Bill Text: CA SB592 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

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-Amended.html

---

BILL NUMBER: SB 592	AMENDED
	BILL TEXT

	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, as amended, 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 instead would require that the security provisions
include whether title to project facilities will be held by the
school district in which the facility is to be physically located or
by another entity, as specified. 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, or the charter school holds
title to the project facilities, subject to specified conditions. The
bill would  require   authorize a charter
school to request  a school district  that 
 to transfer title to project   facilities to an entity
authorized by the bill, as specified, if the district  entered
into an agreement  to hold title to charter school project
facilities   ,  prior to January 1, 2010, 
upon the request of a charter school that has applied for funding, to
transfer title to the entity requested by the charter school, except
as specified   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. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.


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.
   (3) As a third priority, the school district in which the charter
school is physically located may notify the authority and take
possession of the facility 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) 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 titleholder 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.
   (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) The local governmental entity shall not exercise any control
over the operation of the charter school.
   (B) The local governmental entity shall comply with the uniform
terms and conditions set forth in Section 17078.57.
   (3) A request that the charter school be authorized to hold fee
simple title to the subject property, on which a lien shall be
recorded in favor of the board for the total amount of funds
allocated pursuant to this article. 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) Upon the request of a charter school that has applied for
funding pursuant to paragraph (2) of subdivision (b) of Section
17078.53, a school district that entered into an agreement to hold
title to charter school project facilities prior to January 1, 2010,
shall transfer title to the entity requested by the charter school
pursuant to this section. A school district is not subject to the
requirement in this subdivision under either of the following
circumstances:  
   (1) The school district has contributed a dollar amount that is no
less than 50 percent of the local matching share based on the
approved preliminary apportionment.  
   (2) The charter school facility project is located on a site
purchased in whole by the school district and ownership is retained
by the school district.  
   (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.