BILL ANALYSIS �
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THIRD READING
Bill No: AB 308
Author: Hagman (R)
Amended: 6/26/13 in Senate
Vote: 21
SENATE EDUCATION COMMITTEE : 9-0, 6/19/13
AYES: Liu, Wyland, Block, Correa, Hancock, Hueso, Huff,
Monning, Torres
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/12/13
AYES: De Le�n, Gaines, Hill, Lara, Steinberg
NO VOTE RECORDED: Walters, Padilla
ASSEMBLY FLOOR : 74-0, 5/23/13 (Consent) - See last page for
vote
SUBJECT : School facilities: surplus property
SOURCE : Author
DIGEST : This bill authorizes the State Allocation Board (SAB)
to establish a program which requires the return of funding
received for purchase, construction, or modernization, under the
School Facilities Program (SFP), unless the property is sold for
specified purposes, or the proceeds are used for capital outlay
purposes.
ANALYSIS : Existing law establishes the SFP under which the
state provides general obligation bond funding for various
school construction projects.
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Existing law 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. Existing law requires that the
proceeds from the sale or lease of property be expended solely
for capital outlay purposes.
Existing law requires that funds derived from the sale of
surplus property be used for capital outlay or for costs of
maintenance of school district property that the governing board
determines will not recur 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. Existing law authorizes the
proceeds from the sale or lease with option to purchase to be
deposited 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,
including, but not limited to, salaries and other general
operating expenses.
Existing law authorizes, until January 1, 2014, 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.
Existing law requires the governing board of a school district
seeking to sell or lease surplus real property designed to
provide direct instruction or instructional support to first
offer that property to any charter school that has submitted a
written request to the school district and then to a contracting
agency to be used for child care and development services, any
city within which the land may be situated, any park or
recreation district, any regional park authority, or any county
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within which the land may be situated.
This bill:
1. Authorizes SAB to establish a program which requires a school
district, county office of education or a charter school to
return funding received under the SFP if it sells real
property purchased, modernized or constructed with those
funds if all the following conditions are met:
A. The property is not sold to a charter school, a
school district, a county office of education or an
agency that will use the property exclusively for the
delivery of child care and development services,
pursuant to existing provisions governing the sale of
surplus property.
B. The proceeds from the sale of the property are not
used for capital outlay.
C. The property was purchased, or improvements
constructed, within 10 years before the property is
sold.
2. Specifies that any funding received within 10 years prior to
the property being sold be returned.
3. Requires the return of a proportionate share of the funding
if a portion of the property is sold, as specified.
Comments
According to the author's office, while voters have approved
over $38 billion in school construction bonds since 1998, these
funds are nearing exhaustion, and it is uncertain whether a
statewide school construction bond will be placed on the ballot
in 2014. The author's office contends that it is an inefficient
use of state funds to allow a school district to build or
modernize a facility, sell that property, and then apply for
more state money to meet facility needs. This bill ensures that
money allocated by the State goes to the purpose funded, and
ensures that state funds are spent on capital improvements.
SFP . The SFP provides funding grants for school districts to
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acquire school sites, construct new school facilities, or
modernize existing school facilities. The two major funding
types available are "new construction" and "modernization". The
new construction grant provides funding on a 50/50 state and
local match basis. The modernization grant provides funding on
a 60/40 basis. Districts that are unable to provide some, or
all, of the local match requirement and are able to meet the
financial hardship provisions may be eligible for state funding
at a reduced match amount.
With the authorization of Proposition 1D in 2006, $7.3 billion
was made available for K-12 education facilities, with specific
amounts allocated for modernization, new construction, charter
schools, career technical education facilities, joint use
projects, severely overcrowded schoolsites and high performance
incentive grants to promote energy efficient design and
materials.
As of the May meeting of SAB, the Office of Public School
construction reports that about $350 million of bond authority
remains of the amount authorized in 2006. In addition, the May
agenda reflects that, as of April 30, the program has received
over $70 million in applications for new construction and
modernization projects beyond the bond authority list.
Prior Legislation
SB 70 (Senate Budget and Fiscal Review Committee, Chapter 7,
Statutes of 2011) extended the authority to use proceeds from
the sale of surplus school property for one-time general fund
purposes by two years, until January 1, 2014.
AB 2 (Evans, Chapter 2, Statutes of the 2009-10 Fourth
Extraordinary Session) authorized school districts to use the
proceeds from the sale of surplus school property for any
one-time general fund purposes until January 1, 2012.
SB 1415 (Scott, Chapter 810, Statutes of 2006) authorized the
use of proceeds from the sale of surplus school property for any
one-time expenditures and prohibited the use of these funds for
ongoing expenditures. In exchange, it prohibited the
participation of the district in the SFP for 10 years, with an
exception provided if after five years, the SAB made a
determination that the district demonstrated enrollment growth
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or a need for additional sites or construction which the
district could not have reasonably anticipated.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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.
SUPPORT : (Verified 8/13/13)
California Charter Schools Association Advocates
ASSEMBLY FLOOR : 74-0, 5/23/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell,
Gray, Hagman, Hall, Harkey, Roger Hern�ndez, Jones-Sawyer,
Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Wagner, Weber, Wieckowski, Wilk, Williams, Yamada, John
A. P�rez
NO VOTE RECORDED: Grove, Holden, Jones, Waldron, Vacancy,
Vacancy
PQ:d 8/14/13 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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