BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1161 (Lowenthal)
Hearing Date: 05/03/2010 Amended: 04/20/2010
Consultant: Dan Troy Policy Vote: ED 7-0
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BILL SUMMARY: SB 1161 would delete the current statutory
definition of a material inaccuracy and authorize, rather than
require, the State Allocation Board (SAB) to prohibit a school
district from self-certifying certain project information due to
a determination that an apportionment of school construction
bonds was made based upon materially inaccurate information.
The bill would also delete the authority of the SAB to impose a
self-certification penalty where no funding apportionment or
fund release has been made.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Self-certifcation Minor impact Bond
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STAFF COMMENTS:
Current law requires the Office of Public School Construction
(OPSC) to notify the State Allocation Board (SAB) in the event a
district submits information that is materially inaccurate,
defined in statute as information found to have been "falsely
certified by school districts, architects or design
professionals."
If an apportionment or fund release has been made based upon a
material inaccuracy, the SAB is currently required to impose the
following penalties:
1) Require the school district to repay to the SAB an amount
proportionate to the additional funding received owing to
the material inaccuracy with interest, pursuant to a
maximum 5-year repayment schedule as approved by the SAB.
2) Prohibit the school district from self-certifying certain
project information for any subsequent applications for
project funding for a period of up to five years or until
full repayment is made.
3) Establish an alternative process for state or independent
certification of compliance that includes procedures for
payment by the school district of any increased costs
associated with the alternative certification process.
If a funding apportionment has occurred, but no fund release has
been made, the board is required to reduce the apportionment to
the district as necessary to reflect the actual nature of the
project and to disregard the inaccurate information or material.
In addition, the district is subject to the loss of
self-certification for a specified period of time.
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SB 1161 (Lowenthal)
This bill would delete the current statutory reference to a
"material inaccuracy" and instead authorize the SAB to prohibit
a school district from self-certifying project information for
any subsequent applications for project funding for a period of
up to five years following the date of the finding of the
material inaccuracy. The SAB would be required to set forth the
reasons for its decision at a regularly scheduled public
meeting. Further, the bill would delete the authority of the
State Allocation Board to impose a self-certification penalty if
no funding apportionment or fund release has been made.
Effectively, this bill provides the SAB with discretion in
determining whether an inaccuracy merits the loss of
self-certification penalty. Currently, any "false
certification" merits the penalty, even if the infraction was
minor. Further, the SAB would not have the option of imposing
the penalty when no funding apportionment or fund release has
occurred. As material inaccuracies determined to result in
apportionments or fund releases would still require repayment,
this bill is not likely to result in a significant fiscal
impact. Additionally, this bill may ease some workload at the
Office of Public School Construction, which would no longer have
to handle the certifications for districts penalized for
relatively minor infractions. Staff notes that since 1998,
only nine districts have been found to have submitted materially
inaccurate applications, so there does not appear to be
significant evidence that this is a frequent occurrence.