Requires the appointment of an independent fiduciary upon the closing of a charter school to develop and implement the dissolution plan of such charter school, including the distribution of assets.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6112
SPONSOR: Forrest
 
TITLE OF BILL:
An act to amend the education law, in relation to the appointment of an
independent fiduciary upon the dissolution of a charter school
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill requires that, upon closure of a charter school, an independ-
ent fiduciary be appointed to perform financial audits and to facilitate
the return of public funds to the school district.
 
SUMMARY OF PROVISIONS:
Section one amends section 2855 of the education law to allow the
commissioner to appoint an independent fiduciary to create a dissolution
plan for a charter school as soon as possible after it has been acknowl-
edged that the charter school will be closing. It also requires that the
board of trustees and management at the charter school must fully coop-
erate in this dissolution plan.
Section two amends section 1950 of the education law to allow independ-
ent fiduciaries to enter into contracts with charters pursuant to
section twenty-eight hundred fifty-five of the education law.
Section three sets the effective date.
 
JUSTIFICATION:
When a charter school closes, the charter school is supposed to use its
assets to facilitate the closure of the school, and return the remainder
back to its school district.
However, there is a lack of transparency in this process, leading to
questions such as:
Were the remaining funds properly spent to facilitate the closure of the
school? How much of the funding remains? Did the school district receive
all of those funds?
This bill would provide transparency throughout the process by having a
third party conduct a financial audit of the remaining assets and
provide oversight for the closure of the charter school.
 
PRIOR LEGISLATIVE HISTORY:
2021-2022 S2185
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
 
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
6112
2023-2024 Regular Sessions
IN ASSEMBLY
April 3, 2023
___________
Introduced by M. of A. FORREST -- read once and referred to the Commit-
tee on Education
AN ACT to amend the education law, in relation to the appointment of an
independent fiduciary upon the dissolution of a charter school
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2855 of the education law is amended by adding
2 three new subdivisions 2-a, 2-b and 2-c to read as follows:
3 2-a. (a) Within thirty days of a final decision, or as soon as practi-
4 cable thereafter, by a charter entity to revoke, to not renew, or to
5 acknowledge the expiration or surrender of a charter, the commissioner
6 may appoint an independent fiduciary to implement the dissolution plan
7 of such charter school, including the distribution of assets pursuant to
8 paragraph (t) of subdivision two of section twenty-eight hundred fifty-
9 one of this article, and shall notify the closing charter school, the
10 school district of location for the charter school and the school
11 districts of residence for the charter school in writing of the
12 appointed independent fiduciary responsible for overseeing the school's
13 dissolution and closure process.
14 (b) The independent fiduciary may be a non-profit entity, board of
15 cooperative educational services (BOCES), a school district other than
16 the school district of location for the charter school or a school
17 district of residence for pupils of such charter school, or an individ-
18 ual.
19 (c) The independent fiduciary shall contract with the charter school
20 and shall be compensated, and shall be reimbursed for reasonable and
21 necessary expenses incurred as determined by the commissioner. Such
22 compensation and reimbursement shall be paid by the charter school. The
23 independent fiduciary shall be entitled to defense and indemnification
24 by the charter school to the same extent as a charter school employee.
25 The appointment of an independent fiduciary may be terminated by the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06029-01-3
A. 6112 2
1 commissioner for a violation of law or the commissioner's regulations or
2 for breach of contract or neglect of duty as determined by the commis-
3 sioner. In the event that an independent fiduciary's appointment is
4 terminated by the commissioner, a replacement independent fiduciary
5 shall be appointed by the commissioner as soon as practicable following
6 the effective date of such termination.
7 2-b. Notwithstanding any other provision of law to the contrary, the
8 independent fiduciary shall have the power to review all existing
9 disbursements and to review, disallow, modify or approve all new
10 contracts and disbursements of the charter school subsequent to the date
11 of the fiduciary's appointment, the authority to prepare and file a
12 petition regarding the disposition of assets and/or a petition for
13 dissolution on behalf of the charter school's board of trustees, and may
14 supersede any decision or policy of the charter school that in the sole
15 judgment of the independent fiduciary conflicts with the school dissol-
16 ution plan. The independent fiduciary shall, within sixty days follow-
17 ing the formal dissolution of the charter school, submit a comprehensive
18 report to the commissioner including information pertaining to the
19 disposition of assets pursuant to section twenty-eight hundred fifty-one
20 of this article.
21 2-c. It shall be the duty of the charter school trustees and manage-
22 ment to fully cooperate with the independent fiduciary. The independent
23 fiduciary may visit, examine into and inspect any records of such school
24 under its oversight.
25 § 2. Paragraph h of subdivision 4 of section 1950 of the education law
26 is amended by adding a new subparagraph 14 to read as follows:
27 (14) To enter into contracts with individual charter schools to serve
28 as an independent fiduciary pursuant to section twenty-eight hundred
29 fifty-five of this chapter.
30 § 3. This act shall take effect on the sixtieth day after it shall
31 have become a law. Effective immediately, the addition, amendment and/or
32 repeal of any rule or regulation necessary for the implementation of
33 this act on its effective date are authorized to be made and completed
34 on or before such effective date.