DAR File No. 38541

Education, Administration

Rule R277-477

Distribution of Funds from the Interest and Dividend Account and Administration of the School LAND Trust Program

Notice of Proposed Rule

(Amendment)

DAR File No.: 38541
Filed: 05/15/2014 04:47:49 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is amended to provide changes to the School LAND Trust Program in response to legislative changes in H.B. 367, 2012 General Legislative Session and H.B. 168, 2014 General Legislative Session. The amendments also make stylistic changes.

Summary of the rule or change:

Amendments to this rule add a definition; change "Section" to "Director" in some provisions; eliminate redundant language; and provide language to emphasize the importance of local board member and administrator training. The amendments to the rule also provide language that allows local education agencies to use a minimum amount of School LAND Trust funds for civic and character education programs.

State statutory or constitutional authorization for this rule:

• Subsection 53A-1-401(3)
• Subsection 53A-16-101.5(3)(c)

Anticipated cost or savings to:

the state budget:

There is likely no anticipated cost or savings to the state budget. The amount of the distribution of School LAND Trust funds is not changed because of the amendments to this rule.

local governments:

Some local education agencies may receive greater or lesser School LAND Trust funds due to a minor formula adjustment in the rule. Distribution amounts are speculative, subject to the total distribution and student enrollment counts.

small businesses:

The amendments to this rule add a definition; change "Section" to "Director" in some provisions; eliminate redundant language; provide language to emphasize the importance of local board member and administrator training; and provide language that allows a minimum amount of School LAND Trust funds for civic and character education programs which likely will not result in a cost or savings to small businesses.

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

There is likely no anticipated cost or savings to persons other than small businesses, businesses, or local government entities. School LAND Trust funds are distributed to local education agencies.

Compliance costs for affected persons:

There is likely no compliance costs for affected persons. Only local education agencies will receive funds under this rule. No persons are subject to compliance under this rule.

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

I have reviewed this rule and I believe that there is likely no fiscal impact on businesses.

Martell Menlove, 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 carol.lear@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:

07/01/2014

This rule may become effective on:

07/08/2014

Authorized by:

Carol Lear, Director, School Law and Legislation

R277. Education, Administration

R277-477. Distribution of Funds from the Interest and Dividend Account and Administration of the School LAND Trust Program.

R277-477-1. Definitions.

A. "Approving Entity" means the school district, University, or other legally authorized entity that approves or rejects plans for a district or charter school.

B. "Board" means the Utah State Board of Education. The Board is the primary beneficiary representative and advocate for beneficiaries of the School Trust corpus and the School LAND Trust Program.

C. "Chartering Entity" means the school district, Board, university, or other entity authorized to charter a charter school.

D. "Charter trust land council" means a council comprised of a two person majority of elected parents or guardians of students attending the charter school and may include other members, as determined by the board of the charter school. The governing board of a charter school may serve as a charter trust land council if the board membership includes at least two more parents or guardians of students currently enrolled at the school than all other members combined consistent with Section 53A-16-101.5. If not, the board of the charter school shall develop a school policy governing the election of a charter trust land council. R277-491 does not apply to charter trust land councils.

E. "Councils" means school community councils and charter trust lands councils.

F. "Fall enrollment report" means the audited census of students registered in Utah public schools as reported in the audited October 1 Fall Enrollment Report from the previous year.

G. "Funds" means interest and dividend income as defined under Section 53A-16-101.5(2).

H. "Interest and Dividends Account" means a restricted account within the Uniform School Fund created under Section 53A-16-101 established to collect interest and dividends from the permanent State School Fund until the end of the fiscal year. The USOE distributes funds[ are distributed] to school districts, charter schools and the USDB through the School LAND Trust Program at the beginning of the next fiscal year.

I. "Local board of education" means the locally-elected board designated in Section 53A-3-101 that makes decisions and directs the actions of local school districts, and [is directed in Section 53A-16-101.5(5)(b) to]which approves School LAND Trust plans for schools under the local board's authority.

J. "Most critical academic needs" for purposes of this rule means academic needs identified in an individual school's improvement plan developed consistent with Section 53A-1a-108.5 or identified in the school charter.

K. "Principal" means an administrator licensed as a principal in the state of Utah and employed in that capacity at a school. For the purposes of this rule, "principal" includes the director of a charter school. "Principal" also includes a specific designee of the principal.

[K]L. "School Children's Trust [Section]Director" means [employees who report to the State Superintendent of Public Instruction (Superintendent) or Superintendent's designee and have responsibilities as outlined in Sections 53A-16-101.5 and 53A-16-101.6.]the Director appointed by the Board under Section 53A-16-101.6 to assist the Board in fulfilling its duties as primary beneficiary representative for trust lands and funds.

[L]M. "School community council" means the council organized at each school district public school as established in Section 53A-1a-108 and R277-491. The council includes the principal, school employee members and parent members. There shall be at least a two parent member majority.

[M]N. "State Charter School Board (SCSB)" means the board designated under Section 53A-1a-501.5 that has responsibility for making recommendations regarding the welfare of charter schools to the Board.

[N]O. "State Superintendent of Public Instruction (Superintendent)" means the individual appointed by the Board as provided for in Section 53A-1-301(1) to administer all programs assigned to the Board in accordance with the policies and the standards established by the Board.

[O]P. "Student" means a child in public school grades kindergarten through twelve counted on the audited October 1 Fall Enrollment Report of the school district, charter school, or USDB.

[P]Q. "USDB" means the Utah Schools for the Deaf and the Blind.

[Q]R. "USOE" means the Utah State Office of Education.

 

R277-477-2. Authority and Purpose.

A. This rule is authorized by Utah Constitution Article X, Section 3 which places general control and supervision of the public school system under the Board, by Section 53A-16-101.5(3)(c) which allows the Board to adopt rules regarding the time and manner in which the student count shall be made for allocation of school trust land funds, and by 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:

(1) provide financial resources to public schools to enhance or improve student academic achievement and implement an academic component of the school improvement plan;

(2) involve parents and guardians of a school's students in decision making regarding the expenditure of School LAND Trust Program money allocated to the school;

(3) provide direction in the distribution from the Interest and Dividends Account created in Section 53A-16-101 and funded in Section 53A-16-101.5(2);

(4) provide for appropriate and adequate oversight of the expenditure and use of School LAND Trust monies by designated local boards of education, chartering entities, and the Board;

(5) provide for:

[(a) reviewing and monitoring of funds and revenue generated by school trust lands and the permanent State School Fund;

](a) appropriate and timely distribution of School LAND Trust funds;

(b) accountability of councils for notice to school community members and appropriate use of funds;

(c) independent oversight of the agencies managing school trust lands and the permanent State School Fund to ensure those trust assets are managed prudently, profitably, and in the best interest of the beneficiaries;

(d) representation, advocacy, and information on school trust lands and permanent State School Fund issues to all interested parties including: the School and Institutional Trust Lands Administration, the School and Institutional Trust Lands Board of Trustees, the School and Institutional Trust Fund Office, the School and Institutional Trust Fund Board of Trustees, the Legislature, the Utah Attorney General's office, school community councils, and the general public;

([b]e) compliance by councils with requirements in statute and Board rule; and

([c]f) allocation of the monies as provided in Section 53A-16-101.5(3)(c) based on student count.

(6) define the roles, duties, and responsibilities of the School Children's Trust [Section]Director within the USOE.

 

R277-477-3. Distribution of Funds - Local Board or Local Charter Board Approval of School LAND Trust Plans.

A. All public schools receiving School LAND Trust Program funds shall have a council as required by Sections 53A-1a-108 and R277-491, a charter school trust lands council as required in 53A-16-101.5(7), or have a local board approved exemption under R277-491-3[(C)]E. District public schools and charter schools shall submit a Principal Assurance Form, as described in R277-491[(5)(a)]-5A.

B. All charter schools that elect to receive School LAND Trust funds shall have a charter trust lands council, develop an academic plan in accordance with the school charter, and report the date when the charter trust lands council and charter board approved the plan. The principal for each charter school that elects to receive School LAND Trust funds shall submit a [P]plan[s] [shall be submitted]on the School LAND Trust Program website no later than May 1; newly opening charter schools shall submit plans on the School LAND Trust Program website no later than October 1 in the school's first year.

C. [Local boards of education or the other]An approving entity shall consider plans annually and may approve or disapprove a school plan. If the approving entity does not approve a plan[ is not approved], the approving entity shall provide a written explanation [of]explaining why the plan was not approved and request [a revised plan for reconsideration]that the school revise the plan, consistent with Section 53A-16-101.5.

D. The principal for each public school shall provide [I]information on each school's plan to address most critical academic needs [shall be completed]and complete the USOE-provided form via the School LAND Trust website[ maintained through the USOE for accurate and uniform reporting].

[E. Plans shall be electronically submitted to the USOE on the School LAND Trust Program website, including](1) Along with each plan, the principal shall submit a record of the vote by the school community council or charter trust land council [when the school plan was approved including]approving the school plan.

(2) The approval shall include the date of the vote, votes for, against, and absent, consistent with Section 53A-16-101.5.

[F]E. To facilitate schools' submission of information[ by schools], each local[school]board of education shall establish a school district submission date for the school district schools not later than May 1 of each year. Timelines shall allow for school [committee]community council reconsideration and amendment of the school plans [following local board of approving entity explanation or plan rejection]if the approving entity rejects a plan.

[G]F. The USOE shall only distribute [F]funds [shall only be distributed ]to schools with plans approved by the approving entity.

[H]G. Approving entity responsibilities:

(1) Principals shall show at least one of the training DVDs available on the School LAND Trust website in at least one school faculty meeting annually. In the same meeting, the principal shall explain how the school is spending its School LAND Trust funds.

(2) Prior to [distribution of funds, the School Children's Trust Section]approval of school plans, the approving entity shall ensure that plans include academic goals, specific steps to meet those goals, measurements to assess improvement and specific expenditures focused on student academic improvement.

(3) The USOE shall not distribute [ F] funds [ shall not be distributed]until a school[s] ha[ve]s an approved plan to use [their]funds to enhance or improve a school's academic excellence consistent with Section 53A-16-101.5 and R277-477.

(4) [For charter schools,]The School Children's Trust Director shall review and approve all charter school plans on behalf of the SCSB. [t]The School Children's Trust [Section]Director shall also provide notice as necessary to the SCSB of changes required of charter schools for compliance with state law and Board rule.

 

R277-477-4. Appropriate Use of School LAND Trust Program Funds.

[I]A. Examples of successful plans using School LAND Trust Program monies include programs focused on:

(1) credit recovery courses and programs;

(2) study skills classes;

(3) college entrance exam preparation classes;

(4) academic field trips;

(5) classroom equipment and materials such as flashcards, math manipulatives, calculators, microscopes, maps or books;

(6) teachers, teacher aides, and student tutors;

(7) professional development directly tied to school academic goals;

(8) student focused educational technology, including hardware and software, computer carts and work stations;

(9) books, textbooks, workbooks, library books, bookcases, and audio-visual materials;

(10) student planners; and

(11) nominal student incentives that are academic in nature or of marginal total cost.

[J]B. Examples of plans ineligible for School LAND Trust Program funding include[, but are not limited to]:

(1) security;

(2) phone, cell phone, electric, and other utility costs;

[(3) behavior, character education, bullying prevention;

]([4]3) sports and playground equipment;

([5]4) athletic or intermural programs;

([6]5) extra-curricular non-academic expenditures;

([7]6) audio-visual systems in non-classroom locations;

([8]7) non-academic field trips;

([9]8) food and drink for council meetings or parent nights;

([10]9) printing and mailing costs for notices to parents;

([11]10) accreditation, administrative, clerical, or secretarial costs;

([12]11) cash or cash equivalent incentives for students;

([13]12) other furniture;[ and]

([14]13) staff bonuses[.]; and

(14) similar non-instructional items or programs.

C. Each school plan may budget and spend no more than the lesser of $5,000 or 20 percent of the annual allocation of School LAND Trust funds for in-school civic and character education including student leadership skills training and positive behavior intervention. A school may designate funds for these programs/activities only if the plan clearly describes how these activities/programs directly affect student academic achievement.

[K]D. Schools that are specifically designated to serv[ing]e students with disabilities may use funds as needed to directly influence and improve student performance according to the students' Individual Education Plans (IEPs).

[L]E. The school trust is intended to benefit all of Utah's school children. [Councils are]The Board encourage[d]s councils to design and implement plans in a way [to]that benefits all children at each school.

[M]F. School districts and charter schools [wishing]choosing to submit information to the School LAND Trust website through a comprehensive electronic plan shall [meet the parameters]satisfy standards for programming and data entry required by the USOE. They shall review School LAND Trust plans on the USOE website prior to local board of education or chartering entity approval to ensure information consistent with the law has been downloaded by individual schools into the electronic plan visible on the School LAND Trust Program website.

[N]G. [A form that includes the names of members of the council shall be signed by members of the council to indicate]Principals shall ensure that all council members have the opportunity to sign the form indicating their involvement in implementing the current School LAND Trust plan and developing the school plan for the upcoming year. [The]A principal shall upload the form[ shall be uploaded] to the database[ by the principal, director, or school district employee].

H. Prior to approval of the School LAND Trust plans, the president or chair of an approving entity shall ensure that the members of the approving entity receive annual training on the requirements of Section 53A-16-101.5.

[O]I. When approving school plans on the School LAND Trust Program website, the approving entity shall report the meeting date(s) when the approving entity approved the plans.

 

R277-477-[4]5. Distribution of Funds - Determination of Proportionate Share.

A. A designated amount appropriated by the Legislature from the Interest and Dividends Account shall[ be used to] fund the School Children's Trust Section, the administration of the program and other duties outlined in this rule and Sections 53A-16-101.5 and 53A-16-101.6. The USOE shall deposit [A]any unused balance initially allocated for School LAND Trust Program administration[ shall be deposited] in the Interest and Dividends Account for future distribution to schools [in]through the School LAND Trust Program.

B. The USOE, through the School LAND Trust Program, shall distribute [F]funds[ shall be distributed] to school districts and charter schools as provided under Section 53A-16-101.5(3)(a). The [distribution shall be based]USOE shall base the distribution on the state's total fall enrollment as reflected in the audited October 1 Fall Enrollment Report from the previous school year.

C. Each school district shall distribute funds received under R277-477-3A to each school within each school district on an equal per student basis.

[E]D. Local boards of education shall adjust distributions, maintaining an equal per student distribution within a school district , for school openings and closures and for boundary changes occurring after the audited October 1 Fall Enrollment Report of the prior year.

[D]E. The USOE shall fund [C]charter schools[ shall receive funding from the USOE] on a per pupil basis, provided that each charter school, including newly opening charter schools, receives at least 0.4 percent of the total available to charter schools as a group. A newly opening charter school shall receive the greater of 0.4 percent of the total available to charter schools as a group or the per pupil amount based on the school's estimated enrollment. The USOE shall allocate [T]the remainder of the distribution to charter schools [shall be allocated]on a per pupil basis to all charter schools that [do not receive the minimum amount, on a per pupil basis]receive an amount greater than the base 0.4 percent amount. The USOE shall increase or decrease a newly opening charter school's enrollment in the school's second year to reflect the school's actual initial October 1 enrollment.

F. If a school chooses not to apply for School LAND Trust Program funds [n]or does not meet the requirements for receiving funds, the USOE shall retain the funds allocated for that school [shall be retained by the USOE ]and include[d] those funds[with] in the statewide distribution for the following school year.

G. Local boards of education and school districts shall ensure timely notification to chairs and principals of the availability of the funds to schools with approved plans.

H. The School Children's Trust Director shall review and approve all [P]plans submitted by the USDB governing board [shall be reviewed and approved by the School Children's Trust Section and reported to the State Superintendent or designee]as necessary.

 

R277-477-[5]6. School LAND Trust Program: Implementation of Plans and Required Reporting.

A. Schools shall make full good faith efforts to implement [the ]plans as approved.

B. The school community council or charter school trust land council may amend a current year plan when necessary. The council shall amend the plan by a majority vote of a quorum of the council. [A school's website shall show an amended plan.]The principal shall amend the school plan on the School LAND Trust website. The approving entity shall consider the amendment for approval, and approve amendments before funds are spent according to the amendment.

C. A school may carryover [F]funds not used in the school approved plan[ may be carried over by the school] to the next school year and add[ed] those funds to the School LAND Trust Program funds available for expenditure in th[at]e school the following year.

D. Schools shall provide an explanation for any carry over that exceeds one-tenth of the school's allocation in a single year in the school plan or report. The USOE shall consider [D]districts and schools with consistently large carryover balances over multiple years [are]as not making adequate and appropriate progress on their approved plans[,].  The USOE [and shall be subject to] may direct compliance reviews [findings ]and corrective action.

E. Approval of school plans on the School LAND Trust website affirms that the approving entity has reviewed the plans and that the plans meet the requirements of Section 53A-1a-105 and R277-477.

[E]F. District and charter school business officials shall enter prior year audited expenditures by category on the School LAND Trust website on or before October 15th. The expenditure data shall appear in the final reports submitted online by principals for reporting to parents as required in Section 53A-1a-108.

[F. Expenditures made after the close of the fiscal year shall be accounted for as expenditures in the following fiscal year.

]G. Principals shall submit [F]final reports[ shall be submitted by schools] on the School LAND Trust website by [November 15]October 20 annually.

 

R277-477-[6]7. School LAND Trust Program - School Children's Trust to Review Compliance.

A. [The financial report in]The School Children's Trust Section staff shall review each school final report[ shall be reviewed by the School Children's Trust Section] for consistency with the [narrative submitted by that council]approved school plan.

B. The School Children's Trust Section staff shall create a list of all schools whose [F]final reports indicat[ing]e that funds from the School LAND Trust Program were expended inconsistent with the requirements and academic intent of the law, inconsistent with R277-477 or R277-491, [and/]or inconsistent with the [school]local board of education/charter board approved plan[ shall be listed by the School Children's Trust Section and]. The School Children's Trust Section staff shall report[ed] this list of schools to the district contact, district superintendent, and local board of education or charter board president annually.

C. USOE staff may visit schools receiving funds from the School LAND Trust Program[ as directed by the Superintendent] to discuss the program, receive information and suggestions, provide training, and answer questions.

D. The School Children's Trust Director shall supervise [A]annual compliance reviews[ shall be conducted] to review expenditure of funds relative to the approved plan and allowable expenses.

E. The School Children's Trust [Section]Director shall report annually to the Board Audit Committee on compliance review findings and other compliance issues. The Board Audit Committee shall make determinations regarding questioned costs and corrective action, following review and consideration of compliance and financial reviews conducted by the School Children's Trust Section staff.

F. The [State ]Board Audit Committee may recommend to the Board that the Board reduce or eliminate funds if a school [has] fail[ed]s to comply with [code]Utah law or Board rule. The Board may require that the school reimburse the School LAND Trust Program for any inappropriate expenditures.

 

R277-477-8. School Children's Trust Director - Other Provisions.

A. The Director shall have professional qualifications and expertise in the areas generating revenue to the trust, including economics, energy development, finance, investments, public education, real estate, renewable resources, risk management, and trust law, as provided in 53A-16-101.6(3)(b).

B. The Director shall report to the Board Audit Committee monthly. The Director shall report day to day to the Superintendent or Superintendent's designee and has responsibilities as outlined in Sections 53A-16-101.5 and 53A-16-101.6.

C. The employees of the section report to the Director, who shall carry out the policy direction of the Board under law and faithfully adhere to the Board-approved budget.

D. The School Children's Trust Director shall submit a draft section budget to the Board Audit Committee annually, consistent with Section 53A-16-101.6(5)(a).

E. The School Children's Trust Director shall include in the draft budget a proposed School LAND Trust Program and school community council training schedule, as described in Section 53A-16-101.6(11).

F. The Board Audit Committee may discuss or approve, or both, the School Children's Trust budget in an open portion of the Board Audit Committee meeting.

G. The Board, consistent with Section 53A-16-101.6(5)(b), shall propose an approved budget to the Legislature.

 

KEY: schools, trust lands funds

Date of Enactment or Last Substantive Amendment: [November 7, 2013]2014

Notice of Continuation: June 10, 2013

Authorizing, and Implemented or Interpreted Law: Art X Sec 3; 53A-16-101.5(3)(c); 53A-1-401(3)