H.B. 241 Charter School Amendments: transcript

Good morning, Senator Vickers. Uh, thanks for your patience and, and getting me into your committee. Uh, this is a bill that we worked on over interim in our education committee. And, um, as we look at some of the hurdles in place when we're expanding opportunities for education, one of those things is, uh, having buildings for charter schools available. And, uh, so as we worked on this, uh, we felt like it was very important that we looked at, uh, schools that were closing and making sure that we offered those up as an opportunity first for a charter or city to both have first right of, of refusal. Uh, now I'll point out that actually prior to this bill, the assumption was just that all cities had first right of refusal. And then as we've opened this bill up and dived into this cove, actually it, there was a density standard in place that made it so a lot of cities didn't qualify. So working with the League of Cities and Towns, we've put it in and clarified that cities have the first right or refusal when purchasing one of those buildings, um, on parody with charters. So the league is supportive of this bill. We worked really hard with them to get them there. I'll also say there is reciprocity here. So if a charter school were to close, a district would have first right of refusal and purchasing that building, uh, should the charter sell that building that they've won once upon a time purchase from a district, then they'll have to split the revenue with the district. So, um, that's one component of the bill. It also requires that charter school board members take an oath office similar to how our state Board of Education does. And then, uh, this just clarifies and replacing the charter school revolving account with the charter school revolving funds that we established last year. And Representative Walter's bill. I think it's important, um, when taxpayers are, um, putting in the effort and the cost of a school building, if we can have that stay a school building, uh, and an opportunity for either charters or districts to utilize. I think that's important. Um, and I also think that this helps expand opportunities for kids across the state. We don't anticipate this to happen more than once a year. Uh, this will be very occasional, uh, but just that it is an opportunity available. Happy to answer questions.

Yeah. Thank you Mr. Chair. Yeah. And I was noticing on just a clarification on the fund,

I assume that the same rules apply Yes. Going forward, however, was being done Previously. Absolutely, yes. It's really just kind of a name change kind.

It is, yes. And then, um, I, you answered kinda one question. I I didn't know how often that happened that a, the school district actually sold, you know, facilities, um, and then every, do you know, so the, the bill that Senator Wilson was running, I think it's 2 40 40. Yeah, it just came through our committee yesterday. Yeah. That, that deals with, you know, how buildings are constructed and it brought to light this audit that some of the buildings aren't safe. Mm-hmm. So if, if a building is being sold that falls into that category, then would the buyer, I assume the buyer would be, whether it be a charter school city or someone else would be responsible to upgrade the building or Correct. Tear it down, I guess.

Absolutely. That's correct. And also, I mean, they, as part of this process, they have to buy it for fair market value. They can have an inspector come in, uh, but absolutely they would have to pay the cost of upgrading it.

Good Morning Friends, uh, Royce Van Tassel, Utah Association of Public Charter Schools. This, Uh, There. Okay, that's better. Um, it's good to be here. Uh, appreciate, uh, representative Pucci, uh, she said, uh, we have, uh, worked, uh, for quite a while on this. It was presented for the first time at the interim committee last June. Um, and we've worked with a lot of stakeholders to say, let's make sure, uh, that we get this right. Uh, to your point, Senator Vickers, um, the expectation is that schools have to be safe. And this doesn't change that. Uh, it simply says that when, um, you, when, when you have a school district that's going through a closure process, they're not closing one, they're probably closing or looking at closing two or three. Um, and I don't expect, uh, as Representative Pucci indicated that this is going to happen often. Um, but we want to have an opportunity for the community to say, what forum should that school look like? There's gonna be kids that still need to attend a school and perhaps it's gonna be at a charter school, and perhaps it's gonna, we're gonna consolidate down to, um, a a a district school. It's a little bit weird for the charter school guide to say this, but on some level I'm genuinely ambivalent. But we need to be able to have that meaningful conversation so that if the option says let's go with a charter school, that we can use that existing facility, um, in the way that the community likes. And so we really appreciate, uh, the work that Representative Pucci has done to say, let's, uh, provide that opportunity so that we can have a meaningful conversation with the committee, um, or with, with the community and, and make the decision that works right for the families that live in that area.

Could I ask a question? Sure, Go Ahead. Just a kind of a follow up question. So I was thinking, you know, there's a unique situation in St. George with right across from Utah Tech. There was an elementary school that, uh, that was sold by the district. And in that situation, it made a whole lot of sense for the university to buy it, and they actually turned it into an innovation center. So with, with the Bill passage, say that a scenario like that pops up, um, where would the university be in line with the, the ability to purchase the building and use it?

So it would, first step would be cities and charters, but in that situation, when they've already had this working relationship, I think it wouldn't change a lot in your situation. Uh, that's what we're hearing as we've worked on this bill for now months, is that those buildings, as they're closing, those uh, districts are working with the community. And I would imagine that wouldn't be something a charter would want to grab up.

Okay. Uh, I guess if a charter did, then they would put them in front of, They would have to purchase it for fair market value and go through the process and, you know, higher education. That's unique. That hasn't been brought to my attention up to this point, but I'm open to that discussion 'cause it's still,

It be the only situation in the state. I don't know, Very unique, but it is still meeting an educational purpose.

So I'm happy to work with you still if you'd like to adjust that. Thanks.

Good morning, Mr. Chair and members of the committee. Cameron Dale, executive Director of the Utah League of Cities and Towns. We also support the bill. While this bill is a charter school bill, it actually also has turned into a city clarification. Bill and Representative Pucci pointed this out. That is, she reached out to us and we started, uh, looking deeper into the bill. What we realized was that the prior or existing state law, uh, only extends this first right to a, a handful of cities around the state. And as we work together, uh, with the other stakeholders, this bill will now clarify that all cities have that opportunity for partnership if and when a school closes. And there are quite a few of those examples around the state of where cities have worked with closing school schools and school districts to repurpose those facilities for community centers or for parks or for other things of the public benefit. And this bill will continue, continue that and clarify it for more cities. So we're supportive of the bill. Thank you. Thank You. All

Yes, Mr. Chair. Thank you. Um, I, I just want to add to, uh, to what, uh, Cameron said, uh, I represent

Yeah. Sorry about that. I forgot. Um, holy holdaway. I'm representing, uh, the communities of Kearns and Magna. Uh, both of those, uh, communities have been interested in, uh, in working with the, uh, the local school district in terms of, uh, schools that have been closed. Uh, this bill, uh, is something that we had concerns with initially. Uh, we want to thank the sponsor for, uh, for the accommodations that she's made for cities, uh, and, uh, and certainly, uh, are, are grateful for, uh, the opportunity to, uh, to participate and, and support this bill. Thank you.

Mr. Chair. I'd like to make a motion.

Would make a motion that we favor re recommend third substitute house bill 2 41.

for summation. Thank you.

I have to, I have to admit, I've been a little skeptical of this bill from first time I heard it and it kind of followed its path and watch through. Um, I, you know, I appreciate some of the changes you made and the approach you're taking and, uh, so I feel comfortable in supporting it now. Thank you.

Hello, colleagues. Thank you. It's a great place to be on a Friday afternoon. Um, and we have a full audience, so thanks to the audience. It's awesome to have this much participation today. Uh, I appreciate the committee's patience. I've been trying to work with stakeholders on this bill, which is why you see that second sub before you and Mr. Chair when the time is right. I would definitely be looking for someone to adopt that substitute. But colleagues, let me tell you, uh, this bill actually came about, if you'll remember back to interim, which feels like a while ago, we had a discussion, uh, about charter schools and one of their requests came as it related to capacity and, uh, facilities. And this came from our interim discussion as a committee and is one that I've been working on. So I've had a chance to speak, I think, with everyone on the committee about it. Nearly everyone. Uh, and what the bill does is it gives charter schools the ability to join cities in that first right of refusal. So right now, uh, certain cities are eligible to have first right of refusal when a district chooses to close a school. And this would not remove the cities, it would simply add charters to have that ability. Now, that same, uh, rule would apply, say when a charter's closing a school, that a district would also have that first right of refusal with cities. So it is, it goes both ways. Um, and so then it would be an option for those charters. They'd have to make a free, excuse me, it would not be free. They would have to make a fair market value bid on it, and then the district could decide. So if it were to come down between a charter and a city, the district would be able to make that decision. I'll also point out in the most recent substitute, which this was a revision that came, uh, in working, in listening to one of our districts that should a charter purchase one of these buildings at fair market value, if they were to sell it later on, they would split the profits with the district acknowledging the district had initially built that. Um, I think this is important as a lot of these buildings, uh, the taxpayers, uh, invested in anticipating that would, it would serve an educational purpose. And I think it's the first and best way that we can help all students have different opportunities available to them with the resources that are already existing. This bill also would require that charter school board members take an oath of office, just like we have for the State Board of Education. And then, uh, one of the additions in this bill, uh, is a policy that Representative Walter, chair Walter has championed regarding the revolving, uh, loan fund for charter schools to help improve their existing buildings or obtaining a new building. Uh, and that's something that we've merged into this bill as well to be helpful for our charter. So that is the bill in a nutshell. Like I said, I I was on your agenda for last week, but wanted to hold it to make sure I had worked with our stakeholders to get it to a point where, uh, I feel like this fair is, this bill is fair and consistent. And with that, I'm open for questions.

Thank you, Mr. And I'm so sorry I missed your entire presentation. I'm not gonna ask you to do it again, but your Questions are now nevermind. Yeah, oh yeah, just like last time. Um, uh, but I am a curious, uh, I, I understand that you're speaking to the second substitute, second sub, yeah, the second sub uhhuh. And, and this, uh, from what I re recall, I may maybe you mentioned is just to clarify that the charters and the munis have equal opportunity.

Yeah. So we didn't, in the initial, the very first draft of the bill, it said that charters would supersede cities. Right. But now we've added back in municipalities that qualify for this, uh, writ of refusal are on equal footing. And then this also just to bring it up to speed, it also makes sure that if a charter were to sell that building later on, which we don't anticipate, but if they wore, they would have to split the profits with the district they purchased it from. Yeah. The, yes.

Thank you. Um, could you please, I, I'm just looking at the second sub mm-hmm. Now, and I haven't seen that before. Um, and I'm wondering the part about the merge with the other bill, can you point me toward the lines with that?

Oh, yeah. So, and it, it wasn't necessarily, I don't believe another bill, but just another concept with the revolving loan fund. So you can see in line 71 2 1 16, it'll be talking about that charter school revolving account fund. You'll see that on the Utah Charter Finance Authority sits the state superintendent, the treasurer or governor, or one of their designees. And this is Representative Walter's baby that's in the front here. And then you have the piece around the WR Of first refusal starting about 1 61. Okay.

Would you like me to speak to that? I would Love that.

So, um, Representative Peck, historically, there's been a charter school revolving loan fund, which was used to help fund charter school startup, which startup costs. Um, though they, when it's, when I say it's a revolving load and fund, it's always been a loan, it's always had to be paid back. Um, there's not as much need for that fund. And so there's been an interest over the last couple of years to repurpose that so that it could be used to help support small capital improvement projects in the school that they might not have the cash to, uh, support, for example, a portable, um, on site. So, um, all we're doing is repurposing the charter school loan fund for a purpose that's more useful today than its historic purpose.

Thank you. Does this have also, I guess I'm asking you if I can question you. You okay? As long as the sponsor will allow Me to participate. I'm so confused now. Okay.

Anyway, so does this have, um, I, I remember having conversations before about this concept, and I'm wondering, um, is this one of those situations where, um, there are, there are certain charters who are upset at other charters, and this is why this

Is No, it has nothing to do with, this is exclusively to do with, there was a, there was a fund that was used for, to help schools start up. And now that fund isn't needed for that purpose anymore. Um, it's a, it's a fairly reg regular occurrence that a, uh, school needs a small capital ex, uh, improvement, uh, loan. And so this is a way for us to repurpose that. That's, it's all, This isn't about their makeup or their managers Don't need anything do, do with any, Anything like that. Okay. It's the same policy we've heard, um, in past years, but, um, for various reasons it hasn't made it through the process. And instead of having multiple bill files, we've got charter school amendments and it's, so it's in this bill.

Thank you. I just wanted to make sure that we, what we were putting together there. Thank you.

Uh, Mr. Chair. That would still be a dual purpose revolving fund, right? They could use it for a new school or the Capital Improvement project. So it can be my under, well, my, my understanding is that the original Purpose wa for Startup Loans is not being used anymore. I'm sure it's not being used, but you could still do it if you had a new Mm-hmm. I suspect that would be the case. Okay. That's All I wanted to make sure. Thank you. Thank you, Mr. Thank you. I represent Peterson. Alright.

Name's not okay. Hi, I'm Anthony Sud, weeks. I'm the director of Wallace Stegner Academy. We're the second largest charter network in the state, serving just under 3000 mostly low income students. I just have a couple comments about this bill. So, um, over the past 10 years, granite school districts has closed eight, closed eight schools. Salt Lake has closed four. Only one of those schools was ever offered to a charter school. There are multiple unused public school buildings sitting vacant right now just to name a few. Riley Elementary, Jackson Elementary, or Trudy Elementary. Over the same period of time, our network has had to go out and borrow almost a hundred million dollars to build new schools just to house our students right down the road from some of these empty buildings. The public hates to see their public schools close. They voted for those schools in their neighborhoods and they paid for them. Charter schools offer a great opportunity for the public to keep their public schools opening and to keep them functioning at public schools. Um, I have two other things to say about this. If the districts have a choice between selling it to us or IT, or city or town, they're gonna choose a city or the town. A lot of people don't like that. We offer competition. We think the competition makes our students better and district schools better. And so I, that's all I have. Thank you. Appreciate your comments. Go ahead.

Thank you Kim Frank with Utah Charter Network. I just wanna point out a couple of things. Uh, last week in education appropriations, the LFA shared with Edda probes that, um, dec decline districts are declining and they will be declining through 2034. But that charter schools are growing and will be growing through 2034. I will say, I don't think this is going to happen very often, that a, a charter school will be in a position to, to set up in an existing district school. But educators have been saying for years that we're all about community neighborhood schools. If we really are about community neighborhood schools, then let's give a smaller charter school an opportunity to come into an older building and have those students that reside in that neighborhood, attend that school. Um, one more thing on the revolving loan fund. Um, I, I love this, this provision in this bill, there are charter schools that are highly successful, have long wait lists. So, for instance, I just built a school two years ago for a thousand students in Alpine School District. I'm already in a position where we need to expand. So having this money available to us, there's not a lot of, of startup fee, uh, money available to charter schools. So that's a very important part of this, of this bill. And then one final thing. Uh, we sent out a letter to our schools across the state because we haven't felt like charter schools have had a huge voice in Utah, and we had over 5,000 families sign up from around the state. If you wanna see the, the families in your district, I'm happy to share that with you. But they want you to know that we care, that we're watching, that we're excited about school choice in Utah and that we genuinely care. So it asks for your support of this bill. Thank you.

Hello, I'm Charlotte Fife, Jefferson School board member, Salt Lake City School board member again. Um, I just wanted to let you know that school districts sometimes hold on to the, the properties for a bit to see if they need, while they're assessing whether they need that, that, um, property. So Riley Elementary in our district is, it was closed, but we are going to be building a CTC center there. So, um, we know that the community doesn't wanna have empty buildings, but I I also wanted to make a point that if we, if, uh, the enrollment is declining in schools, and this is across the state, um, we, and that means that public schools are struggling with, um, funding. So because, because the IT enrollment is declining, but if we, it doesn't make sense to, if we have to close a school, be to be responsible fiscally, then open it up to a charter school, which would take more, potentially take more students away from our, from our public schools. It, it, it's just, um, exacerbating the problem and that, you know, that I just wanted to bring that's a consequence possibly of this.

Hi, my name is Tamara Watson. I'm the Director of Communication for the Utah Association of Public Charter Schools. I'm here on behalf of our executive director Royce Van Tassel. He apologizes to Representative Pucci and the members of the House Committee that he could not be present today. We just wanna express our appreciation and support for HB 2 4 1. Uh, we also want to express appreciation to the civic leaders that have engaged in, uh, great conversation, productive conversations this week to come up with the best solutions, uh, for the purchase of, of these said buildings that are outlined. Uh, we remind all of us that these bi or these buildings originated as schools and as a representative, Pucci said that they were used public funds were used to build them so that we could have them in our neighborhoods. And all we're asking is that we have equal opportunity as charter schools to bid alongside a city as an association. We also, uh, support the clear language in this bill that reminds all of us that charter schools are indeed, uh, public schools. We are part of the, the greater public education, and we're proud to be that. And, um, as such, our board members would take that oath of office. So, uh, we encourage and support this bill and hope that you will vote favorably. Thank you.

Thank you, Mr. Chair. My name is Corey Holdaway and, uh, I, I am trying to find in the bill where I'm referencing, uh, the first substitute. No, I understand that. Um, and, and in the first sub, it, uh, it was clear that, uh, schools and, uh,

Oh, yes. Thank you. Um, I, I represent Kearns and Magna, uh, thank you City. Uh, thank you. Um, in the first sub, uh, it, it, it was clear that, uh, we're on equal footing. I'm not seeing that in the second sub. Can you I can you point to that?

Okay. As part of the public comment, Just as, just as part of the, uh, my comments then is, uh, uh, I know that, uh, the two cities that I represent, uh, are in negotiations right now, uh, to, to acquire, uh, some surplus schools. Um, and, uh, and being on equal footing is, is important for the, for those cities. So, um, just offer that as

Uh, thank you Mr. Chair. Justin Lee, deputy Director of Utah League of Susan Towns. And first I want to thank the sponsor. When people ask me what I do, I say I go to every committee, but education. So I'd like to thank for thank her welcome Mr. For getting me an education. It's nice to be here. Um, but we've been, we've been working with a sponsor on this bill, and we do think these subsequent subs, um, that, that bring equality or or equity to the bid process are better than where it started out. Our city certainly had concerns about Loa losing that first. Right. Um, and we have some additional conversations we're having with the sponsor. We have not taken official position on the bill yet, but do want to thank the sponsor for continuing to talk to us and, and working forward as a moves forward.

Thank you. Perfect. Uh, well thank you Chair and members of the committee. Marcos Lopez for the record. Western Legislative Director for X Excel, ANED in action and national nonprofit that works with state leaders to advance education policies and empower families, strengthen accountability, prioritize early literacy, and prepare students for college and career success. Uh, we support House Bill 2 4 1. I think this is a great step forward to make sure we're, uh, stewarding properly our taxpayer funded assets as well as giving charter the opportunity to purchase these surplus buildings. Uh, secondly, the charter revolving loan fund, we're super supportive of that. Uh, we have seen this be very successful in other states. Recently, Idaho expanded their program and our analysis of their, uh, revolving loan funds showed that teach, uh, the charters were able to hire as many as 10 extra teachers, uh, when they're able to have access to these loans that were able to, uh, ease their, um, their capital constraints as they're expanding or growing. Uh, so we support this legislation and we hope to see it passed. Thank you.

Thank you, Mr. Chair. I'd like

Alright. Very good. Um, would you, so my understanding is, is that you did fix this so that the cities are at the same equal footing with the charter schools. Is that correct?

That's correct. It's on line 1 61. Correct. Under if both a charter school and one or more eligible Entities, and excuse me, which are you speaking to? The second Substitute, second sub. So everyone should be on the second sub line 1 61.

And I verified with the attorney to make sure I get answer Mr. Hold away's question. But it's for eligible entities, so that would be the municipalities correct.

Thank you. Mr. Chair. I'd like to make a motion that we substitute house bill 2 41 with second substitute house bill 2 41.

No, I think this is a good, uh, compromise and I appreciate the sponsor for working with everyone to make this a, a win-win for cities and charter schools.

Will I be able to come back When, when we get to the original bill?

Ahead. I'd like to make a motion that we pass out with a favorable recommendation.

I think we've had a good discussion, so let's, uh, move this on out. Thank

Representative MacPherson. Thank You, Mr. Chair. And just say that, speaking in favor of this, uh, motion as well. Um, you know, as, uh, vice chair of Public Head appropriations, we look at these, um, uh, education dollars very closely as a state and not based on districts, not based on charters, but as the public education total framework. Um, these buildings are already schools. If there's a chance that we can keep them as schools, it keeps the cost of schools lower. Um, overall this is a good, um, item. I, I actually would prefer if they stayed in first position personally, but I'm still happy with the negotiations you've made because of this. So I support this motion. Thank you. Alright,

Thank you Mr. Chair. I'd just like to briefly explain my opposition to the bill. Uh, first of all, I represent primarily Granite School District who's made the decision not to sell properties if they close schools. And, um, for two reasons. One, that they have repurposed some of these schools and one of them, for example, is now, uh, the home of the Granite Foundation and, and staff and so on. That's, I think it's Twin Peaks, but the other one was expressed by school board member, um, from Salt Lake. And that is that if you put a charter school in an area on the east side where I live, where it's already declining enrollment, you're just likely to pull more kids away from those public schools and, um, not bring kids from other places. We don't know, but that's a big concern. But I think the bigger thing is that initially when you close the school, as in our district, we may find other uses for it. And so we don't want to sell them. So that's my opposition.

Thank you Mr. Chair. There is is also a lot I like about this bill. Um, the charter, charter school revolving fund makes a lot of sense. Um, I do, um, share similar concerns to Representative Voxer about, um, offering surplus property to charter schools. Um, I think there will be some un unintended con consequences of that and, um, we're not always be in the best interest of the community.

Um, I'm gonna take the prerogative of the chair and speak in favor of the bill. Um, I know that this has been a lot of time and effort and energy to, uh, work through a number of, uh, stakeholders to work to this place. I realize that, uh, um, there are some concerns out there, but I, I appreciate the sponsors good efforts. I appreciate the effort to balance the community interests and the, uh, um, uh, particular school community, uh, dynamics around our, uh, charter school community. And I, I appreciate the efforts to work through evolving loan funds.

You. Thank you the committee. I appreciate the discussion we've had today. There are a couple things that were said that I were concerning to me. I just wanna respond on them. First off, enrollment isn't declining because we're reducing funding and education. We have invested funding and education every year. In fact, we are dumping money in public education. Enrollment is falling because we have falling fertility rates and we have the seventh fastest falling fertility rates in the country right now. And it is not because part charters are poaching. And I, I think I have a real concern multiple times and even committee members said, charters and public schools, charter schools are public schools and our job in the legislature is not to protect turf wars and silos. Our job is to protect students and taxpayer dollars. And so while the world would like to see us with different colored glasses, if the concern is you're going to start losing students to a charter school coming in, then you're concerned about your product. But that means students might be better served elsewhere. When racing canes pops up next to Chick-fil-A, Chick-fil-A doesn't freak out because they're confident in their product and their customer base. So I think this is once again us introducing a very teeny tiny market force into what has traditionally been a monopoly. And we're getting a lot of pushback for it. And I would hope that as a committee we are student focused rather than looking at systems within the system. Uh, it's anticipated this will be used less than one time a year, if that. Uh, and, and to the individual who spoke previously from the charter school community, we are still giving districts the choice if they were to sell this, who it would go to between the municipality and the charter school. But I would hope that we can start viewing charters and districts as partners and that they can both be in service of students rather than us constantly defending our turf. I'd ask for the committee support.

Thank you, Mr. Chair. I just, uh, I think one of the things that you need to keep in mind is this is surplus property, so the district has to surplus it. And I think that as a, a member of, uh, in my district, I have both public charter schools and public schools and, and parents make a decision about where they think their best education can happen for their children. And I think that, uh, it's important for both schools to be able to provide a good education for our youth as they grow up. And so I support this bill and urge you to vote for it.

Thank you to the members of the committee.

Thank you Mr. Speaker Motion to adopt the third substitute. It's been online for about 30 minutes and it's cherry colored

Yes, I would make the motion that we withdraw that motion and circle to, uh, second substitute of house bill 2 41.

Thank you Mr. Speaker Motion to adopt the third substitute. It's been online for about 30 minutes and it's cherry colored

Yes, I would make the motion that we withdraw that motion and circle to, uh, second substitute of house bill 2 41.

Thank you Mr. Speaker. I'd also make the motion that we adopt the third substitute of this bill.

Yes. Colleagues. Uh, for those of you who have been tracking this bill, I have worked closely with the League of Cities and Towns, as well as the charter school community to get to a good place on this. And with this third substitute, the League of Cities of Towns is now supportive of the bill. So it's an important sub.

Thank you. With the sponsor. Yield to question Representative per will you yield?

Yes. Yes. Representative Thurston. Uh,

Can you tell us how the school board association is feeling about the third sub?

I cannot tell you that because they have not reached out to me on the third sub.

Yes. Yes. Representative.

Yeah. And this substitute actually should have been public for more than I think about an hour now, at least. Um, but just to walk through some of the changes, and if it's okay, Mr. Speaker, I might just present the bill because you have to understand the concept of the bill to get the changes. But colleagues, uh, one of the biggest barriers for charter schools is actually, uh, building capacity. And this is something that came up over the interim as a way that we could creatively find a solution that was in the best interest of students. And so, um, many of you may not be aware, and I was not aware until I opened this bill, but we all have this understanding that cities have the first right of refusal in purchasing a closed school building. It turns out that that right is actually not absolute and it does not apply to most cities who have, um, been operating under an assumption for the past two decades that they exclusively had this first right of refusal. But actually in our code more than three decades ago, it said that a certain density type was required for you to have that first right of refusal. And so in working on this bill, the cities realized this and were very concerned. And so this bill has become more than just a charter school bill, but in fact a city bill because we are completely giving them first red refusal and updating the law. And so there are cities who wanted to make purchases that did not qualify prior to the third sub that now would be able to do that and work in collaboration. The second piece is related to leasing. And this was something that was requested by the districts that we make this change. Um, I've actually taken every, uh, change in, uh, amendment that I could to this bill from the districts. And so it would say that it doesn't apply to leasing, it just applies to the sell of the property. So, um, that is to give you an example and, and differences of the second sub to third sub.

Thank you colleague. So you've now with that robust discussion around the third substitute, have an idea of some of what this bill does. Uh, but I wanna go into it for greater detail so you can see how thoughtful we've been about this process. So should a district school choose to close one of their school buildings, the city and a charter entity could put in a bid, uh, of a fair market value to purchase that building? It would be up to the district to choose of those two, should two of them even offer a bid to select which one they would like to sell it to. So I've had people bring concerns of, well, what if my city is already working with a district on a collaborative project when they're closing or leasing? This doesn't disrupt any of that because the district is the one who is able to decide who they're selling it to. Now the other thing is, if you look at the actual buying capacity from our charters, this is going to be a very occasional occurrence. This is not going to become a norm. Uh, but should a charter school purchase a district school and then someday sell that charter school, they're required to split the revenues with the original district school they bought it from. And this same right of first refusal will apply to the district as well and the ability to buy it back as well as cities. Uh, this bill also requires that charter school members will take a, um, excuse me, charter school board members take an oath of office similar to how we have the State Board of Education. And I will defer the rest of my time because we have merged two bills. And so I'll yield the rest of my time to Representative Walter to discuss the charter school revolving fund Representative

Walter, Mr. Speaker, uh, I appreciate, uh, the good sponsor's efforts. Uh, she's been highly engaged with, uh, stakeholders for a, a number of months on this particular issue. And, uh, I was one of those that, uh, approached her and, uh, was able to collaborate with, uh, the sponsor. And I appreciate, uh, the good efforts to collaborate on this particular bill. Uh, for many years, for decades, we've had the charter school revolving fund and the charter school revolving fund, uh, was specifically and exclusively used to help fund, uh, charter schools, uh, in a startup capacity. So as they would start up, they would have the ability to borrow a, uh, or take out a loan that had to be paid back within a few years, um, to help defray some of the startup costs of, uh, those facilities. Um, uh, the loan performed really well. It helped a number of schools. It was a good product. Um, but as time's gone on, uh, there's, the needs have evolved. And one of the, one of the things that we've done with, uh, this charter school revolving fund is add the capacity for them to, um, uh, uh, fund, uh, small capital improvement projects. So you wanna think about like under a million dollars. This could be portables, um, it could, might be be a lunchroom expansion, but, but these are the kinds of projects that, um, uh, they take more cash than maybe they want to, uh, use outta their operating budgets in a given year. Um, but they don't have the ability to go out and raise, um, large amounts of capital or raise capital. Sometimes it's because of either capital constraints and sometimes it's just because they have bond covenants that prevent, uh, additional, uh, additional debt. So what this does is it allows them to have access to, uh, some resources. They'll be limited, um, uh, but they, and they have to pay them back over time. But it'll allow them to address, uh, some of their capital improvement needs in the charter school. Um, uh, through the charter, through the e evolution of the charter school revolving fund. Uh, thank you Mr. Speaker.

Thank you Mr. Speaker. ProAm colleagues, I would just say, um, this bill is about increasing opportunities and resources for students and choice within the system. I've been really surprised as I've worked on this bill. How many people have asked me about charter schools and I just wanna be very clear, charter schools are public schools and so this is a great tool that we can give them to overcome a hurdle that's been placed before them as they work to service our students in our state. And I would ask for my colleague support on it.

Thank you Mr. Speaker. I'd also make the motion that we adopt the third substitute of this bill.

Yes. Colleagues. Uh, for those of you who have been tracking this bill, I have worked closely with the League of Cities and Towns, as well as the charter school community to get to a good place on this. And with this third substitute, the League of Cities of Towns is now supportive of the bill. So it's an important sub.

Thank you. With the sponsor. Yield to question Representative per will you yield?

Yes. Yes. Representative Thurston. Uh,

Can you tell us how the school board association is feeling about the third sub?

I cannot tell you that because they have not reached out to me on the third sub.

Mr. Speaker, will this sponsor yield to a question?

Yes. Yes. Representative.

Um, just with this going public just now, would you mind letting us know what's in this sub?

Yeah. And this substitute actually should have been public for more than I think about an hour now, at least. Um, but just to walk through some of the changes, and if it's okay, Mr. Speaker, I might just present the bill because you have to understand the concept of the bill to get the changes. But colleagues, uh, one of the biggest barriers for charter schools is actually, uh, building capacity. And this is something that came up over the interim as a way that we could creatively find a solution that was in the best interest of students. And so, um, many of you may not be aware, and I was not aware until I opened this bill, but we all have this understanding that cities have the first right of refusal in purchasing a closed school building. It turns out that that right is actually not absolute and it does not apply to most cities who have, um, been operating under an assumption for the past two decades that they exclusively had this first right of refusal. But actually in our code more than three decades ago, it said that a certain density type was required for you to have that first right of refusal. And so in working on this bill, the cities realized this and were very concerned. And so this bill has become more than just a charter school bill, but in fact a city bill because we are completely giving them first red refusal and updating the law. And so there are cities who wanted to make purchases that did not qualify prior to the third sub that now would be able to do that and work in collaboration. The second piece is related to leasing. And this was something that was requested by the districts that we make this change. Um, I've actually taken every, uh, change in, uh, amendment that I could to this bill from the districts. And so it would say that it doesn't apply to leasing, it just applies to the sell of the property. So, um, that is to give you an example and, and differences of the second sub to third sub.

Thank you colleague. So you've now with that robust discussion around the third substitute, have an idea of some of what this bill does. Uh, but I wanna go into it for greater detail so you can see how thoughtful we've been about this process. So should a district school choose to close one of their school buildings, the city and a charter entity could put in a bid, uh, of a fair market value to purchase that building? It would be up to the district to choose of those two, should two of them even offer a bid to select which one they would like to sell it to. So I've had people bring concerns of, well, what if my city is already working with a district on a collaborative project when they're closing or leasing? This doesn't disrupt any of that because the district is the one who is able to decide who they're selling it to. Now the other thing is, if you look at the actual buying capacity from our charters, this is going to be a very occasional occurrence. This is not going to become a norm. Uh, but should a charter school purchase a district school and then someday sell that charter school, they're required to split the revenues with the original district school they bought it from. And this same right of first refusal will apply to the district as well and the ability to buy it back as well as cities. Uh, this bill also requires that charter school members will take a, um, excuse me, charter school board members take an oath of office similar to how we have the State Board of Education. And I will defer the rest of my time because we have merged two bills. And so I'll yield the rest of my time to Representative Walter to discuss the charter school revolving fund Representative

Speaker, uh, I appreciate, uh, the good sponsor's efforts. Uh, she's been highly engaged with, uh, stakeholders for a, a number of months on this particular issue. And, uh, I was one of those that, uh, approached her and, uh, was able to collaborate with, uh, the sponsor. And I appreciate, uh, the good efforts to collaborate on this particular bill. Uh, for many years, for decades, we've had the charter school revolving fund and the charter school revolving fund, uh, was specifically and exclusively used to help fund, uh, charter schools, uh, in a startup capacity. So as they would start up, they would have the ability to borrow a, uh, or take out a loan that had to be paid back within a few years, um, to help defray some of the startup costs of, uh, those facilities. Um, uh, the loan performed really well. It helped a number of schools. It was a good product. Um, but as time's gone on, uh, there's, the needs have evolved. And one of the, one of the things that we've done with, uh, this charter school revolving fund is add the capacity for them to, um, uh, uh, fund, uh, small capital improvement projects. So you wanna think about like under a million dollars. This could be portables, um, it could, might be be a lunchroom expansion, but, but these are the kinds of projects that, um, uh, they take more cash than maybe they want to, uh, use outta their operating budgets in a given year. Um, but they don't have the ability to go out and raise, um, large amounts of capital or raise capital. Sometimes it's because of either capital constraints and sometimes it's just because they have bond covenants that prevent, uh, additional, uh, additional debt. So what this does is it allows them to have access to, uh, some resources. They'll be limited, um, uh, but they, and they have to pay them back over time. But it'll allow them to address, uh, some of their capital improvement needs in the charter school. Um, uh, through the charter, through the e evolution of the charter school revolving fund. Uh, thank you Mr. Speaker.

Thank you Mr. Speaker. ProAm colleagues, I would just say, um, this bill is about increasing opportunities and resources for students and choice within the system. I've been really surprised as I've worked on this bill. How many people have asked me about charter schools and I just wanna be very clear, charter schools are public schools and so this is a great tool that we can give them to overcome a hurdle that's been placed before them as they work to service our students in our state. And I would ask for my colleague support on it.

You Mr. President. Pro tem uh, charter school amendments is about charter schools being able to have the, the right of first refusal and school districts likewise, having that same reciprocity. HB 2 41 permits charter schools to bid on a closed school district building at the same time as cities and counties. If a school district receives multiple bids, the school district decides which bid to accept. It protects taxpayer investment by encouraging public school facilities to remain public schools. The district has a reciprocal right of first refusal. If the charter were to resell the building, if the charter schools sold the building above purchase price and plus improvements, uh, the excess proceeds are shared equally between the district and the charter school at the request of school districts. This does not apply to portables, which LEAs often move around within the district. Uh, we have worked very hard with the league and the districts and made as many accommodations as possible. One of the things that we learned while working on this bill was the only 34 cities actually have the right of first refusal under existing code. And more or less, everyone has assumed that all cities have this right. This bill, um, does something that cities have asked us to do, which is to clarify that all cities do have the right of first refusal and the leagues supports this bill. Um, governance and accountability. This bill reinforces that charter schools are public schools. Under Utah law requires members of charter school governing board to take the constitutional oath of office, just like members of a school district board and state board members. And there's some financial modernization, which replacing the charter school revolving account with the charter school revolving fund. It establishes clear loan terms, interest rates and repayment structures, improves oversight and long-term financial stability. And with that, I conclude my presentation.

Thank you President. Uh, question for the sponsor. Senator Balderree, will you yield?

I Will. Go ahead. Senator Owens.

Thank you, president. The question is that have Apple has this process already? Uh, I know this first right of refusal not in place, but certainly there's, the charter schools have purchased closed public schools, right? It's already happened. Senator Balderree?

Uh, I am not aware. This is, this is a new thing as far as I'm aware.

Okay. Yes, but I don't, I believe, um, I, I believe charter schools have already been able to do this. I don't know that they need first read of refusal. It seems like regular business practice that some have already purchased these schools. Um, I I was curious if the sponsor was, uh, could elaborate a little bit. Um, you mentioned the, the sponsor mentioned some accommodations that were made in the bill. Can you tell me a few of what those were?

Yes. Uh, the accommodations we're talking about is the one that takes, gives all all cities the right of first refusal. That was one of the accommodations that we're, was asked for. The other accommodation was to, to give it to district schools. So either way. And that was not in there originally. It was just for charter schools. Now it goes both ways.

Okay. Thank you, president. Thank You. Follow up.

Will the sponsor yield?

I will. Senator Balder's? Agree.

Okay. I I'm just, I'm just kind of curious if this would set up a, uh, preserver, perverse incentive for, uh, school districts to not close schools because of the competition that might come from those charter schools. I, that, that worries me a little bit.

Thank you. That is a great, uh, that is a great question. If the school district is closing buildings, uh, doesn't that mean we need fewer schools? Not more. Um, the argument has been made thousands of times in Utah and across the country, and yet parents are still flocking to charter schools. They want the academics and values and responses, responsiveness that they find in charter schools. And Utah families wanna be integral part of their children's education. And the Utah charter schools make that happen. So if school districts have an obligation to their taxpayers to use property and income taxes efficiently, they can't simultaneously keep underused buildings open and then ask tax taxpayers for more income and property taxes. Um, there is other legislation moving this session, uh, that is creating a database of buildings and parcels owned, I I wanna say it's house before 92, if you wanna take a look at that one. Um, and used by Cities County, school District, et cetera. So if school districts are hanging on to underused facilities, this bill, this companion bill in 4 92, I believe will shine a light on that inefficiency.

The the other thing I was curious about too is it seems like to me, if it's a closed public school, that a charter school would probably have that, that might be the highest and best use, which means they'd probably be willing to pay the most for it. It seems like markets could clear these things out without some imposition by, by the government.

Um, well that, that's a good point. We, um, but as I'll remind you that our publicly funded schools are publicly funded.

Okay. Thank you. Thank you. Thank you.

Thank you, Mr. President. Um, do charter schools have the same requirement as our neighborhood schools To have first right refusal to our cities and to our school districts

That Senator Balderree, Uh, that part was added to the bill. So it goes both ways.

Thank you. Thank you.

You know, it, it seems like that it would depend on the area of the, of the state. It would depend on the school district. These would make very, very, it would make a lot of sense to, uh, sell to a charter school in a, maybe an area that was high growth. Uh, it make seems like it would make a lot of sense to that. A, uh, uh, a charter would be able to buy and build and, and the school district maybe not affect school population. But I think, you know, someone's made, made a statement here a minute ago that said, yeah, it should be the market. So I think, I don't see how this interferes with the market very much so. Thank you.

Thank you for the questions and comments. Uh, with that I move under suspension of the rules that House Bill 2 41 shall pass.