1. (1) Subject to legislative appropriation, the state board shall distribute small charter school base funding to charter schools with 2,000 or fewer students in the amount of the greater of $40,000 or $115 per student.
2. (2) A charter school's eligibility for small charter school base funding is determined by the charter school's student enrollment on October 1 of a given year.
3. (3) Notwithstanding this section and subject to legislative appropriations, including intent language for the applicable fiscal year, the state board may distribute to charter schools, regardless of size, one-time funding that the Legislature appropriates.

4. (4)

   1. (a) Subject to legislative appropriations, the state board shall coordinate and facilitate a comprehensive study of administrative and base funding costs for charter schools.

   2. (b) The study described in Subsection (4)(a) shall include the following members to constitute the study group:

      1. (i) a charter school business administrator from a small charter school whom the chair of the state board appoints;
      2. (ii) a charter school director from a large charter school whom the chair of the state board appoints;
      3. (iii) a school district business administrator whom the chair of the state board appoints;
      4. (iv) the director of each charter school association that has a member charter school operating in the state, or the director's designee;
      5. (v) a member of the Utah State Charter School Board whom the chair of the state board appoints;
      6. (vi) a member of the state board whom the chair of the state board appoints;
      7. (vii) relevant staff from the state board whom the chair of the state board appoints; and
      8. (viii) a representative from the Governor's Office of Planning and Budget whom the director of the Governor's Office of Planning and Budget appoints.

   3. (c) The chair of the state board shall:

      1. (i) convene the first meeting of the study group no later than April 1, 2026; and
      2. (ii) designate a member of the study group to serve as chair of the study group.

5. (5) The study group described in Subsection (4)(b) shall:

   1. (a) examine how factors such as school size, enrollment scale, and operational models impact the relative costs of operating charter schools;
   2. (b) analyze the adequacy and effectiveness of the charter school base funding formula in addressing economies of scale challenges faced by charter schools of varying sizes;
   3. (c) compare administrative and operational cost structures across charter schools of different sizes and configurations and applicable districts;

   4. (d) evaluate whether current funding mechanisms appropriately account for:

      1. (i) fixed costs that do not scale proportionally with enrollment;
      2. (ii) administrative requirements mandated by state and federal law; and
      3. (iii) operational efficiencies or challenges unique to charter schools;
   5. (e) consider funding models used in other states or jurisdictions that may provide insights for the charter school funding system; and
   6. (f) identify any additional factors that significantly impact charter school operational costs beyond those currently considered in the funding formula.

6. (6) The state board shall submit a report to the Public Education Appropriations Subcommittee no later than December 1, 2026, that includes:

   1. (a) findings from the study described in this section;
   2. (b) recommendations for any modifications to the charter school base funding formula;
   3. (c) proposed criteria or metrics for evaluating the ongoing adequacy of charter school base funding;
   4. (d) estimated fiscal impacts of any recommended changes; and
   5. (e) a proposed timeline for implementation of any recommended modifications.
7. (7) Subject to legislative appropriations, the state board may contract with a qualified third party, including institutions of higher education or research organizations, to conduct part of the study described in this section.

Amended by Chapter 228, 2026 General Session