UT
Utah House Bill HB0219

Utah 2025 Regular Session

Utah House Bill HB0219 Compare Versions

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1-Enrolled Copy H.B. 219
1+02-04 17:29 1st Sub. (Buff) H.B. 219
2+R. Neil Walter proposes the following substitute bill:
23 1
34 Charter School Funding Revisions
45 2025 GENERAL SESSION
56 STATE OF UTAH
67 Chief Sponsor: R. Neil Walter
7-Senate Sponsor: Lincoln Fillmore
8+Senate Sponsor:
89 2
910
1011 3
1112 LONG TITLE
1213 4
1314 General Description:
1415 5
1516 This bill modifies provisions in the Charter School Credit Enhancement Program.
1617 6
1718 Highlighted Provisions:
1819 7
1920 This bill:
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2122 ▸ modifies criteria for qualifying charter schools under the Charter School Credit
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2324 Enhancement Program;
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2526 ▸ expands evaluation standards for charter school operating history;
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2728 ▸ specifies financial metrics for program qualification;
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2930 ▸ establishes additional requirements for annual program certification;
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3132 ▸ establishes credit rating-based maintenance fees for participating charter schools;
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3334 ▸ creates parameters for state appropriation repayment procedures; and
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3536 ▸ makes technical changes.
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3738 Money Appropriated in this Bill:
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3940 This bill appropriates $4,000,000 in restricted fund and account transfers for fiscal year
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4142 2026, all of which is from the various sources as detailed in this bill.
4243 19
4344 Other Special Clauses:
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4546 This bill provides a special effective date.
4647 21
4748 Utah Code Sections Affected:
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4950 AMENDS:
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5152 53G-5-606, as renumbered and amended by Laws of Utah 2018, Chapter 3
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5354 53G-5-609, as renumbered and amended by Laws of Utah 2018, Chapter 3
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5556
5657 26
5758 Be it enacted by the Legislature of the state of Utah:
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59-Section 1. Section 53G-5-606 is amended to read: H.B. 219 Enrolled Copy
60+Section 1. Section 53G-5-606 is amended to read:
6061 28
6162 53G-5-606 . Charter School Credit Enhancement Program -- Standards for the
63+1st Sub. H.B. 219 1st Sub. (Buff) H.B. 219 02-04 17:29
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6365 designation of qualifying charter schools -- Debt service reserve fund requirements.
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6567 (1) There is created the Charter School Credit Enhancement Program to assist a qualifying
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6769 charter [schools] school in obtaining favorable financing by providing a means of
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6971 replenishing a qualifying charter school's debt service reserve fund.
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7173 (2) The authority shall establish standards for a charter school to be designated as a
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7375 qualifying charter school.
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7577 (3) In accordance with Subsection (4), in establishing the standards described in Subsection
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7779 (2) the authority shall consider:
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7981 [(a) whether a charter school has received an investment grade rating, independent of
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8183 any rating enhancement resulting from the issuance of bonds pursuant to the credit
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8385 enhancement program;]
8486 40
8587 [(b) the location of the charter school's project;]
8688 41
8789 [(c) the operating history of the charter school;]
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8991 [(d)] (a) the financial strength of the qualifying charter school, as demonstrated by:
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9193 (i) debt service coverage ratios;
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9395 (ii) days cash on hand; and
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9597 (iii) other financial metrics as determined by the authority; and
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9799 [(e)] (b) any other criteria the authority determines are relevant.
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99101 (4) Excepted as provided in Subsection (12), based on a qualifying charter school's credit
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101103 rating from at least one nationally recognized rating agency, the authority shall:
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103105 (a) for a rating of investment grade:
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105107 (i) approve a qualifying charter school for a bond issuance pursuant to this section;
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107109 and
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109111 (ii) waive the annual maintenance fee;
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111113 (b) for a rating of BB+ or equivalent rating:
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113115 (i) approve a qualifying charter school for a bond issuance pursuant to this section;
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115117 and
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117119 (ii) assess an annual maintenance fee of 0.15% of outstanding debt;
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119121 (c) for a rating of BB or equivalent rating:
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121123 (i) apply the standards described in Subsection (3) in determining whether to approve
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123125 a qualifying charter school for a bond issuance pursuant to this section; and
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125127 (ii) if the qualifying charter is approved in accordance with Subsection (4)(c)(i),
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127129 assess an annual maintenance fee of 0.25% of outstanding debt; and
128-- 2 - Enrolled Copy H.B. 219
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130131 (d) adjust any maintenance fee described in this Subsection (4) to reflect a change in the
132+- 2 - 02-04 17:29 1st Sub. (Buff) H.B. 219
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132134 qualifying charter school's credit rating.
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134136 [(4)] (5) The bonds [issued by the authority] the authority issues for a qualifying charter
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136138 school are not an indebtedness of the state or of the authority but are special obligations
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138140 payable solely from:
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140142 (a) the revenues or other funds pledged by the qualifying charter school; and
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142144 (b) amounts appropriated by the Legislature pursuant to Subsection [(9)] (10).
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144146 [(5)] (6) The authority shall notify the authorizer of a charter school that the charter school
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146148 is participating in the credit enhancement program if the authority:
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148150 (a) designates the charter school as a qualifying charter school; and
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150152 (b) issues bonds for the qualifying charter school under the credit enhancement program
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152154 described in this section.
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154156 [(6)] (7) One or more debt service reserve funds shall be established for a qualifying charter
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156158 school with respect to bonds issued pursuant to the credit enhancement program.
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158160 [(7)] (8)(a) Except as provided in Subsection [(7)(b)] (8)(b), money in a debt service
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160162 reserve fund may not be withdrawn from the debt service reserve fund if the amount
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162164 withdrawn would reduce the level of money in the debt service reserve fund to less
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164166 than the debt service reserve fund requirement.
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166168 (b) So long as the applicable bonds issued under the credit enhancement program remain
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168170 outstanding, money in a debt service reserve fund may be withdrawn in an amount
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170172 that would reduce the level of money in the debt service reserve fund to less than the
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172174 debt service reserve fund requirement if the money is withdrawn for the purpose of:
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174176 (i) paying the principal of, redemption price of, or interest on a bond when due and if
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176178 no other money of the qualifying charter school is available to make the payment,
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178180 as determined by the authority; or
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180182 (ii) paying any redemption premium required to be paid when the bonds are
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182184 redeemed prior to maturity if no bonds will remain outstanding upon payment
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184186 from the funds in the qualifying charter school's debt service reserve fund.
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186188 [(8)] (9) Money in a qualifying charter school's debt service reserve fund that exceeds the
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188190 debt service reserve fund requirement may be withdrawn by the qualifying charter
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190192 school.
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192194 [(9)] (10)(a) The authority shall annually, on or before December 1, certify to the
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194196 governor the amount, if any, required to restore amounts on deposit in the debt
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196198 service reserve funds of qualifying charter schools to the respective debt service
197-- 3 - H.B. 219 Enrolled Copy
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199200 reserve fund requirements, which certification shall include:
201+- 3 - 1st Sub. (Buff) H.B. 219 02-04 17:29
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201203 (i) detailed calculations supporting the certified amount; and
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203205 (ii) a report on the current status of each qualifying charter school's debt service
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205207 reserve fund.
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207209 (b) The governor shall request from the Legislature an appropriation of the certified
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209211 amount to restore amounts on deposit in the debt service reserve funds of qualifying
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211213 charter schools to the respective debt service reserve fund requirements.
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213215 (c) The Legislature may appropriate money to the authority to restore amounts on
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215217 deposit in the debt service reserve funds of qualifying charter schools to the
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217219 respective debt service reserve fund requirements.
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219221 (d) A qualifying charter school that receives money from an appropriation to restore
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221223 amounts on deposit in a debt service reserve fund to the debt service reserve fund
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223225 requirement, shall repay the state at the time and in the manner as the authority shall
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225227 require, provided that:
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227229 (i) the repayment schedule shall not exceed five years from the date of the
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229231 appropriation;
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231233 (ii) the authority shall establish a minimum annual repayment amount; and
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233235 (iii) the authority shall provide annual reports to the Legislature on the status of all
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235237 outstanding repayment obligations.
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237239 [(10)] (11) The authority may create and establish other funds for its purposes.
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239241 (12) The authority shall waive the annual maintenance fee for a qualifying charter school
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241243 that:
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243245 (a) received bond issuance approval on or before July 1, 2025; and
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245247 (b) has obtained an investment grade credit rating from at least one nationally
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247249 recognized rating agency.
248250 121
249251 Section 2. Section 53G-5-609 is amended to read:
250252 122
251253 53G-5-609 . Limitation on participation in Charter School Credit Enhancement
252254 123
253255 Program.
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255257 (1) In accordance with Subsection (2), on or before January 1 of each year, the authority
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257259 shall determine the credit enhancement program's bond issuance limitation.
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259261 (2) The authority may not issue bonds for a qualifying charter school under the credit
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261263 enhancement program if the total par amount outstanding under the program would
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263265 exceed an amount equal to the product of:
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265267 (a) [1.3] 2.0;
266-- 4 - Enrolled Copy H.B. 219
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268269 (b) an amount equal to the quotient of:
270+- 4 - 02-04 17:29 1st Sub. (Buff) H.B. 219
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270272 (i) annual charter school enrollment; divided by
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272274 (ii) annual state enrollment; and
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274276 (c) the total par amount then outstanding under the school bond guarantee program
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276278 established in Chapter 4, Part 8, School District Bond Guaranty.
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278280 Section 3. FY 2026 Appropriations.
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280282 The following sums of money are appropriated for the fiscal year beginning July 1,
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282284 2025, and ending June 30, 2026. These are additions to amounts previously appropriated for
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284286 fiscal year 2026.
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286288 Subsection 3(a). Restricted Fund and Account Transfers
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288290 The Legislature authorizes the State Division of Finance to transfer the following
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290292 amounts between the following funds or accounts as indicated. Expenditures and outlays from
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292294 the funds to which the money is transferred must be authorized by an appropriation.
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294296 ITEM 1 To Charter School Reserve Account
295297 144
296298 From Public Education Economic Stabilization
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298300 Restricted Account, One-time 4,000,000
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300302 Schedule of Programs:
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302304 Charter School Reserve Account 4,000,000
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304306 Section 4. Effective Date.
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306308 This bill takes effect on July 1, 2025.
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