1. (1) As used in this section:

   1. (a) "Innovation LEA" means the same as that term is defined in Section 53G-7-221.
   2. (b) "Innovation school" means the same as that term is defined in Section 53G-7-221.
   3. (c) "Innovative education program" means the same as that term is defined in Section 53G-7-221.

2. (2) Notwithstanding any other provision of the Utah Code:

   1. (a) an innovation LEA may, in each fiscal year:

      1. (i) apply to the state board for approval to expend up to 35% of the LEA's state restricted funding for each formula-based program to support an innovative education program at an innovation school in the innovation LEA; and
      2. (ii) except as provided in Subsection (2)(b), transfer fund balances between funds as necessary to expend funds as described in Subsection (2)(a)(i); and

   2. (b) an innovation LEA may not transfer funds under Subsection (2)(a) related to:

      1. (i) the school LAND Trust Program, established in Section 53G-7-1206; or
      2. (ii) a qualified grant program.
3. (3) An innovation LEA that expends funds as described in Subsection (2)(a) shall, in accordance with the requirements that the state board establishes under Subsection (4), report to the state board on how the innovation LEA expends the funds.

4. (4) The state board shall:

   1. (a) make rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to establish:

      1. (i) requirements for an innovation LEA to apply for the state board's approval to expend funds as described in Subsection (2);
      2. (ii) procedures for an innovation LEA to submit the application described in Subsection (4)(a); and
      3. (iii) requirements for the report described in Subsection (3); and
   2. (b) upon request of the Education Interim Committee, provide a report described in Subsection (3) to the Education Interim Committee.
5. (5) In addition to the requirements established by the state board under Subsection (4)(a)(i), an innovation LEA shall demonstrate how the innovation LEA has met the requirements of each formula-based program from which the innovation LEA seeks approval to expend funds as described in Subsection (2).

6. (6)

   1. (a) Nothing in this section authorizes an innovation LEA to violate:

      1. (i) federal law; or
      2. (ii) federal restrictions on the LEA's funds.
   2. (b) An innovation LEA that takes an action that this section authorizes shall ensure that the innovation LEA continues to meet federal maintenance of effort requirements.

Enacted by Chapter 291, 2022 General Session