No. 33745 (New Rule): Rule R277-480. Charter Schools School Building Subaccount

(New Rule)

DAR File No.: 33745
Filed: 06/15/2010 07:13:09 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this new rule is to provide procedures for determining membership of the Charter School Building Subaccount Committee, and determining loan amounts and loan repayment conditions. Although there are currently Charter School Building Subaccount criteria in Section R277-470-17, Charter Schools, the language in this new rule provides more detail and is more comprehensive. Therefore, a stand-alone rule was proposed and approved by the Utah State Board of Education. This new rule will supersede language in Section R277-470-17 until it is officially removed from Rule R277-470.

Summary of the rule or change:

The new rule provides definitions and a Charter School Building Subaccount section that includes procedures for establishing or reauthorizing a Subaccount committee, and application criteria and procedures.

State statutory or constitutional authorization for this rule:

• Subsection 53A-1-401(3)

Anticipated cost or savings to:

the state budget:

There are no anticipated costs or savings to the state budget. The new rule provides procedures and criteria for Subaccount Committee membership and loan applications.

local governments:

There are no anticipated costs or savings to local government. The rule allows eligible charter schools to apply for a loan from the Charter School School Building Subaccount.

small businesses:

There are no anticipated costs or savings to small businesses. This rule applies to charter schools.

persons other than small businesses, businesses, or local governmental entities:

There are no anticipated costs or savings to persons other than small businesses, businesses, or local government entities. The rule applies to charter schools.

Compliance costs for affected persons:

There are no compliance costs for affected persons. Charter schools must be eligible to apply for a loan from the Charter School School Building Subaccount.

Comments by the department head on the fiscal impact the rule may have on businesses:

I have reviewed this rule and I see no fiscal impact on businesses.

Larry K. Shumway, State Superintendent

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Education
Administration
250 E 500 S
SALT LAKE CITY, UT 84111-3272

Direct questions regarding this rule to:

• Carol Lear at the above address, by phone at 801-538-7835, by FAX at 801-538-7768, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/02/2010

This rule may become effective on:

08/09/2010

Authorized by:

Carol Lear, Director, School Law and Legislation

RULE TEXT

R277. Education, Administration.

R277-480. Charter Schools School Building Subaccount.

R277-480-1. Definitions.

A. "Board" means the Utah State Board of Education.

B. "Charter schools" means schools acknowledged as charter schools by local boards of education under Section 53A-1a-515 or by the Board under Section 53A-1a-505.

C. "Subaccount" means the Charter School Building Subaccount consisting of funds provided under 53A-21-401(5)(b)

D. "Subaccount Committee" means the committee established by the Superintendent under Section 53A-21-401(6).

E. "Superintendent" means the State Superintendent of Public Instruction as designated under 53A-1-301.

F. "USOE" means the Utah State Office of Education.

 

R277-480-2. Authority and Purpose.

A. This rule is authorized under Utah Constitution Article X, Section 3 which vests general control and supervision over public education in the Board, Section 53A-21-401(6) which requires the Board to establish or reauthorize a Subaccount Committee by July 15 annually, and Section 53A-1-401(3) which allows the Board to adopt rules in accordance with its responsibilities.

B. The purpose of this rule is to establish procedures for determining membership of the Charter School Building Subaccount Committee, and determining loan amounts and loan repayment conditions.

 

R277-480-3. Charter School Building Subaccount.

A. The Board shall establish or reauthorize a Subaccount Committee consistent with 53A-21-401(6) by July 15 annually.

(1) The Superintendent, on behalf of the Board, may annually accept nominations of individuals provided by the State Charter School Board who meet the qualifications of 53A-21-401(6)(b).

(a) The State Charter School Board shall submit a list of at least three nominees per vacancy who meet the requirements of Section 53A-21-401(6)(b) for appointment by the Board.

(b) Subaccount Committee members shall be appointed by the Board for terms that do not exceed three years.

(2) For appointment prior to June 1, 2010, the Superintendent, under the direction of the Board, shall designate which Subaccount Committee members shall be reappointed and which members shall serve continuing one, two or three year terms in order to stagger the terms of Subaccount Committee members.

(3) Subaccount Committee members appointed by the Board after May 1, 2010 shall serve two year terms.

(4) The USOE Charter School Director or designee shall be a non-voting Subaccount Committee member.

B. The Subaccount Committee shall develop and the USOE shall make available a loan application that includes criteria designated under Sections 53A-21-401(6)(c) and (8).

C. The Subaccount Committee shall include other criteria or information from loan applicants that the committee or the Board determines to be necessary and helpful in making final recommendations to the Superintendent, the State Charter School Board and the Board.

D. The Subaccount Committee shall establish terms and conditions for loan repayment, consistent with Section 53A-21-401(6)(c) and Section 53A-21-401(8). Terms may include:

(1) A tiered schedule of loan fund distribution:

(a) 50 percent (up to $150,000) disbursed no more than 12 months prior to August 15 in the school's first year of operations;

(b) 25 percent (up to $75,000) disbursed no more than six months prior to August 15 in the school's first year of operation;

(c) the balance of loan funds disbursed no more than three months prior to August 15 in the school's first year of operations.

(2) The loan amount to a charter school board awarded under Section 53A-21-401(7) shall not exceed:

(a) $1,000 per pupil based on prior year October 1 enrollment count for operational schools; or

(b) $1,000 per pupil based on approved enrollment capacity of the first year of operation for pre-operational schools; or

(c) $300,000 of the total of all current loan awards by the Board to a charter school board.

E. Applications for loans shall be accepted on an ongoing basis, subject to eligibility criteria and availability of funding.

(1) To apply for a loan, a charter school shall submit the information requested on the Board's most current loan application form together with the requested supporting documentation.

(2) The application shall include a resolution from the governing board of the charter school that the governing board, at a minimum:

(a) agrees to enter into the loan as provided in the application materials;

(b) agrees to the interest established by the Subaccount Committee and repayment schedule of the loan designated by the Subaccount Committee and the Board;

(c) agrees that loan funds shall only be used consistent with the purposes of Section 53A-21-401(5)(c) and the purpose of the approved charter;

(d) agrees to any and all audits or financial reviews ordered by the Subaccount Committee or the Board;

(e) agrees to any and all inspections or reviews ordered by the Subaccount Committee or the Board;

(f) understands that repayment, including interest, shall be deducted automatically from the charter school's monthly fund transfers, as appropriate.

F. The Subaccount Committee shall not make recommendations to the Superintendent, the State Charter School Board or the Board until the committee receives complete and satisfactory information from the applicant and the Subaccount Committee has reached a majority recommendation.

G. The submission of intentionally false, incomplete or inaccurate information from a loan applicant shall result in immediate cancellation of any previous loan(s), the requirement for immediate repayment of any funds received, denial of subsequent applications for a 12 month period from the date of the initial application, and possible Board revocation of a charter.

H. The Superintendent, in consultation with USOE and State Charter Board staff, shall review recommendations from the Subaccount Committee and make final recommendations to the Board.

I. The Superintendent shall submit final recommendations from the Subaccount Committee to the Board no more than 60 days after submission of all information and materials from the loan applicant to the Subaccount Committee.

J. The Board may request additional information from loan applicants or a reconsideration of a recommendation by the Subaccount Committee.

K. The Board's approval or denial of loan applications constitutes the final administrative action in the charter school building revolving loan process.

 

KEY: charter schools, building subaccount

Date of Enactment or Last Substantive Amendment: 2010

Authorizing, and Implemented or Interpreted Law: Art X, Sec 3; 53A-21-401(6); 53A-1-401(3)

 

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