Charter School Revolving Loan Fund.

Senator Richardson’s measure to amend the Charter School Revolving Loan Fund restructures the program to increase lending capacity and alter risk, governing how funds are extended to charter schools and their authorizing authorities. The most notable shift is a doubling of the lifetime loan limit to half a million dollars per charter school, available through either a chartering authority or directly to a non-conversion charter school, with multiple loans allowed so long as the aggregate amount does not exceed the new cap. The bill also introduces joint liability for defaults when a loan is made directly to a charter school, meaning both the charter school and the entity managing it share repayment responsibility.

Key mechanisms accompanying the expanded cap include a tiered repayment framework and a revised pricing structure. Generally, loan repayments are scheduled over up to five years, but for those charter schools that qualify under startup or disaster-prioritized categories, the repayment period may extend to eight years. The interest rate is defined as the lesser of the rate on funds in the state’s pooled investment account or 50 percent of the interest rate on the most recent general obligation bond sale, calculated via the true cost method, with a floor of 3 percent. Interest payments are directed into the Charter School Security Fund rather than the Revolving Loan Fund, and regular interest installments are withdrawn from the charter school’s annual apportionment.

The measure adds an explicit prioritization framework and enhanced oversight. Startup costs for new charter schools receive priority, followed by a disaster-related priority for schools damaged or closed for 10 or more days, available through July 1, 2029. It requires CSFA to monitor fund adequacy and, with the Director of Finance’s approval, transfer funds from the Security Fund to the Revolving Loan Fund to replace losses from defaults, after attempting recovery from the defaulting recipient. The bill expands annual reporting to multiple legislative and fiscal bodies and specifies a 2029 report that analyzes expenditures by loan recipients for loans issued after July 1, 2026, drawing on information from loan applications and audits. No new general fund appropriation is authorized by the measure.