No. 43394 (New Rule): Rule R277-552. Charter School Timelines and Approval Processes

(New Rule)

DAR File No.: 43394
Filed: 11/15/2018 10:56:22 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

In the 2018 Legislative Session, the Legislature passed H.B. 313. H.B. 313 (2018) made significant amendments to the process charter school authorizers should follow in approving and providing oversight to charter schools. H.B. 313 (2018) also directed the Utah State Board of Education (Board) to make rules to carry out the legislative changes in relation to oversight of charter schools and their authorizers.

Summary of the rule or change:

H.B. 313 (2018) directed the Board to make rules to carry out the legislative changes in relation to the oversight of charter schools and their authorizers. This new rule, R277-552, governs charter school approval processes and timelines, and includes language from repealed rule R277-482. (EDITOR'S NOTE: The repeal of Rule R277-482 is included in this December 1, 2018, Bulletin under DAR No. 43392.)

Statutory or constitutional authorization for this rule:

Article X, Section 3
Subsection 53G-6-504(5)
Section 53F-2-702
Subsection 53E-3-401(4)
Section 53G-5-306
Section 53G-5-304
Section 53G-5-305

Anticipated cost or savings to:

the state budget:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. The Board was funded for an full-time employee (FTE) in the 2018 session to absorb the costs. The State Charter School Board has staff that will be performing these activities and is funded through the Board.

local governments:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and the Utah Center for Assistive Technology (UCAT) will be required to develop policies and practices and monitor the schools they authorize. The percentage of charter schools not authorized by the State Charter School Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than a FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually.

small businesses:

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and UCAT will be required to develop policies and practices and monitor the schools they authorize. The percentage of charter schools not authorized by the State Charter School Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than a FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually.

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

This new rule is expected to have a fiscal impact on charter school authorizers and the Board. The Board anticipates the activities created by this group of charter school rules will require ongoing monitoring. We anticipate that other charter school authorizers such as school districts and UCAT will be required to develop policies and practices and monitor the schools they authorize. The percentage of charter schools not authorized by the State Charter School Board is relatively small, around 10 of the total 120 active schools. We anticipate that monitoring activities would cost less than a FTE. Average costs of an FTE would be between $80,000-$120,000, thus we anticipate costs to an authorizer to be around $50,000 annually.

Compliance costs for affected persons:

Of the 1,241 entities, there are 15 private businesses, all of which are small businesses (there are no large businesses with a NAICS code 611110). This new rule is anticipated to cost state government $155,000 annually and other authorizers approximately $250,000 annually.

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

There are 1,241 entities with a NAICS code 611110 (Elementary and Secondary Schools) operating in Utah according to a "Firm Find Data" search through Utah's Department of Workforce Services. Most of the entities in the list are schools including public schools, charter schools, and private schools. Of the 1,241 entities, there are 15 private businesses, all of which are small businesses (there are no large businesses with a NAICS code 611110). This new rule is anticipated to cost state government $155,000 annually and other authorizers approximately $250,000 annually.

Sydnee Dickson, State Superintendent

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

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

Direct questions regarding this rule to:

Angela Stallings at the above address, by phone at 801-538-7550, by FAX at 801-538-7768, or by Internet E-mail at angie.stallings@schools.utah.gov

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:

01/02/2019

This rule may become effective on:

01/09/2019

Authorized by:

Angela Stallings, Deputy Superintendent of Policy

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

$155,000

Local Government

$250,000

$250000

250000

Small Businesses

Non-Small Businesses

Other Person

Total Fiscal Costs:

$405,000

405,000

Fiscal Benefits

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Persons

Total Fiscal Benefits:

Net Fiscal Benefits:

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

Appendix 2: Regulatory Impact to Non - Small Businesses

The Assistant Superintendent of Financial Operations at the Utah State Board of Education, Natalie Grange, has reviewed and approved this fiscal analysis.

R277. Education, Administration.

R277-552. Charter School Timelines and Approval Processes.

R277-552-1. Authority and Purpose.

(1) This rule is authorized by:

(a) Utah Constitution Article X, Section 3, which vests general control and supervision over public education in the Board;

(b) Subsection 53E-3-401(4), which allows the Board to adopt rules in accordance with its responsibilities;

(c) Subsection 53G-6-504(5), which requires the Board to make rules regarding a charter school expansion or satellite campus;

(d) Sections 53G-5-304 through 53G-5-306, which require the Board to make a rule providing a timeline for the opening of a charter school;

(e) Section 53F-2-702, which directs the Board to distribute funds for charter school students directly to the charter school;

(f) the Charter School Expansion Act of 1998, 20 U.S.C. Sec. 8063, which directs the Board to submit specific information prior to a charter school's receipt of federal funds; and

(d) Subsection 53G-5-205(5), which requires the Board to make rules establishing minimum standards that a charter school authorizer is required to apply.

(2) The purpose of this rule is to establish procedures for timelines and approval processes for charter schools.

R277-552-2. Charter School Authorization Process.

(1) An individual or non-profit organization as described in Subsection 53G-5-302(2)(b) may apply to open a charter school from any statutorily approved authorizer.

(2) An authorizer shall submit a process to the Board for approval of:

(a) a new charter school;

(b) a charter school expansion;

(d) a satellite school.

(3) A new authorizer shall submit a new charter school application process to the Board for approval at least six months prior to accepting applications for a new charter school.

(4)(a) The Board shall approve or deny an authorizer's application process within 65 days of receipt of the proposed process from an authorizer.

(b) If the Board denies an application process, the Superintendent shall provide a written explanation of the reasons for the denial to the applicant within 45 days.

(c) If an authorizer's application process is denied, the authorizer may submit a revised application process for approval at any time.

(5) An existing authorizer may not authorize a new charter school for the 2021-22 school year and beyond until the Board approves the authorizer's application process.

(6) An authorizer shall have an application and charter agreement, which shall include all elements required by Title 53G, Chapter 5, Part 3, Charter School Authorization.

(7) An authorizer shall maintain the official charter agreement, which shall presumptively be the final, and complete agreement between a school and the school's authorizer.

(8) An authorizer's review process for a new charter school shall include:

(a) a plan for pre-operational and other trainings;

(b) an evaluation of the school's governing board, including:

(i) a review of the resumes of and background information of proposed governing board members; and

(ii) a capacity interview of the proposed governing board;

(i) a market analysis;

(ii) anticipated enrollment; and

(iii) anticipated and break even budgets;

(d) an evaluation of the school's academic program and academic standards by which the authorizer will hold the school accountable; and

(e) an evaluation of the school's proposed pre-operational plan, including implementation of:

(i) required policies;

(ii) student data systems;

(iii) reporting; and

(iv) financial management.

(9) An authorizer review process shall include contacting the school district in which a proposed charter school will be located and consideration of any feedback provided by the district.

(10) An authorizer shall design its approval process so that the authorizer notifies the Superintendent of an authorizer approval of a request identified in Subsection (2) no later than October 1, one fiscal year prior to the state fiscal year the charter school intends to serve students.

R277-552-3. Timelines - Charter School Starting Date and Facilities.

(1) A charter school may receive state start-up funds if the charter school is approved as a new charter school by October 1, one fiscal year prior to the state fiscal year the charter school intends to serve students.

(2) Prior to receiving state start-up funds an authorizer shall certify in writing to the State Charter School Board that a charter school has:

(a) completed all financial identifying documents;

(b) completed background checks for each governing board member; and

(3) A charter school may receive state funds, including minimum school program funds, if the charter school authorizer certifies in writing to the Superintendent by June 30 prior to the school's first operational year that:

(a) the charter school meets the requirements of Subsection (2);

(b) the charter school's governing board has adopted all policies required by statute or board rule, including a draft special education policies and procedures manual;

(c) the charter school's governing board has adopted an annual calendar in an open meeting and has submitted the calendar to the Superintendent;

(d) the authorizer has received the charter school's facility contract as required by Subsection 53G-5-404(9);

(e) the charter school has met the requirements of Subsections (5) and (6) and that the school's building is on track to be completed prior to occupancy;

(f)(i) the charter school has hired an executive director and a business administrator; or

(ii)(A) the charter school governing board has designated an executive director or business administrator employed by a third party; and

(B) the charter school governing board has established policies regarding the charter school's supervision of the charter school's third-party contractors;

(g) the charter school's enrollment is on track to be sufficient to meet the school's financial obligations and implement the charter school agreement;

(h) the charter school has an approved student data system that has successfully communicated with UTREx, including meeting the compatibility requirements of Subsection R277-484-5(3); and

(i) the charter school has a functional accounting system.

(4) An authorizer shall:

(a) create a process to verify the requirements in Subsection (3);

(b) maintain documentation of Subsection (4)(a); and

(5) A charter school shall begin construction on a new or existing facility requiring major renovation, such as requiring a project number consistent with Rule R277-471, no later than January 1 of the year the charter school is scheduled to open.

(6) A charter school that intends to occupy a facility requiring only minimal renovation, such as renovation not requiring a project number according to Rule R277-471, shall enter into a written agreement no later than May 1 of the calendar year the charter school is scheduled to open.

(7) If a charter school fails to meet the requirements of this section within 36 months of approval, the approval of the charter school shall expire.

R277-552-4. Charter Amendment Requests.

(1) An authorizer shall have a policy establishing a process for consideration of proposed amendments to a school's charter agreement.

(2) An authorizer's timeline for consideration of an amendment to a charter agreement may not conflict with any funding deadline established in Board rule.

R277-552-5. Charter School Expansion Requests.

(1) A charter school may request approval for an expansion if:

(a) the charter school satisfies the requirements of federal and state law, regulations, rule, and the charter agreement; and

(b)(i) the charter school's charter agreement provides for an expansion consistent with the request; or

(ii) the charter school governing board has submitted a formal amendment request to the charter school authorizer consistent with the charter school authorizer's requirements.

(2) If the charter school authorizer approves a charter school expansion, the expansion shall be approved before October 1 of the state fiscal year prior to the school's intended expansion date.

(3) A charter school authorizer that authorizes an expansion of the authorizer's charter school shall provide the total number of students by grade that the charter school is authorized to enroll to the Superintendent on or before October 1 of the state fiscal year prior to the charter school's intended expansion date.

(4) When considering whether to approve a charter school's request for an expansion, an authorizer shall consider the following:

(a) the amount of time the charter school has operated successfully meeting the terms of its charter agreement;

(b) two years of academic performance data of students at the charter school, including whether the charter school is performing at or above:

(i) the academic goals established in the charter school's charter agreement; and

(ii) the average academic performance of other district and charter schools in the area, or for schools targeting specific populations, schools with similar demographics;

(c) the financial position of the charter school, as evidenced by the charter school's financial records, including the charter school's:

(i) most recent annual financial report (AFR);

(ii) annual program report (APR); and

(iii) audited financial statement;

(d) whether the charter school has a waiting list for enrollment;

(e) adequacy of the charter school's facility;

(f) any student safety issues; and

(g) ability to meet state and federal reporting requirements, including whether the charter school has regularly met Board reporting deadlines.

(6) A charter school requesting an expansion shall provide the information described in Subsection (5) to the authorizer with the charter school's request for expansion.

R277-552-6. Requests for a New Replication or Satellite School for an Approved Charter School.

(1) A charter school and all of the charter school's replication or satellite schools are a single LEA for purposes of public school funding and reporting.

(2) An existing charter school may submit a request to the charter school's authorizer for a replication or satellite charter school if:

(a) the charter school satisfies requirements of federal and state law, regulations, and rule;

(b) the charter school has operated successfully for at least three years meeting the terms of its charter agreement;

(c) the students at the charter school are performing on standardized assessments at or above the academic goals in the charter agreement, or, if there are no such goals in the charter agreement, are performing at or above surrounding schools;

(d) the charter school has adequate qualified administrators and staff to meet the needs of the proposed student population at the replication or satellite charter school;

(e) the charter school provides any additional information or documentation requested by the charter school authorizer; and

(f) the charter school is in good standing with its authorizer.

(3) As part of the application process, the authorizer shall review the charter school's:

(a) educational services, assessment, and curriculum;

(b) governing board's capacity to manage multiple campuses; and

(4) A replication or satellite charter school that will receive School LAND Trust funds shall have a charter trust land council and satisfy all requirements for charter trust land councils consistent with Rule R277-477.

(5) A replication or satellite charter school may receive state funding if the authorizer approves the replication or satellite charter school by October 1 of the state fiscal year prior to the year the school intends to serve students.

(6) If a replication or satellite charter school does not open within 36 months of approval, the approval shall expire.

(7) A charter school authorizer that authorizes a replication or satellite charter school shall provide the total number of students by grade that the charter school is authorized to enroll to the Superintendent on or before October 1 of the state fiscal year prior to the charter school's intended expansion date.

R277-552-7. Procedures and Timelines to Change Charter School Authorizers.

(1) A charter school may transfer to another charter school authorizer.

(2) A charter school shall submit an application to the new charter school authorizer at least 90 days prior to the proposed transfer.

(3) The charter school authorizer transfer application shall include:

(a) current governing board members;

(b) financial records that demonstrate the charter school's financial position, including the following:

(i) most recent annual financial report (AFR);

(ii) annual project report (APR); and

(iii) audited financial statement;

(d) current employees and assignments;

(e) board minutes for the most recent 12 months; and

(f) affidavits, signed by all board members certifying:

(i) the charter school's compliance with all state and federal laws and regulations;

(ii) all information on the transfer application is complete and accurate;

(iii) the charter school is current with all charter school governing board policies;

(iv) the charter school is operating consistent with the charter school's charter agreement; and

(v) there are no outstanding lawsuits or judgments or identifying outstanding lawsuits filed or judgments against the charter school.

(4) The current authorizer of a charter school seeking to transfer charter school authorizers shall submit a position statement to the new charter school authorizer about:

(a) the charter school's status;

(b) compliance with the charter school authorizer requirements; and

(5) A new charter school authorizer shall review an application for transferring a charter school authorizer for acceptance within 60 days of submission of a complete application, including all required documentation.

(6) If an authorizer accepts the transfer of a new charter school, the new authorizer shall notify the Superintendent within 30 days.

KEY: training, timelines, expansion, satellite

Date of Enactment or Last Substantive Amendment: 2018

Authorizing, and Implemented or Interpreted Law: Art X Sec 3; 53E-3-401; 53G-5-205; 53F-2-702; 53G-6-503