Public Charter School Funding and Facilities Model Legislation Exposed

The Public Charter School Funding and Facilities Model Legislation was adopted by ALEC's Education and Workforce Development Task Force at the Annual Meeting on July 23, 2015, approved by the ALEC Board of Directors on September 4, 2015. (Accessed on 11/30/2015).

ALEC Bill Text

Summary

The purpose of this legislation is to outline the funding requirements for and facilities operations of public charter schools.

Model Policy

Section 1. {Definitions}

(A) An “applicant” means any person, entity, or group that develops and submits an application for a public charter school to an authorizer.

(B) An “applicant” means any person or group that develops and submits an application for a public charter school to an authorizer.

(C) An “at-risk student” means a student who has an economic or academic disadvantage that requires special services or assistance to succeed in educational programs. The term includes, but is not necessarily limited to, students who are members of economically disadvantaged families, students who are identified as having special educational needs, students who are limited in English proficiency, students who are at risk of dropping out of high school, students who are under-credited, and students who do not meet minimum standards of academic proficiency.

(D) An “authorizer” means an entity authorized under this Act to review applications, decide whether to approve or reject applications, enter into charter contracts with applicants, oversee public charter schools, and decide whether to renew, not renew, or revoke charter contracts.

(E) A “charter contract” means a fixed-term, renewable contract between a public charter school and an authorizer that outlines the roles, powers, responsibilities, and performance expectations for each party to the contract.

(F) A “conversion public charter school” means a charter school that existed as a non-charter public school before becoming a public charter school.

(G) An “education service provider” means a for-profit education management organization, non-profit charter management organization, school design provider, or any other partner entity with which a public charter school intends to contract for educational design, implementation, or comprehensive management.

(H) A “governing board” means the independent board of a public charter school that is party to the charter contract with the authorizer and whose members have been elected or selected pursuant to the school’s application.

(I) A “local school board” means a school board exercising management and control of a local school district pursuant to the state constitution and state statutes.

(J) A “local school district” means a public agency that establishes and supervises one or more public schools within its geographical limits pursuant to the state constitution and state statutes.

(K) A “non-charter public school” means a public school that is under the direct management, governance, and control of a local school board or the state.

(L) A “parent” means a parent, guardian, or other person or entity having legal custody of a child.

(M) A “public charter school” means a public school that:

(1) Has autonomy over decisions including, but not limited to, matters concerning finance, personnel, scheduling, curriculum, and instruction;

(2) Is governed by an independent governing board;

(3) Is established and operating under the terms of a charter contract between the school’s board and its authorizer;

(4) Is a school to which parents choose to send their children;

(5) Is a school that admits students on the basis of a lottery if more students apply for admission to any specific grade or program than can be accommodated;

(6) Provides a program of education that includes one or more of the following: pre-school, pre- kindergarten, any grade or grades from kindergarten through 12th grade, and adult community, continuing, and vocational education programs;

(7) Operates in pursuit of a specific set of educational objectives as defined in its charter contract; and

(8) Operates under the oversight of its authorizer in accordance with its charter contract and application.

(N) A “start-up public charter school” means a public charter school that did not exist as a non- charter public school prior to becoming a public charter school.

(O) A “student” means any child who is eligible for attendance in public schools in the state.

(P) A “virtual public charter school” means a public charter school that offers educational services predominantly through an online program.

Section 2. {Funding}

[The 44 jurisdictions with public charter school laws vary greatly in how they fund public charter schools. In this model legislation, we provide three options for handling this issue in state law. In the first option, funding flows from the state to school districts to public charter schools. In the second option, funding flows from the state directly to public charter schools. In the third option, funding flows from the state to authorizers to public charter schools. It is preferred that all federal, state, and local dollars follow a student to a public charter school.]

OPTION 1: FUNDING FLOWS FROM THE STATE TO SCHOOL DISTRICTS TO PUBLIC CHARTER SCHOOLS

(A) Enrollment

(1) The enrollment of students attending public charter schools shall be included in the enrollment, attendance, and, if applicable, count of students with disabilities of the school district in which the student resides. The public charter school shall report all such data to the school districts of residence in a timely manner. Each school district shall report such enrollment, attendance, and count of students with disabilities to the state department of education.

(B) Operational Funding

(1) The school district of residence shall pay directly to the public charter school for each student enrolled in the public charter school who resides in the school district an amount of state and local dollars for that student equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for school districts, notwithstanding any oversight fee reductions pursuant to this Act.

(C) Payment Schedule

(1) Payments made pursuant to this section shall be made by school districts in twelve substantially equal installments each year beginning on the first business day of July and every month thereafter. Amounts payable under this section shall be determined by the state department of education. Amounts payable to a public charter school in its first year of operation shall be based on the projections of initial-year enrollment set forth in the charter contract. Such projections shall be reconciled with the actual enrollment at the end of the school’s first year of operation, and any necessary adjustments shall be made to payments during the school’s second year of operation.

(D) Sanctions for Failure to Make Payments

(1) In the event of the failure of a school district to make payments required by this section, the state treasurer shall deduct from any state funds which become due to such school district an amount equal to the unpaid obligation. The treasurer shall pay over such sum to the public charter school upon certification of the state department of education. The state department of education shall promulgate regulations to implement the provisions of this section.

(E) Categorical Funding

(1) A school district shall direct the proportionate share of moneys generated under federal and state categorical aid programs to public charter schools serving students eligible for such aid. A school district shall ensure that public charter schools with rapidly expanding enrollments are treated equitably in the calculation and disbursement of all federal and state categorical aid program dollars. Each public charter school that serves students who may be eligible to receive services provided through such programs shall comply with all reporting requirements to receive the aid.

(F) Special Education Funding

FOR PUBLIC CHARTER SCHOOLS THAT ARE THEIR OWN LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) A school district shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF NON-DISTRICT AUTHORIZER LEAS FOR

SPECIAL EDUCATION PURPOSES:

(1) A school district shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) A public charter school shall pay to its authorizer any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student that the authorizer provides directly or indirectly.

(3) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services, including, but not necessarily limited to, a reasonable reserve not to exceed five percent of the authorizer’s total budget for providing special education services. The reserve shall only be used by the authorizer to offset excess costs of providing services to students with disabilities enrolled in one of its public charter schools.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF SCHOOL DISTRICT LEAS FOR SPECIAL

EDUCATION PURPOSES:

(1) The school district shall provide special education services to students enrolled in public charter schools on the same basis as such services are provided to students enrolled in other public schools of the school district.

(2) The school district shall retain any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student with a disability that the school district provides directly or indirectly.

(3) At either party’s request, however, the public charter school and the school district may negotiate and include in a contract alternate arrangements for the provision of and payment for special education services. If the public charter school and the school district have negotiated to allow the public charter school to provide special education services, the proportionate share of state and federal resources generated by such students shall be directed by the school district to the public charter school enrolling such students.

(G) Generally Accepted Accounting Principles – Independent Audit

(1) A public charter school shall adhere to Generally Accepted Accounting Principles.

(2) A public charter school shall annually engage an external auditor to do an independent audit of the school’s finances. A public charter school shall file a copy of each audit report and accompanying management letter to its authorizer by [INSERT DATE].

(H) Transportation Funding

(1) The state department of education shall disburse state transportation funding to a school district for each of the public charter school students residing in the school district on the same basis and in the same manner as it is paid to school districts. A school district shall disburse state transportation funding to a public charter school in proportion to the amount generated by the school’s students who reside in the school district.

(2) A public charter school may enter into a contract with a school district or private provider to provide transportation to the school’s students.

(I) Budget Reserves

(1) Any monies received by a public charter school from any source and remaining in the public charter school’s accounts at the end of any budget year shall remain in the public charter school’s accounts for use by the public charter school during subsequent budget years.

(J) Ability to Accept Gifts, Donations, and Grants

(1) Nothing in this article shall be construed to prohibit any person or organization from providing funding or other assistance to the establishment or operation of a public charter school. The governing board of a public charter school is authorized to accept gifts, donations, and grants of any kind made to the public charter school and to expend or use such gifts, donations, and grants in accordance with the conditions prescribed by the donor; provided, however, that no gift, donation, or grant may be accepted if subject to a condition that is contrary to any provision of law or term of the charter contract.

OPTION 2: FUNDING FLOWS FROM THE STATE DIRECTLY TO PUBLIC CHARTER SCHOOLS

(A) Enrollment

(1) Each public charter school shall certify to the state department of education its student enrollment in the same manner as school districts.

(B) Operational Funding

(1) For a public charter school authorized by a school district, the state shall pay directly to the public charter school for each student enrolled in the public charter school an amount of state and local dollars for that student equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for the student’s resident school district, notwithstanding any oversight fee reductions pursuant to this Act.

(2) For a public charter school authorized by an entity other than a school district, the state department of education shall withhold from the state equalization payments for each school district with students residing in the school district and attending the public charter school an amount equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for each student in the resident school district multiplied by the number of students enrolled in the public charter school from the resident school district. The state department of education shall send the sum of these withholdings to the public charter school, notwithstanding any oversight fee reductions pursuant this Act.

(C) Payment Schedule

(1) Payments made pursuant to this section shall be made by the state in twelve substantially equal installments each year beginning on the first business day of July and every month thereafter. Amounts payable under this section shall be determined by the state department of education. Amounts payable to a public charter school in its first year of operation shall be based on the projections of initial-year enrollment set forth in the charter contract. Such projections shall be reconciled with the actual enrollment at the end of the school’s first year of operation, and any necessary adjustments shall be made to payments during the school’s second year of operation.

(D) Categorical Funding

(1) The state shall direct the proportionate share of moneys generated under federal and state categorical aid programs to public charter schools serving students eligible for such aid. The state shall ensure that public charter schools with rapidly expanding enrollments are treated equitably in the calculation and disbursement of all federal and state categorical aid program dollars. Each public charter school that serves students who may be eligible to receive services provided through such programs shall comply with all reporting requirements to receive the aid.

(E) Special Education Funding

FOR PUBLIC CHARTER SCHOOLS THAT ARE THEIR OWN LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) The state shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF NON-DISTRICT AUTHORIZER LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) The state shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) A public charter school shall pay to its authorizer any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student that the authorizer provides directly or indirectly.

(3) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services, including, but not necessarily limited to, a reasonable reserve not to exceed five percent of the authorizer’s total budget for providing special education services. The reserve shall only be used by the authorizer to offset excess costs of providing services to students with disabilities enrolled in one of its public charter schools.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF SCHOOL DISTRICT LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) The school district shall provide special education services to students enrolled in public charter schools on the same basis as such services are provided to students enrolled in other public schools of the school district.

(2) The school district shall retain any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student with a disability that the school district provides directly or indirectly.

(3) At either party’s request, however, the public charter school and the school district may negotiate and include in a contract alternate arrangements for the provision of and payment for special education services. If the public charter school and the school district have negotiated to allow the public charter school to provide special education services, the proportionate share of state and federal resources generated by such students shall be directed by the school district to the public charter school enrolling such students.

(F) Generally Accepted Accounting Principles – Independent Audit

(1) A public charter school shall adhere to Generally Accepted Accounting Principles.

(2) A public charter school shall annually engage an external auditor to do an independent audit of the school’s finances. A public charter school shall file a copy of each audit report and accompanying management letter to its authorizer by [INSERT DATE].

(G) Transportation Funding

(1) The state department of education shall disburse state transportation funding to a public charter school on the same basis and in the same manner as it is paid to school districts.

(2) A public charter school may enter into a contract with a school district or private provider to provide transportation to the school’s students.

(H) Budget Reserves

(1) Any monies received by a public charter school from any source and remaining in the public charter school’s accounts at the end of any budget year shall remain in the public charter school’s accounts for use by the public charter school during subsequent budget years.

(I) Ability to Accept Gifts, Donations, and Grants

(1) Nothing in this article shall be construed to prohibit any person or organization from providing funding or other assistance to the establishment or operation of a public charter school. The governing board of a public charter school is authorized to accept gifts, donations, and grants of any kind made to the public charter school and to expend or use such gifts, donations, and grants in accordance with the conditions prescribed by the donor; provided, however, that no gift, donation, or grant may be accepted if subject to a condition that is contrary to any provision of law or term of the charter contract.

OPTION 3: FUNDING FLOWS FROM THE STATE TO AUTHORIZERS TO PUBLIC CHARTER SCHOOLS

(A) Enrollment

(1) Each authorizer shall certify to the state department of education the student enrollment for that year for each of its public charter schools in the same manner as school districts.

(B) Operational Funding

(1) For a public charter school authorized by a school district, the school district shall pay directly to the public charter school for each student enrolled in the school an amount of state and local dollars for that student equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for the student’s resident school district, notwithstanding any oversight fee reductions pursuant to this Act.

(2) For a public charter school authorized by an entity other than a school district, the state department of education shall withhold from the state equalization payments for each school district with students residing in the school district and attending the public charter school an amount equal to one hundred percent of the amount calculated pursuant to the state’s funding formula for each student in the resident school district multiplied by the number of students enrolled in the public charter school from the resident school district. The state department of education shall send the sum of these withholdings to the authorizer. The authorizer shall forward the sum of these withholdings to each public charter school, notwithstanding any oversight fee reductions pursuant to this Act.

(C) Payment Schedule

(1) Payments made pursuant to this section shall be made by an authorizer in twelve substantially equal installments each year beginning on the first business day of July and every month thereafter. Amounts payable under this section shall be determined by the state department of education. Amounts payable to a public charter school in its first year of operation shall be based on the projections of initial-year enrollment set forth in the charter contract. Such projections shall be reconciled with the actual enrollment at the end of the school’s first year of operation, and any necessary adjustments shall be made to payments during the school’s second year of operation.

(D) Sanctions for Failure to Make Payments

(1) In the event of the failure of an authorizer to make payments required by this section, the state treasurer shall deduct from any state funds which become due to such an authorizer an amount equal to the unpaid obligation. The treasurer shall pay over such sum to the public charter school upon certification of the state department of education. The state department of education shall promulgate regulations to implement the provisions of this section.

(E) Categorical Funding

(1) An authorizer shall direct the proportionate share of moneys generated under federal and state categorical aid programs to public charter schools serving students eligible for such aid. The state shall ensure that public charter schools with rapidly expanding enrollment are treated equitably in the calculation and disbursement of all federal and state categorical aid program dollars. Each public charter school that receives such aid shall comply with all reporting requirements to receive the aid.

(F) Special Education Funding

FOR PUBLIC CHARTER SCHOOLS THAT ARE THEIR OWN LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) An authorizer shall pay directly to the public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF NON-DISTRICT AUTHORIZER LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) The authorizer shall pay directly to a public charter school any federal or state aid attributable to a student with a disability attending the school.

(2) A public charter school shall pay to its authorizer any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student that the authorizer provides directly or indirectly.

(3) At either party’s request, a public charter school and its authorizer may negotiate and include in the charter contract alternate arrangements for the provision of and payment for special education services, including, but not necessarily limited to, a reasonable reserve not to exceed five percent of the authorizer’s total budget for providing special education services. The reserve shall only be used by the authorizer to offset excess costs of providing services to students with disabilities enrolled in one of its public charter schools.

FOR PUBLIC CHARTER SCHOOLS THAT ARE PART OF SCHOOL DISTRICT LEAS FOR SPECIAL EDUCATION PURPOSES:

(1) The school district shall provide special education services to students enrolled in public charter schools on the same basis as such services are provided to students enrolled in other public schools of the school district.

(2) The state shall disburse to a school district any federal or state aid attributable to a student with a disability attending a public charter school in proportion to the level of services for such student with a disability that the school district provides directly or indirectly.

(3) At either party’s request, however, the public charter school and the school district may negotiate and include in a contract alternate arrangements for the provision of and payment for special education services. If the public charter school and the school district have negotiated to allow the public charter school to provide special education services, the proportionate share of state and federal resources generated by such students shall be directed by the school district to the public charter school enrolling such students.

(G) Generally Accepted Accounting Principles – Independent Audit

(1) A public charter school shall adhere to Generally Accepted Accounting Principles.

(2) A public charter school shall annually engage an external auditor to do an independent audit of the school’s finances. A public charter school shall file a copy of each audit report and accompanying management letter to its authorizer by [INSERT DATE].

(H) Transportation Funding

(1) The state department of education shall disburse state transportation funding to an authorizer for each of its public charter school students on the same basis and in the same manner as it is paid to school districts. An authorizer shall disburse state transportation funding to a public charter school in proportion to the amount generated by the school’s students.

(2) A public charter school may enter into a contract with a school district or private provider to provide transportation to the school’s students.

(I) Budget Reserves

(1) Any monies received by a public charter school from any source and remaining in the public charter school’s accounts at the end of any budget year shall remain in the public charter school’s accounts for use by the public charter school during subsequent budget years.

(J) Ability to Accept Gifts, Donations, and Grants

(1) Nothing in this article shall be construed to prohibit any person or organization from providing funding or other assistance to the establishment or operation of a public charter school. The governing board of a public charter school is authorized to accept gifts, donations, and grants of any kind made to the public charter school and to expend or use such gifts, donations, and grants in accordance with the conditions prescribed by the donor; provided, however, that no gift, donation, or grant may be accepted if subject to a condition that is contrary to any provision of law or term of the charter contract.

Section 3. {Facilities}

[In this model law, we provide a menu of approaches for handling this issue in state law, most of which should be included in a given state’s law.]

(A) Per-Student Facility Allowance

(1) The per-student facility allowance for public charter schools shall be determined as follows: the total capital costs for public schools in the state over the past five years shall be divided by the total student count in the state over the past five years.

(2) The actual facility allowance payments to be received by each public charter school shall be determined as follows: the per-student facility allowance shall be multiplied by the number of students estimated to be attending each public charter school.

(B) Public Charter School Facility Grant Program

(1) The state board of education shall establish, within available bond authorizations, a grant program to assist public charter schools in financing school building projects, general improvements to school buildings, and repayment of debt for school building projects. Public charter schools may apply for such grants to the state board of education at such time and in such manner as the state board of education prescribes. The state board of education shall give preference to applications that provide for matching funds from non-state sources.

(2) For the purposes described in subsection (3) of this section, the [INSERT NAME OF APPROPRIATE STATE BONDING AUTHORITY] shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate [INSERT DOLLAR AMOUNT] provided [INSERT DOLLAR AMOUNT] of said authorization shall be effective [INSERT DATE].

(3) The proceeds of the sale of said bonds, to the extent of the amount stated in subsection (2) of this section, shall be used by the state board of education for the purpose of grants pursuant to subsection (1).

(4) Bonds issued pursuant to this section shall be general obligations of the state and the full faith and credit of the state are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the state treasurer shall pay such principal and interest as the same become due.

(C) Public Charter School Facility Revolving Loan Program

(1) The public charter school facility revolving loan program is hereby created in the state treasury. The public charter school facility revolving loan program shall be comprised of federal funds obtained by the state for public charter schools and any other funds appropriated or transferred to the fund by the state. Funds appropriated to the public charter school facility revolving loan program shall remain available for the purposes of the program until re-appropriated or reverted by the general assembly.

(2) Loans may be made from moneys in the public charter school facility revolving loan program to a public charter school, upon application by a public charter school and approval by the state board of education or its designee. Money loaned to a public charter school pursuant to this section shall be for construction, purchase, renovation, and maintenance of public charter school facilities. No loan to a public charter school shall exceed [INSERT DOLLAR AMOUNT] over [INSERT NUMBER OF YEARS]. A public charter school may receive multiple loans from the public charter school facility revolving loan program, as long as the total amount received from the program over [INSERT NUMBER OF YEARS] does not exceed [INSERT DOLLAR AMOUNT].

(3) The state board of education or its designee may consider all of the following when making a determination as to the approval of a public charter school’s loan application:

(a) Soundness of the financial business plans of the applicant public charter school.

(b) Availability to the public charter school of other sources of funding.

(c) Geographic distribution of loans made from the public charter school facility revolving loan program.

(d) The impact that loans received pursuant to this section will have on the public charter school’s receipt of other private and public financing.

(e) Plans for innovatively enhancing or leveraging funds received pursuant to this section, such as loan guarantees or other types of credit enhancements.

(f) The financial needs of the public charter school.

(4) Commencing with the first fiscal year following the fiscal year the public charter school receives the loan, the [INSERT NAME OF APPROPRIATE STATE AGENCY] shall deduct from apportionments made to the public charter school, as appropriate, an amount equal to the annual repayment of the amount loaned to the public charter school under this section and pay the same amount into the public charter school facility revolving loan program in the state treasury. Repayment of the full amount loaned to the public charter school shall be deducted by the [INSERT NAME OF APPROPRIATE STATE AGENCY] in equal annual amounts over a number of years agreed upon between the public charter school and the state board of education or its designee, not to exceed [INSERT NUMBER OF YEARS] for any loan.

(5) Notwithstanding other provisions of law, a loan may be made to a public charter school pursuant to this section only in the case of a public charter school that is incorporated.

(6) Notwithstanding other provisions of law, in the case of default of a loan made directly to a public charter school pursuant to this section, the public charter school shall be solely liable for repayment of the loan.

(D) Bonding Authority

[Public charter schools should either have equal access to all of the relevant bonding authorities in a state or have their own bonding authority. For the first option, a state must amend the appropriate section of the law (e.g., state health and educational facility authority section) to clarify that public charter schools are eligible to obtain tax-exempt financing from the relevant authority. For the second option, see language below.]

(1) As used in this section:

(a) “Authority” means the state public charter school finance authority created by this section.

(b) “Obligations” mean any notes, debentures, revenue bonds, or other evidences of financial indebtedness, except general obligation bonds.

(c) “Project” means:

(i) Any building, structure, or property owned, or to be acquired, by a public charter school for any of its educational purposes and the related appurtenances, easements, rights-of-way, improvements, paving, utilities, landscaping, parking facilities, and lands; or

(ii) Any capital equipment owned, or to be acquired, by a public charter school for any of its educational purposes, interests in land, and grounds, together with the personal property necessary, convenient, or appurtenant to them.

(2) There is created a body politic and corporate known as the state public charter school finance authority. The authority is created to provide an efficient and cost-effective method of financing public charter school facilities.

(3) The governing board of the authority shall be composed of:

(a) The governor or the governor’s designee;

(b) The state treasurer; and

(c) The state superintendent of public instruction or the state superintendent’s designee.

(4) Upon request, the state board of education shall provide staff support to the authority.

(5) The authority shall have perpetual succession as a body politic and corporate.

(6) The authority may:

(a) Sue and be sued in its own name;

(b) Have, and alter at will, an official seal;

(c) Receive and accept aid or contributions from any source, including the United States or this state, in the form of money, property, labor, or other things of value to be held, used, and applied to carry out the purposes of this part, subject to the conditions upon which the aid and contributions are made, for any purpose consistent with this part;

(d) Exercise the power to borrow money and issue obligations, except the authority may only exercise powers to finance a project as defined in state law;

(e) Employ advisers, consultants, and agents, including financial experts, independent legal counsel, and any advisers, consultants, and agents as may be necessary in its judgment and fix their compensation;

(f) Make and execute contracts and other instruments necessary or convenient for the performance of its duties and the exercise of its powers and functions; and

(g) Have and exercise any other powers or duties that are necessary or appropriate to carry out and effectuate the purposes of this chapter.

(7) If the authority is dissolved at any time, for any reason, all funds, property, rights, and interests of the authority, following the satisfaction of the authority’s obligations, shall immediately vest in and become the property of the state, which shall succeed to all rights of the authority subject to any encumbrances which may then exist on any particular properties.

(8) None of the net earnings of the authority shall inure to the benefit of any private person.

(E) Moral Obligation of the State

(1) The general assembly hereby finds and declares that its intent in enacting this section is to support public charter schools and public charter school capital construction by helping qualified public charter schools that choose to have the [INSERT NAME OF BONDING AUTHORITY] issue bonds on their behalf obtain more favorable financing terms for the bonds.

(2) If the [INSERT NAME OF BONDING AUTHORITY] has issued bonds on behalf of a public charter school that defaults on its debt service payment obligations, the board of directors of the authority shall submit to the governor a certificate certifying any amount of moneys required to fulfill the school’s debt service payment obligations. The governor shall submit a request for appropriations in an amount sufficient to fulfill the school’s debt service payment obligations and the general assembly may, but shall not be required to, appropriate moneys for said purpose. If, in its sole discretion, the general assembly appropriates any moneys for said purpose, the aggregate outstanding principal amount of bonds for which moneys may be appropriated for said purpose shall not exceed [INSERT DOLLAR AMOUNT].

(F) Access to State Facilities Programs for Non-Charter Public Schools

[Public charter schools should have equal access to all of the existing state facilities programs for traditional public schools in a state. To implement this item, a state must amend the relevant section of the law (e.g., public school capital construction assistance fund section) to clarify that public charter schools are eligible to obtain funding from the relevant program.]

(G) Credit Enhancement Fund

(1) [INSERT DOLLAR AMOUNT] shall be set aside for a credit enhancement fund for public charter schools to be administered by the state board of education.

(2) Using the amounts described in paragraph (1), the state board of education shall make and disburse grants to eligible nonprofit corporations to carry out the purposes described in paragraph (3).

(3) The recipient of a grant under this fund shall use the monies provided under the grant to carry out activities to assist public charter schools in:

(a) Obtaining financing to acquire interests in real property (including by purchase, lease, or donation), including financing to cover planning, development, and other incidental costs;

(b) Obtaining financing for construction of facilities or the renovation, repair, or alteration of existing property or facilities (including the purchase or replacement of fixtures and equipment), including financing to cover planning, development, and other incidental costs;

(c) Enhancing the availability of loans (including mortgages) and bonds; and

(d) Obtaining lease guarantees.

(4) Funds provided under a grant under this subparagraph may not be used by a recipient to make direct loans or grants to public charter schools.

(H) Access to District Facilities and Land

(1) A public charter school shall have a right of first refusal to purchase or lease at or below fair market value a closed public school facility or property or unused portions of a public school facility or property located in a school district from which it draws its students if the school district decides to sell or lease the public school facility or property.

(I) Contracting for Use of Facilities

(1) A public charter school may negotiate and contract at or below fair market value with a school district, the governing body of a state college or university or public community college, or any other public or for-profit or nonprofit private entity for the use of facility for a school building.

(J) Use of Other Facilities under Preexisting Zoning and Land Use Designations

(1) Library, community service, museum, performing arts, theatre, cinema, church, community college, college, and university facilities may provide space to public charter schools within their facilities under their preexisting zoning and land use designations.

(K) Exemptions from Ad Valorem Taxes and Certain Fees

(1) Any facility, or portion thereof, used to house a public charter school shall be exempt from ad valorem taxes.

(2) Public charter school facilities are exempt from assessments of fees for building permits, fees for building and occupational licenses, impact fees, service availability fees, and assessments for special benefits.

Approved by ALEC’s Education and Workforce Development Task Force at the ALEC Annual Meeting on Thursday July 23, 2015.

Approved by ALEC Board of Directors on September 4, 2015.