BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
                                           264 (Mullin)
          Hearing Date:  8/28/03          Amended: 6/2/03        
          Consultant:  Bob Franzoia           Policy Vote: Ed  9-0
          ____________________________________________________________ 
          ___
          BILL SUMMARY: AB 264 would, notwithstanding contrary  
          provisions of law, do the following:
          - Authorize a school district meeting specified criteria to  
          deposit up to 25 percent of the proceeds of the sale of  
          surplus property into the school district general fund for  
          use for any one-time expenditure of the school district  
          including, but not limited to, the costs of temporary  
          employees, as specified.
          - Preclude that transfer from disqualifying the school  
          district from state school construction or deferred  
          maintenance funding.
          - Define "sale" to include a lease of surplus property with  
          an option to purchase.
          - Repeal the above provisions on 1/1/05.
          - Require the State Allocation Board 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 a one-time  
          expenditure by the district for five years following that  
          expenditure.
                              Fiscal Impact (in thousands)
           
          Major Provisions            2003-04             2004-05              
           2005-06            Fund  
          
          Increased school  Unknown, potentially multi-million dollarBond/
          construction/     cost pressure between 1/1/04 and 1/1/05General*
          modernization and
          deferred maintenance
          eligibility
                                                             
          * Counts toward meeting the Proposition 98 minimum funding guarantee  
          (deferred maintenance)
          
          STAFF COMMENTS: SUSPENSE FILE.

          Under the provisions of this bill, a school district must  
          meet the following criteria in order to be eligible to  
          redirect the proceeds from the sale of surplus property  
          into its general fund to be used for specified purposes:










          - Have enrollment of fewer than 11,000 students.
          - Have declining enrollment for each school year from  
          1999-00 to 2002-03.
          - Use proceeds from the sale of property that occurred  
          between 7/1/97 and 6/30/00.

          To the extent that a school district meets the specified  
          criteria and can still maintain eligibility for new  
          construction and modernization funding, the bill could  
          result in unknown, potentially multi-million dollar cost  
          pressure on school facilities bonds since current law  
          generally requires surplus property proceeds to be used for  
          school capital outlay.