BILL ANALYSIS Ó AB 1664 Page 1 ASSEMBLY THIRD READING AB 1664 (Hagman) As Amended April 22, 2014 Majority vote EDUCATION 7-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Buchanan, Olsen, Chávez, |Ayes:|Gatto, Bigelow, | | |Gonzalez, Nazarian, | |Bocanegra, Bradford, Ian | | |Weber, Williams | |Calderon, Campos, | | | | |Donnelly, Eggman, Gomez, | | | | |Holden, Jones, Linder, | | | | |Pan, Quirk, | | | | |Ridley-Thomas, Wagner, | | | | |Weber | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Authorizes a school district to offer to sell or lease property to another school district, a county office of education (COE), or a governmental agency that provides child care and development services, prior to selling or leasing a schoolsite to a city, park or recreation district, or any regional park authority, if a charter school has not accepted an offer to purchase or lease a schoolsite and if the schoolsite was purchased with or modernized with, or on which improvements were constructed that were funded with, any moneys from a state school facilities funding program (SFP). This bill also makes technical, conforming amendments. FISCAL EFFECT : According to the Assembly Appropriations Committee, negligible fiscal impact. COMMENTS : The construction and modernization of public kindergarten through grade 12 (K-12) facilities are funded by a combination of state and local general obligation (G.O.) bonds, local assessments, and developer's fees. Since the inception of the SFP in 1998, voters have approved $35.4 billion in state G.O. bonds for K-12 schools. The SFP provides 50% of eligible state education bond funds for the construction of new schools and 60% for the modernization of school facilities. Districts considered "financial hardship districts" receive up to 100% of eligible grant funds. The SFP also provides AB 1664 Page 2 funds to acquire schoolsites and supplemental funds for specified purposes, such as for meeting fire code, for multilevel construction, hazardous waste removal, and others. Existing law requires school districts to establish routine facilities accounts and deferred maintenance accounts, and requires proceeds from the sale of property to stay in capital facilities or maintenance funds to ensure that districts protect and maintain their facilities. School districts can also sell surplus property and use the funds for one-time general fund expenditures under specified conditions. When selling or leasing surplus property, school districts are required to first offer, until July 1, 2016, the property to a charter school with at least 80 units of average daily attendance. After charter schools, there are a number of separate provisions that specify priorities for selling or leasing real property, including offering the real property to an entity that will use the property for the delivery of child care and development services, park or recreational purposes, or offer the property for sale or lease at fair market value to specified entities, including state and local governments and agencies. Existing law, under Education Code Section 17489, commonly known as the "Naylor Act," requires a school district to offer any or all portion of property used for a school playground, playing field or other outdoor recreational purposes and open space, to the following entities in order of priority: 1)A charter school. 2)Any city within which the land is located. 3)Any park or recreation district within which the land is located. 4)Any regional park authority having jurisdiction within the area in which the land is located. 5)Any county within which the land may be situated. Existing law prohibits the cost from exceeding the cost of acquisition, adjusted by a cost of living factor, plus the cost of any improvements made to the open-space portion of the property. The entity that purchases or leases the property must maintain the property for playground, playing field, or other outdoor AB 1664 Page 3 recreational and open-space uses. This bill inserts in the Naylor Act the authority for a school district to offer open-space property to a school district, COE or a governmental agency that provides child care and development services, prior to offering the property to a city, park or recreation district, regional park authority or a county, if the school district had constructed, modernized, or made improvements on the property using state bond funds. According to the author's office, this bill is intended to prevent school districts complying with the Naylor Act from having to return state bond funds pursuant to legislation, AB 308 (Hagman), Chapter 496, Statutes of 2013, enacted last year. AB 308 authorizes the State Allocation Board, a 10 member board that allocates and administers the SFP and state bond funds, to establish a process whereby a school district, COE or a charter school that sells real property that was purchased with, modernized with, or on which improvements were constructed that were funded with, any state bond funds within 10 years before the property is sold, must return the portion received from the state, if the funds are not used for capital outlay purposes. Property sold to a charter school, a school district, a COE or an agency that will use the property for child care and development services is exempted from the requirement to return funds to the state. According to the author, a school district complying with the Naylor Act by selling open-space property to a city, county, or park authority would be required to return the amount received from state bond funds, if the property is sold within 10 years after receipt of state bond funds. By authorizing school districts to sell the property to another local educational agency or a governmental agency that provides child care and development services prior to offering the property to the entities specified under the Naylor Act, the property would remain with an educational institution and the school district would not be required to return state bond funds. If the property is sold or leased to one of the entities prescribed in the bill, the entities would be required to maintain the property as open space, consistent with the Naylor Act. Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087 AB 1664 Page 4 FN: 0003728