The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Senate Legislative Services. The keyword,
summary, and digest do not constitute part of the law or proof or indicia of legislative
intent. [R.S. 1:13(B) and 24:177(E)]
DIGEST
SB 71 Original 2025 Regular Session Foil
Present law (R.S. 17:4001) establishes the Louisiana Charter School Start-Up Loan Fund, hereinafter
referred to as the "fund", within the state treasury for the purposes of providing a source for funding
no-interest loans to assist both existing and new Type 1, Type 2, or Type 3 charter schools with
initial start-up funding and for funding the administrative and legal costs associated with the charter
school program.
Proposed law renames the fund as the Louisiana Charter School Start-Up and Expansion Loan Fund
and expands the authorized uses and purposes of the fund to provide a source for funding loans to
assist eligible charter schools to expand existing operations and facilities or establish new operations
and facilities with initial start-up funding, including funding for eligible costs associated with facility
predevelopment, development, and associated financing activities.
Proposed law defines an "eligible charter school" as an existing or new Louisiana public charter
school authorized by either a local school board or the State Board of Elementary and Secondary
Education, hereinafter referred to as the "state board", an affiliated supporting organization as
defined in Section 509(a)(3) of the Internal Revenue Code, or a charter school's wholly-owned,
nonprofit corporation real estate entity.
Present law provides that monies in the fund are subject to appropriation by the legislature and shall
be appropriated to the state board for allocation by the board as no-interest loans. Further requires
all unexpended and unencumbered monies remaining in the fund at the end of each fiscal year to
remain in the fund and that the monies be invested by the state treasurer in accordance with state law.
Proposed law removes the requirement that the loans be issued without interest, authorizes expenses
incurred by the state board in administrating the fund to be reimbursable from the fund, and
otherwise retains present law.
Present law requires the state board to administer the use of the monies appropriated from the fund
and adopt rules in accordance with the APA.
Proposed law retains present law.
Proposed law authorizes the state board to enter in contracts and other agreements in connection with
the operation of the fund. Present law limits the uses of loan funding to purchase tangible items such as equipment, technology,
instructional materials, and facility acquisition, upgrade, and repairs. Such equipment or other items
shall become the property of the state if the loan is not fully repaid by virtue of the school ceasing
to operate during the three years of automatic loan repayment.
Proposed law repeals present law.
Proposed law requires that rules adopted by the state board include the following:
(1) Charter school eligibility requirements.
(2)Loan application and processing procedures.
(3) Security and collateral requirement provisions.
(4) Terms of the loan agreement, including the manner of execution, repayment schedule,
redemption features, the maximum principal amount of the obligation, the maximum interest
rate to be incurred or borne by the obligation, the maximum term in years for the obligation,
and default provisions.
(5) Provisions defining eligible costs to include predevelopment costs of construction prior to
construction, such as property or land acquisition, feasibility and site studies, design and
engineering fees, legal costs, permitting, review, and inspection fees, surveys, utility
assessments, financing costs and other eligible project costs as determined by the board.
(6) Provisions defining development costs to include the costs of construction, labor and
materials, site acquisition, construction administration, financing, equipment, demolition,
infrastructure, required off-site improvements, and other related costs as determined by the
board.
(7) Provisions defining eligible renovations to include material additions and renovations to
existing buildings, general environmental abatement, systems, code and life-safety upgrades,
and other types of renovations as determined by the board.
Present law authorizes loans for Type 1, Type 2, and Type 3 charter schools, not to exceed $100,000
per loan, for the purpose of paying for charter school start-up and early operating expenses.
Proposed law authorizes loans for eligible charter schools for the following purposes:
(1) To pay for charter school start-up and early operating expenses.
(2) To purchase tangible items such as equipment, technology, and instructional materials.
(3) Land acquisition and facility predevelopment and development costs, including construction
hard and soft costs. (4) Facility acquisition, upgrade, repairs, and other eligible renovations.
(5)Any other purposes approved by the state board that are related to the start-up, operation,
expansion, or renovation of an eligible charter school.
Proposed law requires an eligible charter school to comply with all of the following:
(1) The eligible charter school shall demonstrate sufficient financial resources and a detailed
financial strategy for repayment of the loan.
(2)The eligible charter school shall complete and submit the supplemental reporting schedule
as mandated in proposed law as part of its annual financial reporting to the legislative
auditor.
Proposed law limits an eligible charter school to one loan from the loan fund; however, once all of
the principal, interest, and any other obligations due under the loan agreement are paid in full, the
eligible charter school may apply for a new loan.
Proposed law prohibits loans from being made without the approval of the state board. Further
requires loans to be executed through a loan agreement between the state board and the eligible
charter school.
Proposed law requires loans to eligible charter schools to be repaid in accordance with the terms of
the loan agreement as approved by the state board and the rules adopted by the state board. Further
requires all interest and principal payments on loans to be repaid and deposited back into the fund
and made available for additional loans.
Present law requires loan repayment to occur by having the state Dept. of Education automatically
reduce the last state payment or payments for each charter school by 1/3 of the total loan amount
during the initial three years of the loan term and instead deposit those funds in the Louisiana Charter
School Start-up Loan Fund.
Proposed law instead authorizes the state Dept. of Education to reduce the last state payment or
payments for each eligible charter school in accordance with the terms of the loan agreement.
Proposed law provides that if the charter agreement of any eligible charter school is revoked or the
school ceases to operate during the term of the loan agreement and the loan is not fully repaid, all
equipment, property, facilities or other physical assets purchased or constructed with loan funds shall
be transferred in accordance with the loan agreement and the rules adopted by the state board.
Proposed law authorizes the state to, by suit, action, mandamus, or other proceedings, protect and
enforce any rights to assets or security provided in connection with a loan agreement.
Proposed law requires the state board to submit an annual report to the legislature, on or before
December 31st, relative to loan fund activities for the prior calendar year. Present law (R.S. 24:514) requires certain auditees to furnish to the legislative auditor sworn annual
financial statements.
Proposed law retains present law and further requires the annual financial statements of eligible
charter schools receiving loans to be accompanied by a supplemental schedule developed by the
legislative auditor.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 17:4001 and R.S. 24:514(I))