Institute Charter Schools & Bond Indebtedness

The bill allows a school district board of education (school district) to consider and submit to the eligible electors of the district the question of contracting a bonded indebtedness for capital construction or land and facilities needs of an institute charter school located within the school district. if:

• The school district, in the school district's sole discretion, has approved support for the institute charter school's capital construction or land and facilities needs; and
• The school district has obtained security or assurances, if any, regarding its interest in the land or facilities of the institute charter school that the school district retains.

In order for a school district to consider whether to include the capital construction needs of an institute charter school (school) located within the school district, the school must submit a capital construction plan to the board of education (board) of the school district. When a school district wants to include the capital construction needs of a school in a ballot question, the board must, prior to submitting the ballot question to the voters of the school district, enter into a written agreement with the school that includes:

• The process by which investment and interest earnings on bonded indebtedness proceeds;
• The allocation of investment and interest earnings on the bonded indebtedness proceeds;
• Allocation of the costs to submit the ballot question;
• An agreement that if the school's charter is revoked or not renewed, if the school becomes insolvent and can no longer operate as a school, or if the school otherwise ceases to exist, the school district has priority in recovering debt over all other debtors for costs and payments of all other debts secured by the capital construction and that ownership of any capital construction, land, or facilities financed by the bonded indebtedness proceeds automatically reverts to the school district; and
• An agreement that the school shall not encumber any capital construction financed by bonded indebtedness with any additional debt without the express approval of the school district.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)