§ 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 (12)(a), to accept enrollment applications from students of a closing charter school.
(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.
(3) A decision to close a charter school is made:
(3)(a) when a charter school authorizer approves a motion to terminate described in Section 53G-5-503;
(3)(b) when the state board takes final action described in Section 53G-5-503; or
(3)(c) when a charter school provides notice to the charter school's authorizer that the charter school is relinquishing the charter school's charter.
(4) (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:
(4)(a)(i) provide notice to the following, in writing, of the decision:
(4)(a)(i)(A) if the charter school made the decision to close, the charter school's authorizer;
(4)(a)(i)(B) if the state board did not make the decision to close, the state board;
(4)(a)(i)(C) parents of students enrolled at the charter school;
(4)(a)(i)(D) the charter school's creditors;
(4)(a)(i)(E) the charter school's lease holders;
(4)(a)(i)(F) the charter school's bond issuers;
(4)(a)(i)(G) other entities that may have a claim to the charter school's assets;
(4)(a)(i)(H) the school district in which the charter school is located and other charter schools located in that school district; and
(4)(a)(i)(I) any other person that the charter school determines to be appropriate; and
(4)(a)(ii) publish notice of the decision for the school district in which the charter school is located, as a class A notice under Section 63G-30-102, for at least 30 days.
(4)(b) The notice described in Subsection (4)(a) shall include:
(4)(b)(i) the proposed date of the charter school closure;
(4)(b)(ii) the charter school's plans to help students identify and transition into a new school; and
(4)(b)(iii) contact information for the charter school during the transition.
(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:
(5)(a) designate a custodian for the protection of student files and school business records;
(5)(b) designate a base of operation that will be maintained throughout the charter school closing, including:
(5)(b)(i) an office;
(5)(b)(ii) hours of operation;
(5)(b)(iii) operational telephone service with voice messaging stating the hours of operation; and
(5)(b)(iv) a designated individual to respond to questions or requests during the hours of operation;
(5)(c) assure that the charter school will maintain private insurance coverage 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;
(5)(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;
(5)(e) inventory all assets of the charter school; and
(5)(f) list all creditors of the charter school and specifically identify secured creditors and assets that are security interests.
(6) The closing charter school's authorizer shall oversee the closing charter school's compliance with Subsection (5).
(7) (7)(a) Unless a different order is determined by a bankruptcy court under 11 U.S.C. Sec. 1001 et seq., a closing charter school shall distribute the assets of the closing charter school in the following order:
(7)(a)(i) return assets donated by a private donor to the private donor if:
(7)(a)(i)(A) the assets were donated for a specific purpose;
(7)(a)(i)(B) the private donor restricted use of the assets to only that specific purpose; and
(7)(a)(i)(C) the closing charter school has assets that have not been used for the specific purpose;
(7)(a)(ii) distribute assets to satisfy outstanding payroll obligations for employees of the closing charter school;
(7)(a)(iii) distribute assets to creditors of the closing charter school; and
(7)(a)(iv) distribute assets to satisfy any outstanding liability or obligation to the state board, state, or federal government.
(7)(b) A closing charter school shall return any assets remaining, after all liabilities and obligations of the closing charter school are paid or discharged consistent with Subsection (7)(a), to the closing charter school's authorizer.
(7)(c) Upon receipt of the assets under Subsection (7)(b), the closing charter school's authorizer shall:
(7)(c)(i) liquidate assets at fair market value; or
(7)(c)(ii) assign the assets to another public school.
(7)(d) The closing charter school's authorizer shall oversee liquidation of assets and payment of liabilities and obligations in accordance with this section, Sections 53F-9-307 and 53G-5-501, and state board rule.
(8) The closing charter school shall:
(8)(a) comply with all state and federal reporting requirements; and
(8)(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) 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) The state board shall, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, and after considering suggestions from charter school authorizers, make rules that:
(10)(a) provide additional closure procedures for charter schools; and
(10)(b) establish a charter school closure process.
(11) (11)(a) Upon termination of the charter school's charter agreement:
(11)(a)(i) notwithstanding provisions of 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
(11)(a)(ii) the net assets of the charter school shall revert to the authorizer as described in Subsection (7).
(11)(b) The charter school and the authorizer shall mutually agree in writing on the effective date and time of the dissolution described in Subsection (11)(a).
(11)(c) The effective date and time of dissolution described in Subsection (11)(b) may not exceed five years after the date of the termination of the charter agreement.
(12) Notwithstanding the provisions of Chapter 6, Part 5, Charter School Enrollment:
(12)(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:
(12)(a)(i) (12)(a)(i)(A) is authorized by the same authorizer as the closing charter school; or
(12)(a)(i)(B) is authorized by a different authorizer and the authorizer of the receiving charter school approves the increase in enrollment; and
(12)(a)(ii) agrees to accept enrollment applications from students of the closing charter school;
(12)(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
(12)(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 (12).
(13) 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 oneself from a decision regarding the enrollment of students from a closing charter school as described in Subsection (12).

Legislative History

Amended by Chapter 63, 2024 General Session