BILL NUMBER: AB 264	CHAPTERED  10/12/03

	CHAPTER  891
	FILED WITH SECRETARY OF STATE  OCTOBER 12, 2003
	APPROVED BY GOVERNOR  OCTOBER 12, 2003
	PASSED THE ASSEMBLY  SEPTEMBER 10, 2003
	PASSED THE SENATE  SEPTEMBER 9, 2003
	AMENDED IN SENATE  SEPTEMBER 8, 2003
	AMENDED IN ASSEMBLY  JUNE 2, 2003
	AMENDED IN ASSEMBLY  MAY 8, 2003
	AMENDED IN ASSEMBLY  APRIL 10, 2003

INTRODUCED BY   Assembly Member Mullin
   (Coauthor:  Senator Speier)

                        FEBRUARY 4, 2003

   An act to add Section 17462.7 to, and to add and repeal Section
17462.5 of, the Education Code, relating to public schools.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 264, Mullin.  Surplus school property:  use of proceeds.
   (1) Existing law requires that the funds from the sale of surplus
school real property be used for capital outlay or for costs of
maintenance of prescribed school district property.  Existing law
permits a school district to deposit proceeds from a lease of school
district property with an option to purchase in its general fund for
use for any general fund purpose if approved by the State Allocation
Board if certain conditions are met.
   This bill would, notwithstanding contrary provisions of law,
authorize a school district to deposit up to 25% of the proceeds of
the sale of surplus school real property into the school district
general fund for use for any one-time expenditure of the school
district, except for salaries and benefits, if prescribed conditions
are met, and would preclude that transfer from disqualifying the
school district for prescribed state facilities funding. The bill
would define "sale," for this purpose, to include a lease of surplus
property with an option to purchase and would require the State
Allocation Board to review, and authorize the State Allocation Board
to disapprove, the determination of the governing board of a school
district that property is surplus property when any of the proceeds
from the sale of that property are used for purposes other than
capital outlay or maintenance costs.
   This bill would repeal those provisions on January 1, 2005.
   (2) Existing law authorizes a school district to apply for
hardship state funding for the construction of school facilities
under specified circumstances.
   This bill would require the board to reduce an apportionment of
hardship assistance awarded to a school district by an amount equal
to the amount of any proceeds from the sale of surplus property used
for a one-time expenditure by the district for 5 years following that
expenditure.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 17462.5 is added to the Education Code, to
read:
   17462.5.  (a) Notwithstanding any other provision of law to the
contrary, including, but not limited to, Section 17462, a school
district may deposit an amount not to exceed 25 percent of the
proceeds of the sale of surplus school real property, excluding any
interest earned thereon, into the school district general fund and
may use those proceeds for any one-time expenditure of the school
district, except for salaries and benefits, if all of the following
criteria are met:
   (1) The school district has an enrollment of fewer than 11,000
pupils.
   (2) The school district has experienced declining enrollment for
each school year from 1999-2000 to 2002-03, inclusive.
   (3) The proceeds are from the sale of school district real
property that occurred between July 1, 1997, and June 30, 2000,
inclusive.
   (b) Deposit of proceeds in the school district general fund
pursuant to this section does not disqualify the school district from
eligibility for state funding under the Leroy F. Greene School
Facilities Act of 1998 (Chapter 12.5 (commencing with Section
17070.10)) or under Section 17584.
   (c) For the purposes of this section "sale" includes, but is not
limited to, a lease of surplus property with an option to purchase.
   (d) For purposes of this section, the State Allocation Board shall
review and may disapprove the determination of the governing board
of a school district that property is surplus property if any of the
proceeds from the sale of that property are used for purposes other
than capital outlay or maintenance costs.
   (e) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2005, deletes or extends that
date.
  SEC. 2.  Section 17462.7 is added to the Education Code, to read:
   17462.7.  The board shall reduce an apportionment of hardship
assistance awarded to a school district pursuant to Article 8
(commencing with Section 17075.10) by an amount equal to the amount
of any proceeds from the sale of surplus property used for a one-time
expenditure of the school district pursuant to Section 17462.5 for
five years following the expenditure.