BILL ANALYSIS
AB 264
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Date of Hearing: May 21, 2003
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 264 (Mullin) - As Amended: May 8, 2003
Policy Committee:
EducationVote:11-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes a school district to deposit up to 25% of
the proceeds of the sale of surplus school real property,
excluding any interest earned, into the school district general
fund and to use those proceeds for any purpose of the school
district, if specified criteria are met. Specifically, the bill:
1)Specifies that in order to utilize the prescribed authority a
school district must have an enrollment of fewer than 11,000
pupils and have experienced declining enrollment for each
school year from 1999-2000 through 2002-03, inclusive. The
identified proceeds must be from the sale of school district
real property that occurred between July 1, 1997 and June 30,
2000.
2)Specifies that school districts that deposit proceeds into
their general fund pursuant to this measure are not
disqualified from participating in the School Facilities
Program (SFP) or deferred maintenance program.
3)Requires the State Allocation Board (SAB) to reduce an
apportionment of hardship assistance awarded to a school
district by an amount equal to the amount of any proceeds from
the sale of surplus property used for operating expenses for
up to five years following the expenditure.
4)Specifies the provisions related to use of proceeds from the
sale of surplus district property shall remain in effect until
January 1, 2005
FISCAL EFFECT
AB 264
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To the extend a school district meets the specified criteria and
can still maintain eligibility for new construction,
modernization and deferred maintenance funding, the bill could
result in unknown but significant school bond pressure likely in
the tens of millions, since current law generally requires
surplus property proceeds to be used for school capital outlay.
COMMENTS
1)Rationale . According to the author, "California faces an
unprecedented fiscal crisis. 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."
2)Current law :
a) 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.
b) Authorizes the use of proceeds from a lease of a school
district property with an option to purchase to be
deposited into a restricted fund for the routine repair of
district facilities for up to a five-year period.
c) Authorizes 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.
Analysis Prepared by : Daniel Alvarez / APPR. / (916) 319-2081