BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 948
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          ASSEMBLY THIRD READING
          AB 948 (Olsen)
          As Amended  May 24, 2013
          Majority vote 

           EDUCATION           6-0         APPROPRIATIONS      17-0        
           
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          |Ayes:|Buchanan, Olsen, Campos,  |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Chávez, Nazarian,         |     |Bocanegra, Bradford, Ian  |
          |     |Williams                  |     |Calderon, Campos,         |
          |     |                          |     |Donnelly, Eggman, Gomez,  |
          |     |                          |     |Hall, Ammiano, Linder,    |
          |     |                          |     |Pan, Quirk, Wagner, Weber |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Expands eligibility and makes other changes to the  
          Charter School Facility Grant Program (CSFGP).  Specifically,  
           this bill  : 

          1)Specifies that in any year in which additional funds remain  
            after state and federal funds have been allocated to eligible  
            applicants, the California Department of Education (CDE) shall  
            expand eligibility by reducing the free and reduced-price  
            meals threshold one percentage point at a time, but in no case  
            below 60%, for charter schools that meet eligibility based on  
            the school's enrollment of pupils that are eligible for free  
            and reduced-price meals.  

          2)Deletes an obsolete provision requiring the CDE to submit a  
            report to the Legislature.

          3)Deletes the provision expressing the intent of the Legislature  
            that not less than $18 million annually be appropriated for  
            the grant program.

          4)Specifies that a charter school that receives CSFGP funds  
            shall be subject to audits conducted pursuant to the audit  
            guide.  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, there is likely to be a potential loss of General  
          Fund/Proposition 98 savings over the next two fiscal years,  
          likely between $9 million and $20 million.  There is also  








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          potential increased General Fund/Proposition 98 cost pressure,  
          likely in the hundreds and thousands to low millions, to  
          increase funding for the CSFGP.  

           COMMENTS  :  The CSFGP was established by SB 740 (O'Connell),  
          Chapter 892, Statutes of 2001, to provide charter schools  
          serving low-income areas with assistance in rent and lease  
          payments.  Eligible charter schools may receive up to $750 per  
          unit of average daily attendance (ADA), but may not receive more  
          than 75% of the school's annual rent or lease costs.  If the  
          program is oversubscribed, the funds would be distributed on a  
          pro-rata basis.   
           
          Eligibility is limited to:  

          1)A charter school physically located in the attendance area of  
            a public school with at least 70% of its students eligible for  
            free or reduced-price meals, and the school gives preference  
            in admissions to pupils who are currently enrolled in that  
            public elementary school and to pupils who reside in the  
            attendance area where the charter school is located; or,  

          2)A charter school in which 70% or more of its pupil enrollment  
            is eligible for free or reduced- price meals.  

          According to the CDE, 60% of the charter schools that received  
          funds in 2011-12 were eligible based on the charter school  
          meeting the 70% threshold, while 40% of the charter schools  
          funded were eligible based on the enrollment of the public  
          school in the attendance area.  Funds may be used for costs  
          associated with facilities rents and leases, but may also  
          include remodeling, deferred maintenance, initially installing  
          or extending service systems and other built-in equipment, and  
          improving sites.  

          The enacting legislation stated the Legislature's intent to  
          appropriate $10 million for the program for the 2001-02,  
          2002-03, and 2003-04 fiscal years (FY).  Funds for this program  
          have increased substantially over time, with the bulk of the  
          funding coming from the transfer of funds from the phase out of  
          the Year-Round Operational Grant Program.  SB 658 (Romero),  
          Chapter 271, Statutes of 2008, required all funds appropriated  
          for the Year-Round School Grant Program at the FY 2007-08 level,  
          which, at the time, was $97 million, to be transferred to the  








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          CSFGP at a rate of 20% each year.  The FY 2009-10 budget reduced  
          allocations to categorical programs, including this program.   
          The program received $92 million in FY 2012-13.  

          Up until FY 2010-11, the CSFGP was a reimbursement-based  
          program.  The FY 2010-11 budget contained language authorizing  
          charters to receive grants at the beginning of the fiscal year  
          based on prior year ADA and estimated costs.   

          This bill expands eligibility for charter schools that meet  
          eligibility based on their enrollment of pupils that are  
          eligible for the free and reduced-priced meal program by  
          lowering the 70% threshold by one percentage at a time, but not  
          lower than 60% of kids eligible for free and reduced-price  
          meals, if funds are available after all applicants that meet the  
          70% threshold are funded.  This bill also deletes obsolete  
          language and requires the CSFGP funds to be subject to audit  
          through the audit guide.    

          According to the CDE, grant requests have increased since the  
          program was changed to a grant program instead of a  
          reimbursement program.  In 2011-12, the CDE received 389 new  
          applications totaling $58 million in requests.  The 2012-13  
          budget allocated $92 million for this program.  

          The Governor's FY 2013-14 budget proposes to transfer the  
          administration of the program from the CDE to the California  
          School Finance Authority under the State Treasurer's office.   
          The Governor proposes to fund nonclassroom-base charter school  
          facilities, but only the portions that are used to provide  
          direct instruction and instructional support.  The Governor's  
          proposal also allows charter schools that receive district or  
          county office of education (COE) facilities to receive funds for  
          the portions of their facilities that are not existing district  
          or COE facilities or reasonably equivalent facilities received  
          from their chartering authority.  The Governor's proposal moves,  
          from October 1 to August 31 or no later than 30 days after  
          enactment of the Budget Act, by which grant funds must be  
          allocated to charter schools.  The Governor's proposal  
          incorporates the funds in the audit guide.    
           

          Analysis Prepared by  :    Sophia Kwong Kim / ED. / (916) 319-2087  









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