(a) A school district board of directors, or the Commissioner of Elementary and Secondary Education acting in lieu of a school district board of directors, with approval from the State Board of Education, may enter into a school transformation contract with:

1. (1) An entity approved by the state board under Arkansas Code § 6-15-3201 and determined to be in good standing; or

2. (2) The governing body of a current or former open-enrollment public charter school, if the entity:

   1. (A) Has not previously operated an open-enrollment public charter school in which the charter expired or was revoked or surrendered; and
   2. (B) For the three (3) school years preceding the school year of the proposed school transformation, all open-enrollment public charter schools under the entity’s governance had:

(i) An overall performance rating of “C” or higher according to the school rating system under Arkansas Code § 6-15-2101 et seq., or an equivalent performance rating in the accountability system of the state in which it currently operates; and

1. (ii) No significant findings on the prior-year annual financial audit.

(b) A public school district proposing to enter into a contract under this section shall notify the commissioner of the public school district's intent to enter into the contract at least ninety (90) days prior to the school year in which the contract is effective.

1. (c) If a transformation campus operator requests a new charter or seeks to amend its existing charter to include the transformation campus, then the state public charter authorizer will review the public school or public school district’s request to enter into a school transformation contract and shall decide whether to approve a school transformation contract, subject to review by the state board.

   1. (d) The Division of Elementary and Secondary Education shall notify a public school district whether a proposed school transformation contract is approved not later than sixty (60) days after the date:
2. (1) The state board and the commissioner received notice of the proposed contract; and
3. (2) All information required by the commissioner to be submitted has been received.