BILL ANALYSIS �
AB 2279
Page 1
ASSEMBLY THIRD READING
AB 2279 (Swanson)
As Amended May 2, 2012
Majority vote
EDUCATION 6-4 APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|Brownley, Ammiano, |Ayes:|Fuentes, Harkey, |
| |Buchanan, Carter, Eng, | |Blumenfield, Bradford, |
| |Williams | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Norby, Grove, Halderman, | | |
| |Wagner | | |
| | | | |
-----------------------------------------------------------------
SUMMARY : Removes the requirement that a trustee appointed by
the Superintendent of Public Instruction (SPI) who works in a
school district that received an emergency loan serve until the
loan is repaid. Specifically, this bill :
1)Requires the trustee to serve for at least three years and
until the school district has adequate fiscal systems/controls
in place and the SPI determines the district's future
compliance with the fiscal plan is probable, as specified.
2)Authorizes the county superintendent of schools (CSS) to stay
or rescind an action of the governing board of the school
district that may affect the financial condition of the
district after the trustee's period of service and until the
emergency loan is repaid.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, for a school district with an emergency loan, this
bill will result in local school district general fund savings,
likely in excess of $150,000, per year by repealing the
requirement for a trustee to serve in the district until its
loan is repaid.
AB 2279
Page 2
COMMENTS : Existing law provides for emergency loans to school
districts that are unable to meet their current operating
expenses. Such loans are provided by legislation enacted at the
request of the district. Existing law requires districts that
request and agree to receive an emergency loan to agree to
statutory terms and conditions regarding repayment of the loan
and the steps to be taken to return the district to financial
solvency.
If a district receives an emergency loan of up to 200% of its
recommended budget reserve, then the Superintendent of Public
Instruction (SPI) is required to appoint a trustee to monitor
and review the operation of the district and who has the
authority to stay and rescind any action of the district
governing board. Existing law requires the trustee to serve
until the loan is repaid, the district has adequate fiscal
systems and controls in place, and the SPI determines that the
district's future compliance with its approved fiscal plan is
probable. In addition, existing law provides that-before the
district repays the loan-it shall select an auditor from a list
established by the SPI and State Controller to conduct an audit
of its fiscal systems. If the fiscal systems are deemed to be
inadequate, then the SPI may retain the trustee until the
deficiencies are corrected.
This bill changes the conditions that govern how long a trustee
shall serve by removing the requirement that the trustee serve
until the emergency loan is repaid. Instead, the trustee may be
removed after three years if the school district has adequate
fiscal systems/controls in place and the SPI determines the
district's future compliance with the fiscal plan is probable,
as specified. In addition, the bill authorizes the county
superintendent of schools (CSS) to stay or rescind an action of
the governing board of the school district that may affect the
financial condition of the district after the trustee's period
of service and until the emergency loan is repaid.
Reason for the bill: The term of an emergency loan is typically
20 years. Having a trustee in place for this length of time
undermines the community's engagement with its schools, because
the powers and authority of the locally elected governing board
is constrained. Over time, this can discourage qualified
members of the community from choosing to serve on the board,
leading to further disengagement, and making self-government
AB 2279
Page 3
more difficult when full authority returns to the board. A goal
of this bill, therefore, is to be able to remove the trustee and
return full authority to the local governing board sooner than
20 years.
Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087
FN: 0003696