Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 242 Third Substitute (2020GS)

Sponsor

Rep. Moss, J.

Final action

Governor Signed 3/28/2020

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• defines terms;
• creates an initial review period before a charter school receives ongoing approval from an authorizer;
• requires a charter school to use the same accounting methods as district schools;
• requires district schools to use certain accounting methods; and
• permits authorizers to:
• request financial documents from a charter school;
• petition a district court to appoint a receiver for a charter school on certain grounds;
• transfer operation and control of a charter school to a high performing charter school under certain circumstances; and
• transfer students from a closing charter school to another charter school.

Every vote on this bill

Bill text

CHARTER SCHOOL OPERATIONS AND SCHOOL ACCOUNTING
AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Jefferson Moss
Senate Sponsor: 
Daniel McCay
LONG TITLE
General Description:
This bill amends certain provisions related to school accounting methods, and the
approval, oversight, and closure of charter schools by an authorizer.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ creates an initial review period before a charter school receives ongoing approval
from an authorizer;
▸ requires a charter school to use the same accounting methods as district schools;
▸ requires district schools to use certain accounting methods; and
▸ permits authorizers to:
• request financial documents from a charter school;
• petition a district court to appoint a receiver for a charter school on certain
grounds;
• transfer operation and control of a charter school to a high performing charter
school under certain circumstances; and
• transfer students from a closing charter school to another charter school.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
53G-4-404
, as last amended by Laws of Utah 2019, Chapters 293 and 324
53G-5-404
, as last amended by Laws of Utah 2019, Chapters 83 and 293
53G-5-405
, as last amended by Laws of Utah 2019, Chapters 293 and 505
53G-5-501
, as last amended by Laws of Utah 2019, Chapter 293
53G-5-502
, as last amended by Laws of Utah 2019, Chapter 293
53G-5-503
, as last amended by Laws of Utah 2019, Chapter 293
53G-5-504
, as last amended by Laws of Utah 2019, Chapter 293
ENACTS:
53G-5-307
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
53G-4-404
 is amended to read:
53G-4-404.
Annual financial report -- Audit report.
(1) 
(a)
 The annual financial report of each school district, containing items required by
law or by the state board and attested to by independent auditors, shall be prepared as required
by Section 
51-2a-201
.
(b) A school district shall use fund and program accounting methods and standardized
account codes capable of producing financial reports that comply with:
(i) generally accepted accounting principles;
(ii) financial reporting requirements established by the state board under Section
53E-3-501
; and
(iii) accounting report standards established by the state auditor as described in Section
51-2a-301
.
(2) If auditors are employed under Section 
51-2a-201
, the auditors shall complete their
field work in sufficient time to allow them to verify necessary audit adjustments included in the
annual financial report to the state superintendent.
(3) (a) (i) The district shall forward the annual financial report to the state
superintendent not later than October 1.
(ii) The report shall include information to enable the state superintendent to complete
the statement of funds required under Section 
53E-1-203
.
(b) The state board shall publish electronically a copy of the report on the Internet not
later than January 15.
(4) The completed audit report shall be delivered to the school district local school
board and the state superintendent not later than November 30 of each year.
Section 2. Section 
53G-5-307
 is enacted to read:
 53G-5-307.
Charter school authorization -- Initial review period.
(1) An authorizer shall grant a charter school approved under this title initial approval
for a three-year review period, beginning with the first year of the charter school's operation.
(2) Beginning in the first year of the initial review period, the authorizer shall comply
with the accountability and review procedures described in Section 
53G-5-406
.
(3) The authorizer may extend the initial review period for one year, up to two times
during the initial review period.
(4) At the end of the initial review period, the authorizer shall:
(a) grant the charter school ongoing approval; or
(b) terminate the charter agreement, subject to the requirements of Section 
53G-5-503
.
(5) The authorizer shall, under the minimum standards described in Section
53G-5-205
, base the decision to grant ongoing approval or terminate the charter agreement on:
(a) the charter school's compliance with the terms of the charter agreement;
(b) whether the charter school is meeting academic standards in the charter school's
charter agreement;
(c) the charter school's financial viability; and
(d) the charter school's capacity to meet governance standards.
(6) A charter school that is granted initial approval under this section may not
participate in the Charter School Credit Enhancement Program until the authorizer grants
ongoing approval of the charter school's charter.
Section 3. Section 
53G-5-404
 is amended to read:
53G-5-404.
Requirements for charter schools.
(1) A charter school shall be nonsectarian in its programs, admission policies,
employment practices, and operations.
(2) A charter school may not charge tuition or fees, except those fees normally charged
by other public schools.
(3) A charter school shall meet all applicable federal, state, and local health, safety, and
civil rights requirements.
(4) (a) A charter school shall:
(i) make the same annual reports required of other public schools under this public
education code, including an annual financial audit report 
described in Section 
53G-4-404
;
[
and
]
(ii) ensure that the charter school meets the data and reporting standards described in
Section 
53E-3-501
[
.
]
; and
(iii) use fund and program accounting methods and standardized account codes capable
of producing financial reports that comply with:
(A) generally accepted accounting principles;
(B) the financial reporting requirements applicable to LEAs established by the state
board under Section 
53E-3-501
; and
(C) accounting report standards established by the state auditor as described in Section
51-2a-301
.
(b) Before, and as a condition for opening a charter school:
(i) a charter school shall:
(A) certify to the authorizer that the charter school's accounting methods meet the
requirements described in Subsection (4)(a)(iii); or
(B) if the authorizer requires, conduct a performance demonstration to verify that the
charter school's accounting methods meet the requirements described in Subsection (4)(a)(iii);
and
(ii) the authorizer shall certify to the state board that the charter school's accounting
methods meet the requirements described in Subsection (4)(a)(iii).
[
(b)
] 
(c)
 A charter school shall file the charter school's annual financial audit report
with the Office of the State Auditor within six months of the end of the fiscal year.
(d) For the limited purpose of compliance with federal and state law governing use of
public education funds, including restricted funds, and making annual financial audit reports
under this section, a charter school is a government entity governed by the public education
code.
(5) (a) A charter school shall be accountable to the charter school's authorizer for
performance as provided in the school's charter agreement.
(b) To measure the performance of a charter school, an authorizer may use data
contained in:
(i) the charter school's annual financial audit report;
(ii) a report submitted by the charter school as required by statute; or
(iii) a report submitted by the charter school as required by its charter agreement.
(c) A charter school authorizer may not impose performance standards, except as
permitted by statute, that limit, infringe, or prohibit a charter school's ability to successfully
accomplish the purposes of charter schools as provided in Section 
53G-5-104
 or as otherwise
provided in law.
(6) A charter school may not advocate unlawful behavior.
(7) Except as provided in Section 
53G-5-305
, a charter school shall be organized and
managed under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, after its
authorization.
(8) A charter school shall provide adequate liability and other appropriate insurance[
.
]
,
including:
 (a) general liability, errors and omissions, and directors and officers liability coverage
through completion of the closure of a charter school under Section 
53G-5-504
; and
(b) tail coverage or closeout insurance covering at least one year after closure of the
charter school.
(9) Beginning on July 1, 2014, a charter school
, including a charter school that has not
yet opened,
 shall submit any lease, lease-purchase agreement, or other contract or agreement
relating to the charter school's facilities or financing of the charter school's facilities to the
school's authorizer and an attorney for review and advice [
prior to
] 
before
 the charter school
[
entering into
] 
enters
 the lease, agreement, or contract.
(10) A charter school may not employ an educator whose license [
has been
] 
is
suspended or revoked by the state board under Section 
53E-6-604
.
(11) (a) Each charter school shall register and maintain the charter school's registration
as a limited purpose entity, in accordance with Section 
67-1a-15
.
(b) A charter school that fails to comply with Subsection (11)(a) or Section 
67-1a-15
 is
subject to enforcement by the state auditor, in accordance with Section 
67-3-1
.
(12) (a) As used in this Subsection (12), "contracting entity" means a person with
which a charter school contracts.
(b) A charter school shall provide to the charter school's authorizer any information or
documents requested by the authorizer, including documents held by a subsidiary of the charter
school or a contracting entity:
(i) to confirm the charter school's compliance with state or federal law governing the
charter school's finances or governance; or
(ii) to carry out the authorizer's statutory obligations, including liquidation and
assignment of assets, and payment of debt in accordance with state board rule, as described in
Section 
53G-5-504
.
(c) A charter school shall comply with a request described in Subsection (12)(b),
including after an authorizer recommends closure of the charter school or terminates the charter
school's contract.
(d) Documents held by a contracting entity or subsidiary of a charter school that are
necessary to demonstrate the charter school's compliance with state or federal law are the
property of the charter school.
(e) A charter school shall include in an agreement with a subsidiary of the charter
school or a contracting entity a provision that stipulates that documents held by the subsidiary
or a contracting entity, that are necessary to demonstrate the charter school's financial
compliance with federal or state law, are the property of the charter school.
Section 4. Section 
53G-5-405
 is amended to read:
53G-5-405.
Application of statutes and rules to charter schools.
(1) A charter school shall operate in accordance with its charter agreement and is
subject to this public education code and other state laws applicable to public schools, except
as otherwise provided in this chapter and other related provisions.
(2) (a) Except as provided in Subsection (2)(b), state board rules governing the
following do not apply to a charter school:
(i) school libraries;
(ii) required school administrative and supervisory services; and
(iii) required expenditures for instructional supplies.
(b) A charter school shall comply with rules implementing statutes that prescribe how
state appropriations may be spent.
(3) The following provisions of this public education code, and rules adopted under
those provisions, do not apply to a charter school:
[
(a) Section 
53G-7-1202
, requiring the establishment of a school community council;
]
[
(b) Section 
53G-4-409
, requiring the use of activity disclosure statements;
]
[
(c) Section 
53G-7-606
, requiring notification of intent to dispose of textbooks;
]
[
(d) Section 
53G-10-404
, requiring annual presentations on adoption;
]
[
(e) Sections 
53G-7-304
 and 
53G-7-306
 pertaining to fiscal procedures of school
districts and local school boards; and
]
[
(f) Section 
53E-4-408
, requiring an independent evaluation of instructional materials.
]
(a) Section 
53E-4-408
, requiring an independent evaluation of instructional materials;
(b) Section 
53G-4-409
, requiring the use of activity disclosure statements;
(c) Sections 
53G-7-304
 and 
53G-7-306
, pertaining to fiscal procedures of school
districts and local school boards;
(d) Section 
53G-7-606
, requiring notification of intent to dispose of textbooks;
(e) Section 
53G-7-1202
, requiring the establishment of a school community council;
and
(f) Section 
53G-10-404
, requiring annual presentations on adoption.
(4) For the purposes of Title 63G, Chapter 6a, Utah Procurement Code, a charter
school is considered an educational procurement unit as defined in Section 
63G-6a-103
.
(5) Each charter school shall be subject to:
(a) Title 52, Chapter 4, Open and Public Meetings Act; and
(b) Title 63G, Chapter 2, Government Records Access and Management Act.
(6) A charter school is exempt from Section 
51-2a-201.5
, requiring accounting reports
of certain nonprofit corporations. A charter school is subject to the requirements of Section
53G-5-404
.
(7) (a) The State Charter School Board shall, in concert with the charter schools, study
existing state law and administrative rules for the purpose of determining from which laws and
rules charter schools should be exempt.
(b) (i) The State Charter School Board shall present recommendations for exemption to
the state board for consideration.
(ii) The state board shall consider the recommendations of the State Charter School
Board and respond within 60 days.
Section 5. Section 
53G-5-501
 is amended to read:
53G-5-501.
Noncompliance -- Rulemaking.
(1) If a charter school is found to be out of compliance with the requirements of
Section 
53G-5-404
 or the school's charter agreement, the charter school authorizer shall notify
the following in writing that the charter school has a reasonable time to remedy the deficiency,
except as otherwise provided in Subsection 
53G-5-503
(4):
(a) the charter school governing board; and
(b) if the charter school is a qualifying charter school with outstanding bonds issued in
accordance with Part 6, Charter School Credit Enhancement Program, the Utah Charter School
Finance Authority.
(2) 
(a)
 If the charter school does not remedy the deficiency within the established
timeline, the authorizer may:
[
(a)
] 
(i)
 subject to the requirements of Subsection (4), take one or more of the
following actions:
[
(i)
] 
(A)
 remove a charter school director or finance officer;
[
(ii)
] 
(B)
 remove a charter school governing board member; [
or
]
[
(iii)
] 
(C)
 appoint an interim director [
or
]
,
 mentor
, or finance officer
 to work with the
charter school; or
(D) appoint a governing board member;
[
(b)
] 
(ii)
 subject to the requirements of Section 
53G-5-503
, terminate the school's
charter agreement[
.
]
; or
(iii) transfer operation and control of the charter school to a high performing charter
school, as defined in Subsection 
53G-5-502
(1), including reconstituting the governing board to
effectuate the transfer.
(b) The authorizer may prohibit the charter school governing board from removing an
appointment made under Subsection (2)(a)(i), for a period of up to one year after the date of the
appointment.
(3) The costs of an interim director [
or
]
,
 mentor
, or finance officer
 appointed [
pursuant
to
] 
under
 Subsection (2)(a) shall be paid from the funds of the charter school for which the
interim director [
or
]
,
 mentor
, or finance officer
 is working.
(4) The authorizer shall notify the Utah Charter School Finance Authority before the
authorizer takes an action described in [
Subsections
] 
Subsection
 (2)(a)(i) [
through (iii)
] if the
charter school is a qualifying charter school with outstanding bonds issued in accordance with
Part 6, Charter School Credit Enhancement Program.
(5) The state board shall make rules:
(a) specifying the timeline for remedying deficiencies under Subsection (1); and
(b) ensuring the compliance of a charter school with its approved charter agreement.
(6) (a) An authorizer may petition the district court where a charter school is located or
incorporated to appoint a receiver, and the district court may appoint a receiver if the authorizer
establishes that the charter school:
(i) is subject to closure under Section 
53G-5-503
; and
(ii) (A) has disposed, or there is a demonstrated risk that the charter school will
dispose, of the charter school's assets in violation of Subsection 
53G-5-403
(4); or
(B) cannot, or there is a demonstrated risk that the charter school will not, make
repayment of amounts owed to the federal government or the state.
(b) The court shall describe the powers and duties of the receiver in the court's
appointing order, and may amend the order from time to time.
(c) Among other duties ordered by the court, the receiver shall:
(i) ensure the protection of the charter school's assets;
(ii) preserve money owed to creditors; and
(iii) if requested by the authorizer, carry out charter school closure procedures
described in Section 
53G-5-504
, and state board rules, as directed by the authorizer.
(d) If the authorizer does not request, or the court does not appoint, a receiver:
(i) the authorizer may reconstitute the governing board of a charter school; or
(ii) if a new governing board cannot be reconstituted, the authorizer shall complete the
closure procedures described in Section 
53G-5-504
, including liquidation and assignment of
assets, and payment of debt in accordance with state board rule, as described in Section
53G-5-504
.
(e) For a qualifying charter school with outstanding bonds issued in accordance with
Part 6, Charter School Credit Enhancement Program, an authorizer shall obtain the consent of
the Utah Charter School Finance Authority before the authorizer takes the following actions:
(i) petitions a district court to appoint a receiver, as described in Subsection (6)(a);
(ii) reconstitutes the governing board, as described in Subsection (6)(d)(i); or
(iii) carries out closure procedures, as described in Subsection (6)(d)(ii).
Section 6. Section 
53G-5-502
 is amended to read:
53G-5-502.
Voluntary school improvement process.
(1) As used in this section[
,
]
:
(a)
 "[
high
] 
High
 performing charter school" means a charter school that:
[
(a)
] 
(i)
 satisfies all requirements of state law and state board rules;
[
(b)
] 
(ii)
 has operated for at least three years meeting the terms of the school's charter
agreement; and
[
(c)
] 
(iii)
 is in good standing with the charter school's authorizer.
(b) "Low performing charter school" means a charter school that is designated a low
performing school, as that term is defined in Section 
53E-5-301
.
(c) "School turnaround plan" means the same as that term is defined in Section
53E-5-301
.
(2) (a) Subject to Subsection (2)(b), a charter school governing board may voluntarily
request the charter school's authorizer to place the 
charter
 school
, including a low performing
charter school that has a school turnaround plan,
 in a school improvement process.
(b) A charter school governing board shall provide notice and a hearing on the charter
school governing board's intent to make a request under Subsection (2)(a) to parents of students
enrolled in the charter school.
(3) An authorizer may grant a charter school governing board's request to be placed in
a school improvement process if the charter school governing board has provided notice and a
hearing under Subsection (2)(b).
(4) An authorizer that has entered into a school improvement process with a charter
school governing board shall:
(a) enter into a contract with the charter school governing board on the terms of the
school improvement process;
(b) notify the state board that the authorizer has entered into a school improvement
process with the charter school governing board;
(c) make a report to a committee of the state board regarding the school improvement
process; and
(d) notify the Utah Charter School Finance Authority that the authorizer has entered
into a school improvement process with the charter school governing board if the charter
school is a qualifying charter school with outstanding bonds issued in accordance with Part 6,
Charter School Credit Enhancement Program.
(5) Upon notification under Subsection (4)(b), and after the report described in
Subsection (4)(c), the state board shall notify charter schools and the school district in which
the charter school is located that the charter school governing board has entered into a school
improvement process with the charter school's authorizer.
(6) A high performing charter school or the school district in which the charter school
is located may apply to the charter school governing board to assume operation and control of
the charter school that has been placed in a school improvement process.
(7) A charter school governing board that has entered into a school improvement
process shall review applications submitted under Subsection (6) and submit a proposal to the
charter school's authorizer to:
(a) terminate the school's charter, notwithstanding the requirements of Section
53G-5-503
; and
(b) transfer operation and control of the charter school to:
(i) the school district in which the charter school is located; or
(ii) a high performing charter school.
(8) Except as provided in Subsection (9) and subject to Subsection (10), an authorizer
may:
(a) approve a charter school governing board's proposal under Subsection (7); or
(b) (i) deny a charter school governing board's proposal under Subsection (7); and
(ii) (A) terminate the school's charter agreement in accordance with Section
53G-5-503
;
(B) allow the charter school governing board to submit a revised proposal; or
(C) take no action.
(9) An authorizer may not take an action under Subsection (8) for a qualifying charter
school with outstanding bonds issued in accordance with Part 6, Charter School Credit
Enhancement Program, without mutual agreement of the Utah Charter School Finance
Authority and the authorizer.
(10) (a) An authorizer that intends to transfer operation and control of a charter school
as described in Subsection (7)(b) shall request approval from the state board.
(b) (i) The state board shall consider an authorizer's request under Subsection (10)(a)
within 30 days of receiving the request.
(ii) If the state board denies an authorizer's request under Subsection (10)(a), the
authorizer may not transfer operation and control of the charter school as described in
Subsection (7)(b).
(iii) If the state board does not take action on an authorizer's request under Subsection
(10)(a) within 30 days of receiving the request, an authorizer may proceed to transfer operation
and control of the charter school as described in Subsection (7)(b).
(11) If operation and control of a low performing charter school that has a school
turnaround plan is transferred to a high performing charter school as described in Subsection
(7)(b), the low performing charter school shall complete the requirements of the school
turnaround plan and any other requirements imposed by the authorizer for school improvement.
Section 7. Section 
53G-5-503
 is amended to read:
53G-5-503.
Termination of a charter agreement.
(1) Subject to the requirements of Subsection (3), a charter school authorizer may
terminate a school's charter agreement for any of the following reasons:
(a) failure of the charter school to meet the requirements stated in the charter
agreement;
(b) failure to meet generally accepted standards of fiscal management;
(c) (i) designation as a low performing school under Title 53E, Chapter 5, Part 3,
School Turnaround and Leadership Development; and
(ii) failure to improve the school's grade under the conditions described in Title 53E,
Chapter 5, Part 3, School Turnaround and Leadership Development;
(d) violation of requirements under this chapter or another law; or
(e) other good cause shown.
(2) (a) The authorizer shall notify the following of the proposed termination in writing,
state the grounds for the termination, and stipulate that the charter school governing board may
request an informal hearing before the authorizer:
(i) the charter school governing board; and
(ii) if the charter school is a qualifying charter school with outstanding bonds issued in
accordance with Part 6, Charter School Credit Enhancement Program, the Utah Charter School
Finance Authority.
(b) Except as provided in Subsection (2)(e), the authorizer shall conduct the hearing in
accordance with Title 63G, Chapter 4, Administrative Procedures Act, within 30 days after
receiving a written request under Subsection (2)(a).
(c) If the authorizer, by majority vote, approves a motion to terminate a charter school,
the charter school governing board may appeal the decision to the state board.
(d) (i) The state board shall hear an appeal of a termination made pursuant to
Subsection (2)(c).
(ii) The state board's action is final action subject to judicial review.
(e) (i) If the authorizer proposes to terminate the charter agreement of a qualifying
charter school with outstanding bonds issued in accordance with Part 6, Charter School Credit
Enhancement Program, the authorizer shall conduct a hearing described in Subsection (2)(b)
120 days or more after notifying the following of the proposed termination:
(A) the charter school governing board of the qualifying charter school; and
(B) the Utah Charter School Finance Authority.
(ii) Prior to the hearing described in Subsection (2)(e)(i), the Utah Charter School
Finance Authority shall meet with the authorizer to determine whether the deficiency may be
remedied in lieu of termination of the qualifying charter school's charter agreement.
(3) An authorizer may not terminate the charter agreement of a qualifying charter
school with outstanding bonds issued in accordance with Part 6, Charter School Credit
Enhancement Program, without mutual agreement of the Utah Charter School Finance
Authority and the authorizer.
(4) (a) The state board shall make rules that require a charter school to report any
threats to the health, safety, or welfare of its students to the State Charter School Board in a
timely manner.
(b) The rules under Subsection (4)(a) shall also require the charter school report to
include what steps the charter school has taken to remedy the threat.
(5) Subject to the requirements of Subsection (3), the authorizer may terminate a
charter agreement immediately if good cause has been shown or if the health, safety, or welfare
of the students at the school is threatened.
(6) If a charter agreement is terminated [
during a school year
], the following entities
may apply to the charter school's authorizer to assume operation of the school:
(a) the school district where the charter school is located;
(b) the charter school governing board of another charter school; [
or
]
(c) a private management company[
.
]
; or
(d) the governing board of a nonprofit corporation.
(7) (a) If a charter agreement is terminated, a student who attended the school may
apply to and shall be enrolled in another public school under the enrollment provisions of
Chapter 6, Part 3, School District Residency, subject to space availability.
(b) Normal application deadlines shall be disregarded under Subsection (7)(a).
Section 8. Section 
53G-5-504
 is amended to read:
53G-5-504.
Charter school closure.
(1) As used in this section, "receiving charter school" means a charter school that an
authorizer permits under Subsection (13)(a), to accept enrollment applications from students of
a closing charter school.
[
(1)
] 
(2)
 If a charter school is closed for any reason, including the termination of a
charter agreement in accordance with Section 
53G-5-503
 or the conversion of a charter school
to a private school, the provisions of this section apply.
[
(2)
] 
(3)
 A decision to close a charter school is made:
(a) when a charter school authorizer approves a motion to terminate described in
Subsection 
53G-5-503
(2)(c);
(b) when the state board takes final action described in Subsection 
53G-5-503
(2)(d)(ii);
or
(c) when a charter school provides notice to the charter school's authorizer that the
charter school is relinquishing the charter school's charter.
[
(3)
] 
(4)
 (a) No later than 10 days after the day on which a decision to close a charter
school is made, the charter school shall:
(i) provide notice to the following, in writing, of the decision:
(A) if the charter school made the decision to close, the charter school's authorizer;
(B) the State Charter School Board;
(C) if the state board did not make the decision to close, the state board;
(D) parents of students enrolled at the charter school;
(E) the charter school's creditors;
(F) the charter school's lease holders;
(G) the charter school's bond issuers;
(H) other entities that may have a claim to the charter school's assets;
(I) the school district in which the charter school is located and other charter schools
located in that school district; and
(J) any other person that the charter school determines to be appropriate; and
(ii) post notice of the decision on the Utah Public Notice Website, created in Section
63F-1-701
.
(b) The notice described in Subsection [
(3)
] 
(4)
(a) shall include:
(i) the proposed date of the charter school closure;
(ii) the charter school's plans to help students identify and transition into a new school;
and
(iii) contact information for the charter school during the transition.
[
(4)
] 
(5)
 No later than 10 days after the day on which a decision to close a charter
school is made, the closing charter school shall:
(a) designate a custodian for the protection of student files and school business records;
(b) designate a base of operation that will be maintained throughout the charter school
closing, including:
(i) an office;
(ii) hours of operation;
(iii) operational telephone service with voice messaging stating the hours of operation;
and
(iv) a designated individual to respond to questions or requests during the hours of
operation;
(c) assure that the charter school will maintain 
private
 insurance coverage [
and
] 
or
 risk
management coverage 
for covered claims that arise before closure,
 throughout the transition to
closure and for a period following closure of the charter school as specified by the charter
school's authorizer;
(d) assure that the charter school will complete by the set deadlines for all fiscal years
in which funds are received or expended by the charter school a financial audit and any other
procedure required by state board rule;
(e) inventory all assets of the charter school; and
(f) list all creditors of the charter school and specifically identify secured creditors and
assets that are security interests.
[
(5)
] 
(6)
 The closing charter school's authorizer shall oversee the closing charter
school's compliance with Subsection [
(4)
] 
(5)
.
[
(6)
] 
(7)
 (a) A closing charter school shall return any assets remaining, after all
liabilities and obligations of the closing charter school are paid or discharged, to the closing
charter school's authorizer.
(b) The closing charter school's authorizer shall liquidate assets at fair market value or
assign the assets to another public school.
[
(7)
] 
(8)
 The closing charter school's authorizer shall oversee liquidation of assets and
payment of debt in accordance with state board rule. 
[
(8)
] 
(9)
 The closing charter school shall:
(a) comply with all state and federal reporting requirements; and 
(b) submit all documentation and complete all state and federal reports required by the
closing charter school's authorizer or the state board , including documents to verify the closing
charter school's compliance with procedural requirements and satisfaction of all financial
issues.
[
(9)
] 
(10)
 When the closing charter school's financial affairs are closed out and
dissolution is complete, the authorizer shall ensure that a final audit of the charter school is
completed.
[
(10)
] 
(11)
 On or before January 1, 2017, the state board shall, after considering
suggestions from charter school authorizers, make rules that:
(a) provide additional closure procedures for charter schools ; and
(b) establish a charter school closure process. 
(12) (a) Upon termination of the charter school's charter agreement:
(i) notwithstanding provisions to the contrary in Title 16, Chapter 6a, Part 14,
Dissolution, the nonprofit corporation under which the charter school is organized and
managed may be unilaterally dissolved by the authorizer; and
(ii) the net assets of the charter school shall revert to the authorizer as described in
Subsection (7).
(b) The charter school and the authorizer shall mutually agree in writing on the
effective date and time of the dissolution described in Subsection (12)(a).
(c) The effective date and time of dissolution described in Subsection (12)(b) may not
exceed five years after the date of the termination of the charter agreement.
(13) Notwithstanding the provisions of Chapter 6, Part 5, Charter School Enrollment:
(a) an authorizer may permit a specified number of students from a closing charter
school to be enrolled in another charter school, if the receiving charter school:
(i) (A) is authorized by the same authorizer as the closing charter school; or
(B) is authorized by a different authorizer and the authorizer of the receiving charter
school approves the increase in enrollment; and
(ii) agrees to accept enrollment applications from students of the closing charter
school;
(b) a receiving charter school shall give new enrollment preference to applications
from students of the closing charter school in the first school year in which the closing charter
school is not operational; and
(c) a receiving charter school's enrollment capacity is increased by the number of
students enrolled in the receiving charter school from the closing charter school under this
Subsection (13).
(14) A member of the governing board or staff of the receiving charter school that is
also a member of the governing board of the receiving charter school's authorizer, shall recuse
himself or herself from a decision regarding the enrollment of students from a closing charter
school as described in Subsection (13).