.

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                                        26
             [L. 1995, c. 426 (emphasis added).]

      Although the underlined provision regarding per pupil expenditures was

subsequently amended, L. 2007, c. 260, § 56, reading the statute as a whole as

originally enacted supports both the Commissioner's and the Highland I court's

interpretation that the Legislature meant the term "school district of residence,"

to refer to the student's residence. There would have been no need for such a

provision if districts were only responsible for funding students attending

charter schools in their districts.

      Moreover, the current funding provision, N.J.S.A. 18A:36A-12(b), was

amended by the School Funding Reform Act of 2008 (SFRA), N.J.S.A. 18A:7F-

43 to -63, to apply the "weighted school funding formula" to charter schools.

Our Supreme Court described that formula, which is used to calculate the

amount of state aid to be provided to each school district, as "the State's most

recent, lengthy and painstaking effort to craft a redesigned school funding

formula that satisfies the constitutional standard." Abbott v. Burke (Abbott

XX), 199 N.J. 140, 147 (2009).        Under N.J.S.A. 18A:36A-12(b), the school

district of residence shall pay directly to the charter school certain funds,

including equalization aid, security categorical aid, received by the district

under the SFRA formula. N.J.A.C. 6A:23A-15.1. Those funds, which are

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                                        27
"attributable to the student," are paid to the school district where the student

resides and not to the district where the charter school is located. N.J.S.A.

18A:7F-43 to -63.

      Thus, it would make no sense to interpret "school district of residence" to

mean the "district of residence." N.J.S.A. 18A:36A-12(b). Given that both

resident and non-resident students can attend a charter school, the term "school

district or residence" logically means the district where the student resides. A

school is located in a district, it does not reside in a district.

      This interpretation is also consistent with another section of the CSPA,

N.J.S.A. 18A:36A-11(b), which provides that a charter school shall comply with

the laws concerning the "provision of services to students with disabilities;

except that the fiscal responsibility for any student currently enrolled in or

determined to require a private day or residential school shall remain with the

district of residence."      As used in N.J.S.A. 18A:36A-11(b), "district of

residence" must refer to the student's home district, because a non-resident

district would not be obligated to fund a student residing outside its borders. In

fact, the Legislature did not use the term "district of residence" elsewhere in the

Act when referring to the district where the charter school is located.         See

N.J.S.A. 18A:36A-8(a); N.J.S.A. 18A:36A-13. Further, in a separate Act, the

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Legislature directed the Commissioner, for school funding purposes for children

in State facilities, N.J.S.A. 18A:7B-12(b), to determine the child's "district of

residence" based on the district where the parent or resource family resided.

N.J.S.A. 18A:7B-12.

      Additionally, as this court found in Highland Park I, the interpretation is

supported by the legislative history of the CSPA. In its fiscal estimate the OLS

confirmed its understanding that the district in which the student resided would

pay an out-of-district charter school. Legislative Fiscal Estimate to S. 1796 (L.

1995, c. 426). Although, as the ALJ pointed out, the fiscal estimate is not "the

perfect extrinsic aid" because the bill was subsequently amended, and the

estimate was not available at the time of the Sponsor's Statement to S. 1796 5

(L.1995, c. 426), it nonetheless demonstrates the Legislature's understanding

that the student's district would fund the charter school. See In re Pub. Serv.

Elec. & Gas Co.'s Rate Unbundling, 167 N.J. 377, 388 n.2 (2001) (Legislative

Fiscal Estimate was a "slender reed on which to overturn the BPU's Final

Order"); Bd. of Chosen Freeholders of Cty. of Morris v. State, 311 N.J. Super.

637, 645 (Law Div. 1997) (Legislative Fiscal Estimate is very useful in

ascertaining legislative intent if relied on by Legislature in enacting bill), aff'd,

311 N.J. Super. 587 (App. Div. 1998), aff'd, 159 N.J. 565 (1999).

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                                        29
      Nonetheless, Piscataway argues here, as in Highland Park II, that under

that interpretation non-resident school districts will be deprived of due process

because non-resident districts are not entitled to receive formal notice of a

charter school's application to amend its charter, or input into the amendment

process. N.J.A.C. 6A:11-2.1, -2.6(a)(b). Piscataway argues that "surely," the

Legislature did not contemplate a system where every school district had to

constantly monitor charter school activity throughout the state, and was

obligated to fund those schools without consideration of the charter school's

impact.

      The notice provisions do not, however, relieve non-resident districts from

bearing financial responsibility for their students' attendance at charter schools.

Because preference for enrollment in a charter school is given to students who

reside in the school district in which the charter school is located, N.J.S.A.

18A:36A-8(a), it is likely that the majority of students will reside in that district,

and thus it makes sense that the district of residence should receive formal notice

and an opportunity for input.

      Moreover, it was undisputed that Piscataway, and the appellants in the

other back-to-back appeals, were aware of the applications to amend filed by

Hatikvah and Central Jersey College Prep (CJCP), and had an opportunity to

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                                         30
submit comments on the amendment requests. In fact, in Highland II, the

Commissioner received, and considered, comments from several school

districts, individuals, an educational service commission, and even several

legislators. Nor is there any indication in this record that the process of tracking

applications to amend a charter would be particularly onerous for a non-resident

district.

       Nonetheless, Piscataway contends that its interpretation finds support in

the Court's decision in Englewood, 164 N.J. at 316. However, this argument

also lacks merit. In Englewood, three boards of education brought an action

challenging the New Jersey Board of Education's grants of charters to schools

in their respective districts. Id. at 318-19.    In discussing a prior version of

N.J.S.A. 18A:36A-12,6 the Court wrote that "the Act provides that the district

of residence of the charter school shall forward to the school a per-pupil amount

set by the Commissioner, but presumptively set by the Legislature at 90% of the

local levy budget per pupil for that student's grade level in the district." Id. at

322. However, in that passing comment, the Court was merely referring to the

6
   N.J.S.A. 18A:36A-12 then provided that "[t]he school district of residence
shall pay directly to the charter school for each student enrolled in the charter
school who resides in the district a presumptive amount equal to 90% of the
local levy budget per pupil for the specific grade level in the district." L. 1995,
c. 426.
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                                        31
funding provision, and did not address the question of whether the term "school

district of residence" referred to the student's or the school's location.

      Finally, the amicus unpersuasively argues that Piscataway's interpretation

is logical because there is no provision in the CSPA prohibiting the charge of

tuition to students from other districts and thus non-resident students must pay

tuition to attend an out-of-district charter school.       N.J.S.A. 18A:36A-8(a)

provides that "[a] charter school shall not charge tuition to students who reside

in the district." Although there is no similar provision prohibiting a charter

school from charging a non-resident student tuition, there are also no provisions

specifically authorizing such payment, or defining the method of determining

tuition rates. See N.J.A.C. 6A:23A-22.1 to -22.15 (Financial Operations of

Charter Schools).

      For example, with regard to traditional public schools, N.J.S.A.18A:38 -

3(a) provides that "[a]ny person not resident in a school district, if eligible

except for residence, may be admitted to the schools of the district with the

consent of the board of education upon such terms, and with or without payment

of tuition, as the board may prescribe." See N.J.A.C. 6A:23A-17-1 to -17.2

(method of determining tuition rates for regular public schools); N.J.A.C.

6A:23A-18.1 to -18.23 (tuition for private schools for students with disabilities).

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                                        32
      In contrast, for charter schools, the Department specifically provided for

payment of state and federal aid to the charter school by both the resident and

non-resident districts. N.J.A.C. 6A:23A-15.2 to -15.3. As set forth above, the

Legislature did not act in response to that interpretation, and non-resident school

districts have apparently been funding their students' attendance at charter

schools since they were first established in 1997. Further, the Commissioner's

interpretation is consistent with the legislative policy to encourage the

development of charter schools, N.J.S.A. 18A:36A-2, and the OLS statement

that out-of-district districts would pay for the cost of their students to attend the

charter school. Legislative Fiscal Estimate to S. 1796 1 (Sept. 14, 1995).

      In sum, we conclude that the Commissioner correctly determined that the

Department properly implemented the funding requirements of N.J.S.A.

18A:36A-12(b) by obligating both a "district of residence" and a "non-resident

district" to fund their students' attendance at charter schools.          Therefore,

N.J.A.C. 6A:23A-15.2 and -15.3 are not ultra vires, and Piscataway is obligated

to provide funding for its students enrolled in charter schools located outside its

school district.

      Affirmed.

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