BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 592|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 592
Author: Romero (D)
Amended: 6/9/09
Vote: 21
SENATE EDUCATION COMMITTEE : 9-0, 4/29/09
AYES: Romero, Huff, Alquist, Hancock, Liu, Maldonado,
Padilla, Simitian, Wyland
SENATE APPROPRIATIONS COMMITTEE : 10-0, 6/29/09
AYES: Kehoe, Cox, Corbett, Leno, Price, Runner, Walters,
Wolk, Wyland, Yee
NO VOTE RECORDED: Denham, Hancock, Oropeza
SUBJECT : Charter Schools Facilities Program
SOURCE : Author
DIGEST : This bill authorizes 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 also authorizes 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.
ANALYSIS : Current law establishes the School Facility
Program (SFP) under which the state provides general
obligation bond funding for various school new construction
CONTINUED
SB 592
Page
2
and modernization projects. In 2002, Proposition 47
authorized $11.4 billion in general obligation bonds.
Among other things, it created the Charter Schools
Facilities Program (CSFP) and provided $100 million in
funding for this purpose. In 2004, Proposition 55
authorized $10 billion in general obligation bonds and
provided an additional $300 million for the new
construction of facilities for charter schools. Most
recently, Proposition 1D made several changes and further
expanded the CSFP, providing an additional $500 million for
charter school facilities.
Current law requires that a school district hold title, in
trust, for the benefit of the state public school system,
to any project facilities constructed with state bond
funds. Current law also provides for the continued use of
a charter school facility by another charter, or the school
district if the charter school funded under the CSFP ceases
to use the facility for a charter school purpose. If the
district declines to take possession of the facility or it
is no longer needed for public school purposes, the
district is authorized to dispose of the facility in a
manner applicable to the disposal of surplus public school
sites.
This bill alters the CSFP, principally, by allowing
entities other than the school district to hold title to
the facility. The bill requires that prior to the release
of funds, the applicant school will provide one of the
following:
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
SB 592
Page
3
the total amount of funds allocated for the project.
This bill also authorizes 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 will 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
negotiations. This bill is intended to address some of
these concerns.
Comments
What is the problem ? In order to participate in the CSFP,
the California School Finance Authority (Authority)
requires three agreements: the Memorandum of Understanding
(MOU), which outlines the roles and responsibilities of all
parties involved in the CSFP project; the Funding
Agreement, which sets forth the repayment terms of the
local matching share amount (templates for these agreements
were adopted by the SAB in January 2007); and the Use
Agreement, which is negotiated and entered into by the
school district and charter school. As titleholders for
facilities constructed under the CSFP, school districts
must sign both the MOU and the Use Agreements. All three
agreements must be executed prior to any fund release.
Charter schools contend that the time involved in
negotiating the use Agreements is excessive, resulting in
delays in initiating projects or acquiring land. In
addition, charters have expressed concern that school
districts have placed "onerous" conditions upon them in
these agreements and have extracted unreasonable
concessions such as rights for parking, use of rights for
adult school programs or other non-charter programs, and
that they have been required to waive all rights to request
any other property from the district for the term of the
SB 592
Page
4
lease. This bill attempts to address this issue by
authorizing both local government entities and charter
schools to be eligible to hold title to the facilities.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, both the
Legislative Counsel and legal staff from the Department of
General Services believes the state should incur no
liability resulting from the purchase of a lien on a CSFP
charter school project; costs resulting from this bill
should be minimal. There may be some minor administrative
costs to adopt regulations and for review of required
documentation.
SUPPORT : (Verified 7/1/09)
Alliance for College-Ready Public Schools
Aspire Public Schools
California Charter Schools Association
Coalition for Adequate School Housing (if amended)
Department of General Services
Ed Voice
Green Dot Public Schools
Los Angeles Unified School District
Vaughn Next Century Learning Center
DLW:cm 7/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****