(1) An authorizer may request that the commissioner permit external control over certain functions of a charter school or charter management organization by submitting to the commissioner and the charter school or charter management organization a concise written statement identifying the emergency that justifies external control and the form or forms of external control requested. The authorizer shall state clearly if it is requesting an order of reorganization. The commissioner may authorize external control over a charter school or charter management organization by issuing a temporary order as provided in subsection (2) of this section or a preliminary order as provided in subsection (3) of this section.
The commissioner may issue a temporary order in the event that immediate and irreparable injury, loss, or damage will result from the identified emergency before the charter respondent is able to state its opposition and before the authorizer certifies in writing or in person to the commissioner the efforts that have been made to give notice to the charter respondent. A temporary order issued pursuant to this subsection (2) shall state the date and hour of issuance, define the injury, state why the injury is irreparable, and state why the temporary order was given without notice. A temporary order issued under this subsection (2) shall be valid for ten days and may be extended for up to an additional ten days for good cause shown. The authorizer shall immediately provide the charter respondent with a copy of any temporary order issued pursuant to this subsection (2). A charter respondent shall provide an authorizer two business days' notice prior to requesting that the commissioner dissolve a temporary order issued pursuant to this subsection (2).
The commissioner shall issue a preliminary order only if:
The charter respondent received two business days' written notice that the authorizerhas requested external control over certain functions of the charter respondent and the basis for the request;
In the case of a charter respondent that is a charter management organization, authorizers of each of the affected charter schools have received two business days' written notice of the request for external control;
The authorizer requesting external control and all parties that received notice havehad the opportunity to meet with the commissioner to present such evidence and argument as the commissioner finds appropriate under the circumstances. In any meeting held before issuing a preliminary order pursuant to this subsection (3), the commissioner may accept evidence and arguments from the parties involved as he or she deems appropriate, but neither a formal adversarial hearing nor application of the rules of evidence shall be required.
Following a meeting held pursuant to paragraph (c) of this subsection (3), the commissioner finds and determines that the authorizer has demonstrated an emergency and the risk of irreparable injury resulting from the emergency justifies an intrusion on the internal operations of the charter respondent.
The commissioner may demand production of information from the charter respondent that may be necessary to conduct an investigation pursuant to this section, may issue subpoenas as otherwise provided for in section 24-4-105 (5), C.R.S., and may draw appropriate inferences from failure of any party to promptly comply with such requests.
A preliminary order issued pursuant to subsection (3) of this section shall be valid forone hundred twenty days and may be extended for up to an additional one hundred twenty days, upon good cause shown.
(a) A temporary or preliminary order may appoint the authorizer or another entity or person to act as a fiduciary; except that, if more than one authorizer is a party to the proceeding or if the authorizer is requesting an order of reorganization, the commissioner shall appoint a separate person or entity that is not a party to the proceeding to act as a fiduciary. The fiduciary may exercise, subject to the limitations set forth in paragraph (b) of this subsection (6), the powers over and for the charter respondent that are ordinarily exercised by the charter respondent's board of directors and may take action respecting excess benefits as authorized pursuant to section 22-30.5-704.
(b) A temporary or preliminary order shall not authorize, nor be construed to permit, a fiduciary to:
Conclude, dissolve, relinquish, or surrender the charter contract;
Effect nonrenewal or revocation of the charter contract;
Negotiate, renegotiate, or amend the charter contract;
Exercise the legal standing of the charter respondent in any administrative or courtproceeding other than one brought pursuant to this section; except that the fiduciary may seek recovery of unpaid moneys due to the charter respondent from an authorizer;
Transfer into a trust the assets of the charter respondent;
Repeal, alter, amend, restate, or in any fashion modify the charter respondent's organic documents;
Remove, recall, or appoint any member of the charter respondent's governing board or officers;
Take any action that is reserved for the membership of a charter respondent thatis organized as a membership organization; or
Take any action that is not within the power of the charter respondent's governingboard.
The commissioner may require a fiduciary to provide evidence of appropriate insurance coverage, including but not limited to appropriate certificates of insurance. The insurance coverage shall be reasonably adequate to protect against risks of liability for any actions taken under an order granted pursuant to this section.
(a) If an authorizer has requested an order of reorganization and the commissioner, after appropriate proceedings pursuant to this section, has appointed a fiduciary other than the authorizer to exercise certain powers, the fiduciary shall independently determine whether to continue to request the order of reorganization. An order of reorganization shall be authorized only if it is issued in compliance with the processes, standards, and purposes set forth in this section.
(b) A fiduciary other than an authorizer may request an order of reorganization at any time while a preliminary order or an extension of a preliminary order is pending, so long as the fiduciary provides at least ten days' notice to the charter respondent, the authorizer, and the commissioner. The fiduciary shall specifically state in the notice the powers of reorganization he or she is requesting and the reasons justifying the request. Notwithstanding the limitations placed on the powers of a fiduciary acting under a temporary or preliminary order, as set forth in subsection (6) of this section, the powers of reorganization shall only include one or more of the following powers:
To fill one or more board vacancies, notwithstanding the charter respondent's organicdocuments;
To remove one or more board directors or officers, notwithstanding the charter respondent's organic documents; or
To make specific, stated modifications to the charter respondent's organic documents, notwithstanding the process for amendment or restatement otherwise prescribed in those documents.
The commissioner may issue an order of reorganization only after giving the authorizer and the charter respondent a reasonable opportunity to be heard, and then only if the commissioner finds that the risks created by the emergency to the charter respondent and the authorizer cannot be resolved by any less restrictive means. In any meeting held before issuing an order of reorganization, the commissioner may accept evidence and argument from the parties involved as he or she deems appropriate, but neither a formal adversarial hearing nor application of the rules of evidence shall be required.
An order of reorganization shall be valid for the balance of the term of any pendingpreliminary order or for sixty days, whichever is greater, and may be renewed for an additional thirty days upon good cause shown. An order of reorganization shall be valid for no more than ninety days.
The fiduciary shall submit appropriate financial information to the commissioner andthe director of public school finance within the department of education and provide copies to the charter respondent and authorizer. The charter respondent and authorizer may submit additional information to the director of public school finance. After receipt of all pertinent financial information, the director of public school finance shall make a written recommendation to the commissioner.
A temporary or preliminary order or an order for reorganization granted pursuant tothis section shall state the reasons for issuance; be specific in its terms; and describe in reasonable detail, without reference to the request or other documents, the act or acts authorized. An order granted pursuant to this section is binding only upon the charter school and its employees. An order appointing a fiduciary may specify or limit the fiduciary's powers and may direct the fiduciary to act only upon particular issues or only to exercise certain powers.
Expenses incurred by an authorizer in pursuing a proceeding pursuant to this sectionshall be borne by the authorizer, and expenses incurred by a charter respondent in defending any proceeding pursuant to this section shall be borne by the charter respondent. Expenses incurred by the department shall be borne equally by the authorizer and the charter respondent. Expenses incurred by a fiduciary shall be submitted to the charter respondent and commissioner for approval and, after the commissioner resolves any disputed charges, shall be borne by the charter respondent.
Notwithstanding any other provision of Colorado law, including but not limited tothe "Colorado Revised Nonprofit Corporation Act", articles 121 to 137 of title 7, C.R.S., or any provision of a charter contract to the contrary, the powers granted pursuant to this part 7 shall be effective and valid as a matter of law.
Nothing in this part 7 shall limit the authority of an authorizer to exercise any contractual rights, including any remedies, emergency or otherwise, for breach of a charter contract. A charter contract provision that purports to grant authority to an authorizer to exercise emergency powers as described in this part 7 shall be construed, if possible, to be consistent with this part 7. A provision construed to be inconsistent with this part 7 shall be deemed contrary to public policy, void, unenforceable, and of no legal effect. The burden shall be on the party asserting an inconsistency to demonstrate that such a provision is inconsistent with this part 7.
An order issued pursuant to this section shall be final and binding and not subject toappeal. A charter respondent may seek judicial review of an order issued pursuant to this section under rule 106 (a)(4) of the Colorado rules of civil procedure; except that a temporary order shall not be subject to judicial review. A charter respondent may file an action for judicial review in the district court for the city and county of Denver or the district court in the county in which the charter respondent is located.
An order issued pursuant to this section shall not be deemed to be an appointmentof a trustee or receiver under the terms of any financing of a charter school facility or other instrument.
The commissioner may fill any vacancy created by the death or inability of a fiduciary or, for good cause shown, may remove a fiduciary that is exercising powers pursuant to a preliminary order or order of reorganization and appoint a new fiduciary.
A meeting conducted by the commissioner pursuant to this section shall be open toall parties to the proceeding. An order of the commissioner issued pursuant to this section and all requests for orders, by any party, shall be considered public documents.
The state board is authorized to adopt rules, pursuant to the "State AdministrativeProcedure Act", article 4 of title 24, C.R.S., for the implementation of this section.
Source: L. 2010: Entire part added, (HB 10-1345), ch. 245, p. 1089, § 2, effective May 21.