BILL ANALYSIS
AB 1476
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1476 (Cook) - As Amended: May 6, 2009
Policy Committee: Education
Vote:11-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes the State Allocation Board (SAB) to extend
the repayment period by an additional five years for school
districts found to be falsely certifying state school
construction funding eligibility or application, if both of the
following conditions apply:
1)The district has received a negative certification related to
its fiscal health from the county office of education (COE).
2)The SAB finds that the district has no capital facilities
funds available to use for repayment.
FISCAL EFFECT
Potential loss of state school construction savings, of
approximately $2.9 million, in the 2009-10 fiscal year, by
authorizing the SAB to extend the repayment schedule for school
districts who have found to be falsely certifying state school
construction funding eligibility or application.
COMMENTS
1)Purpose . Current law requires the SAB to impose penalties on
a school district, if any certified eligibility or funding
application related information is found to have been falsely
certified by the district, architects, or design
professionals. This occurrence is referred to as "material
inaccuracy," which is defined as any falsely certified
application that allowed a district an advantage in the
funding process (i.e., awarded funds it was not eligible to
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receive due to inaccuracies). Statute also requires the SAB
to approve a repayment schedule not to exceed five years.
The SAB determined that Val Verde Unified School District
(VVUSD) committed material inaccuracy when it failed to
disclose certificates of participation (COP), a form of lease
purchasing using property as collateral, when it received
financial hardship funding from the state school facilities
program. School districts are eligible for financial hardship
funding (up to 100% project funding), because they unable to
provide local matching funds, as determined by the SAB.
In September 2007, the SAB directed VVUSD to repay $11.8
million due to a material inaccuracy associated with the
failure to disclose COP funds. This repayment is required to
be made within a five year period. In response to this
decision, VVUSD filed a lawsuit against the SAB charging that
the state school facilities grant funding is inadequate and
therefore, the school district was justified in using COPs
funds to calculate the financial hardship costs. The courts
determined that the lawsuit was unjustified.
The author states that VVUSD made an initial payment of $3
million to the SAB in March 2008. However, the school
district is unable to make its next scheduled repayment of
$2.9 million, which was due in March of this year. According
to the author, VVUSD "cannot make the current repayment
schedule due to a convergence of fiscal factors that have had
a severe impact on the district's budget for the foreseeable
future. The school district board recently self-certified a
'negative' 2009-10 budget, based upon state budget criteria
that require such a certification if a district is unable to
meet its budget obligations over a three-year budget cycle."
This bill authorizes the SAB to extend the current repayment
period by an additional five years for school districts who
have been found to commit material inaccuracy.
2)VVUSD , located in Riverside County, enrolls approximately
19,547 pupils in 21 schools. According to the State
Department of Education, the VVUSD received $112.4 million
GF/98 in revenue limit funding (general purpose) in 2007-08.
This equates to approximately $5,943 per average daily
attendance.
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Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081