BILL NUMBER: AB 2560	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 17, 2010
	AMENDED IN SENATE  JUNE 15, 2010
	AMENDED IN ASSEMBLY  APRIL 14, 2010

INTRODUCED BY   Assembly Member Brownley
   (Coauthor: Senator Hancock)

                        FEBRUARY 19, 2010

   An act to add Section 12001.6 to the Education Code, relating to
education finance, and declaring the urgency thereof, to take effect
immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2560, as amended, Brownley. Education finance: federal tax
credit bond volume cap.
   Existing law assigns specified amounts of the state's 2009 federal
tax credit bond volume cap to the State Department of Education and
the California School Finance Authority, to be assigned and
distributed to school districts, county offices of education, and
charter schools, as specified.
   This bill would authorize the department to assign and distribute
the state's 2010 federal tax credit bond volume cap for qualified
school construction bonds to or for the benefit of school districts
and county offices of education and would authorize the 
authority   California School Finance Authority  to
assign and distribute the state's 2010 federal tax credit bond
volume cap for qualified school construction bonds to or for the
benefit of charter schools, or to be further assigned and distributed
to one or more issuers in the state for the benefit of charter
schools, as determined by the authority.  The bill would allow a
charter school to apply for the federal qualified school construction
bond volume cap if it meets specified criteria. 
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) In 2009, the United States Congress passed and the President
signed into law the American Recovery and Reinvestment Act of 2009
(Public Law 111-5) in order to provide funding and other economic
stimulus to foster economic recovery among the states.
   (b) The federal tax credit bond volume cap for qualified school
construction bonds is included in the federal American Recovery and
Reinvestment Act of 2009 and can be used to lower the cost of
financing the construction, rehabilitation, or repair of a public
school facility or for the acquisition of land where a school will be
built.
   (c) On March 17, 2010, the United States Department of the
Treasury released the second allocation authority of eleven billion
dollars ($11,000,000,000) in federal tax credit bond volume cap for
the issuance of qualified school construction bonds, of which six
billion six hundred million dollars ($6,600,000,000) will be
allocated directly to the states and four billion four hundred
million dollars ($4,400,000,000) will be allocated to 103 large,
local educational agencies based upon the enrollment of pupils who
qualify for the federal free or reduced price meal program.
   (d) In order to allocate the seven hundred twenty million
fifty-eight thousand dollars ($720,058,000) in federal tax credit
bond volume cap for qualified school construction bonds provided to
California in 2010, this act is necessary to provide the authority to
the department and the California School Finance Authority to make
distributions to local educational agencies and eligible charter
schools.
  SEC. 2.  Section 12001.6 is added to the Education Code, to read:
   12001.6.  (a) The Legislature hereby finds and declares that the
federal tax credit bond volume cap for qualified school construction
bonds designated to California by the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5), together with Internal
Revenue Service Notice 2010-17 issued pursuant thereto, does not
constitute federal moneys, federal funds, or funds of any kind for
any purpose under this code.
   (b) The department is authorized to assign and distribute the
state's 2010 federal tax credit bond volume cap for qualified school
construction bonds to or for the benefit of school districts and
county offices of education in the state.
   (c) There is hereby assigned to the department six hundred
fifty-one million six hundred fifty-two thousand dollars
($651,652,000) of the state's 2010 federal tax credit bond volume cap
for qualified school construction bonds.
   (1) A school district or county office of education may apply for
the federal tax credit bond volume cap for qualified school
construction bonds if it meets all of the following eligibility
criteria: 
   (A) The project for which the federal qualified school
construction bond authorization may be applied received approval from
the Division of the State Architect before the application was
submitted.  
   (B) 
    (A)  The project is funded by local  voter
approved   voter-approved  bonds issued by the
school district. A county office of education and a school district
with an enrollment of 2,500 or less may use other forms of financing
with the submission of a resolution adopted by the county board of
education or governing board of the school district authorizing the
issuance of the financing. 
   (C) 
    (B)  The governing board of the school district or
county board of education has adopted a resolution committing the
district or county office to  meet or exceed  
consider  the criteria of the Collaborative for High Performance
Schools or the criteria on sustainable school design, construction,
and operation of the Leadership in Energy and Environmental Design
 and commits the district or county office to ensure that
every   when developing and approving all subsequent
 new school, new building, and major modernization 
project meets those criteria   projects  . 

   (2) A school district or county office of education that received
a 2009 federal tax credit bond volume cap for qualified school
construction bonds is not eligible to apply.  
   (2) A school district or county office of education that received
a 2009 allocation but did not make any issuance may apply for 2010
federal tax credit bond volume cap for qualified school construction
bonds nine months after the effective date of this section. 
   (3) A school district or county office of education that received
a 2009 or 2010 federal tax credit bond volume cap for qualified
school construction bond allocation from the United States Department
of the Treasury is not eligible to apply.
   (4) Five business days after the enactment of this legislation,
the department shall post the application form on its Internet Web
site.
   (A) An application must be submitted via certified mail.
   (B) An application  may not be postmarked until 20
  shall not be postmarked until 30  business days
after the enactment of this legislation.
   (C) An application shall include the total number of enrolled
pupils who qualify for the federal free and reduced priced meal
program and the total overall pupil enrollment for the 2008-09 school
year.
   (5) An application not meeting the conditions set forth in
paragraphs (1) and (4) shall be returned to the applicant.
   (6) Applications meeting the conditions set forth in paragraphs
(1) and (4) shall be accepted on a first-come-first-served basis by
date of postmark. If this program is oversubscribed, order of
allocation shall be established using the following criteria:
   (A) First, earliest date of postmark. 
   (B) Second, the project for which the federal qualified school
construction bond authorization will be applied received approval
from the Division of the State Architect before the application was
submitted.  
   (B) Second, 
    (C)     Third,    the greater
percentage of pupils who qualify for the federal free and reduced
priced meals program and are enrolled in the applying school district
or county office of education in the 2008-09 school year. The
department shall certify the number of pupils who qualify and the
overall enrollment and calculate the percentage to the nearest
one-hundredth of 1 percent.
   (7) The department shall authorize the 2010 federal tax credit
bond volume cap for qualified school construction bonds no sooner
than December 1, 2010.
   (8) The department shall maintain a waiting list of eligible
school districts and county offices of education that did not receive
an allocation in the order established pursuant to paragraph (6).
   (9) An applicant may not apply for more than twenty-five million
dollars ($25,000,000) of 2010 federal tax credit bond volume cap for
qualified school construction bonds.
   (10) A school district or county office of education applying for
2010 federal tax credit bond volume cap for qualified school
construction bonds authorization shall certify in its application
that it will fulfill all of the federal qualified school construction
bond program requirements  , including both of the following
requirements:  
   (A) Within six months of the date of issuance, the school district
or county office of education shall enter into a contract or
contracts for use of an amount of bond proceeds equal to 10 percent
of the authorization. 
    (B)     Within three years of the date of
issuance, the school district or county office of education shall
spend 100 percent of the bond proceeds for a qualified purpose 
.
   (11) Fifteen days after bond issuance, the school district or
county office of education shall submit to the department a copy of
the appropriate federal Internal Revenue Service Form, Information
Return for Tax-Exempt Bonds, as confirmation of issuance.
   (12) Thirty days after the completion of the expenditure the
recipient shall submit a completion report to the department. The
completion report must be certified by the bond counsel of the school
district or county office of education.
   (13) If any or all of the federal qualified school construction
bond authorizations to a school district or county office of
education are not issued within six months from the date of
authorization, any or all unused federal qualified school
construction bond authorizations shall revert to the department. No
extensions shall be provided.
   (A) The department shall reallocate any remaining federal
qualified school construction bond allocation to school districts or
county offices of education that were eligible and applied for the
authorization but did not receive an allocation.
   (B) Reverted 2010 federal tax credit bond volume cap for qualified
school construction bonds shall be allocated to school districts or
county offices of education pursuant to the order of priority
established by paragraph (6).
   (C) The department shall allocate reverted federal qualified
school construction bond authorizations as they are available and
until all are issued.
   (d) The California School Finance Authority, established pursuant
to Section 17172, is authorized to assign and distribute the state's
2010 federal tax credit bond volume cap for qualified school
construction bonds to or for the benefit of charter schools, or to be
further assigned and distributed to one or more issuers in the state
for the benefit of charter schools, as determined by the authority.
   (1) There is hereby assigned to the California School Finance
Authority, established pursuant to Section 17172, sixty-eight million
four hundred six thousand dollars ($68,406,000) of the state's 2010
federal tax credit bond volume cap for qualified school construction
bonds, to be issued for the benefit of charter schools, or to be
further assigned and distributed to one or more issuers in the state
for the benefit of charter schools, as the authority shall determine.

   (2) The parameters specified in "Borrowing Authority Parameters
and Application," dated February 10, 2010, as developed by the
California School Finance Authority and referenced in Resolution
10-04 of the authority, shall apply to all applications submitted to
the California School Finance Authority for the state's 2010 federal
tax credit bond volume cap for qualified school construction bonds.
If an applicant uses any 2010 federal tax credit bond volume cap in
conjunction with a bond that will serve as a local match for purposes
of the Charter School Facilities Program established by Section
17078.52, the applicant, in addition to the requirements of this
section, shall comply with all of the requirements of the Charter
School Facilities Program.  
   (2) A charter school may apply for the federal qualified school
construction bond volume cap if it meets all of the following
criteria:  
   (A) The charter school is operated as, or is operated by, a
nonprofit entity.  
   (B) The charter school has an approved charter in place that is
current at the time of application and continuously through the date
of bond issuance.  
   (C) The chartering authority certifies that the charter school is
in good standing and is in compliance with the terms of its charter.
 
   (D) The charter school provides the level of classroom-based
instruction specified in paragraph (1) of subdivision (e) of Section
47612.5.  
   (E) The applicant has completed at least three full school years
of instructional operation as a charter school as of the end of the
previous school year.  
   (3) Five business days after the effective date of this section,
the California School Finance Authority shall post the application
form and fee schedule on its Internet Web site.  
   (4) An application shall not be postmarked until 30 business days
after the effective date of this section.  
   (5) Following a review of all applications and a preliminary award
of borrowing authority, the California School Finance Authority
shall ask applicants to provide additional information as necessary
for the issuance of the bonds.  
   (6) Applications that meet the conditions set forth in paragraph
(2) shall be considered by the California School Finance Authority on
a first-come-first-served basis by date of postmark. If the program
is oversubscribed, staff shall present a priority list to the
authority pursuant to paragraph (7).  
   (7) In the event that the program is oversubscribed, priority
shall be assigned first to those charter schools that are best able
to demonstrate to the California School Finance Authority, in its
sole discretion, that they will be capable of accessing the capital
markets or be privately placed with an investor. The order of
allocation shall be established using the following criteria: 

   (A) Applicants who are able to obtain credit enhancement for a
qualified school construction bond financing, including a bank letter
of credit, who contribute substantial equity to a project, or who
are otherwise able to obtain investment-grade credit ratings shall
receive priority over other applicants.  
   (B) In the event that multiple applicants satisfy the criteria
described in subparagraph (A), priority shall be assigned to
applications with the earliest postmark date. An application that is
hand delivered and does not have a postmark date will be ranked based
on the time the application is received by the California School
Finance Authority.  
   (8) Applicants shall not apply for more than twenty-five million
dollars ($25,000,000) of qualified school construction bond
authorization per project.  
   (9) Subsequent application cycles may be considered if borrowing
authority for qualified school construction bonds remains available
after the initial application period.  
   (10) Subject to the sole discretion of the California School
Finance Authority, any authorization to borrow qualified school
construction bond proceeds is contingent on the issuance of the
qualified school construction bonds by December 31, 2011, after which
time the authorization expires and the authority may allocate the
authorization to another qualified applicant.  
   (11) The California School Finance Authority shall allocate
reverted federal qualified school construction bond authorization as
it becomes available and until all of the authorization is issued.
 
   (12) If an applicant uses any federal tax credit bond volume cap
in conjunction with a bond that will serve as a local match for
purposes of the Charter School Facilities Program established by
Section 17078.52, the applicant, in addition to the requirements of
this section, shall comply with all of the requirements of the
Charter School Facilities Program. 
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to access federal stimulus tax credits at the earliest
possible opportunity, it is necessary that this act take effect
immediately.