GARRETT, J.
Defendant, a school district, appeals a judgment granting declaratory relief to plaintiff, a charter school. The parties' dispute concerns the interpretation of Oregon's charter school law. In 2012, plaintiff requested that defendant "renew their charter agreement" plaintiff's school as provided by statute. Defendant's board voted to approve the renewal, contingent on the successful negotiation of a new charter agreement. After the parties failed to negotiate an agreement, plaintiff solicited interest for sponsorship from other school districts. In response, defendant asserted that plaintiff was already bound to an additional term under the existing charter. Plaintiff brought this action seeking a declaration that it was not so bound and moved for summary judgment, which the trial court granted. We affirm.
It is helpful to begin with a brief overview of the relevant law. Oregon has a comprehensive statutory framework governing public charter schools. See ORS ch 338. A "public charter school" is defined as "an elementary or secondary school offering a comprehensive instructional program operating under a written agreement entered into between a sponsor and an applicant and operating pursuant to this chapter." ORS 338.005(3). A "sponsor" may be, among other entities, "[t]he board of the common school district or the union high school district in which the public charter school is located that has developed a written charter with an applicant to create a public charter school." ORS 338.005(5)(a).
ORS chapter 338 sets out the process for establishment of the charter school. Under ORS 338.045, the applicant first submits a written proposal to a school district board that includes information about such matters as the proposed school's philosophy, mission, curriculum, governance structure, and budget. The school district is required to hold a public hearing, weigh the proposal in light of statutory criteria, and either approve or reject the proposal. ORS 338.055. Approval triggers a process of negotiation and development of the actual "charter" that becomes the legal basis for the charter school's operation, as set out by ORS 338.065. Several procedural aspects of that statute are relevant to this appeal:
ORS 338.065 (emphasis added). The parties' arguments on appeal, as discussed further below, concern competing interpretations of the italicized text added to the statute by the legislature in 2013. See Or. Laws 2013, ch. 136, § 1.
To summarize, the statute provides a process for, first, school district board approval of an applicant's proposal for a charter school. Following approval, the board becomes the "sponsor," which commences a process whereby the parties are required to "develop a written charter," which may contain different terms from those in the proposal. The statute makes explicit that it is the charter that is "legally binding" between the parties and acts as the "legal authorization for the establishment of the public charter school." The initial charter may last for no more than five years, and may be renewed for an identical period. Subsequent renewals may be for periods between five and 10 years. If the board approves the renewal request, the parties are required to "negotiate a new charter" within 90 days unless they agree to an extension. ORS 338.065(5)(e). The 2013 addition to that subsection further provides that, regardless of a charter's expiration date, "an expiring charter shall remain in effect until a new charter is negotiated." Plaintiff contends that that text pertains only to active and voluntary negotiations, whereas defendant contends that the text means that the charter must continue until the parties successfully negotiate a new charter.
The pertinent facts are not disputed. In 2005, defendant approved plaintiff's request for sponsorship, and the parties entered into a charter agreement for a five-year period that expired on June 30, 2010. In 2009, plaintiff requested renewal of the charter, defendant approved the renewal, and the parties entered into an amended charter agreement effective from July 1, 2010 through June 30, 2015.
In March 2012, well in advance of the expiration of the second charter agreement, plaintiff requested renewal for a 10-year period beginning July 1, 2015. Plaintiff's proposal included several proposed revisions to the charter. In May 2012, defendant's
On May 1, 2014, plaintiff sent letters to eight school districts, including defendant, soliciting interest in sponsoring plaintiff's charter school beginning July 1, 2015, after the expiration of its 2010-2015 charter with defendant. In response to that letter, defendant asserted that the parties were already bound to an additional 10-year charter term from 2015 through 2025. Defendant acknowledged that the parties had failed to negotiate a new charter following the 2012 approval but cited the language of the 2013 amendment to ORS 338.065 to argue that "the parties' failure to negotiate a new 2015-2025 Charter Agreement is inconsequential as the `expiring charter shall remain in effect until a new charter is negotiated.'" That is, according to defendant, the 2010-2015 charter would "simply remain in effect until the parties amend the Charter Agreement."
Plaintiff then brought this action for declaratory judgment under ORS 28.010, seeking a declaration that ORS 338.065(5)(e), including the 2013 amendment, "does not bind [plaintiff] to an additional ten (10) year contractual term with [defendant], running from July 1, 2015 to June 30, 2025, and that [plaintiff] is free to seek contractual relationships with other potential sponsoring school districts that will begin upon expiration of" the 2010-2015 charter. Defendant counterclaimed for declaratory and injunctive relief, seeking a declaration that, under ORS 338.065(5)(e), the parties' current charter "shall remain in effect" past its June 30, 2015, expiration date until the execution of a new charter agreement.
Plaintiff moved for summary judgment, which the trial court granted in a December 11, 2014, letter opinion that succinctly laid out the court's analysis:
As explained below, we agree with the trial court's construction of ORS 338.065(5)(e).
Defendant reasons as follows: (1) a school district's approval of a charter school's renewal request triggers a mandatory period of negotiation, and (2) the 2013 statutory amendment provides for the existing charter to "remain in effect until a new charter is negotiated." Thus, according to defendant,
The parties' dispute poses a question of statutory construction, which we resolve using the framework set out in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). That is, we examine the text of a statute in context, consider legislative history where it appears useful to our analysis, and, if the legislative intent remains unclear, turn to general maxims of statutory construction to resolve the uncertainty. See id. at 171-73, 206 P.3d 1042 (explaining methodology). In so doing, "[o]ur goal is to determine the meaning of the statute that the legislature that enacted it most likely intended." Halperin v. Pitts, 352 Or. 482, 486, 287 P.3d 1069 (2012) (citing PGE v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993)).
We begin, therefore, with the text and context of ORS 338.065. Again, subsection (5)(e) provides:
Under defendant's construction, the concluding phrase, "an expiring charter shall remain in effect until a new charter is negotiated," can be read to mean that "an expiring charter shall remain in effect indefinitely, if a new charter is not negotiated." The difficulty with that construction is that it divorces the language from the language of the preceding sentence. That preceding sentence contemplates a period of active negotiation following the school district's acceptance of a proposed renewal; it does not address the possibility that negotiations will be abandoned or that the parties will fail to negotiate a new charter. This particular subsection presumes success — or, at a minimum, ongoing effort. The language added to the subsection in 2013 should be understood in that context. That is, if the parties are engaged in productive negotiations, the charter school may legally continue in operation, even if the existing charter technically expires before the new charter is executed.
The legislative history further supports that construction. The 2013 amendment to ORS 338.065 was enacted by House Bill (HB) 2875. See Or. Laws 2013, ch. 136, § 1. The bill was first considered by the House Committee on Education, where Representative Julie Parrish, the bill's sponsor, described it as a "cleanup" measure to ensure that a school whose charter had lapsed while "still * * * in a negotiation window" with the sponsoring district could continue to operate until the parties reached an agreement on a new charter. Audio Recording, House Committee on Education, HB 2875, Mar. 22, 2013, at 1:27:47 (testimony of Rep Julie Parrish), https://olis.leg.state.or.us (accessed Apr. 11, 2016). At a later work session, HB 2875 was introduced as "[t]he bill that says if you get to the end of your charter contract, and you're still negotiating the charter contract, you can keep operating your charter until you finish negotiating your charter contract." (Emphasis added.) Audio Recording, House Committee on Education, HB 2875, Apr. 12, 2013, at 1:21:10 (statement of Rep Sara Gelser), https://olis.leg.state.or.us (accessed Apr. 11, 2016). The committee voted to approve HB 2875 without any further discussion, and sent it to the House floor, where it passed unanimously.
Before the Senate Committee on Education and Workforce Development, Representative Parrish again testified that the purpose of HB 2875 was to promote educational continuity for children and to prevent charters
Id. at 37:05 (emphasis added).
Senator Beyer questioned whether HB 2875 would have the effect of eliminating a charter school's leverage during charter negotiations in a situation where, as here, a school sought renewal on terms different from those in the expiring charter. Id. at 37:55. Parrish responded that "[t]he goal is that you don't want to hurt the people who need the service, but you want to make sure that both people can continue to come to the table and have the conversation." Id. at 38:45. The committee also heard testimony from Kaaren Heikes from the Northwest Center for Educational Options. Heikes testified that renewal is "not merely a contract extension," but, rather, a process by which the charter school and sponsoring district agree to renew the relationship and then, negotiate a contract. Id. at 42:10. Heikes further explained that, during charter negotiations, "the reality is the district is in the power position with the charter school. They always are. And that's just the way it's set up." Id. at 42:50. According to Heikes, HB 2875 would protect charter schools that otherwise "feel pressure * * * to either accept terms that aren't acceptable to them, or to close their doors" by creating a "longer timeframe to mutually agree to new terms." Id. at 43:41.
The legislative history thus confirms that the purpose of the 2013 amendment was to benefit charter schools and their students by ensuring that their charters would not lapse, threatening the schools' ability to operate, while the details of a new charter agreement were being negotiated.
In short, the text, context, and legislative history support the construction urged by plaintiff and adopted by the trial court.
Second, if the existing charter is to take on indefinite life at the moment that the school district approves a renewal, it is difficult to see what purpose is served by the 90-day negotiation period in the statute. Furthermore, defendant's reading would create a bargaining imbalance that contradicts the legislature's intention. If the terms of the existing charter became locked in for the entirety of the renewal period upon the district's approval of the renewal request, the district would have no incentive to agree to any less favorable terms in the new agreement. A charter school seeking renewal but on different terms would be in an untenable
For the foregoing reasons, we conclude that the trial court did not err in granting plaintiffs motion for summary judgment.
Affirmed.