BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
592 (Romero)
Hearing Date: 06/29/2009 Amended: 06/09/2009
Consultant: Dan Troy Policy Vote: ED 9-0
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BILL SUMMARY: SB 592, an urgency measure, would authorize a
local government entity, including a county board of education,
a city or a county, and authorizes a charter school to hold
title to a charter school facility constructed with state bond
funds. The bill would also authorize a charter school to
request a district currently holding title to such a facility to
transfer title to the charter school or other specified entity
upon mutual agreement.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Administrative costs Minor costs for regulations and
review Bond
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STAFF COMMENTS: SUSPENSE FILE.
The state provides general obligation bond funding for various
school new construction and modernization projects through the
School Facility Program (SFP). In addition to authorizing over
$11 billion in general obligation school facilities bonds,
Proposition 47 of 2002 authorized established the Charter
Schools Facilities Program (CSFP) and provided $100 million in
funding for this purpose. Subsequent ballot initiatives,
Proposition 55 (2004) and Proposition 1D (2006) provided an
additional $800 million for the CSFP.
Under the CSFP, only school districts may hold title, in trust,
for the benefit of the state public school system, to school
facilities constructed with state general obligation bond funds.
Currently, if a charter school housed in a facility constructed
through the CSFP fails to have its petition renewed or the
petition is revoked, the facility may be used by another charter
school or by the school district. If the facility is no longer
needed for public school purposes it may be disposed of by the
district in the manner of other surplus property.
This bill would alter the CSFP, principally, by allowing
entities other than the school district to hold title to the
facility. The bill would require that prior to the release of
funds, the applicant school would provide one of the following:
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SB 592 (Romero)
1. Documentary evidence that the school district holds
title to the project facilities in trust for the benefit of
the public school system.
2. Documentary evidence that a local government entity,
including a county office of education, a city and/or a
county, holds title to the project facilities in trust for
the benefit of the public school system, as specified.
3. A request that the charter school be authorized to hold
fee simple title to the property, on which a lien shall be
recorded in favor of the State Allocation Board for the
total amount of funds allocated for the project.
The bill would also authorize charter schools to request a
school district to transfer title to the charter school or other
authorized entity if the district entered into an agreement to
hold title to the facility prior to January 1, 2010. The
transfer would be subject to terms and conditions mutually
agreed upon by the district and the charter school.
Currently, prior to the release of funds, among other
requirements, a school district and a charter school must
negotiate a use agreement. Some districts are reluctant to sign
the use agreement due to liability concerns. Also, some charter
schools contend that districts place onerous conditions on the
school as part of the use agreement negotiation. This bill is
intended to address some of these concerns.
As both Legislative Counsel and legal staff from the Department
of General Services believe the state should incur no liability
resulting from the purchase of a lien on a CSFP charter school
project, costs resulting form this bill should be minimal. There
may be some minor administrative costs to adopt regulations and
for review of required documentation.