BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 308 (Hagman) - School Facilities: Surplus Property
Amended: June 26, 2013 Policy Vote: Education 9-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Jacqueline Wong-Hernandez
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 308 authorizes the State Allocation Board (SAB)
to establish a program to require the return of funding received
for purchase, construction, or modernization, under the School
Facilities Program (SFP), when that real property is sold in
specified circumstances.
Fiscal Impact:
SAB program: Minor costs to the SAB, if it elects to
establish the program authorized by this bill. The SAB has
indicated that it could absorb program the costs and
workload within its existing resources.
Revenue / Returned SFP funds: Unknown, potentially
significant revenue. Any revenue returned to the SAB as a
result of this program would be available to the SFP for
other projects.
Background: Existing law establishes the SFP, under which the
state provides general obligation bond funding for various
school construction projects.
Existing law further authorizes the governing board of any
school district to sell or lease, for a term not exceeding 99
years, any real property of the school district that is not or
will not be needed by the district for school classroom
buildings, subject to specified conditions. The proceeds from
the sale or lease of property are required to be expended solely
for capital outlay purposes. (EC Section 17455, 17456)
Funds derived from the sale of surplus property must be used for
capital outlay or for costs of maintenance of school district
property that the governing board determines will not recur
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within a five-year period. Existing law also authorizes proceeds
from a lease of a school district property with an option to
purchase to be deposited into a restricted fund for the routine
repair of district facilities for up to a five-year period.
School districts are also authorized to deposit the proceeds
from the sale or lease with option to purchase in the general
fund of the district if the governing board and the SAB have
determined that the district has no anticipated need for
additional sites or building construction for the ten-year
period following the sale or lease with option to purchase, and
the district has no major deferred maintenance requirements.
Proceeds from the sale or lease with option to purchase of
school district property shall be used for one-time
expenditures, and may not be used for ongoing expenditures. (EC
§ 17462)
Until January 1, 2014, current law authorizes a school district
to deposit the proceeds from the sale of surplus real property,
together with any personal property located on the property,
purchased entirely with local funds into the general fund of the
school district and authorizes the school district to use the
proceeds for any one-time general fund purpose. (EC § 17463.7)
Proposed Law: AB 308 authorizes the SAB to establish a program
to require a school district, county office of education (COE)
or a charter school to return funding received under the SFP if
it sells real property purchased, modernized or constructed with
those funds. This bill provides conditions for the program, and
exceptions from having to return state funds.
Staff Comments: The extent to which revenue is generated as a
result of this bill, will depend upon on the degree to which
real property held by school districts that received for
purchase, construction, or modernization of that real property
is being sold, (a) within 10 years of purchase, construction, or
modernization with SFP funds, (b) to an entity other than a
charter school, school district, COE or child care agency, and
(c) the proceeds are not used for capital outlay. It is not
known how common it is for school districts to sell real
property (and, in a way) that meets the reimbursement
specifications of this bill.
This bill is unlikely to result in any significant state costs,
and may result in significant one-time state savings. It
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authorizes the SAB to establish a program that the board
believes can be administered within existing resources, if the
SAB chooses to create it. That program, if established, would
allow the SAB to recoup SFP funds under certain specified
circumstances, which otherwise would be retained at the local
level.