BILL ANALYSIS
AB 1022
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Date of Hearing: May 13, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1022 (Nava) - As Amended: April 29, 2009
Policy Committee: Education
Vote:10-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes the Ventura Unified School District (VUSD)
to deposit $10 million of the proceeds of the sale of surplus
real property, purchased entirely with local funds and sold
before January 1, 2005, into the GF of the school district.
This measure further authorizes VUSD to use the proceeds for any
one-time GF purpose. Specifically, this bill:
1)Requires the proceeds from the sale of the surplus property to
not exceed the difference between the purchase price of the
property and the proceeds of the sale, if the property was
originally purchased using a local general obligation bond or
local developer fees, as specified.
2)Requires the State Allocation Board (SAB) to reduce the amount
of hardship assistance funding awarded to VUSD, if it sells
its surplus property for a one-time GF purpose.
3)Declares VUSD ineligible for hardship funding under the State
School Deferred Maintenance Fund, if it if it sells its
surplus property for a one-time GF purpose.
4)Requires VUSD's governing board, before it sells the property,
to submit documents to the SAB certifying the following: (a)
the district has no major deferred-maintenance requirements
not covered by existing capital outlay resources and (b) the
sale of the surplus property does not violate any provisions
of a local bond act.
5)Requires VUSD, prior to selling the property, to submit an
expenditure plan of the proceeds of the sale to its governing
board, as specified.
AB 1022
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6)Sunsets the provisions of this measure on October 31, 2013.
FISCAL EFFECT
Potential state and local school bond cost pressure, likely in
the tens to hundreds of thousands of dollars, to offset the loss
of proceeds from the sale of surplus property, which are
primarily used for capital outlay purposes.
COMMENTS
1)Purpose . VUSD enrolled approximately 17,321 pupils in 31
schools in 2007-08. It received approximately $95.9 million in
revenue limit funding (general purpose), including $5,883 per
average daily attendance during this same period.
According to VUSD, "Existing law does not provide us the
flexibility to utilize this source of funds as our students
suffer from the recent devastating cutbacks to our budget.
[We] understand the importance of building and maintaining
excellent facilities in which to teach our children, [but]
this must not be at the expense of our primary mission. Our
primary mission is student achievement through programs and
the allocation of resources that actually increase student
achievement such as the resources low class size, academic and
social intervention, technology, summer school, music
programs, extra-curricular programs, and our recently hired
innovative teachers in our classrooms. In short, our
programmatic needs are far greater and more critical to our
students than our facility needs."
VUSD reports it bought and sold property to maximize its
return, which resulted in $30 million in proceeds from the
sale of surplus property that is separate from local and state
bond funds. This bill authorizes the district to deposit $10
million of the proceeds of the sale of surplus real property
to use for one-time GF purposes. This measure deletes this
authority in October 2013.
2)Existing law requires the sale of surplus property to be used
for capital outlay purposes. SB 1415 (Scott), Chapter 810,
Statutes of 2006, authorizes the proceeds from the sale of
surplus property to be deposited into the GF for one-time
expenditures and prohibits the use for on-going expenditures.
As a condition for using funds for a one-time GF purposes, a
district must demonstrate that it does not need additional
sites or need to construct schools for a 10-year period
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following the sale of the property. Likewise, the district
cannot apply for state school construction funds during the
10-year period, though statute authorizes the school district
to apply for funds after five years, if the SAB determines
that the district demonstrates enrollment growth or the
unanticipated need for additional schoolsites.
Prior to Chapter 810, statute also provides various districts
with the authority to sell surplus property purchased with
local funds to be used for one-time GF purposes. This
authority does not result in a ban from applying for state
bond funds for these districts. Also, statute limits the
authority to specific time periods and conditions.
Existing law also provides Oakland Unified School District and
Vallejo City Unified School District with the authority to
sell surplus property in order to repay state emergency loans.
3)Previous related legislation . SB 1447 (Yee), authorized the
San Bruno Park School District to expend up to $1.4 million of
the proceeds from the sale of an elementary school for any
one-time GF purpose and required the district to repay the
capital outlay account within 10 years. This measure was
vetoed in September 2008 with the following message:
"I do not agree with provisions in this bill that would allow
the San Bruno Park School District to continue to be eligible
for state school facility bond funds even after it sells off
property to meet its non-capital financial obligations.
However, I am willing to sign a bill that provides some
budgetary relief through the sale of excess property, as long
as it excludes the district from applying for additional bond
funds, and other conditions are met, as specified in prior
bills I have signed."
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081