BILL ANALYSIS Ó
SB 739
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Date of Hearing: June 17, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
SB
739 (Pavley) - As Amended May 6, 2015
SENATE VOTE: 23-11
SUBJECT: Charter schools: sited outside boundaries:
prohibition
SUMMARY: Prohibits the governing board of a school district to
authorize new charter schools to locate outside the boundaries
of the school district if the school district is assigned a
negative budget certification.
EXISTING LAW:
1)Specifies that a charter school that is unable to locate
within the jurisdiction of the chartering school district may
establish one site outside the boundaries of the authorizer,
but within the county in which that school district is
located, if the school district within the jurisdiction of
which the charter school proposes to operate is notified in
advance of the charter petition approval, the county
superintendent of schools and the Superintendent are notified
of the location of the charter school before it commences
operations, and either of the following circumstances exists:
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a) The school has attempted to locate a single site or
facility to house the entire program, but a site or
facility is unavailable in the area in which the school
chooses to locate.
b) The site is needed for temporary use during a
construction or expansion project. (Education Code 47605
and 47605.1)
2)Requires the governing board of each school district to
certify, in writing, within 45 days after the close of the
period being reported, whether the school district is able to
meet its financial obligations for the remainder of the fiscal
year and, based on current forecasts, for the subsequent
fiscal year. These certifications shall be based upon the
governing board of the school district's assessment, on the
basis of standards and criteria for fiscal stability adopted
by the state board, of the school district budget, as revised
to reflect current information regarding the adopted State
Budget, school district property tax revenues, and ending
balances for the preceding fiscal year. The certifications
shall be classified as positive, qualified, or negative, as
prescribed by the Superintendent for purposes of determining
subsequent actions by the Superintendent, the Controller, or
the County Superintendent of Schools. A negative
certification shall be assigned to any school district that,
based upon current projections, will be unable to meet its
financial obligations for the remainder of the fiscal year or
the subsequent fiscal year. A qualified certification shall be
assigned to any school district that, based upon current
projections, may not meet its financial obligations for the
current fiscal year or two subsequent fiscal years. A positive
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certification shall be assigned to any school district that,
based upon current projections, will meet its financial
obligations for the current fiscal year and subsequent two
fiscal years. (Education Code 42131)
FISCAL EFFECT: According to the Senate Appropriations Committee,
the prohibition of a school district assigned a negative
certification to authorize new charter schools outside of the
school district's jurisdiction, is not expected to result in a
significant increase in state costs.
COMMENTS: Background on Charters: According to the California
Department of Education (CDE), in the 2013-14 academic year
there were 1,125 schools charter schools in California, with an
enrollment of over 514,000 students. Some charter schools are
new, while others are conversions from existing public schools.
Charter schools are part of the state's public education system
and are funded by public dollars. A charter school is usually
created or organized by a group of teachers, parents and
community leaders, a community-based organization, or an
education management organization. Charter schools are
authorized by school district boards, county boards of education
or the state board of education. A charter school is generally
exempt from most laws governing school districts, except where
specifically noted in the law. Specific goals and operating
procedures for the charter school are detailed in an agreement
(or "charter") between the sponsoring board and charter
organizers.
This bill prohibits a school district from authorizing new
charter schools outside their district boundaries if the school
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district receives a negative budget certification. Two
arguments are presented as rationale for this bill. First, that
a school district with a negative budget certification is
experiencing an urgent budget crisis and is ill equipped to take
on the oversight responsibilities of new charter schools,
especially those located a distance away. And second, that
there could be a perverse incentive for school districts with a
negative budget certification to approve new charter schools
located outside their district boundaries in order to increase
district revenues through oversight fees.
According to the author, California law gives school districts
and county offices of education the authority to authorize and
oversee charter schools operating within their boundaries. In
most cases, charter schools are located within the boundaries of
the local educational agency that authorized the school.
However, current law allows a charter school to locate a
facility in a school district other than the one it is
authorized by under a very limited number of circumstances.
Unfortunately, there have been a number of high-profile cases in
which cash-strapped school districts have authorized charter
schools outside of the district in order to generate revenue
through "oversight fees." In the Santa Clarita area, the
Acton-Agua Dulce Unified School District authorized a charter
school that was subsequently located in another school district
that had previously denied the school. In return, the school
then paid a 3.5% oversight fee to the school district. Though
the situation in Santa Clarita has brought more attention to
this statewide problem, other school districts, including Los
Angeles Unified, Culver City Unified, Beverly Hills Unified,
Pomona Unified, and San Diego Unified have all had charter
schools located within their boundaries by other school
districts. SB 739 restricts school districts in negative
certification (at risk of not meeting financial obligations)
from locating charter schools outside of their district
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boundaries. This will remove incentives for school districts to
use charter authorization as a means to generate revenues.
How Common is Negative Budget Certification?: According to data
from the Interim Reports filed with the California Department of
Education, there were four districts in 2014-15, eight districts
in 2013-14, and eight districts in 2012-13 that received a
negative certification. This means that the school district will
be unable to meet its financial obligations for the remainder of
the fiscal year or the subsequent fiscal year. The district
mentioned above, Acton-Aqua Dulce Unified School District was
assigned a negative budget certification in 2013-14.
Arguments in Support: The California School Employees
Association supports the bill and states, "Districts with
negative certification are likely to be ill equipped to provide
the necessary oversight and support for charters that they
authorize beyond the boundaries of the school district. This
bill will also have a positive consequence of disincentivizing
the authorization of charters outside of district boundaries,
solely to collect a portion of the charter school's average
daily attendance funding."
Arguments in Opposition: The California Charter Schools
Association Advocates opposes the bill and states, "This bill
grows out of a situation in the Santa Clarity Valley region of
the author's district in which a school district (Acton-Aqua
Dulce Unified School District) was viewed as "out of control"
because it was authorizing too many charter schools, including
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one that sought to site a single school facility in a
neighboring school district under current law. At the time the
perceived offenses by Acton-Aqua Dulce occurred, the district
was in negative certification by the state. Curiously, the
author's solution to the situation with Action-Aqua Dulce is too
late because the district is no longer in negative
certification. So, SB 739 would have no impact on the charter
school authorizing activities of Acton-Agua Dulce."
Previous Legislation: SB 1263 (Pavley) from 2014, which was
vetoed by the Governor, would have authorized a charter school
to locate outside the jurisdiction of the chartering school
district with written approval from the school district within
the jurisdiction of which the charter school chooses to operate
and for purposes of construction, as specified; authorized
existing charter schools that are located outside the
jurisdiction of the chartering school district to continue
operation if they were approved prior to April 1, 2013, and are
in operation with students enrolled and attending before
September 15, 2014; and, prohibited a school district with a
negative certification from authorizing new charter schools
located outside of their jurisdiction. Governor's veto message:
This bill seeks to reverse the application of a limited
exemption in law that allows a charter school petitioner to
locate a single school site outside of its authorizing
school district, under specific circumstances. This bill
would instead require the charter school to first get
permission from the host district where it intends to
locate.
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Unfortunately, it appears that some districts and charter
schools have gone against the spirit of the law and the
exemption has instead become the rule. This has led to
litigation and strained relationships among districts and
charter schools.
While this bill attempts to solve a real problem, I am not
comfortable with the retroactive language that could force
existing charter schools to change locations.
I have assembled a team to examine this situation and come
back with solutions that minimize disruption to students
and parents.
AB 2954 (Liu) from 2006, which was vetoed by the Governor, would
have added "negative fiscal impact" as a reason for a school
district to deny a charter school petition and authorizes a
condition for approval of a petition as it relates to providing
free and reduced priced meals. Governor's veto message:
While I understand the plight of school districts faced
with fiscal challenges of declining enrollment and other
management issues, I cannot condone allowing them to deny
parents and students their rights to petition for the
establishment of a charter school. In essence, this bill
would grant school districts the authority to punish
charter petitioners because of problems caused by their own
fiscal management issues or their unwillingness to make
tough decisions, or both.
In addition, allowing school districts to require, as a
condition of approval, that the petition describe how the
charter school will provide free and reduced-priced meals
to eligible pupils would simply provide districts with
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another pretext on which to deny a charter. Charter
schools are generally exempt from most laws and regulations
governing school districts and they should continue to be
exempt from this one.
In sum, this bill runs counter to the intent of charter
schools, which is to provide parents and students with
other options within the public school system and to
stimulate competition that improves the quality not only of
charter schools, but of non-charter schools as well.
REGISTERED SUPPORT / OPPOSITION:
Support
American Federation of State, County and Municipal Employees
Association of California School Administrators
California School Employees Association
California Teachers Association
Castaic Union Elementary School District
Los Angeles Unified School District
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Newhall Elementary School District
Saugus Springs Union Elementary School District
School Employers Association of California
Sulphur Springs Union Elementary School District
William S. Hart Union High School District
Opposition
California Charter Schools Association Advocates
Analysis Prepared by:Chelsea Kelley / ED. / (916)
319-2087