Third Substitute H.B. 164

Senator Lyle W. Hillyard proposes the following substitute bill:

1 CHARTER SCHOOL AMENDMENTS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Ron Bigelow
5 Senate Sponsor: Lyle W. Hillyard
6
7 LONG TITLE
8 General Description:
9 This bill modifies provisions relating to charter schools.
10 Highlighted Provisions:
11 This bill:
12 . provides definitions;
13 . modifies charter school application and authorization provisions;
14 . modifies certain requirements for charter schools, including those relating to charter
15 school assets and school closures;
16 . modifies charter school funding provisions;
17 . regulates certain transactions and relationships relating to charter schools;
18 . requires the State Board of Education and the State Charter School Board to
19 develop a joint proposal and submit the proposal to the Executive Appropriations
20 Committee;
21 . makes a nonlapsing appropriation; and
22 . makes technical corrections.
23 Monies Appropriated in this Bill:
24 This bill appropriates:
25 . as an ongoing appropriation subject to future budget constraints, $35,971,488 from

26 the Uniform School Fund for fiscal year 2007-08 to the State Board of Education for charter
27 schools;
28 . $9,500,000 from the Uniform School Fund for fiscal year 2007-08 only to the State
29 Board of Education for charter schools; and
30 . $6,000,000 from the Uniform School Fund for fiscal year 2007-08 only to the
31 Charter School Building Subaccount within the School Building Revolving
32 Account.
33 Other Special Clauses:
34 This bill takes effect on July 1, 2007.
35 This bill coordinates with H.B. 3 by providing that certain amendments in this bill
36 supersede the amendments in H.B. 3 and that certain amendments in H.B. 3 supersede
37 the amendments in this bill.
38 This bill coordinates with H.B. 160 by providing that certain amendments in this bill
39 supersede the amendments in H.B. 160 and that certain amendments in H.B. 160
40 supersede the amendments in this bill.
41 Utah Code Sections Affected:
42 AMENDS:
43 53A-1a-501.3, as enacted by Chapter 251, Laws of Utah 2004
44 53A-1a-501.6, as last amended by Chapter 291, Laws of Utah 2005
45 53A-1a-502.5, as enacted by Chapter 354, Laws of Utah 2006
46 53A-1a-504, as last amended by Chapter 291, Laws of Utah 2005
47 53A-1a-506, as last amended by Chapters 291 and 301, Laws of Utah 2005
48 53A-1a-507, as last amended by Chapter 251, Laws of Utah 2004
49 53A-1a-508, as last amended by Chapter 291, Laws of Utah 2005
50 53A-1a-510, as last amended by Chapter 291, Laws of Utah 2005
51 53A-1a-514, as enacted by Chapter 231, Laws of Utah 1998
52 53A-1a-515, as last amended by Chapter 354, Laws of Utah 2006
53 53A-17a-104, as last amended by Chapters 4 and 354, Laws of Utah 2006
54 53A-17a-108, as last amended by Chapter 221, Laws of Utah 2003
55 53A-21-104, as last amended by Chapter 105, Laws of Utah 2005
56 ENACTS:

57 53A-1a-506.5, Utah Code Annotated 1953
58 53A-1a-510.5, Utah Code Annotated 1953
59 53A-1a-517, Utah Code Annotated 1953
60 53A-1a-518, Utah Code Annotated 1953
61 REPEALS:
62 53A-1a-501.8, as enacted by Chapter 251, Laws of Utah 2004
63 Uncodified Material Affected:
64 ENACTS UNCODIFIED MATERIAL
65
66 Be it enacted by the Legislature of the state of Utah:
67 Section 1. Section 53A-1a-501.3 is amended to read:
68 53A-1a-501.3. Definitions.
69 As used in this part[, "chartering]:
70 (1) "Asset" means property of all kinds, real and personal, tangible and intangible, and
71 includes:
72 (a) cash;
73 (b) stock or other investments;
74 (c) real property;
75 (d) equipment and supplies;
76 (e) an ownership interest;
77 (f) a license;
78 (g) a cause of action; and
79 (h) any similar property.
80 (2) "Chartering entity" means the entity that authorizes the establishment of a charter
81 school.
82 Section 2. Section 53A-1a-501.6 is amended to read:
83 53A-1a-501.6. Power and duties of State Charter School Board.
84 (1) The State Charter School Board shall:
85 (a) authorize and promote the establishment of charter schools, subject to the
86 [procedures] provisions in [Section 53A-1a-505 ] this part;
87 (b) annually review and evaluate the performance of charter schools authorized by the

88 State Charter School Board and hold the schools accountable for their performance;
89 (c) monitor charter schools authorized by the State Charter School Board for
90 compliance with federal and state laws, rules, and regulations;
91 (d) provide technical support to charter schools and persons seeking to establish charter
92 schools by:
93 (i) identifying and promoting successful charter school models;
94 (ii) facilitating the application and approval process for charter school authorization;
95 (iii) directing charter schools and persons seeking to establish charter schools to
96 sources of private funding and support;
97 (iv) reviewing and evaluating proposals to establish charter schools for the purpose of
98 supporting and strengthening proposals before an application for charter school authorization is
99 submitted to the State Charter School Board or a local school board; and
100 (v) assisting charter schools to understand and carry out their charter obligations;
101 (e) provide technical support, as requested, to a local school board relating to charter
102 schools;
103 (f) make recommendations on legislation and rules pertaining to charter schools to the
104 Legislature and State Board of Education, respectively; and
105 (g) make recommendations to the State Board of Education on the funding of charter
106 schools.
107 (2) The State Charter School Board may:
108 (a) contract;
109 (b) sue and be sued; and
110 (c) (i) at the discretion of the charter school, provide administrative services to, or
111 perform other school functions for, charter schools authorized by the State Charter School
112 Board; and
113 (ii) charge fees for the provision of services or functions.
114 Section 3. Section 53A-1a-502.5 is amended to read:
115 53A-1a-502.5. Charter schools -- Maximum authorized students.
116 (1) The State Charter School Board and local school boards may only authorize[: (1) a
117 maximum of five charter schools that will begin operation in the 2007-08 school year; and (2)]
118 a combined maximum student capacity of [5,000]:

119 (a) 27,921 students for the charter schools [authorized in accordance with Subsection
120 (1).] in the 2007-08 school year; and
121 (b) 32,921 students for the charter schools in the 2008-09 school year.
122 (2) The State Board of Education, in consultation with the State Charter School Board,
123 shall allocate the students under Subsection (1) between the State Charter School Board and
124 local school boards.
125 Section 4. Section 53A-1a-504 is amended to read:
126 53A-1a-504. Proposal.
127 (1) (a) A proposal to establish a charter school may be made by an individual or groups
128 of individuals, including teachers and parents or guardians of students who will attend the
129 school, or a not-for-profit legal entity organized under the laws of this state.
130 (b) Except as provided in Section 53A-1a-515 , a proposal to establish a charter school
131 shall include provisions that the charter school will be organized and managed under Title 16,
132 Chapter 6a, Utah Revised Nonprofit Corporation Act, after its authorization.
133 (2) (a) The principal, teachers, or parents of students at an existing public school may
134 submit a proposal to convert the school or a portion of the school to charter status.
135 (b) (i) At least 2/3 of the licensed educators employed at the school and at least
136 two-thirds of the parents or guardians of students enrolled at the school must have signed a
137 petition approving the proposal prior to its submission to the chartering entity if the entire
138 school is applying for charter status.
139 (ii) The percentage is reduced to a simple majority if the conversion is for only a
140 portion of the school.
141 (c) A proposal submitted under Subsection (2)(a) must first be approved by the local
142 school board based on its determination that:
143 (i) students opting not to attend the proposed converted school would have access to a
144 comparable public education alternative; and
145 (ii) current teachers who choose not to teach at the converted charter school or who are
146 not retained by the school at the time of its conversion would receive a first preference for
147 transfer to open teaching positions for which they qualify within the school district. If no
148 positions are open, contract provisions or board policy regarding reduction in staff would
149 apply.

150 (3) A parochial school or home school is not eligible for charter school status.
151 (4) Beginning on July 1, 2007, a charter school application shall include a statement
152 that indicates the charter school's intent relating to the establishment of its charter school
153 facilities, including:
154 (a) whether the charter school intends to lease or purchase its facilities; and
155 (b) intended financing arrangements.
156 Section 5. Section 53A-1a-506 is amended to read:
157 53A-1a-506. Eligible students.
158 (1) All resident students of the state qualify for admission to a charter school, subject
159 to the limitations set forth in this section and Section 53A-1a-506.5 .
160 (2) (a) A charter school shall enroll an eligible student who submits a timely
161 application, unless the number of applications exceeds the capacity of a program, class, grade
162 level, or the school.
163 (b) (i) If the number of applications exceeds the capacity of a program, class, grade
164 level, or the school, then students shall be selected on a random basis, except that the school
165 may give preference to:
166 (A) a student of a parent who has actively participated in the development of the
167 school;
168 (B) siblings of students presently enrolled in the school;
169 (C) a student of a parent who is employed by the school;
170 (D) students articulating between charter schools offering similar programs that are
171 governed by the same governing body; and
172 (E) students articulating from one charter school to another pursuant to an articulation
173 agreement between the charter schools that is approved by the State Charter School Board.
174 (ii) The school may give preference to students who reside within:
175 (A) the school district in which the school is located;
176 (B) the municipality in which the school is located; or
177 (C) a two-mile radius from the school.
178 (c) When a public school converts to charter status, the school shall give enrollment
179 preference to students who would have otherwise attended it as a regular public school.
180 (3) A charter school may not discriminate in its admission policies or practices on the

181 same basis as other public schools may not discriminate in their admission policies and
182 practices.
183 Section 6. Section 53A-1a-506.5 is enacted to read:
184 53A-1a-506.5. Charter school students -- Applications -- Deadlines.
185 (1) (a) The State School Board, in consultation with the State Charter School Board,
186 shall make rules describing procedures for students to follow in applying for entry into a new
187 charter school or a charter school that has increased its capacity.
188 (b) The rules under Subsection (1)(a) shall provide, as a minimum, for:
189 (i) distribution to interested parties of information about charter schools, charter school
190 opening dates, and how to apply for admission;
191 (ii) use of standard application forms prescribed by the State Board of Education;
192 (iii) submission of applications until the third Friday in February by those seeking
193 admission for the following year;
194 (iv) written notification to the student's parent or legal guardian of an offer of
195 acceptance or the rejection of an application by March 31;
196 (v) written acceptance of the offer by the student's parent or legal guardian by April 30;
197 (vi) written notification to a student's current charter school or resident school district
198 upon acceptance of that student for enrollment in a charter school; and
199 (vii) the admission of students, provided that the admission does not disqualify the
200 charter school from any federal funding, at:
201 (A) any time to protect the health or safety of a student; or
202 (B) times other than those permitted under standard policies if there are other
203 conditions of special need that warrant consideration.
204 (c) The rules under Subsection (1)(a) shall prevent the parent of a student who is
205 enrolled in a charter school or who has accepted an offer as described in Subsection (1)(b)(v)
206 from duplicating enrollment for that student in another charter school or a school district
207 without following the withdrawal procedures described in Subsection (2).
208 (2) The parent of a student enrolled in a charter school may withdraw the student from
209 that charter school for enrollment in another charter school or a school district by:
210 (a) submitting notice of intent to enroll the student in the district of residence for the
211 subsequent year to the student's charter school no later than March 31 of the current school

212 year;
213 (b) submitting notice of intent to enroll the student in another charter school for the
214 subsequent school year to the current charter school of attendance, together with a letter of
215 acceptance from the proposed charter school of attendance, no later than March 31 of the
216 current school year; or
217 (c) obtaining approval from both the charter school of attendance and the school
218 district or charter school in which enrollment is sought, if the parent desires to change the
219 student's enrollment during the school year or after March 31.
220 (3) When a vacancy occurs because a student has withdrawn from a charter school, that
221 charter school may immediately enroll a new student from its list of applicants.
222 (4) Unless provisions have previously been made for enrollment in another school, a
223 charter school releasing a student from enrollment shall immediately notify the district of
224 residence, which shall enroll the student in the resident district and take such additional steps
225 as may be necessary to ensure compliance with laws governing school attendance.
226 (5) A school district or charter school may charge secondary students a one-time $5
227 processing fee, to be paid at the time of application.
228 Section 7. Section 53A-1a-507 is amended to read:
229 53A-1a-507. Requirements for charter schools.
230 (1) A charter school shall be nonsectarian in its programs, admission policies,
231 employment practices, and operations.
232 (2) A charter school may not charge tuition or fees, except those fees normally charged
233 by other public schools.
234 (3) A charter school shall meet all applicable federal, state, and local health, safety, and
235 civil rights requirements.
236 (4) (a) A charter school shall make the same annual reports required of other public
237 schools under Title 53A, State System of Public Education, including an annual financial audit
238 report.
239 (b) A charter school shall file its annual financial audit report with the Office of the
240 State Auditor within six months of the end of the fiscal year.
241 (5) A charter school shall be accountable to its chartering entity for performance as
242 provided in the school's charter.

243 (6) A charter school may not advocate unlawful behavior.
244 (7) Except as provided in Section 53A-1-515 , a charter school shall be organized and
245 managed under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, after its
246 authorization.
247 (8) A charter school shall provide adequate liability and other appropriate insurance.
248 (9) Beginning on July 1, 2007, a charter school shall submit any lease, lease-purchase
249 agreement, or other contract or agreement relating to the charter school's facilities or financing
250 the charter school facilities to its chartering entity for review and advice prior to the charter
251 school entering into the lease, agreement, or contract.
252 (10) A charter school may not employ an educator whose license has been suspended or
253 revoked by the State Board of Education as provided in Section 53A-6-501 .
254 Section 8. Section 53A-1a-508 is amended to read:
255 53A-1a-508. Content of a charter -- Modification of charter.
256 (1) The major issues involving the operation of a charter school shall be considered in
257 advance by the applicant for a charter school and written into the school's charter.
258 (2) The governing body of the charter school and the chartering entity shall sign the
259 charter.
260 (3) The charter shall include:
261 (a) the age or grade levels to be served by the school;
262 (b) the projected maximum number of students to be enrolled in the school and the
263 projected enrollment in each of the first three years of operations;
264 (c) the governance structure of the school;
265 (d) the financial plan for the school and the provisions which will be made for auditing
266 the school under Subsection 53A-1a-507 (4);
267 (e) the mission and education goals of the school, the curriculum offered, and the
268 methods of assessing whether students are meeting educational goals, to include at a minimum
269 participation in the Utah Performance Assessment System for Students under Chapter 1, Part 6,
270 Achievement Tests;
271 (f) admission and dismissal procedures, including suspension procedures;
272 (g) procedures to review complaints of parents regarding the operation of the school;
273 (h) the opportunity for parental involvement at the school;

274 (i) how the school will provide adequate liability and other appropriate insurance for
275 the school, its governing body, and its employees;
276 (j) the proposed school calendar, including the length of the school day and school
277 year;
278 (k) whether any agreements have been entered into or plans developed with school
279 districts regarding participation of charter school students in extracurricular activities within
280 the school districts;
281 (l) the district within which the school will be located and the address of the school's
282 physical facility, if known at the time the charter is signed;
283 (m) the qualifications to be required of the teachers, including the requirement of a
284 criminal background check;
285 (n) in the case of an existing public school converting to charter status, alternative
286 arrangements for current students who choose not to attend the charter school and for current
287 teachers who choose not to teach at the school after its conversion to charter status;
288 (o) the school's intention to create a library;
289 (p) a description of school administrative and supervisory services;
290 (q) fiscal procedures to be used by the school; and
291 (r) the school's policies and procedures regarding:
292 (i) employee evaluation; and
293 (ii) employment of relatives.
294 (4) A charter may be modified by mutual agreement of the board and the governing
295 body of the school.
296 (5) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
297 State Board of Education shall make rules that establish the procedures and deadlines for
298 approved charter schools to apply and qualify for expansion, including the establishment of
299 satellite campuses.
300 Section 9. Section 53A-1a-510 is amended to read:
301 53A-1a-510. Termination of a charter.
302 (1) A chartering entity may terminate a school's charter for any of the following
303 reasons:
304 (a) failure of the school to meet the requirements stated in the charter;

305 (b) failure to meet generally accepted standards of fiscal management;
306 (c) subject to Subsection [(5)] (6), failure to make adequate yearly progress under the
307 No Child Left Behind Act of 2001, 20 U.S.C. Sec. 6301 et seq.;
308 (d) violation of requirements under this part or another law; or
309 (e) other good cause shown.
310 (2) (a) The chartering entity shall notify the governing body of the school of the
311 proposed termination in writing, state the grounds for the termination, and stipulate that the
312 governing body may request an informal hearing before the chartering entity.
313 (b) The chartering entity shall conduct the hearing in accordance with Title 63, Chapter
314 46b, Administrative Procedures Act, within 30 days after receiving a written request under
315 Subsection (2)(a).
316 (c) If the chartering entity, by majority vote, approves a motion to terminate a charter
317 school, the governing body of the charter school may appeal the decision to the State Board of
318 Education.
319 (d) (i) The State Board of Education shall hear an appeal of a termination made
320 pursuant to Subsection (2)(c).
321 (ii) The State Board of Education's action is final action subject to judicial review.
322 (3) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
323 the State Board of Education shall make rules that require a charter school to report any threats
324 to the health, safety, or welfare of its students to the State Charter School Board in a timely
325 manner.
326 (b) The rules under Subsection (3)(a) shall also require the charter school report to
327 include what steps the charter school has taken to remedy the threat.
328 [(3)] (4) The chartering entity may terminate a charter immediately if good cause has
329 been shown or if the health, safety, or welfare of the students at the school is threatened.
330 [(4)] (5) If a charter is terminated during a school year:
331 (a) the school district in which the school is located may assume operation of the
332 school; or
333 (b) a private management company may be hired to operate the school.
334 [(5)] (6) (a) If a charter is terminated, a student who attended the school may apply to
335 and shall be enrolled in another public school under the enrollment provisions of Title 53A,

336 Chapter 2, Part 2, District of Residency, subject to space availability.
337 (b) Normal application deadlines shall be disregarded under Subsection [(5)] (6)(a).
338 [(6)] (7) A chartering entity may terminate a charter pursuant to Subsection (1)(c)
339 under the same circumstances that local educational agencies are required to implement
340 alternative governance arrangements under 20 U.S.C. Sec. 6316.
341 Section 10. Section 53A-1a-510.5 is enacted to read:
342 53A-1a-510.5. Charter school closure.
343 (1) If a charter school is closed for any reason, including the termination of a charter in
344 accordance with Section 53A-1-510 or the conversion of a charter school to a private school,
345 the provisions of this section apply.
346 (2) (a) As soon as possible after the decision is made to close a charter school,
347 notification of the decision, in writing, shall be provided by the charter school to:
348 (i) its chartering entity;
349 (ii) the State Charter School Board;
350 (iii) the State Board of Education;
351 (iv) parents of its students;
352 (v) its creditors; and
353 (vi) the school district in which the charter school is located and other charter schools
354 located in that school district.
355 (b) The notification under Subsection (2)(a) shall include:
356 (i) the proposed date of school closure;
357 (ii) the school's plans to help students identify and transition into a new school; and
358 (iii) contact information for the charter school during the transition.
359 (3) A closing charter school shall:
360 (a) present a school closure plan to its chartering entity as soon as possible after the
361 decision to close is made;
362 (b) designate a custodian for the protection of student files and school business records;
363 (c) maintain a base of operation throughout the charter school closing, including:
364 (i) an office;
365 (ii) hours of operation; and
366 (iii) operational telephone service with voice messaging stating the hours of operation;

367 (d) maintain insurance coverage and risk management coverage throughout the
368 transition to closure and for a period following closure of the charter school as specified by the
369 chartering entity;
370 (e) complete a financial audit immediately after the decision to close is made;
371 (f) inventory all assets of the charter school;
372 (g) list all creditors of the charter school and specifically identify secured creditors and
373 assets that are security interests; and
374 (h) protect all school assets against theft, misappropriation, and deterioration.
375 (4) (a) Any assets held subject to written conditions or limitations in accordance with
376 Section 53A-1a-517 shall be disposed of in accordance with those conditions or limitations.
377 (b) All liabilities and obligations of the closing charter school shall be paid and
378 discharged or adequate provisions shall be made to discharge the liabilities and obligations to
379 the extent of the closing school's assets.
380 (c) (i) The remaining assets shall be returned to the closing charter school's chartering
381 entity.
382 (ii) The chartering entity may liquidate assets at fair market value or assign the assets
383 to another public school.
384 (5) To the extent possible, all leases, service agreements, and other contracts not
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