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A06112 Summary:

BILL NOA06112
 
SAME ASSAME AS S02171
 
SPONSORForrest
 
COSPNSR
 
MLTSPNSR
 
Amd §§2855 & 1950, Ed L
 
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.
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A06112 Actions:

BILL NOA06112
 
04/03/2023referred to education
01/03/2024referred to education
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A06112 Memo:

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
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A06112 Text:



 
                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.
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