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7 LONG TITLE
8 General Description:
9 This bill reorganizes provisions relating to a revolving loan account for charter schools.
10 Highlighted Provisions:
11 This bill:
12 ▸ eliminates the Charter School Revolving Account;
13 ▸ creates the Charter School Revolving Fund;
14 ▸ specifies the permitted uses of funds in the Charter School Revolving Fund and
15 procedures for making loans;
16 ▸ provides that the assets of, and loan payments for loans made from, the Charter
17 School Revolving Account shall be deposited into the Charter School Revolving
18 Fund; and
19 ▸ makes technical changes.
20 Money Appropriated in this Bill:
21 This bill appropriates in fiscal year 2025:
22 ▸ to State Board of Education - Utah Charter School Finance Authority as a one-time
23 appropriation:
24 • from the Public Education Economic Stabilization Restricted Account,
25 One-time, $50,000,000
26 ▸ to State Board of Education - Charter School Reserve Account as a one-time
27 appropriation:
28 • from the Public Education Economic Stabilization Restricted Account,
29 One-time, $4,000,000
30 Other Special Clauses:
31 This bill provides a special effective date.
32 Utah Code Sections Affected:
33 AMENDS:
34 53F-9-203, as last amended by Laws of Utah 2020, Chapter 154
35 ENACTS:
36 53F-9-203.1, Utah Code Annotated 1953
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38 Be it enacted by the Legislature of the state of Utah:
39 Section 1. Section 53F-9-203 is amended to read:
40 53F-9-203. Charter School Revolving Account.
41 (1) (a) The terms defined in Section 53G-5-102 apply to this section.
42 (b) As used in this section, "account" means the Charter School Revolving Account.
43 (2) (a) There is created within the Uniform School Fund a restricted account known as
44 the "Charter School Revolving Account" to provide assistance to charter schools to:
45 (i) meet school building construction and renovation needs; and
46 (ii) pay for expenses related to the start up of a new charter school or the expansion of
47 an existing charter school.
48 (b) The state board, in consultation with the State Charter School Board, shall
49 administer the Charter School Revolving Account in accordance with rules adopted by the state
50 board.
51 (3) The Charter School Revolving Account shall consist of:
52 (a) money appropriated to the account by the Legislature;
53 (b) money received from the repayment of loans made from the account; and
54 (c) interest earned on money in the account.
55 (4) The state superintendent shall make loans to charter schools from the account to
56 pay for the costs of:
57 (a) planning expenses;
58 (b) constructing or renovating charter school buildings;
59 (c) equipment and supplies; or
60 (d) other start-up or expansion expenses.
61 (5) Loans to new charter schools or charter schools with urgent facility needs may be
62 given priority.
63 (6) The state board shall:
64 (a) except as provided in Subsection (7)(a), review requests by charter schools for
65 loans under this section; and
66 (b) in consultation with the State Charter School Board, approve or reject each request.
67 (7) (a) The state board may establish a committee to:
68 (i) review requests under Subsection (6)(a); and
69 (ii) make recommendations to the state board and the State Charter School Board
70 regarding the approval or rejection of a request.
71 (b) (i) A committee established under Subsection (7)(a) shall include individuals who
72 have expertise or experience in finance, real estate, or charter school administration.
73 (ii) Of the members appointed to a committee established under Subsection (7)(a):
74 (A) one member shall be nominated by the governor; and
75 (B) the remaining members shall be selected from a list of nominees submitted by the
76 State Charter School Board.
77 (c) If the committee recommends approval of a loan application under Subsection
78 (7)(a)(ii), the committee's recommendation shall include:
79 (i) the recommended amount of the loan;
80 (ii) the payback schedule; and
81 (iii) the interest rate to be charged.
82 (d) A committee member may not:
83 (i) be a relative, as defined in Section 53G-5-409, of a loan applicant; or
84 (ii) have a pecuniary interest, directly or indirectly, with a loan applicant or any person
85 or entity that contracts with a loan applicant.
86 (8) A loan under this section may not be made unless the state board, in consultation
87 with the State Charter School Board, approves the loan.
88 (9) The term of a loan to a charter school under this section may not exceed five years.
89 (10) The state board may not approve loans to charter schools under this section that
90 exceed a total of $2,000,000 in any fiscal year.
91 (11) (a) On March 16, 2011, the assets of the Charter School Building Subaccount
92 administered by the state board shall be deposited into the Charter School Revolving Account.
93 (b) Beginning on March 16, 2011, loan payments for loans made from the Charter
94 School Building Subaccount shall be deposited into the Charter School Revolving Account.
95 (12) Beginning on July 1, 2024, the state superintendent may not make new loans
96 under this part.
97 Section 2. Section 53F-9-203.1 is enacted to read:
98 53F-9-203.1. Charter School Revolving Fund.
99 (1) The terms defined in Section 53G-5-102 apply to this section.
100 (2) As used in this section, "fund" means the Charter School Revolving Fund.
101 (3) (a) There is created within the Uniform School Fund a restricted account known as
102 the "Charter School Revolving Fund" to provide assistance to charter schools to:
103 (i) meet school building construction and renovation needs; and
104 (ii) pay for expenses related to the start up of a new charter school or the expansion of
105 an existing charter school.
106 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
107 Utah Charter Finance Authority shall make rules to administer the Charter School Revolving
108 Fund including:
109 (i) establishing the interest rates of loans;
110 (ii) amortization schedules for loans; and
111 (iii) other terms of repayment.
112 (4) The Charter School Revolving Fund shall consist of:
113 (a) money appropriated to the account by the Legislature;
114 (b) money received from the repayment of loans made from the account; and
115 (c) interest earned on money in the account.
116 (5) The Utah Charter Finance Authority shall make loans to charter schools from the
117 fund for a loan of:
118 (a) up to $1,000,000 to a charter school for a school facility addition or expansion; or
119 (b) up to 25% of a requested loan amount to a charter school for the acquisition or
120 construction of a school facility.
121 (6) The Utah Charter Finance Authority shall:
122 (a) review requests by charter schools for loans under this section; and
123 (b) approve or reject each request.
124 (7) The Utah Charter Finance Authority:
125 (a) shall:
126 (i) make a loan that is secured by a promissory note and a deed of trust from the charter
127 school; and
128 (ii) require a recipient charter school to repay the funds if the recipient charter school
129 sells or refinances any collateral associated with the loan; and
130 (b) may make a loan that is subordinate to senior debt.
131 (8) A loan under this section may not be made unless the Utah Charter Finance
132 Authority approves the loan.
133 (9) The Utah Charter Finance Authority shall set the term of a loan to a charter school
134 under this section.
135 (10) (a) On July 1, 2024, the assets and unused funds of the Charter School Revolving
136 Account administered by the state board as described in Section 53F-9-203 shall be deposited
137 into the Charter School Revolving Fund.
138 (b) Beginning on July 1, 2024, loan payments for loans made from the Charter School
139 Revolving Account shall be deposited into the Charter School Revolving Fund.
140 Section 3. FY 2025 Appropriation.
141 The following sums of money are appropriated for the fiscal year beginning July 1,
142 2024, and ending June 30, 2025. These are additions to amounts previously appropriated for
143 fiscal year 2025.
144 Subsection 3(a). Expendable Funds and Accounts.
145 The Legislature has reviewed the following expendable funds. The Legislature
146 authorizes the State Division of Finance to transfer amounts between funds and accounts as
147 indicated. Outlays and expenditures from the funds or accounts to which the money is
148 transferred may be made without further legislative action, in accordance with statutory
149 provisions relating to the funds or accounts.
150
ITEM 1
To State Board of Education - Utah Charter School Finance Authority| 151 | From Public Education Economic Stabilization Restricted Account, One-time | $50,000,000 | |||
| 152 | Schedule of Programs: | ||||
| 153 | Charter School Revolving Fund | $50,000,000 | |||
155 The Legislature authorizes the State Division of Finance to transfer the following
156 amounts between the following funds or accounts as indicated. Expenditures and outlays from
157 the funds to which the money is transferred must be authorized by an appropriation.
158
ITEM 2
To Charter School Reserve Account| 159 | From Public Education Economic Stabilization Restricted Account, One-time | $4,000,000 | |||
| 160 | Schedule of Programs: | ||||
| 161 | Charter School Reserve Account | $4,000,000 | |||
162 Section 4. Effective date.
163 This bill takes effect on July 1, 2024.