BILL ANALYSIS
AB 871
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Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON EDUCATION
Julia Brownley, Chair
AB 871 (Nestande) - As Introduced: February 26, 2009
SUBJECT : Year-Round School Grant Program
SUMMARY : Expands eligibility for the Year-Round School Grant
Program from the 2008-09 fiscal year (FY) funds to applications
received on or after August 1, 2008. Specifically, this bill :
1)Specifies that commencing with FY 2008-09, the Superintendent
of Public Instruction (SPI) shall not approve new year-round
school grants based on applications received on or after
August 1, 2008.
2)Provides the following for a school district that did not
receive a grant for FY 2007-08:
a) Be eligible for year-round education operational grant
funding for FY 2008-09 only as it read on the date of the
school district's application as submitted on or before
July 31, 2008, for FY 2008-09; and
b) Be exempt from the increase in school building capacity
required pursuant to Education Code section 17071.35.
c) Specifies that funding received by a school district
pursuant to this bill shall be deemed to be year-round
operational grant funding for FY 2008-09, irrespective of
the fiscal year in which the funding is received by the
school district.
EXISTING LAW :
1)Provides that a school district's ongoing eligibility for new
construction funding is determined by making calculations
related to certain factors, including, but not limited to,
enrollment projections, the number of students that may be
adequately housed in the existing school building capacity of
the district, and increases or decreases in enrollment
resulting from receipt of funding from the Year-Round School
Grant Program.
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2)Provides operational grant funding through the Year-Round
School Grant Program to districts that are on multitrack
year-round calendars if they choose to reduce some of their
eligibility for new school facilities when they apply to the
Office of Public School Construction for state school
construction funds. Provides that funds shall be prorated if
the amount requested exceeds appropriations available.
3)Exempts schools receiving year-round grants that have a
density of 200 or more pupils enrolled per acre that is
located in a school district with 40% of its pupils attending
multitrack year-round schools from losing eligibility.
4)Specifies that a school district that received a year-round
school grant in FY 2007-08 shall have its grant phased out
over four years through a reduction of 20% per year and
requires the funds reduced be transferred to the Charter
School Facility Grant Program.
5)Prohibits the SPI from approving new year-round school grants
commencing with FY 2008-09.
6)Exempts a school district that received a grant in FY 2007-08
from reduction in eligibility for new construction funds.
FISCAL EFFECT : Unknown
COMMENTS : Background . The Year-Round School Grant Program
provides assistance to school districts to maintain existing
multitrack year-round education (MTYRE) programs. A schoolsite
must exceed capacity by at least 5 % in order to be eligible for
an operational grant, used to offset costs associated with
increasing the number of students at a schoolsite. As a
condition for receipt of funds, school districts must forfeit an
equivalent amount of eligibility for state school construction
funding, the argument being that the increased capacity at a
schoolsite avert the need to build new seats for these students
at a new school. Schools with a density of 200 or more pupils
per acre and where 40% of a district's students attend MTYRE
schools are exempted from losing eligibility.
The number of districts applying for grant funds has declined in
the last few years, partly due to districts' reluctance to lose
their eligibility for school facility bond funds. In 2007-08,
four districts, Los Angeles Unified School District (LAUSD), Los
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Banos Unified School District, Modesto City Elementary School
District, and Rialto Unified School District, received a
prorated amount (77%) of their requests totaling $97 million in
grant funds.
In 2006-07, four of the five districts that received grant funds
lost eligibility for 5,934 students. The LAUSD was the only
district that was exempted from loss of eligibility. Districts
that are not exempted lose full eligibility even if they only
receive a prorated apportionment.
Phase out of Year-Round School Grant Program . SB 658 (Romero),
Chapter 271, Statutes of 2008, phases out the Year-Round School
Grant Program and transfers, over five years time, all the funds
in the program ($97 million) to the Charter School Facility
Program (CSFP), which provides charter schools with assistance
in rent and lease payments. The bill provides the four
districts that received funds in FY 2007-08 with funding for
four more years but reduces their funding levels each year by
20% until the program is phased out. The bill also prohibits
the SPI from approving new applications beginning with FY
2008-09. Finally, the bill exempts the four districts that
received grants in FY 2007-08 from losing eligibility for school
bond funds even if they no longer meet the requirements for
exemption from loss of eligibility.
Purpose . This bill will allow a school district that did not
receive grant funds in FY 2007-08 to be eligible for FY 2008-09
grant funds only if it had submitted an application by July 31,
2008. This bill also provides the same exemption from the loss
of eligibility as that provided to the four districts that
received funds in FY 2007-08. According to the California
Department of Education (CDE), an application from the Menifee
Union School District (MUSD) (Riverside County) was received on
July 16, 2008, requesting $4.1 million. This bill applies only
to MUSD.
According to MUSD, the district had adopted its FY 2008-09
budget in June 2008 anticipating submitting an application for
and receiving $2 million in Year-Round School Grant funds. Due
to the enactment of SB 658, the district was ineligible for
grant funds. The MUSD states, "The District is the only
district in the state affected by the late legislative action to
retroactively close the program. The legislation fairly
recognized the potential impact of four other districts
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currently in the program - protecting them with phase-out
language. But because Menifee was not in the program when the
bill was first drafted - the District was not afforded the same
current year budget protection. Menifee was the only district in
the state to be caught in this eleventh hour change repealing
the program after their application.
"Menifee is not asking to continue in the program beyond the
current year or even to be afforded the same gradual phase-down
provided to the other districts in the program. They are asking
for only half of the funding they were eligible for and to be
provided the funding for one year only. The district wants to
avoid a critical budget shortfall inadvertently caused by late
legislative action to retroactively limit a state funding source
after the district had met state deadlines for budget adoption."
The FY 2008-09 funds have already been allocated to the four
districts grandfathered by SB 658. It is unclear where the
funds for this bill will come from. The Year-Round School Grant
Program is a categorical program and was reduced by 15% (from
$77.4 million to $65.5 million) pursuant to the FY 2008-09
budget reductions. The four districts that received funds,
however, were not provided flexibility on how to use the funds.
MUSD indicates that it anticipates receiving funds from the FY
2009-10 budget, but would like to deem the receipt of funds for
the 2008-09 FY. For FY 2009-10, the allocation for the program
will drop to $46.6 million, after a 19.8% cut pursuant to the
budget bill on top of the 20% scheduled reduction pursuant to SB
658. The four districts protected by SB 658 will sustain
further reductions in order for MUSD to get funded.
Suggested amendment . MUSD states that it is seeking 50% ($2) of
the funds it requested in the application, but the bill says
that it is eligible for the amount on the application. If the
committee chooses to pass this bill, staff recommends the bill
be amended to reflect a 50% allocation.
Arguments in Support . Kenneth Young, Riverside County
Superintendent of Schools, states, "AB 871 would NOT require
additional state funding, but would use existing funds in the
state MTYRE operational grant program. The district is not
asking to continue in the program beyond the 2008-09 fiscal
year, or even participate in the gradual phase-down
legislatively provided to the other districts in the program.
They are only asking for half of the funding they are eligible
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for and for one year only. The district simply wants to avoid a
local budget shortfall that was inadvertently caused by late
legislative action that could have severe fiscal impacts on
classroom programs."
REGISTERED SUPPORT / OPPOSITION :
Support
Riverside County Superintendent of Schools
Opposition
None on file
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087