BILL ANALYSIS
AB 264
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Date of Hearing: April 30, 2003
ASSEMBLY COMMITTEE ON EDUCATION
Jackie Goldberg, Chair
AB 264 (Mullin) - As Amended: April 10, 2003
SUBJECT : Surplus school property
SUMMARY : Allows a school district to deposit up to 25% of the
proceeds of the sale of surplus school real property into the
school district general fund. Specifically, this bill :
1)Allows a school district to deposit up to 25% of the proceeds
of the sale of surplus school real property, excluding any
interest earned thereon, into the school district general fund
and to use those proceeds for any purpose of the school
district if all of the following criteria are met:
a) The school district has an enrollment of fewer than
11,000 pupils;
b) The school district has experienced declining enrollment
for each school year from 1999-2000 to 2002-03, inclusive;
and,
c) The proceeds are from the sale of school district real
property that occurred between July 1, 1997, and June 30,
2000, inclusive.
2)Specifies that the deposit of proceeds in the school district
general fund as defined does not disqualify the school
district from eligibility for state funding under the Leroy F.
Greene School Facilities Act.
3)Defines 'sale' for the purposes of this measure to include,
but is not limited to, a lease of surplus property with an
option to purchase.
4)Specifies that the provisions of this measure shall remain in
effect only until January 1, 2005, and as of that date is
repealed, unless a later enacted statute that is enacted
before January 1, 2005, deletes or extends that date.
EXISTING LAW :
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1)Requires that funds from the sale of surplus school real
property be used for capital outlay or for costs of
maintenance of prescribed school district property.
2)Allows that proceeds from a lease of a school district
property with an option to purchase may be deposited into a
restricted fund for the routine repair of district facilities
for up to a five-year period.
3)Permits a school district to deposit proceeds from a sale of
school district property or lease of a school district
property with an option to buy in its general fund for use for
any general fund purpose if the school district governing
board and the State Allocation Board (SAB) have determined
that the district has no anticipated need for additional sites
or building construction for the five-year period following
the sale or lease; and that the district has no major deferred
maintenance requirements.
4)Requires, under the Leroy Green Act, SAB to allocate to
applicant school districts prescribed per-unhoused-pupil state
funding for construction and modernization of school
facilities.
5)Allows school districts to establish a Deferred Maintenance
Fund (DMF) for the purpose of specified major repair or
replacement of school facilities. SAB is required to
apportion, utilizing a specified formula, matching funds to
school districts for DMF.
6)Defines major maintenance, for the purpose of certifying that
a school district has publicly approved an ongoing and major
maintenance plan as required for state school facility project
funding, as all actions necessary to keep roofing, siding,
painting, floor and window coverings, fixtures, cabinets,
heating and cooling systems, landscaping, fences, and other
items designated by the governing board of the district in
good repair.
FISCAL EFFECT : Unknown.
COMMENTS :
Related current legislation . AB 378 (Steinberg) requires school
districts and county offices of education, upon receiving
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specified school facility project funds, to agree to deposit
into a restricted maintenance of facilities account each fiscal
year for 20 years an amount equal to 3% of the total
expenditures by a school district from its general fund for that
fiscal year, not to include expenditures from restricted
accounts, as specified.
Should the state fund school facility needs for a school
district that chooses to spend local school facility funds for
other purposes ? Current law requires that funds from the sale
of surplus school real property be used for capital outlay or
for costs of maintenance of school district property. This bill
allows certain school districts to spend funds from the sale or
lease of school surplus property for general fund purposes while
allowing those same school districts to continue to be eligible
for state funds for facility needs.
The Committee may wish to consider whether school districts that
spend facility funds for purposes other than facilities should
be given additional facility funds from the state.
Arguments in support . According to the author, "California faces
an unprecedented fiscal crisis. In a time of crisis, it is
necessary for the state and local agencies to examine the
priorities that are essential to the core of each agency's
function. Public schools maintaining kindergarten and grades 1
to 12, inclusive, must be given relief from restrictive and
costly state mandates so that school districts will have the
operational and fiscal flexibility to manage their budgets
within the context of the current budget crisis.
"The provisions in the current law make the assumption that if a
school district utilizes funds derived from the sale of school
property for general fund purposes, they do not have any
deferred maintenance needs and therefore should not receive any
State Deferred Maintenance funds for the next five years. This
assumption is not true, as many schools have deferred
maintenance needs that extend beyond that which is immediately
required, but nonetheless still are critical needs. This bill
acknowledges that schools will continue to have deferred
maintenance needs, but in times of extraordinary budget
constraints, school districts should be allowed to utilize a
portion of available funds to prevent cuts to programs without
loss of any future State Deferred Maintenance funds."
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REGISTERED SUPPORT / OPPOSITION :
Support
Approximately 900 individual letters
Opposition
None on file
Analysis Prepared by : Mavonne Garrity / ED. / (916) 319-2087