Section 1. Section 53F-2-706 is amended to read:53F-2-706Effective upon governor's approval. Small charter school base funding -- Base funding study.(1)Subject to legislative appropriation, the state board shall distribute small charter school base funding to charter schools with 2,000 or fewer students in the amount of the greater of $40,000 or $115 per student.(2)A charter school's eligibility for small charter school base funding is determined by the charter school's student enrollment on October 1 of a given year.(3)Notwithstanding this section and subject to legislative appropriations, including intent language for the applicable fiscal year, the state board may distribute to charter schools, regardless of size, one-time funding that the Legislature appropriates to mitigate funding losses as described in legislative appropriations.(4)(a)Subject to legislative appropriations, the state board shall coordinate and facilitate a comprehensive study of administrative and base funding costs for charter schools.(b)The study described in Subsection (4)(a) shall include the following members to constitute the study group:(i)a charter school business administrator from a small charter school whom the chair of the state board appoints;(ii)a charter school director from a large charter school whom the chair of the state board appoints;(iii)a school district business administrator whom the chair of the state board appoints;(iv)the director of each charter school association that has a member charter school operating in the state, or the director's designee;(v)a member of the Utah State Charter School Board whom the chair of the state board appoints;(vi)a member of the state board whom the chair of the state board appoints;(vii)relevant staff from the state board whom the chair of the state board appoints; and(viii)a representative from the Governor's Office of Planning and Budget whom the director of the Governor's Office of Planning and Budget appoints.(c)The chair of the state board shall:(i)convene the first meeting of the study group no later than April 1, 2026; and(ii)designate a member of the study group to serve as chair of the study group.(5)The study group described in Subsection (4)(b) shall:(a)examine how factors such as school size, enrollment scale, and operational models impact the relative costs of operating charter schools;(b)analyze the adequacy and effectiveness of the charter school base funding formula in addressing economies of scale challenges faced by charter schools of varying sizes;(c)compare administrative and operational cost structures across charter schools of different sizes and configurations and applicable districts;(d)evaluate whether current funding mechanisms appropriately account for:(i)fixed costs that do not scale proportionally with enrollment;(ii)administrative requirements mandated by state and federal law; and(iii)operational efficiencies or challenges unique to charter schools;(e)consider funding models used in other states or jurisdictions that may provide insights for the charter school funding system; and(f)identify any additional factors that significantly impact charter school operational costs beyond those currently considered in the funding formula.(6)The state board shall submit a report to the Public Education Appropriations Subcommittee no later than December 1, 2026, that includes:(a)findings from the study described in this section;(b)recommendations for any modifications to the charter school base funding formula;(c)proposed criteria or metrics for evaluating the ongoing adequacy of charter school base funding;(d)estimated fiscal impacts of any recommended changes; and(e)a proposed timeline for implementation of any recommended modifications.(7)Subject to legislative appropriations, the state board may contract with a qualified third party, including institutions of higher education or research organizations, to conduct part of the study described in this section.

Section 2. FY 2027 Appropriations.

The following sums of money are appropriated for the fiscal year beginning July 1, 2026, and ending June 30, 2027. These are additions to amounts previously appropriated for fiscal year 2027.

Subsection 2(a).Operating and Capital Budgets

Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the Legislature appropriates the following sums of money from the funds or accounts indicated for the use and support of the government of the state of Utah.

PUBLIC EDUCATIONSTATE BOARD OF EDUCATION - MINIMUM SCHOOL PROGRAMITEM 1State Board of Education - Minimum School Program - Related to Basic School ProgramsFrom Public Education Economic Stabilization Restricted Account, One-time3,100,000Charter School Funding Base Program3,100,000(1) The Legislature intends the state board to provide additional base funding to charter schools above the amounts directed in Section 53F-2-706 using a formula approved by the state board that distributes no more than $220,000 in total base funding to any charter school with amounts decreasing proportionately for each additional student.(2) The Legislature further intends the formula to distribute no more than $175,000 to charters with more than 2,000 students and for smaller charter schools, no more than what the state board's formula would provide per student for a charter school with 100 students.(3) The Legislature further intends the study described in Section 53F-2-706 shall be funded from this appropriation not to exceed $70,000. STATE BOARD OF EDUCATIONITEM 2State Board of Education - Regional Education Service AgenciesFrom Public Education Economic Stabilization Restricted Account, One-time500,000Charter School Educational Service Agency500,000

Section 3. Effective Date.This bill takes effect:(1)except as provided in Subsection (2), May 6, 2026; or(2)if approved by two-thirds of all members elected to each house:(a)upon approval by the governor;(b)without the governor's signature, the day following the constitutional time limit of Utah Constitution, Article VII, Section 8; or(c)in the case of a veto, the date of veto override.