DAR File No. 43647

Education, Administration

Rule R277-480

Charter School Revolving Account

Notice of Proposed Rule

(Amendment)

DAR File No.: 43647
Filed: 04/15/2019 02:36:32 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Rule R277-480 was reviewed for the five-year review process by the Utah State Board of Education (Board) and changes were deemed necessary.

Summary of the rule or change:

Rule R277-480 has been amended to provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies, and language has been updated in Section R277-480-2 plus clarifying language has been added throughout the rule.

Statutory or constitutional authorization for this rule:

• Article X Section 3
• Subsection 53F-9-203(2)(b)
• Subsection 53E-3-401(4)

Anticipated cost or savings to:

the state budget:

These rule changes are not expected to have any fiscal impact on state government revenues or expenditures. Staff have reviewed this rule and determined that it continues to be necessary. This rule has been amended to provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. None of these changes substantively change the process so there is no fiscal impact.

local governments:

These rule changes are not expected to have any fiscal impact on local governments' revenues or expenditures. This rule has been amended to provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. None of these changes substantively change the process so there is no fiscal impact.

small businesses:

These rule changes are not expected to have any fiscal impact on small businesses' revenues or expenditures. This rule applies to the charter school revolving account and thus does not apply to small businesses.

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

These rule changes are not expected to have any fiscal impact on persons other than small businesses, businesses, or local government entities revenues or expenditures. This rule has been amended to provide technical, conforming, and stylistic changes in accordance with the Rulewriting Manual for Utah and Board policies. None of these changes substantively change the process so there is no fiscal impact.

Compliance costs for affected persons:

There are no compliance costs for affected persons.

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 non-small businesses with a NAICS code 611110). These rule changes have no fiscal impact on local education agencies and will not have a fiscal impact on non-small or small businesses. The Program Analyst at the Utah State Board of Education, Jill Curry, has reviewed and approved this fiscal analysis.

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:

05/31/2019

This rule may become effective on:

06/07/2019

Authorized by:

Angela Stallings, Deputy Superintendent of Policy

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs	FY 2019	FY 2020	FY 2021
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Person	$0	$0	$0
Total Fiscal Costs:	$0	$0	$0
Fiscal Benefits
State Government	$0	$0	$0
Local Government	$0	$0	$0
Small Businesses	$0	$0	$0
Non-Small Businesses	$0	$0	$0
Other Persons	$0	$0	$0
Total Fiscal Benefits:	$0	$0	$0
Net Fiscal Benefits:	$0	$0	$0

 

*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

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 non-small businesses with a NAICS code 611110). Thus, these rule changes are not expected to have any fiscal impact on non-small businesses' revenue or expenditures because there are no applicable non-small businesses and it does not require any expenditures of or generate revenues for non-small businesses.

 

The Program Analyst at the Utah State Board of Education, Jill Curry, has reviewed and approved this fiscal analysis.

 

 

R277. Education, Administration.

R277-480. Charter School Revolving Account.

R277-480-[2]1. Authority and Purpose.

[A.](1) This rule is authorized [under]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 to execute the Board's duties and responsibilities under the Utah Constitution and state law; and

(c) Subsection 53F-9-203(2)(b) , which requires the Board to administer the Charter School Revolving Account[, and Subsection 53E-3-401(4), which allows the Board to adopt rules in accordance with its responsibilities].

[B.](2) The purpose of this rule is to:

(a) establish procedures for administering the Charter School Revolving Account;

(b) [to ]determine membership of the Charter School Revolving Account Committee[,]; and[to]

(c) determine loan amounts and loan repayment conditions.

 

R277-480-[1]2. 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 53G-5-305, by the Board under Section 53G-5-304, and by boards of trustees of higher education institutions under Section 53G-5-306.]

(1) "Charter school" means a public school created in accordance with the provisions of Title 53G, Chapter 5, Charter Schools.

[C.](2) "Charter School Revolving Account" means a restricted account created within the Uniform School fund to provide assistance to charter schools to:

([1]a) meet school building construction and renovation needs; and

([2]b) pay for expenses related to the start up of a new charter school or the expansion of an existing charter school[s].

[D.](3) "Charter School Revolving Account Committee" means the committee established by the Board under Subsection 53F-9-203(6).

[E. "Superintendent" means the State Superintendent of Public Instruction as designated under 53E-3-301.]

(4) "Executive Director" means the Executive Directors of the State Charter School Board or the Executive Director's designee.

[F.](4)(a) "Urgent facility need[,]" [as provided for in Subsection 53F-9-203(5), ]means an unexpected exigency at a charter school that is entitled to priority under Subsection 53F-9-203(5)[that] because it affects the health and safety of students[such as:].

(b) An "urgent facility need" may include:

([1]i) [to satisfy ]an unforeseen condition that precludes a school's qualification for an occupancy permit; or

([2]ii) [to address ]an unforeseen circumstance that keeps the school from satisfying provisions of public safety, public health, or public school laws or Board rules.

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

 

R277-480-3. Charter School Revolving Account Committee.

[A.](1) The Board shall establish a Charter School Revolving Account Committee [consistent]in accordance with Subsection 53F-9-203(6).

[B.](2) The State Charter School Board shall submit a list of at least three nominees per vacancy who meet the requirements of Subsection 53F-9-203(6)(b) for appointment by the Board consistent with timelines established by the Board.

[C.](3) The Board shall annually accept nominations of individuals provided by the State Charter School Board who meet the qualifications of Subsection 53F-9-203(6)(b).

[D.](4) The Board may only select Charter School Revolving Account Committee members who satisfy conditions of Subsection 53F-9-203(6).

[E.](5) Charter School Revolving Account Committee members [appointed by the Board after May 1, 2010 shall be appointed for]shall serve two year terms.

[F.](6) The [USOE Charter School]Executive Director [or designee ]shall be a non-voting Charter School Revolving Account Committee member.

 

R277-480-4. Charter School Revolving Account Application and Conditions.

[A.](1) The Charter School Revolving Account Committee shall develop [and the USOE shall make available ]a loan application that [includes criteria designated under]is consistent with Section 53F-9-203, including criteria for urgent facility needs[criteria].

[B.](2) The Charter School Revolving Account Committee [shall include other criteria or information from loan applicants that the committee or the Board determines to be necessary and helpful, including considerations of Subsection 53F-9-203(5),]may request any criteria or information from an applicant that the committee finds necessary and helpful in making final recommendations to the [Superintendent, the ]State Charter School Board and the Board.

[C.](3)(a) The Charter School Revolving Account Committee shall accept applications for loans [on an ongoing basis]annually by April 30, subject to eligibility criteria and availability of funds.

(b) If the Charter School Revolving Account Committee does not distribute all available funds during its initial application process, the committee may set deadlines to review additional applications.

([1]4) 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]5) [The]A charter school's 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 Charter School Revolving Account Committee and repayment schedule of the loan designated by the Charter School Revolving Account Committee and the Board;

(c) agrees that loan funds shall only be used consistent with the purposes of Section 53F-9-203 and [ the purpose of ]the approved charter;

(d) agrees to any and all inspections, audits or financial reviews ordered by the Charter School Revolving Account Committee or the Board; and

(e) [understands that repayment, including interest, shall be deducted automatically from the charter school's monthly fund transfers, as appropriate.]agrees to all terms required for the loan by the State Division of Finance, including:

(i) servicing by the State Division of Finance;

(ii) payment of an annual servicing fee;

(iii) agreement to execute an electronic funds transfer agreement for monthly payments by the school; and

(iv) in the case of default, agreement to terms established by the State Division of Finance for collection.

[D.](6) The Charter School Revolving Account Committee shall establish terms and conditions for loan repayment, consistent with Section 53F-9-203. Terms shall include:

([1]7) The terms established under Subsection (6) shall include a[A] tiered schedule of loan fund distribution as follows:

(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]8) The loan amount to a charter school board awarded under Section 53F-9-203 [shall]may not exceed:

(a) $1,000 per pupil based on the most recent 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.

 

R277-480-5. Charter School Revolving Account Committee Recommendations and Board Approval.

[A.](1) The Charter School Revolving Account Committee shall make recommendations to the State Charter School Board and the Board only upon receipt of complete and satisfactory information from the applicant and upon a majority recommendation from the Charter School Revolving Account Committee.

[B.](2) The submission of intentionally false, incomplete or inaccurate information from a loan applicant may result in:

(a) immediate cancellation of any previous loan[(s),];

(b) the requirement for immediate repayment of any funds received[,];

(c) denial of subsequent applications for a 12 month period from the date of the initial application[,]; and[possible Board]

(d) a recommendation to a school's authorizer to consider revocation of [a]the school's charter.

[C.](3) The [Board staff]Superintendent and [State Charter Board staff]Executive Director shall review recommendations from the Charter School Revolving Account Committee.

(4) The Charter School Revolving Account Committee shall submit recommendations for loan funding to the State Charter School Board for review.

[D.](5) [Final recommendations from the]The [Charter School Revolving Account Committee]State Charter School Board shall [be submitted]submit final recommendations to the Board no more than [60]90 days after submission of all information and materials from the loan applicant to the Charter School Revolving Account Committee.

[E.](6) [The]Either the State Charter School Board or the Board may request additional information from loan applicants or a reconsideration of a recommendation by the Charter School Revolving Account Committee.

[F.](7) The Board's approval or denial of a loan application[s] constitutes the final administrative action in the charter school building revolving loan process.

 

KEY: charter schools, revolving account

Date of Enactment or Last Substantive Amendment: [August 7, 2014]2019

Notice of Continuation: June 10, 2014

Authorizing, and Implemented or Interpreted Law: Art X, Sec 3; 53F-9-203(2)(b); 53E-3-401(4)