First Substitute H.B. 278

Representative Ron Bigelow proposes the following substitute bill:

1 CHARTER SCHOOL FUNDING AMENDMENTS
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Ron Bigelow
5 Senate Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill modifies provisions related to the funding of charter schools.
10 Highlighted Provisions:
11 This bill:
12 . directs the State Charter School Board to provide support services to charter schools
13 from money appropriated for that purpose;
14 . annually increases the maximum student capacity of charter schools;
15 . requires a school district to provide an allocation of local revenues for each resident
16 student who attends a charter school;
17 . requires the State Board of Education to:
18 . deduct from a school district's state funds the allocation of local revenues for a
19 charter school student; and
20 . remit the money to the student's charter school;
21 . directs the Legislature to provide an appropriation for charter schools to supplement
22 local revenues allocated by school districts; and
23 . modifies charter school administrative cost provisions.
24 Monies Appropriated in this Bill:
25 None

26 Other Special Clauses:
27 This bill takes effect on July 1, 2008.
28 Utah Code Sections Affected:
29 AMENDS:
30 53A-1a-501.6, as last amended by Laws of Utah 2007, Chapter 344
31 53A-1a-502.5, as last amended by Laws of Utah 2007, Chapter 344
32 53A-1a-513, as last amended by Laws of Utah 2005, Chapters 9 and 291
33 53A-17a-108, as last amended by Laws of Utah 2007, Chapter 344
34
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 53A-1a-501.6 is amended to read:
37 53A-1a-501.6. Power and duties of State Charter School Board.
38 (1) The State Charter School Board shall:
39 (a) authorize and promote the establishment of charter schools, subject to the
40 provisions in this part;
41 (b) annually review and evaluate the performance of charter schools authorized by the
42 State Charter School Board and hold the schools accountable for their performance;
43 (c) monitor charter schools authorized by the State Charter School Board for
44 compliance with federal and state laws, rules, and regulations;
45 (d) provide technical support to charter schools and persons seeking to establish charter
46 schools by:
47 (i) identifying and promoting successful charter school models;
48 (ii) facilitating the application and approval process for charter school authorization;
49 (iii) directing charter schools and persons seeking to establish charter schools to
50 sources of private funding and support;
51 (iv) reviewing and evaluating proposals to establish charter schools for the purpose of
52 supporting and strengthening proposals before an application for charter school authorization is
53 submitted to the State Charter School Board or a local school board; and
54 (v) assisting charter schools to understand and carry out their charter obligations;
55 (e) provide technical support, as requested, to a local school board relating to charter
56 schools;

57 (f) make recommendations on legislation and rules pertaining to charter schools to the
58 Legislature and State Board of Education, respectively; and
59 (g) make recommendations to the State Board of Education on the funding of charter
60 schools.
61 (2) The State Charter School Board may:
62 (a) contract;
63 (b) sue and be sued; and
64 (c) (i) at the discretion of the charter school, provide administrative services to, or
65 perform other school functions for, charter schools authorized by the State Charter School
66 Board; and
67 (ii) charge fees for the provision of services or functions.
68 (3) (a) The State Charter School Board shall provide support services to charter schools
69 from monies appropriated under Subsection (3)(b).
70 (b) Subject to future budget constraints, the Legislature shall annually appropriate
71 money to the State Charter School Board for support services to charter schools in the amount
72 of $30 times the number of students enrolled in charter schools on October 1.
73 Section 2. Section 53A-1a-502.5 is amended to read:
74 53A-1a-502.5. Charter schools -- Maximum authorized students.
75 (1) The State Charter School Board and local school boards may only authorize a
76 combined maximum student capacity of:
77 [(a) 27,921 students for the charter schools in the 2007-08 school year; and]
78 [(b)] (a) 32,921 students for the charter schools in the 2008-09 school year[.]; and
79 (b) an annual increase of 7,500 students for the charter schools beginning in the
80 2009-10 school year.
81 (2) (a) The State Board of Education, in consultation with the State Charter School
82 Board, shall allocate the students under Subsection (1) between the State Charter School Board
83 and local school boards.
84 (b) 2,500 of the student capacity described under Subsection (1)(b) shall be allocated to
85 increase the maximum student capacity of operating charter schools.
86 (c) If the operating charter schools do not use the allocation described under
87 Subsection (2)(b), the remaining student capacity may be used by new charter schools.

88 Section 3. Section 53A-1a-513 is amended to read:
89 53A-1a-513. Funding for charter schools.
90 (1) As used in this section:
91 (a) "Charter school students' average local revenues" means the amount determined as
92 follows:
93 (i) for each student enrolled in a charter school on the previous October 1, calculate the
94 district per pupil local revenues of the school district in which the student resides;
95 (ii) sum the district per pupil local revenues for each student enrolled in a charter
96 school on the previous October 1; and
97 (iii) divide the sum calculated under Subsection (1)(a)(ii) by the number of students
98 enrolled in charter schools on the previous October 1.
99 (b) "District per pupil local revenues" means the amount determined as follows, using
100 data from the most recently published school district annual financial reports and state
101 superintendent's annual report:
102 (i) calculate the sum of a school district's revenue received from:
103 (A) a voted levy imposed under Section 53A-17a-133 ;
104 (B) a board levy imposed under Section 53A-17a-134 ;
105 (C) 10% of the cost of the basic program levy imposed under Section 53A-17a-145 ;
106 (D) a tort liability levy imposed under Section 63-30d-704 ;
107 (E) a capital outlay levy imposed under Section 53A-16-107 ;
108 (F) a voted capital outlay levy imposed under Section 53A-16-110 ;
109 (G) state support for a voted levy program provided under Section 53A-17a-133 ;
110 (H) state support for a board levy program provided under Section 53A-17a-134 ; and
111 (I) state ongoing appropriations to the Capital Outlay Foundation and Enrollment
112 Growth Programs created in Section 53A-21-102 ; and
113 (ii) divide the sum calculated under Subsection (1)(b)(i) by the sum of:
114 (A) a school district's average daily membership; and
115 (B) the average daily membership of a school district's resident students who attend
116 charter schools.
117 (c) "Resident student" means a student who is considered a resident of the school
118 district under Title 53A,Chapter 2, District of Residency.

119 (d) "Statewide average debt service revenues" means the amount determined as
120 follows, using data from the most recently published state superintendent's annual report:
121 (i) sum the revenues of each school district from the debt service levy imposed under
122 Section 11-14-310 ; and
123 (ii) divide the sum calculated under Subsection (1)(d)(i) by statewide school district
124 average daily membership.
125 [(1)] (2) (a) Charter schools shall receive funding as described in this section, except
126 Subsections [(2)] (3) through [(7)] (8) do not apply to charter schools described in Subsection
127 [(1)] (2)(b).
128 (b) Charter schools authorized by local school boards that are converted from district
129 schools or operate in district facilities without paying reasonable rent shall receive funding as
130 prescribed in Section 53A-1a-515 .
131 [(2)] (3) (a) Except as provided in Subsection [(2)] (3)(b), a charter school shall receive
132 state funds, as applicable, on the same basis as a school district receives funds.
133 (b) In distributing funds under Title 53A, Chapter 17a, Minimum School Program Act,
134 to charter schools, charter school pupils shall be weighted, where applicable, as follows:
135 (i) .55 for kindergarten pupils;
136 (ii) .9 for pupils in grades 1-6;
137 (iii) .99 for pupils in grades 7-8; and
138 (iv) 1.2 for pupils in grades 9-12.
139 [(c) The State Board of Education shall make rules in accordance with Title 63,
140 Chapter 46a, Utah Administrative Rulemaking Act, to administer Subsection (2)(b), including
141 hold harmless provisions to maintain a charter elementary school's funding level for a period of
142 two years after the effective date of the distribution formula.]
143 [(d) Subsection (2)(b) does not apply to funds appropriated to charter schools to
144 replace local property tax revenues.]
145 [(3) The State Board of Education shall adopt rules to provide for the distribution of
146 monies to charter schools under this section.]
147 [(4) (a) The Legislature shall provide an appropriation for charter schools for each of
148 their students to replace some of the local property tax revenues that are not available to charter
149 schools. The amount of money provided for each charter school student shall be determined

150 by:]
151 [(i) calculating the sum of:]
152 [(A) school districts' operations and maintenance revenues derived from local property
153 taxes, except revenues from imposing a minimum basic tax rate pursuant to Section
154 53A-17a-135 ;]
155 [(B) school districts' capital projects revenues derived from local property taxes; and]
156 [(C) school districts' expenditures for interest on debt; and]
157 [(ii) dividing the sum by the total average daily membership of the districts' schools.]
158 (4) (a) (i) Except as provided in Subsection (4)(a)(ii), a school district shall allocate a
159 portion of school district revenues for each resident student of the school district who is
160 enrolled in a charter school on October 1 as follows:
161 (A) in fiscal year 2008-09, the allocation shall equal 25% of the lesser of:
162 (I) district per pupil local revenues; or
163 (II) charter school students' average local revenues;
164 (B) in fiscal year 2009-10, the allocation shall equal 50% of the lesser of:
165 (I) district per pupil local revenues; or
166 (II) charter school students' average local revenues;
167 (C) in fiscal year 2010-11, the allocation shall equal 75% of the lesser of:
168 (I) district per pupil local revenues; or
169 (II) charter school students' average local revenues; and
170 (D) beginning in fiscal year 2011-12, the allocation shall equal 100% of the lesser of:
171 (I) district per pupil local revenues; or
172 (II) charter school students' average local revenues.
173 (ii) For the purpose of allocating school district revenues under Subsection (4)(a)(i), a
174 kindergarten student who is enrolled in less than a full-day kindergarten program is weighted as
175 .55 of a student.
176 (iii) Nothing in this Subsection (4)(a) affects the school bond guarantee program
177 established under Chapter 28, Utah School Bond Guaranty Act.
178 (b) The State Board of Education shall:
179 (i) deduct an amount equal to the allocation provided under Subsection (4)(a) from
180 state funds the school district is authorized to receive under Title 53A, Chapter 17a, Minimum

181 School Program Act; and
182 (ii) remit the money to the student's charter school.
183 (c) Notwithstanding the method used to transfer school district revenues to charter
184 schools as provided in Subsection (4)(b), a school district may deduct the allocations to charter
185 schools under this section from:
186 (i) unrestricted revenues available to the school district; or
187 (ii) the revenue sources listed in Subsections (1)(b)(i)(A) through (I) based on the
188 portion of the allocations to charter schools attributed to each of the revenue sources listed in
189 Subsections (1)(b)(i)(A) through (I).
190 (d) (i) Subject to future budget constraints, the Legislature shall provide an
191 appropriation for charter schools for each student enrolled on October 1 to supplement the
192 allocation of school district revenues under Subsection (4)(a).
193 (ii) Except as provided in Subsections (4)(d)(iii) and (iv), the amount of money
194 provided by the state for a charter school student shall be the sum of:
195 (A) charter school students' average local revenues minus the allocation of school
196 district revenues under Subsection (4)(a); and
197 (B) statewide average debt service revenues.
198 (iii) If the total of a school district's allocation for a charter school student under
199 Subsection (4)(a) and the amount provided by the state under Subsection (4)(d)(ii) is less than
200 $1427, the state shall provide an additional supplement so that a charter school receives at least
201 $1427 per student under this Subsection (4).
202 (iv) For the purpose of providing state monies for charter school students under this
203 Subsection (4)(d), a kindergarten student who is enrolled in less than a full-day kindergarten
204 program is weighted as .55 of a student.
205 [(b)] (e) Of the monies provided to a charter school under this Subsection (4)[(a)], 10%
206 shall be expended for funding school facilities only.
207 [(c) To qualify for money under Subsection (4)(a), a new charter school shall, by
208 September 30 of the school year prior to the school year it intends to begin operations:]
209 [(i) obtain approval of its application for a charter from:]
210 [(A) the State Board of Education, pursuant to Section 53A-1a-505 ; or]
211 [(B) a local school board, pursuant to Section 53A-1a-515 ; and]

212 [(ii) submit to the chartering entity an estimate of the charter school's first year
213 enrollment.]
214 [(d) Subsection (4)(c) does not apply to charter schools beginning operations in the
215 2005-06 school year.]
216 [(e) By December 1, the State Charter School Board shall submit to the Governor's
217 Office of Planning and Budget and the Office of the Legislative Fiscal Analyst an estimate of
218 total charter school enrollment in the state for the following school year.]
219 (5) Charter schools are eligible to receive federal funds if they meet all applicable
220 federal requirements and comply with relevant federal regulations.
221 (6) The State Board of Education shall distribute funds for charter school students
222 directly to the charter school.
223 (7) (a) Notwithstanding Subsection [(2)] (3), a charter school is not eligible to receive
224 state transportation funding.
225 (b) The board shall also adopt rules relating to the transportation of students to and
226 from charter schools, taking into account Sections 53A-2-210 and 53A-17a-127 .
227 (c) The governing body of the charter school may provide transportation through an
228 agreement or contract with the local school board, a private provider, or with parents.
229 (8) (a) (i) The state superintendent of public instruction may allocate grants for both
230 start-up and ongoing costs to eligible charter school applicants from monies appropriated for
231 the implementation of this part.
232 (ii) Applications for the grants shall be filed on a form determined by the state
233 superintendent and in conjunction with the application for a charter.
234 (iii) The amount of a grant may vary based upon the size, scope, and special
235 circumstances of the charter school.
236 (iv) The governing board of the charter school shall use the grant to meet the expenses
237 of the school as established in the school's charter.
238 (b) The State Board of Education shall coordinate the distribution of federal monies
239 appropriated to help fund costs for establishing and maintaining charter schools within the
240 state.
241 (9) (a) A charter school may receive, hold, manage and use any devise, bequest, grant,
242 endowment, gift, or donation of any property made to the school for any of the purposes of this

243 part.
244 (b) It is unlawful for any person affiliated with a charter school to demand or request
245 any gift, donation, or contribution from a parent, teacher, employee, or other person affiliated
246 with the charter school as a condition for employment or enrollment at the school or continued
247 attendance at the school.
248 [(10) The State Office of Education shall use up to $1,044,000 of funding provided for
249 new growth to fund additional growth needs in charter schools in fiscal year 2005.]
250 Section 4. Section 53A-17a-108 is amended to read:
251 53A-17a-108. Weighted pupil units for school district administrative costs --
252 Appropriation for charter school administrative costs.
253 (1) Administrative costs weighted pupil units are computed and distributed to districts
254 in accordance with the following schedule:
255 Administrative Costs Schedule
256 School District Enrollment as of October 1 Weighted Pupil Units
257 1 - 2,000 students 53
258 2,001 - 10,000 students 48
259 10,001 - 20,000 students 25
260 20,001 and above 16
261 (2) (a) Money appropriated to the State Board of Education for charter school
262 administrative costs, including an appropriation in Section 53A-17a-104 , shall be distributed to
263 charter schools in the amount of [$62] $70 for each charter school student in enrollment.
264 (b) Charter schools are encouraged to identify and use cost-effective methods of
265 performing administrative functions, including contracting for administrative services with the
266 State Charter School Board as provided in Section 53A-1a-501.6 .
267 (3) Charter schools are not eligible for funds for administrative costs under Subsection
268 (1).
269 Section 5. Effective date.
270 This bill takes effect on July 1, 2008.