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An Act
ENROLLED HOUSE
BILL NO. 3372 By: Hall of the House
and
Pugh of the Senate
An Act relating to charter schools; amending 62 O.S.
2021, Section 203, which relates to the apportionment
of monies to the General Revenue Fund; providing
exception to requirement for investment monies to
return to the General Revenue Fund; amending 70 O.S.
2021, Section 3-142, as last amended by Section 2,
Chapter 294, O.S.L. 2025 (70 O.S. Supp. 2025, Section
3-142), which relates to charter school funding;
removing reference to prohibition on issuing bonds;
clarifying repayment obligations for the state in
certain circumstances; stating legislative findings;
creating the Revolving Loan Fund Program for Charter
School Capital Expenditures; describing Revolving
Loan Fund Program management; providing Revolving
Loan Fund Program purpose; allowing a third-party
financial administrator to set interest rates on
loans to charter schools; stating loan recipients;
restricting loan usage for specific purposes;
providing loan eligibility; creating the Charter
School Loan Revolving Fund; providing fund purposes
and limitations; allowing appropriations; providing
procedure for approval and payment of funds; allowing
the promulgation of rules; creating the Charter
School Bond Credit Enhancement Program; prescribing
program eligibility; outlining program approval
process; mandating selection of third-party financial
administrator; requiring interception of State Aid
funds to pay bond obligations; providing permitted
reserve account uses; prohibiting revoking or
amending of payment directive; limiting payment
sources; creating the Charter School Bond Credit
Enhancement Fund; providing fund purposes and
limitations; allowing appropriations; requiring
interest earned to be returned to the fund; mandating
participants pay a one-time fee; outlining procedures
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for default; providing procedure for repayment of
certain monies; clarifying certain bonds are special
obligations payable from charter school funds or
state appropriations; providing program monetary cap;
providing for codification; and providing an
effective date.
SUBJECT: Charter schools
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 203, is
amended to read as follows:
Section 203. A. Except as otherwise provided by subsection B
of this section, all monies that may come into the State Treasury,
pursuant to the provisions of Section 201 et seq. of this title,
together with all amounts that may be received by the State
Treasurer as investment income or as interest on average daily bank
balances, including investment income or interest on deposits from
funds deposited to the credit of the Constitutional Reserve Fund
created pursuant to Section 23 of Article X of the Oklahoma
Constitution, shall be apportioned and credited to the General
Revenue Fund for the current year.
B. The provisions of subsection A of this section shall not
apply to:
1. Interest received on deposits from funds under the control
of the Commissioners of the Land Office;
2. Funds in the Department of Human Services Federal
Disallowance Fund;
3. Interest received on deposits from funds under the control
of the Santa Claus Commission;
4. The Risk Management Revolving Fund;
5. Investment income and interest received from funds in the
Quartz Mountain Revolving Fund from insurance claims;
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6. The Drinking Water Treatment Revolving Loan Account and the
Drinking Water Treatment Loan Administrative Fund;
7. The Clean Water State Revolving Fund Loan Account and the
Clean Water State Revolving Fund Loan Administrative Fund;
8. The State Infrastructure Bank Revolving Fund;
9. The Nursing Facility Quality of Care Fund;
10. The Oklahoma Tourism and Recreation Department Revolving
Fund effective July 1, 2003;
11. The Golf Course Operations Revolving Fund effective July 1,
2003; and
12. Interest received on investments from funds in the County
Bridge and Road Improvement Fund, the Emergency and Transportation
Revolving Fund, the County Road Machinery and Equipment Revolving
Fund, the High Priority State Bridge Revolving Fund as created in
Section 506 of Title 69 of the Oklahoma Statutes, and the County
Improvements for Roads and Bridges Fund as created in Section 507 of
Title 69 of the Oklahoma Statutes; and
13. Interest earned on investments pursuant to subsection G of
Section 5 of this act.
SECTION 2. AMENDATORY 70 O.S. 2021, Section 3-142, as
last amended by Section 2, Chapter 294, O.S.L. 2025 (70 O.S. Supp.
2025, Section 3-142), is amended to read as follows:
Section 3-142. A. The student membership and attendance of a
charter school shall be considered separate from the student
membership and attendance of the sponsor for the purpose of
calculating enrollment and funding including weighted average daily
membership pursuant to Section 18-201.1 of this title and State Aid
pursuant to Section 18-200.1 of this title. A charter school shall
receive the State Aid allocation, federal funds to which it is
eligible and qualifies for, and any other state-appropriated revenue
generated by its students for the applicable year. Not more than
three percent (3%) of the State Aid allocation may be charged by the
sponsor as a fee for administrative services rendered if the sponsor
is a school district, a comprehensive or regional institution of
higher education, a two-year college, a private institution of
higher learning accredited pursuant to Section 4103 of this title,
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or a federally recognized Indian tribe pursuant to Section 3-132 of
this title. The Statewide Charter School Board shall not charge any
charter school or virtual charter school a fee for administrative or
other services. The State Department of Education shall determine
the policy and procedure for making payments to a charter school or
virtual charter school. The fee for administrative services as
authorized in this subsection shall only be assessed on the State
Aid allocation amount and shall not be assessed on any other
appropriated amounts. A sponsor of a charter school shall not
charge any additional State Aid allocation or charge the charter
school any additional fee above the amounts allowed by this
subsection unless the additional fees are for additional services
rendered. The charter school sponsor shall provide to the State
Department of Education financial records documenting any state
funds charged by the sponsor for administrative services rendered
for the previous year.
B. The fee for administrative services authorized by subsection
A of this section shall be used by the sponsor to provide oversight
and services to the charter schools it sponsors. The State
Department of Education shall develop data codes for the Oklahoma
Cost Accounting System which shall be used to comply with the
administrative services reporting required by this section. A
charter school sponsor shall publish a detailed report on its
website and present the report in a public meeting of the charter
school governing board and the charter school sponsor governing
board. The report shall provide sponsor performance and stewardship
including compliance with all applicable laws, regulations, and
terms of the charter contract and listing expenses related to
oversight and services provided by the sponsor to the charter
schools it sponsors.
C. For the purpose of calculating weighted average daily
membership pursuant to Section 18-201.1 of this title and State Aid
pursuant to Section 18-200.1 of this title, the weighted average
daily membership for the first year of operation of a new charter
school site or grade level or full-time statewide virtual charter
school shall be determined initially by multiplying the actual
enrollment of students as of August 1 by 1.333. The charter school
or virtual charter school shall receive revenue equal to that which
would be generated by the estimated weighted average daily
membership calculated pursuant to this subsection. At midyear, the
allocation for the charter school or virtual charter school shall be
adjusted using the first quarter weighted average daily membership
for the charter school or virtual charter school calculated pursuant
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to subsection A of this section. For each subsequent school year,
weighted average daily membership shall be calculated as provided
for in Section 18-201.1 of this title, and State Aid shall be
calculated as provided for in Section 18-200.1 of this title.
D. Except as explicitly authorized by state law, a charter
school or virtual charter school shall not be eligible to receive
state-dedicated, local, or county revenue; provided, a charter
school or virtual charter school may be eligible to receive any
other aid, grants, or revenues allowed to other schools. A charter
school or virtual charter school shall be considered a local
education agency for purposes of funding.
E. Any unexpended funds received by a charter school or virtual
charter school may be reserved and used for future purposes. The
governing board of a charter school or virtual charter school shall
not levy taxes or issue bonds. If otherwise allowed by law, the
governing board of a charter school or virtual charter school may
enter into private contracts for the purposes of borrowing money
from lenders. If the governing board of the charter school or
virtual charter school borrows money, the charter school or virtual
charter school shall be solely responsible for repaying the debt,
and the state or the sponsor shall not in any way be responsible or
obligated to repay the debt, except as provided in Sections 4 and 5
of this act.
F. Any charter school or virtual charter school which chooses
to lease property shall be eligible to receive current government
lease rates.
G. Except as otherwise provided in this subsection, each
charter school shall pay to the Charter Schools Incentive and
Closure Reimbursement Fund created in Section 3-144 of this title an
amount equal to Five Dollars ($5.00) per student based on average
daily membership, as defined by paragraph 2 of Section 18-107 of
this title, during the first nine (9) weeks of the school year.
Each charter school shall complete the payment every school year
within thirty (30) days after the first nine (9) weeks of the school
year. If the Charter Schools Incentive and Closure Reimbursement
Fund has a balance of One Million Dollars ($1,000,000.00) or more on
July 1, no payment shall be required the following school year.
H. Upon the effective date of this act, the Statewide Charter
School Board shall transfer all funds remaining in the balance of
the Charter School Closure Reimbursement Revolving Fund to the
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Charter Schools Incentive and Closure Reimbursement Fund created
pursuant to Section 3-144 of this title.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3-142.1 of Title 70, unless
there is created a duplication in numbering, reads as follows:
The Legislature finds that public charter schools should be
eligible for dedicated or competitive funding made available through
the State of Oklahoma to support public school capital expenditures.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3-142.2 of Title 70, unless
there is created a duplication in numbering, reads as follows:
A. There is hereby established the Revolving Loan Fund Program
for Charter School Capital Expenditures, subject to appropriations
by the Legislature.
B. The Revolving Loan Fund Program for Charter School Capital
Expenditures shall be managed by the Statewide Charter School Board.
The Board shall conduct a competitive procurement process to select
a qualified third-party financial administrator with demonstrated
expertise in public finance, charter school facilities financing, or
municipal bond underwriting to administer the program. The selected
administrator shall manage underwriting, loan structuring, and risk
assessment functions in accordance with rules promulgated by the
Board.
C. The Revolving Loan Fund Program for Charter School Capital
Expenditures shall provide loans and loan guarantees that allow
charter schools to access funding at lower interest rates.
D. The third-party financial administrator selected pursuant to
subsection B of this section shall determine the interest rates,
underwriting standards, and loan terms applicable to loans and loan
guarantees issued under this section, subject to oversight and
approval by the Statewide Charter School Board. In establishing
such rates and terms, the administrator shall seek to provide
competitive, market-aligned interest rates and prudent risk
management.
E. Eligible recipients of loans or loan guarantees through this
program include:
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1. Nonprofit charter school organizations;
2. Nonprofit charter school management organizations;
3. Affiliated entities designed to own property for charter
schools;
4. A nonprofit corporation that develops and finances a
facility that will be occupied by a public charter school throughout
the term of the loan; and
5. One or more third-party, nonprofit charter school loan fund
designed to leverage the total loan amounts to eligible recipients.
F. Funds distributed pursuant to this section shall be for
purchase, construction, renovation, and maintenance of charter
school capital projects including:
1. Purchase of land and related costs;
2. Construction of a new facility and related costs;
3. Purchase of an existing property and related costs;
4. Renovation of a property and related costs; and
5. Capital improvements of an existing property and related
costs.
G. 1. To be eligible to benefit from a loan or loan guarantee
under this section, a charter school shall:
a. operate pursuant to Section 3-137 of Title 70 of the
Oklahoma Statutes,
b. provide a full-time, in-person academic program,
c. certify that any facility financed in whole or in part
under this section shall be used primarily for full-
time, in-person student instruction, and
d. be in good standing with its sponsor.
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2. A charter school shall not be eligible to receive a loan or
loan guarantee under this section if, within the three (3) years
immediately preceding the date of application:
a. the charter school received a grade of “F” on the
Oklahoma School Report Card,
b. the charter school received a severe adverse finding
on its annual financial audit, or
c. the charter school was accredited with warning or
probation by the Oklahoma State Department of
Education.
H. There is hereby created in the State Treasury a revolving
fund for the Statewide Charter School Board to be designated the
"Charter School Loan Revolving Fund". The fund shall be a
continuing fund, not subject to fiscal year limitations, and shall
consist of all monies received by the Statewide Charter School Board
from state appropriations. All monies accruing to the credit of
said fund are hereby appropriated and may be budgeted and expended
by the Statewide Charter School Board for the purpose of
administering the Revolving Loan Fund Program for Charter School
Capital Expenditures. Expenditures from said fund shall be made
upon warrants issued by the State Treasurer against claims filed as
prescribed by law with the Director of the Office of Management and
Enterprise Services for approval and payment.
I. The Statewide Charter School Board may promulgate rules to
implement this section.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 3-142.3 of Title 70, unless
there is created a duplication in numbering, reads as follows:
A. There is hereby established a Charter School Bond Credit
Enhancement Program to assist qualifying charter schools in
obtaining favorable financing on bonds for facility expenditures.
B. 1. A public charter school is eligible to participate in
the program if the school receives approval from the Statewide
Charter School Board confirming compliance with statutory
eligibility requirements and receives a creditworthiness
determination from the third-party financial administrator selected
pursuant to subsection C of this section.
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2. Creditworthiness for purposes of this section shall be
determined by the third-party financial administrator based on
industry-standard underwriting criteria.
3. The Statewide Charter School Board shall not be responsible
for conducting financial underwriting or credit analysis but shall
verify statutory eligibility and compliance.
C. The Statewide Charter School Board shall conduct a
competitive procurement process to select a qualified third-party
financial administrator to evaluate creditworthiness, advise on bond
structuring, and administer financial components of the Charter
School Bond Credit Enhancement Program. The administrator shall
have demonstrated expertise in municipal finance, charter school
facilities financing, or public credit analysis.
D. 1. Upon receipt of documentation satisfying the criteria
set forth in subsection B of this section, the Oklahoma Finance
Authority shall notify the public charter school and the State
Treasurer that the school has been approved to participate in the
charter school bond credit enhancement program if:
a. the public charter school complies with the
requirements set forth in subsection B of this
section, and
b. the public charter school's participation would not
cause a violation of the limitations set forth in
subsection I of this section.
2. Additional requirements and security interests may be
imposed by agreement of the school and bondholder or trustee.
E. 1. A school participating in the Charter School Bond Credit
Enhancement Program shall agree to have deposited a minimum of
twelve (12) months' payment on principal and interest in a
restricted debt service reserve account established and held by the
bondholder or trustee.
2. Except as provided in paragraph 3 of this subsection, money
in a participating public charter school's restricted debt service
reserve account shall not be withdrawn if the amount withdrawn would
reduce the level of money in the account to less than twelve (12)
months' payment on principal and interest.
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3. As long as applicable bonds issued under the facilities
program remain outstanding, money in a restricted debt service
reserve account may be withdrawn in an amount that would reduce the
level to less than twelve (12) months' payment on principal and
interest, if the money is withdrawn for the purpose of:
a. paying the principal, redemption price, or interest on
a bond when due if the state payments intercepted
pursuant to subsection F of this section, funded
grants, and other revenues pledged by the
participating public charter school for payment of the
bond, are insufficient to make the payment, or
b. paying any redemption premium required to be paid when
the bonds are redeemed prior to maturity, if no bonds
will remain outstanding.
F. 1. As a requirement to participate in the Charter School
Bond Credit Enhancement Program, a participating public charter
school shall provide a directive to the Statewide Charter School
Board authorizing the interception of the school's State Aid
funding, as defined pursuant to Section 18-200.1 of Title 70 of the
Oklahoma Statutes, in an amount sufficient to satisfy the scheduled
principal and interest payment due under the applicable bond
indenture and shall be transmitted directly to the bond trustee on
or before the due date specified in the bond indenture. Any
remaining balance of the State Aid funding after satisfaction of the
scheduled debt service payment shall be promptly transmitted to the
participating public charter school.
2. The payment directive required in this subsection shall not
be revoked or amended while bonds supported by the Charter School
Bond Credit Enhancement Program remain outstanding.
3. The intercept authorized by this subsection shall not apply
to federal funds, competitive grants, restricted program funds, or
any revenues other than State Aid funding.
G. There is hereby established in the State Treasury the
Charter School Bond Credit Enhancement Fund, which shall consist of
monies made available through appropriations, fees, grants, gifts,
or any other source to fulfill the purposes of this section. Monies
in the fund are hereby continuously appropriated for the purposes of
this section and shall only be expended for the purposes stated
ENR. H. B. NO. 3372 Page 11
herein. Any interest earned on the investment of idle money in the
Charter School Bond Credit Enhancement Fund shall be returned to the
Charter School Bond Credit Enhancement Fund. Schools participating
in the Charter School Bond Credit Enhancement Program shall pay a
one-time fee in an amount equal to one-half percent (0.5%) of par at
the time of issuance and an annual fee in an amount equal to
seventy-five thousandths percent (0.075%) on the outstanding
balance, which shall be deposited in the Charter School Bond Credit
Enhancement Fund.
H. 1. If a public charter school participating in the Charter
School Bond Credit Enhancement Program has defaulted on its
obligation to pay, a draw on its restricted debt service reserve
account shall be made, and the following shall occur:
a. the bond trustee shall exercise its remedies under the
bond indenture and loan agreement,
b. within ten (10) days following the withdrawal from the
restricted debt service account, the bondholder or
trustee shall notify the issuing Oklahoma Finance
Authority, the State Treasurer, and the State
Comptroller of the shortfall in the school's
restricted debt service reserve account,
c. within fifteen (15) days of the notice provided
pursuant to subparagraph b of paragraph 1 of this
subsection, the State Comptroller shall transfer, from
the Charter School Bond Credit Enhancement Fund, to
the school's restricted debt service reserve account,
an amount equal to one (1) month's principal and
interest on the bonds based on the principal and
interest payments for which the draw on the restricted
debt service reserve account occurred. Monies
transferred to the school's restricted debt service
reserve account pursuant to this paragraph shall be
continuously appropriated for such purposes; provided,
however, that no such transfer shall be made if the
charter school's sponsor has issued written notice of
intent to revoke or of nonrenewal regarding the
charter contract pursuant to the Oklahoma Charter
Schools Act, except to the extent necessary to satisfy
debt service obligations accrued prior to such action,
and
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d. by December 1 of each year, the State Treasurer shall
submit to the Governor a letter certifying the amount,
if any, required to restore amounts on deposit in the
restricted debt service reserve accounts of
participating public charter schools and the Charter
School Bond Credit Enhancement Fund. The Governor
shall send to the Legislature a statement of the
expenditure of monies from the Charter School Bond
Credit Enhancement Fund and report the amount needed
to restore funds in the restricted debt service
reserve accounts to the amount required in paragraph 2
of subsection E of this section. The Legislature may
appropriate money to restore amounts on deposit in the
restricted debt service reserve account of a
defaulting public charter school to the amounts
required in paragraph 2 of subsection E of this
section or to redeem all outstanding bonds issued for
a defaulting public charter school, the source of
which may be the Charter School Bond Credit
Enhancement Fund or any other available funds. The
Legislature may also appropriate money to restore
amounts withdrawn from the Charter School Bond Credit
Enhancement Fund.
2. If money has been withdrawn from the Charter School Bond
Credit Enhancement Fund pursuant to paragraph 1 of this subsection,
the school shall repay the fund from the school's allocation of
facilities funds, at a time agreed to by the Statewide Charter
School Board over a period of years until the amount so withdrawn
has been repaid to the Charter School Bond Credit Enhancement Fund,
as long as the repayment does not cause an event of default on a
facility lease or loan.
I. 1. Bonds issued for the benefit of public charter schools
using the Charter School Bond Credit Enhancement Fund shall not be
indebtedness of the state, but are special obligations payable
solely from:
a. revenues or other funds pledged by the qualifying
public charter school, and
b. amounts appropriated by the Legislature pursuant to
subsection H of this section.
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2. Bonds issued under the public charter school facilities
program shall not be subordinate to any other obligations used to
finance the same project.
3. The aggregate outstanding principal amount of bonds issued
under the public charter school facilities program shall not exceed
Two Hundred Fifty Million Dollars ($250,000,000.00).
SECTION 6. This act shall become effective November 1, 2026.
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Passed the House of Representatives the 12th day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the 23rd day of April, 2026.
Presiding Officer of the Senate
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this ____________________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________
Approved by the Governor of the State of Oklahoma this _________
day of ___________________, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this __________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _________________________________