Bill Text: CA SB592 | 2009-2010 | Regular Session | Chaptered
Bill Title: Charter Schools Facilities Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State. Chapter 192, Statutes of 2009. [SB592 Detail]
Download: California-2009-SB592-Chaptered.html
BILL NUMBER: SB 592 CHAPTERED
BILL TEXT
CHAPTER 192
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE SEPTEMBER 8, 2009
PASSED THE ASSEMBLY SEPTEMBER 2, 2009
AMENDED IN ASSEMBLY AUGUST 24, 2009
AMENDED IN SENATE JUNE 9, 2009
AMENDED IN SENATE MAY 6, 2009
AMENDED IN SENATE APRIL 16, 2009
INTRODUCED BY Senator Romero
FEBRUARY 27, 2009
An act to amend Sections 17078.57 and 17078.62 of, and to add
Section 17078.63 to, the Education Code, relating to school
facilities, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 592, Romero. Charter Schools Facilities Program.
Existing law establishes the Charter Schools Facilities Program to
provide funding to qualifying entities for the purpose of
establishing school facilities for charter school pupils. Existing
law requires the California School Finance Authority, in consultation
with the State Allocation Board, to adopt regulations establishing
uniform terms and conditions that would apply equally to funding for
charter school facilities projects, including security provisions
that include the requirement that title to project facilities be held
by the school district in which the facility is to be physically
located, in trust, for the benefit of the state public school system.
This bill, in addition, would authorize a local governmental
entity, as specified, or a charter school to hold title to charter
school project facilities. The bill would require applicants, prior
to the release of funds for site acquisition or new construction
final apportionments, to provide documentary evidence that the school
district in which the facility is to be physically located, a local
governmental entity, as specified, or the charter school holds title
to the project facilities, subject to specified conditions. The bill
would authorize a charter school to request a school district to
transfer title to project facilities to an entity authorized by the
bill, as specified, if the district entered into an agreement, prior
to January 1, 2010, to hold title to the project facilities. The bill
would authorize a school district that receives such a request to
transfer the title to the entity designated in the request pursuant
to terms and conditions mutually agreed upon by the district and the
charter school. The bill also would make conforming changes.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17078.57 of the Education Code is amended to
read:
17078.57. (a) The authority, in consultation with the board,
shall adopt regulations establishing uniform terms and conditions
that shall apply equally to all projects for funding in accordance
with Section 17078.58, including, but not limited to, all of the
following:
(1) The process for determining the manner in which the applicant
will pay its local matching share, including the method for
determining lease payments to be made in lieu of the local matching
share. The regulations shall comply with all of the following
criteria:
(A) The payment process set forth in Section 17199.4 may be used.
(B) The payment process shall permit lump-sum local matching
payments and shall permit establishment of a schedule for lease
payments to be made in lieu of the local matching share.
(C) The lease payment schedule shall be calculated by amortizing
one-half of the total approved project costs, minus lump-sum
payments, over the entire payment period as set forth in Section
17078.58.
(D) The payment schedule for payments in lieu of the local
matching funds pursuant to this section shall be based upon payment,
within a reasonable period of time not to exceed a 30-year period, of
one-half of the total eligible project costs, and shall be
calculated in a manner that is designed to result in full payment of
that portion, together with interest thereon at a rate set by the
authority. The interest rate shall be set using the lower of the
following:
(i) The rate paid on moneys in the Pooled Money Investment
Account as of the date of disbursement of the funding.
(ii) A rate equal to 50 percent of the interest rate paid by the
state on the most recent sale of state general obligation bonds, and
the interest rate shall be computed according to the true interest
cost method.
(E) Notwithstanding subparagraph (D), the authority shall not set
the interest rate on a loan at a rate lower than 2 percent. Program
participants that have locked in an interest rate before January 1,
2009, may reset their payment schedule based on the interest rate set
pursuant to subparagraph (D) as of January 1, 2009. Program
participants executing an agreement on and after January 1, 2009,
shall have their interest rate set at the time the funding agreement
is executed and shall not renegotiate interest rates without prior
approval of the authority.
(2) The method for determining whether a charter school is
financially sound. In the case of a charter school chartered by a
school district that is located outside of the school district that
chartered it, the method developed by the authority shall include,
but shall not be limited to, a site visit to the school facility
currently being used by the charter school during hours when pupils
are present and instruction is being provided.
(3) (A) Security provisions, including, but not limited to,
whether title to project facilities shall be held by the school
district in which the facility is to be physically located, in trust,
for the benefit of the state public school system, or by another
entity as authorized pursuant to Section 17078.63.
(B) The authority shall adopt a mechanism whereby a person or
entity who provides a substantial contribution that is applied to the
costs of the project in excess of the state share and the local
matching share may be granted a security interest to be satisfied
from the proceeds, if any, realized when the property is ultimately
disposed of as set forth in paragraph (5) of subdivision (b) of
Section 17078.62.
(4) The method for integrating funding pursuant to this article
with the general procedures of the authority pursuant to subdivision
(i) of Section 17180 for otherwise funding projects eligible for
funding under this chapter, if appropriate.
(b) The authority may adopt, amend, or repeal rules and
regulations pursuant to this chapter as emergency regulations. The
adoption, amendment, or repeal of these regulations is conclusively
presumed to be necessary for the immediate preservation of the public
peace, health, safety, or general welfare within the meaning of
Section 11346.1 of the Government Code.
SEC. 2. Section 17078.62 of the Education Code is amended to read:
17078.62. (a) As a first priority, the existing charter school
shall be permitted to continue to use the facility until it is no
longer needed by the charter school for charter school purposes.
(b) If the charter school occupying a facility funded pursuant to
this article ceases to utilize the facility for a charter school
purpose, all of the following apply:
(1) If the charter school is no longer using the facility because
the school district in which the charter school is located has
revoked or declined to renew the charter, the school district, as a
necessary component of the first priority established in subdivision
(a), may not immediately occupy the facility, but shall allow a
reasonable time, not to exceed six months, for completion of the
review process contemplated in Section 47607 or 47607.5.
(2) As a second priority, any qualifying successor charter school
shall be permitted to meet its facility needs by occupying the
facility on equal terms as the prior charter school occupant,
including, but not limited to, assumption of fee simple title to the
facility, as described in paragraph (3) of subdivision (a) of Section
17078.63.
(3) As a third priority, the school district in which the charter
school is physically located may notify the authority and take
possession and take title to the facility, if the title is not
already held by the district, and make the facility available for
continued use as a public school facility.
(4) If the school district in which the charter school is
physically located elects to take possession of a facility pursuant
to paragraph (3), it shall pay the balance of the unpaid local
matching share or demonstrate that it is willing and able to continue
to make the lease payments in lieu of the local matching share on
the same terms. However, the payments shall be reduced or eliminated,
as appropriate, if the school district complies with all of the
following:
(A) It demonstrates that it would have been eligible for hardship
funding under Article 8 (commencing with Section 17075.10) at the
time that the application for funding the facility under this article
was originally submitted.
(B) It certifies to the board that it will utilize the facilities
for public school purposes for a period of at least five years from
the date that it occupies the facility.
(5) (A) If the school district declines to take possession
pursuant to paragraph (3), or if the facility is subsequently no
longer needed for public school purposes, the school district shall
dispose of the facilities in a manner otherwise applicable to the
disposal of surplus public schoolsites. Any unpaid local matching
share shall be paid from the net proceeds, if any, of the disposition
and shall be deposited into the respective 2002, 2004, or 2006
Charter School Facilities Account. To the extent that funds remain
from the proceeds of the disposition after repayment of the local
matching share, any security interest granted to a person or entity
pursuant to subparagraph (B) of paragraph (3) of subdivision (a) of
Section 17078.57 shall be satisfied. Funds remaining from the
proceeds after any security interest has been satisfied shall be paid
to the school district in which the facility is located to be used
for capital improvements in the school district.
(B) If title to the facility is held by a charter school or a
local governmental entity other than the school district, and the
school district declines to dispose of the facility, the board shall
dispose of the facility in accordance with the provisions that would
otherwise apply to the disposal of surplus school property by the
school district, including, but not limited to, Chapter 4 (commencing
with Section 17385) of Part 10.5. The proceeds of the disposition
shall be distributed in accordance with subparagraph (A).
(6) If the lease payments in lieu of the local matching share are
fully paid, the school district shall continue to hold title to the
facility, in trust, for the benefit of the state public school
system. The school district shall permit continued use of the
facility for charter school purposes as long as the facility is
needed for those purposes.
SEC. 3. Section 17078.63 is added to the Education Code, to read:
17078.63. (a) Prior to the release of funds for an application
submitted pursuant to paragraph (2) of subdivision (b) of Section
17078.53 for site acquisition or new construction final
apportionments, applicants shall provide one of the following:
(1) Documentary evidence that the school district in which the
facility is to be physically located holds title to the project
facilities in trust for the benefit of the state public school
system.
(2) Documentary evidence that a local governmental entity,
including, but not limited to, a county board of education, a city, a
county, or a city and county, holds title to the project facilities
in trust for the benefit of the state public school system, subject
to both of the following conditions:
(A) Consistent with the prohibition in Section 6 of Article IX of
the California Constitution regarding governance of public schools, a
city, county, city and county, or other local governmental entity
not included within the public school system that holds title
pursuant to this paragraph shall not exercise any control over the
operation of the charter school.
(B) The following shall be recorded in the chain of title for the
property:
(i) A restrictive covenant specifying that the facility shall be
used only for public school purposes as authorized in the California
Constitution and statute.
(ii) A remainder interest to the school district in which the
facility is physically located or, if the school district disclaims
the interest to the facility, to the board. The remainder interest
shall be triggered when the facility is no longer needed for charter
school purposes and shall then be subject to paragraphs (2) to (6),
inclusive, of subdivision (b) of Section 17078.62.
(3) (A) A request that the charter school be authorized to hold
fee simple title to the subject property in trust for the benefit of
the state public school system, on which a lien shall be recorded in
favor of the board for the total amount of funds allocated pursuant
to this article, including any loan received in lieu of a local
matching share pursuant to Section 17078.57. The charter school shall
include with the request a statement outlining the reasons why
ownership of the project facilities is not vested with an entity set
forth in paragraph (1) or (2). Prior to releasing any project funds,
the board shall make findings that the applicant has submitted all of
the information required by this paragraph.
(B) The following shall be recorded in the chain of title for the
property:
(i) A restrictive covenant specifying that the facility shall be
used only for public school purposes as authorized in the California
Constitution and statute.
(ii) A remainder interest to the school district in which the
facility is physically located or, if the school district disclaims
the interest to the facility, to the board. The remainder interest
shall be triggered when the facility is no longer needed for charter
school purposes and shall then be subject to paragraphs (2) to (6),
inclusive, of subdivision (b) of Section 17078.62.
(b) A charter school may request a school district to transfer
title to project facilities to an entity authorized by paragraph (2)
or (3) of subdivision (a) if the school district entered into an
agreement, prior to January 1, 2010, to hold title to those
facilities. A school district that receives a request pursuant to
this subdivision may transfer the title to the entity designated in
the request pursuant to terms and conditions mutually agreed upon by
the district and the charter school.
(c) The board may adopt regulations to implement this section.
SEC. 4. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to expedite the construction of charter school facilities
by facilitating the allocation of state general obligation bond
proceeds authorized by the voters to be used for purposes of the
Charter Schools Facilities Program at the earliest possible time, it
is necessary that this act take effect immediately.
