BILL ANALYSIS                                                                                                                                                                                                    Ó






                         SENATE COMMITTEE ON EDUCATION
                                Carol Liu, Chair
                           2013-2014 Regular Session
                                        

          BILL NO:       AB 1664
          AUTHOR:        Hagman
          AMENDED:       April 22, 2014
          FISCAL COMM:   Yes            HEARING DATE:  June 18, 2014
          URGENCY:       No             CONSULTANT:Kathleen Chavira

           SUBJECT  :  School facilities sale or lease of real property.
          
           SUMMARY  

          This bill modifies the Naylor Act to authorize a school  
          district to offer open-space property to a school district,  
          county office of education or an agency that will use the  
          property for 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 purchased, constructed, modernized, or  
          made improvements on the property using state bond funds,  
          and makes other related and conforming changes. 

           BACKGROUND
           
          Current law establishes the School Facility Program (SFP)  
          under which the state provides general obligation bond  
          funding for various school construction projects. 

          Current law authorizes, until January 1, 2016, 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)

          Current law authorizes the State Allocation Board (SAB) to  
          establish a program that requires a school district, county  
          office of education, or charter school that sells real  
          property to return any state funds that were provided to  
          purchase the property or on which improvements were  
          constructed if the real property was purchased, or the  
          improvements were constructed or modernized on the real  






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          property within 10 years before the real property is sold,  
          and if the proceeds from the sale of the real property are  
          not sold to a charter school, school district, county  
          office of education or an agency that will use the property  
          exclusively for the delivery of child care and development  
          services.  (EC § 17462.3)

          Current law, 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)   Until, July 1, 2016, 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.  

          Current law requires that the cost not exceed the cost of  
          acquisition, adjusted by a cost of living factor, plus the  
          cost of any improvements made to open-space portion of the  
          property.  Under these provisions, the entity that  
          purchases or leases the property is required to maintain  
          the property for playground, playing field, or other  
          outdoor recreational and open-space uses. 
          (EC § 17485 - § 17500)

           ANALYSIS
           
           This bill:
           
          1)   Modifies the Naylor Act to authorize a school district  
               to offer open-space property to a school district,  
               county office of education or an agency that will use  
               the property for 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 purchased,  
               constructed, modernized, or made improvements on the  
               property using state bond funds.







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          2)   Continues to require, under the Naylor Act, that until  
               July 1, 2016, a school district first offer a school  
               site for sale or lease to a charter school that has  
               submitted a written request to the district to be  
               notified of surplus property offered for sale or  
               lease, and that at the time of the offer has  
               projections of at least 80 units of in-district  
               average daily attendance for the following fiscal  
               year.  

          3)   Makes a clarifying and conforming cross reference to  
               provisions regarding the return of state bond funds if  
               a county office of education, school district, or  
               charter school sells real property that was purchased,  
               constructed upon or modernized using state bond funds  
               within the prior 10 years.

           STAFF COMMENTS  

           1)   Need for the bill  .  According to the author, this bill  
               is intended to prevent school districts complying with  
               the Naylor Act from having to return state bond funds  
               pursuant to recently enacted legislation, AB 308  
               (Hagman, Chapter 496, Statutes of 2013).  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, under  
               provisions established by AB 308, to return the amount  
               received from state bond funds, if the property is  
               sold within 10 years after receipt of state bond  
               funds.  This bill would make conforming changes to  
               Naylor Act provisions within the Education Code to  
               authorize a school district to sell the property to  
               another local educational agency or a child care and  
               development agency, prior to offering the property to  
               the entities specified under the Naylor Act. With  
               these changes, the property could remain with an  
               educational institution and the school district would  
               not be required to return state bond funds.  

           2)   The Naylor Act  .  Current law, within the Government  
               and Education Codes, establishes the Naylor Act for  
               the purpose of preserving school playground, playing  







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               field, or other outdoor recreational purposes and open  
               space land by giving other public agencies the  
               opportunity to purchase or lease such property.   
               Within the Education Code, if a charter school has not  
               accepted an offer to purchase or lease the schoolsite,  
               the Naylor Act requires a school district, prior to  
               selling or leasing such property, to offer to sell or  
               lease the portion of the schoolsite used for school  
               playground, playing field, or other outdoor  
               recreational purposes to the following entities:  1)  
               any city; 2) any park or recreation district; 3) any  
               regional park authority; and 4) any county within  
               which the land may be situated.  
          (EC Section 17489). This bill would provide an exception to  
               these requirements if the property in question would  
               be subject to the return of state bonds funds under  
               the provisions of AB 308 (Hagman, Statutes of 2013).  

           3)   Is the bill necessary  ?  It has been argued and is  
               plausible that current law offers a number of  
               alternative lease or sale arrangements that can be  
               entered into, allowing school districts to be in  
               compliance with the provisions established by AB 308  
               (Hagman) without violating the provisions of the  
               Naylor Act. However, the provisions of the bill would  
               provide an additional incentive to ensure that the  
               open space properties purchased with education bond  
               funds would be maintained by educational entities, and  
               further ensure that state education bond funds are  
               used to meet school facility needs, rather than city  
               or county facility needs which may be unrelated to an  
               education purpose. 
                
            4)   Other conforming and clarifying changes  .  Until July  
               1, 2016, current law requires that school districts  
               first offer surplus property for sale or lease to a  
               charter school with at least 80 units of average daily  
               attendance.  
          (EC § 17457.5).  AB 308 (Hagman, Statutes of 2013)  
               established provisions that required the return of  
               state bond funds unless the real property in question  
               was sold to a charter school, school district, county  
               office of education, or an agency that would use the  
               property for delivery of child care and development  







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               services.  The provisions of AB 308, as enacted, did  
               not provide that current law, until July 2016, extends  
               priority for any surplus property to a charter school.  
                This bill clarifies that the provisions of AB 308,  
               consistent with current law, require that a school  
               district first offer surplus property for sale or  
               lease to a qualifying charter school. 
           SUPPORT  

          Riverside County Superintendent of Schools
          Riverside County School District Superintendents
          California Charter Schools Association Advocates


           OPPOSITION

           Coalition for Adequate School Housing