BILL ANALYSIS                                                                                                                                                                                                    Ó



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        ASSEMBLY THIRD READING
        AB 1664 (Hagman)
        As Amended  April 22, 2014
        Majority vote 

         EDUCATION           7-0         APPROPRIATIONS      17-0        
         
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        |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  








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        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  








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        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 









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