(a) A charter school operates as a school in the local school district except that the charter school (1) is exempt from the local school district's textbook, program, curriculum, and scheduling requirements; (2) is exempt from AS 14.14.130(c); the principal of the charter school shall be selected by the academic policy committee and shall select, appoint, or otherwise supervise employees of the charter school; and (3) operates under the charter school's annual program budget as set out in the contract between the local school board and the charter school under (c) of this section. A local school board may exempt a charter school from other local school district requirements if the exemption is set out in the contract. A charter school is subject to tests required by the department.

(b) A charter school shall

(1) keep financial records of the charter school;

(2) oversee the operation of the charter school to ensure that the terms of the contract required by (c) of this section are being met;

(3) meet regularly with parents and with teachers of the charter school to review, evaluate, and improve operations of the charter school; and

(4) meet with the academic policy committee at least once each year to monitor progress in achieving the committee's policies and goals.

(c) A charter school shall operate under a contract between the charter school and the local school board. A contract must contain the following provisions:

(1) a description of the educational program;

(2) specific levels of achievement for the education program;

(3) admission policies and procedures;

(4) administrative policies;

(5) a statement of the charter school's funding allocation from the local school board and costs assignable to the charter school program budget;

(6) the method by which the charter school will account for receipts and expenditures;

(7) the location and description of the facility;

(8) the name of the teacher, or teachers, who, by agreement between the charter school and the teacher, will teach in the charter school;

(9) the teacher-to-student ratio;

(10) the number of students served;

(11) the term of the contract, not to exceed a term of 10 years;

(12) a termination clause providing that the contract may be terminated by the local school board for the failure of the charter school to meet educational achievement goals or fiscal management standards, or for other good cause;

(13) a statement that the charter school will comply with all state and federal requirements for receipt and use of public money;

(14) other requirements or exemptions agreed upon by the charter school and the local school board.

(d) A school district shall offer to a charter school the right of first refusal for a lease of space in an existing school district facility or in a facility within the school district that is not currently being used as a public school, if the chief school administrator determines the facility meets requirements for health and safety applicable to public buildings or other public schools in the district. If the school district requires lease payments by a charter school, the school district shall negotiate a lease agreement with the charter school for an amount that does not exceed the true operational costs calculated on a square foot basis for space leased under this subsection.