BILL ANALYSIS Ó
SB 739
Page 1
SENATE THIRD READING
SB
739 (Pavley)
As Amended August 25, 2016
Majority vote
SENATE VOTE: 23-11
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Education |6-0 |O'Donnell, Chávez, | |
| | |McCarty, Santiago, | |
| | |Thurmond, Weber | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |14-5 |Gonzalez, Bloom, |Bigelow, Gallagher, |
| | |Bonilla, Bonta, |Jones, Obernolte, |
| | |Calderon, Daly, |Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, Quirk, | |
| | |Santiago, Weber, Wood, | |
| | |Chu | |
| | | | |
| | | | |
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SB 739
Page 2
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:
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 Section
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
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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 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 Section 42131)
FISCAL EFFECT: According to the Assembly Appropriations
Committee, likely minor, if any, state costs associated
prohibiting school districts from authorizing a charter school
outside district boundaries. There are currently two school
districts with a negative budget certification for the 2015-16
fiscal year that could potentially be impacted by this bill.
The districts affected by this bill will change annually
depending on individual district financial health.
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
SB 739
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(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
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
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districts. This bill restricts school districts in negative
certification (at risk of not meeting financial obligations)
from locating charter schools outside of their district
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
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
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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."
Analysis Prepared by:
Chelsea Kelley / ED. / (916) 319-2087 FN:
0004913