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SB-765 School facilities: surplus real property: charter schools.(2017-2018)

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Date Published: 07/04/2017 04:00 AM
SB765:v95#DOCUMENT

Amended  IN  Assembly  July 03, 2017
Amended  IN  Senate  May 26, 2017
Amended  IN  Senate  May 03, 2017
Amended  IN  Senate  March 29, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 765


Introduced by Senator Wiener
(Coauthors: Assembly Members Berman and Friedman)

February 17, 2017


An act to amend Sections 17457.5 and 17516 of, and to add Section 17463.5 to, the Education Code, relating to school facilities.


LEGISLATIVE COUNSEL'S DIGEST


SB 765, as amended, Wiener. School facilities: surplus real property: charter schools.
(1) Existing law, the Charter Schools Act of 1992, provides for the establishment and operation of charter schools and provides that a charter school may operate as, or be operated by, a nonprofit public benefit corporation. Under existing law, a charter school that is unable to locate within the jurisdiction of the chartering school district may, under specified circumstances, establish a site outside of the boundaries of the school district but within the county in which the school district is located.

(1)Existing

Existing law requires law required, until July 1, 2016, the governing board of a school district seeking to sell or lease real property designed to provide direct instruction or instructional support that the governing board deems deemed to be surplus property to first provide a written offer to sell or lease that property to any charter school that has had submitted a written request to the school district to be notified of surplus real property offered by the school district for sale or lease, as specified. Existing law provides that a school district selling or leasing surplus real property is not required to offer that property to a charter school pursuant to this provision on or after July 1, 2016. That law required a charter school to use the real property sold or leased exclusively to provide direct instruction or instructional support.
Existing law, the Teacher Housing Act of 2016, authorizes a school district to establish and implement programs, as provided, that address the housing needs of teachers and school district employees who face challenges in securing affordable housing.
This bill would exempt from reinstate the requirement that expired on July 1, 2016, to first provide a written offer to the above-specified charter schools but would exempt from the requirement the governing board of a school district seeking to sell or lease real property it deems to be surplus property intended to be used in accordance with the Teacher Housing Act of 2016, and 2016. The bill would limit the requirement to provide these written offers to only those charter schools that are operating as, or operated by, a nonprofit public benefit corporation and that are not located outside of the boundaries of the chartering school district pursuant to the provision applicable to a charter school unable to locate within the chartering school district. The bill would remove from that requirement eliminate the specification that the real property deemed to be surplus real property must be designed to provide direct instruction or instructional support. The bill would also extend the operation of that requirement indefinitely. support to be subject to the requirement to offer the property to eligible charter schools. The bill would require a charter school to complete school facilities construction, if any, and begin using the real property for direct instruction or instructional support within 5 years of the date the real property is made available to the charter school.
Existing law required, until July 1, 2016, that the price at which real property was sold to a charter school not exceed the school district’s cost of acquisition, adjusted as specified, and provided that in no event shall the price be less than 25% of the fair market value of the real property or less than the amount necessary to retire the share of local bonded indebtedness plus the amount of the original cost of the approved state aid applications on the property.
This bill would reinstate this requirement and would increase the price at which a school district may sell real property to a charter school to no less than 75% of the fair market value of the real property for a school district that has requested an emergency apportionment or submitted a negative certification to the State Department of Education in the past 2 years and to no less than 50% of the fair market value of the real property for a school district that has submitted a qualified certification to the department in the past 2 years.
Existing law required, until July 1, 2016, a charter school selling real property obtained pursuant to the these provisions to use the proceeds only for capital outlay, maintenance, and other facility-related costs.
This bill would reinstate this requirement, revised to specify that the proceeds shall be used only for capital outlay, maintenance, and other school facility-related costs.
(2) Existing law authorizes the proceeds from the sale or lease with option to purchase of surplus real property owned by a school district to be deposited into the general fund of the school district, to be used for one-time expenditures, if the governing board of the school district and the State Allocation Board have determined that the school district has no anticipated need for additional schoolsite or building construction for the 10-year period following the sale or lease with option to purchase, and the school district has no major deferred maintenance requirements.
This bill would authorize a school district to deposit the proceeds from the lease or sale of surplus real property, together with any personal property located on the property, leased or purchased by a charter school, into the general fund of the school district. The bill would also authorize the school district to use the proceeds, as defined, for any one-time general fund purpose, as specified. The bill would make these authorizations contingent upon the governing board of the school district and the State Allocation Board having determined that the school district has no anticipated need for schoolsite construction, building construction, or major deferred maintenance projects for a 10-year period following the sale or lease of the surplus real property. The bill would provide that, notwithstanding such a determination by the State Allocation Board, a school district may apply for new construction or modernization funding if specified conditions are satisfied.
(3) Existing law authorizes a school district to enter into leases and agreements relating to real property and buildings to be used jointly by the school district and any private person, firm, local governmental agency, or corporation, as specified. Existing law also requires that, before the governing board of a school district enters into a lease or agreement pursuant to this provision, it shall own a site upon which the building to be used by the school district and the private person, firm, local governmental agency, or corporation may be constructed, as specified.
This bill would additionally require that, before the governing board of a school district enters into a lease or agreement pursuant to this provision, it shall first offer to lease or sell the real property or buildings to a charter school, as specified, except when the property is intended to be used in accordance with the Teacher Housing Act of 2016. The bill would exempt from this requirement a lease or agreement that would be used solely to provide instructional programs that benefit pupils.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17457.5 of the Education Code is amended to read:

17457.5.
 (a) Notwithstanding Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5 of the Government Code, except when the real property is intended to be used in accordance with Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code, the governing board of a school district seeking to sell or lease real property it deems to be surplus property shall first offer that property for sale or lease to any a charter school operating as, or operated by, a nonprofit public benefit corporation pursuant to subdivision (a) of Section 47604 that, at the time of the offer, has projections of at least 80 units of in-district average daily attendance for the following fiscal year, is not located outside of the boundaries of the chartering school district pursuant to subdivision (d) of Section 47605.1, and has submitted a written request to the school district to be notified of surplus property offered for sale or lease by the school district, pursuant to the following conditions:
(1) The real property sold or leased shall be used by the charter school exclusively to provide direct instruction or instructional support. A charter school shall complete school facilities construction, if any, and begin using the real property for direct instruction or instructional support within five years of the date the real property is made available to the charter school pursuant to the sale or lease.
(2) If the charter school purchased real property pursuant to this section and fails to comply with paragraph (1), or otherwise desires to dispose of the real property, all of the following shall apply:
(A) The charter school shall immediately offer that real property for sale to the school district that previously owned the property. The charter school shall comply, in that regard, with all requirements under this section that would otherwise apply to a school district.
(B) If the school district does not desire to purchase that real property from the charter school, the school district shall furnish a list of charter schools that have requested notification of surplus property pursuant to subdivision (a). The charter school that owns the real property shall offer that real property for sale to the charter schools on this list and comply with all requirements under this section that would otherwise apply to a school district. In the event the charter school selling property receives more than one offer, the charter school may determine to which charter school it will sell the property. The charter school purchasing the real property shall comply with all provisions of this section.
(C) If that real property remains unsold pursuant to subparagraph (A) or (B), the charter school selling the real property shall offer that property for sale pursuant to Article 5 (commencing with Section 17485). The charter school shall comply with all requirements under that article that would otherwise apply to a school district, except that a sale price computed under subdivision (a) of Section 17491 shall be based upon the cost of acquisition incurred by the school district that sold the property pursuant to this subdivision, rather than that incurred by the charter school.
(D) If all or part of the real property remains unsold pursuant to subparagraph (C), the charter school selling that real property shall dispose of the remaining property pursuant to subdivisions (c), (d), (e), and (f) of Section 17464. References in Section 17464 to a school district shall mean the charter school selling the real property.
(3) In the event, alternatively, of a lease of real property pursuant to this subdivision, the failure by the charter school to comply with paragraph (1) shall constitute a breach of the lease, entitling the school district to immediate possession of the real property, in addition to any damages to which the school district may be entitled under the lease agreement.
(4) The school district, and each of the entities authorized to receive offers of sale pursuant to this article or Article 5 (commencing with Section 17485), has standing to enforce the conditions set forth in this subdivision, and shall be entitled to the payment of reasonable attorney’s fees incurred as a prevailing party in any action or proceeding brought to enforce any of those conditions.
(b) A school district seeking to sell or lease real property it deems to be surplus property shall provide a written offer to any a charter school that, at the time of the offer, has projections of at least 80 units of in-district average daily attendance for the following fiscal year, and that has submitted a written request to the school district to be notified of surplus property offered for sale or lease by the school district. district pursuant to subdivision (a). A charter school desiring to purchase or lease the property shall, within 60 days after a written offer is received, notify the school district of its intent to purchase or lease the property. In the event more than one charter school notifies the school district of their its intent to purchase or lease the property, the governing board of the school district may determine to which charter school to sell or lease the property.
(c) (1) The price at which property described in this section is sold pursuant to this section shall not exceed the school district’s cost of acquisition, adjusted by a factor equivalent to the percentage increase or decrease in the cost of living from the date of purchase to the year in which the offer of sale is made, plus the cost of any school facilities construction undertaken on the property by the school district since its acquisition of the land, adjusted by a factor equivalent to the increase or decrease in the statewide cost index for class B construction, as annually determined by the State Allocation Board pursuant to Section 17072.10, from the year the improvement is completed to the year in which the sale is made. In the event a statewide cost index for class B construction is not available, the school district shall use a factor equal to the average statewide cost index for class B construction for the preceding 10 calendar years. In no event shall the price be less than 25 percent of the fair market value of the property described in this section or less than the amount necessary to retire the share of local bonded indebtedness plus the amount of the original cost of the approved state aid applications on the property. The percentage of annual increase or decrease in the cost of living shall be the amount shown for January 1 of the applicable year by the then current Bureau of Labor Statistics Consumer Price Index for the area in which the schoolsite is located.
(2) In no event shall the price at which school district property described in this section is sold pursuant to this section be less than the amount necessary to retire the share of local bonded indebtedness plus the amount of the original cost of the approved state aid applications on the property, or less than any of the following, as applicable:
(A) For a school district that has requested an emergency apportionment in the past two years pursuant to Section 41320.2 or has submitted a negative certification to the State Department of Education in the past two years pursuant to Section 42131, less than 75 percent of the fair market value of the real property.
(B) For a school district that has submitted a qualified certification to the State Department of Education in the past two years pursuant to Section 42131, less than 50 percent of the fair market value of the real property.
(C) For a school district not described in subparagraph (A) or (B), less than 25 percent of the fair market value of the real property.
(d) Land that is leased pursuant to this section shall be leased at an annual rate of not more than 5 percent of the maximum sales price determined pursuant to subdivision (c), adjusted annually by a factor equivalent to the percentage increase or decrease in the cost of living for the immediately preceding year. The percentage of annual increase or decrease in the cost of living shall be the amount shown for January 1 of the applicable year by the then current Bureau of Labor Statistics Consumer Price Index for the area in which the schoolsite is located.
(e) The sale or lease of the real property of a school district, as authorized under subdivision (a), shall not occur until the school district advisory committee has held hearings pursuant to subdivision (c) of Section 17390.
(f) This section shall only apply to real property identified by a school district as surplus property after July 1, 2012.
(g) The construction of a school building, as defined in Section 17368, located on real property purchased by a charter school pursuant to this section shall comply with the design and construction requirements pursuant to Article 3 (commencing with Section 17280) and Article 6 (commencing with Section 17365). The reconstruction or alteration of, or an addition to, a school building, as defined in Section 17368, located on real property purchased by a charter school pursuant to this section is required to comply with the design and construction requirements pursuant to Article 3 (commencing with Section 17280) and Article 6 (commencing with Section 17365) only if the building complied with those sections on the date the real property was purchased by the charter school.
(h) A charter school selling real property obtained pursuant to this section shall use the proceeds only for capital outlay, maintenance, and other school facility-related costs.

SEC. 2.

 Section 17463.5 is added to the Education Code, to read:

17463.5.
 (a) A school district may deposit the proceeds from the lease or sale of surplus real property, together with any personal property located on the property, leased or purchased by a charter school, into the general fund of the school district, and may use the proceeds for any one-time general fund purpose if the governing board of the school district and the State Allocation Board have determined that the school district has no anticipated need for schoolsite construction, building construction, or major deferred maintenance projects for a 10-year period following the sale or lease of the surplus real property. For purposes of this section, “proceeds” of the transaction means either of the following, as appropriate:
(1) The amount realized from the lease or sale of property, less reasonable expenses related to the lease or sale.
(2) For a transaction that does not result in a lump-sum payment of the proceeds of the transaction, the proceeds of the transaction shall be calculated as the net present value of the future cashflow generated by the transaction.
(b) Notwithstanding a determination by the State Allocation Board pursuant to subdivision (a) that a school district has no anticipated need for schoolsite construction, building construction, or major deferred maintenance projects for a 10-year period following the sale or lease of surplus real property, the school district may apply for new construction or modernization funding pursuant to this chapter if both of the following conditions are satisfied:
(1) Five years have elapsed since the date the sale or lease was executed.
(2) The State Allocation Board determines that the school district has demonstrated enrollment growth or a need for additional schoolsite or building construction that the school district could not have easily anticipated at the time the State Allocation Board made its original determination that the school district had no anticipated need for the 10-year period following the sale or lease.

SEC. 3.

 Section 17516 of the Education Code is amended to read:

17516.
 (a) (1) Before the governing board of a school district enters into a lease or agreement pursuant to this article, it shall first offer to lease or sell the real property and buildings to a charter school pursuant to Section 17457.5, except when the property is intended to be used in accordance with Part 14 (commencing with Section 53570) of Division 31 of the Health and Safety Code. This paragraph shall not apply to a lease or agreement entered into pursuant to this article that would be used solely to provide instructional programs that benefit pupils.
(2) Before the governing board of a school district enters into a lease or agreement pursuant to this article, the school district shall own a site upon which a building to be used by the school district and private person, firm, local governmental agency, as defined in paragraph (3) of subdivision (f) of Section 4420 of the Government Code, or corporation may be constructed and shall have complied with the provisions of law relating to the selection and approval of sites.
(b) This section shall not apply to any building to be acquired by purchase pursuant to Article 2 (commencing with Section 17110) of Chapter 15 of Part 10.