Amended IN Assembly May 03, 2022 Amended IN Assembly April 18, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2484Introduced by Assembly Member Mia BontaFebruary 17, 2022 An act to amend Section 47614.5 of, and to add Section 47607.9 to, the Education Code, relating to charter schools. LEGISLATIVE COUNSEL'S DIGESTAB 2484, as amended, Mia Bonta. Charter schools: school closures: remaining assets: Charter School Facility Grant Program.The Charter Schools Act of 1992 authorizes the establishment and operation of charter schools. Existing law prescribes procedures for the closure of a charter school, as provided. Existing law authorizes the denial of charter petitions that do not include specified information on the procedures to be used if the charter school closes, including procedures to ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records. Existing law establishes the California Longitudinal Pupil Achievement Data System (CALPADS), which is maintained by the State Department of Education and consists of pupil data regarding demographics, program participation, enrollment, and statewide assessments. This bill would require, upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located to become the designated entity for the disposal of any net remaining assets, if there exists no designated entity for the disposal of any remaining net assets of the charter school, as provided. The bill would apply these asset disposal rules to the assets of charter schools maintained by limited liability corporations managed by the governing body of the charter school. The bill would also require charter schools to update all pupil information in CALPADS and report the number of displaced pupils to the department before closing. To the extent that this bill imposes new duties on charter schools, the bill would impose a state-mandated local program.Existing law requires the California School Finance Authority to administer the Charter School Facility Grant Program, and provides that the grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.This bill would additionally require the California School Finance Authority to notify the applicable chartering authority and the school district in which the charter school was geographically located of a charter schools application for grant funding. The bill would, commencing January 1, 2023, impose new grant program conditions on charter school facilities owned by related parties, as defined. The bill would prohibit charter school facilities owned by related parties from receiving grant funding for any facility that exceeds 100% of the cost of the facility. As a condition of receiving additional grant funding, the bill would require charter school grant applicants, upon a charter school facility owned by a related party receiving grant program funds exceeding 50% of the costs of the applicable facility, to certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder, as provided. The bill would, as applied to charter school facilities owned by related parties that are no longer occupied by the charter school, require owners of facilities that sell or lease the facility for any purpose other than of public, nonsectarian education within 10 years after receiving grant program funds to reimburse the Charter School Facility Grant Program Fund for all grant program funds received since January 1, 2023, as provided.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Charter schools are publicly funded by California taxpayers. (b) When a charter school closes unexpectedly, its pupils education is disrupted and taxpayer investments in that school are lost.(c) Charter school facilities are funded by taxpayers through grants, tax-exempt bonds, lottery revenue, and state and local tax apportionments.(d) Charter school facilities are public infrastructure investments to be held in trust for the benefit of the public school system.SEC. 2. Section 47607.9 is added to the Education Code, to read:47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.SEC. 3. Section 47614.5 of the Education Code is amended to read:47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.SEC. 4. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
Amended IN Assembly May 03, 2022 Amended IN Assembly April 18, 2022 CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2484Introduced by Assembly Member Mia BontaFebruary 17, 2022 An act to amend Section 47614.5 of, and to add Section 47607.9 to, the Education Code, relating to charter schools. LEGISLATIVE COUNSEL'S DIGESTAB 2484, as amended, Mia Bonta. Charter schools: school closures: remaining assets: Charter School Facility Grant Program.The Charter Schools Act of 1992 authorizes the establishment and operation of charter schools. Existing law prescribes procedures for the closure of a charter school, as provided. Existing law authorizes the denial of charter petitions that do not include specified information on the procedures to be used if the charter school closes, including procedures to ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records. Existing law establishes the California Longitudinal Pupil Achievement Data System (CALPADS), which is maintained by the State Department of Education and consists of pupil data regarding demographics, program participation, enrollment, and statewide assessments. This bill would require, upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located to become the designated entity for the disposal of any net remaining assets, if there exists no designated entity for the disposal of any remaining net assets of the charter school, as provided. The bill would apply these asset disposal rules to the assets of charter schools maintained by limited liability corporations managed by the governing body of the charter school. The bill would also require charter schools to update all pupil information in CALPADS and report the number of displaced pupils to the department before closing. To the extent that this bill imposes new duties on charter schools, the bill would impose a state-mandated local program.Existing law requires the California School Finance Authority to administer the Charter School Facility Grant Program, and provides that the grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.This bill would additionally require the California School Finance Authority to notify the applicable chartering authority and the school district in which the charter school was geographically located of a charter schools application for grant funding. The bill would, commencing January 1, 2023, impose new grant program conditions on charter school facilities owned by related parties, as defined. The bill would prohibit charter school facilities owned by related parties from receiving grant funding for any facility that exceeds 100% of the cost of the facility. As a condition of receiving additional grant funding, the bill would require charter school grant applicants, upon a charter school facility owned by a related party receiving grant program funds exceeding 50% of the costs of the applicable facility, to certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder, as provided. The bill would, as applied to charter school facilities owned by related parties that are no longer occupied by the charter school, require owners of facilities that sell or lease the facility for any purpose other than of public, nonsectarian education within 10 years after receiving grant program funds to reimburse the Charter School Facility Grant Program Fund for all grant program funds received since January 1, 2023, as provided.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES
Amended IN Assembly May 03, 2022 Amended IN Assembly April 18, 2022
Amended IN Assembly May 03, 2022
Amended IN Assembly April 18, 2022
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Assembly Bill
No. 2484
Introduced by Assembly Member Mia BontaFebruary 17, 2022
Introduced by Assembly Member Mia Bonta
February 17, 2022
An act to amend Section 47614.5 of, and to add Section 47607.9 to, the Education Code, relating to charter schools.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 2484, as amended, Mia Bonta. Charter schools: school closures: remaining assets: Charter School Facility Grant Program.
The Charter Schools Act of 1992 authorizes the establishment and operation of charter schools. Existing law prescribes procedures for the closure of a charter school, as provided. Existing law authorizes the denial of charter petitions that do not include specified information on the procedures to be used if the charter school closes, including procedures to ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records. Existing law establishes the California Longitudinal Pupil Achievement Data System (CALPADS), which is maintained by the State Department of Education and consists of pupil data regarding demographics, program participation, enrollment, and statewide assessments. This bill would require, upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located to become the designated entity for the disposal of any net remaining assets, if there exists no designated entity for the disposal of any remaining net assets of the charter school, as provided. The bill would apply these asset disposal rules to the assets of charter schools maintained by limited liability corporations managed by the governing body of the charter school. The bill would also require charter schools to update all pupil information in CALPADS and report the number of displaced pupils to the department before closing. To the extent that this bill imposes new duties on charter schools, the bill would impose a state-mandated local program.Existing law requires the California School Finance Authority to administer the Charter School Facility Grant Program, and provides that the grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.This bill would additionally require the California School Finance Authority to notify the applicable chartering authority and the school district in which the charter school was geographically located of a charter schools application for grant funding. The bill would, commencing January 1, 2023, impose new grant program conditions on charter school facilities owned by related parties, as defined. The bill would prohibit charter school facilities owned by related parties from receiving grant funding for any facility that exceeds 100% of the cost of the facility. As a condition of receiving additional grant funding, the bill would require charter school grant applicants, upon a charter school facility owned by a related party receiving grant program funds exceeding 50% of the costs of the applicable facility, to certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder, as provided. The bill would, as applied to charter school facilities owned by related parties that are no longer occupied by the charter school, require owners of facilities that sell or lease the facility for any purpose other than of public, nonsectarian education within 10 years after receiving grant program funds to reimburse the Charter School Facility Grant Program Fund for all grant program funds received since January 1, 2023, as provided.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
The Charter Schools Act of 1992 authorizes the establishment and operation of charter schools. Existing law prescribes procedures for the closure of a charter school, as provided. Existing law authorizes the denial of charter petitions that do not include specified information on the procedures to be used if the charter school closes, including procedures to ensure a final audit of the charter school to determine the disposition of all assets and liabilities of the charter school, including plans for disposing of any net assets and for the maintenance and transfer of pupil records. Existing law establishes the California Longitudinal Pupil Achievement Data System (CALPADS), which is maintained by the State Department of Education and consists of pupil data regarding demographics, program participation, enrollment, and statewide assessments.
This bill would require, upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located to become the designated entity for the disposal of any net remaining assets, if there exists no designated entity for the disposal of any remaining net assets of the charter school, as provided. The bill would apply these asset disposal rules to the assets of charter schools maintained by limited liability corporations managed by the governing body of the charter school. The bill would also require charter schools to update all pupil information in CALPADS and report the number of displaced pupils to the department before closing. To the extent that this bill imposes new duties on charter schools, the bill would impose a state-mandated local program.
Existing law requires the California School Finance Authority to administer the Charter School Facility Grant Program, and provides that the grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.
This bill would additionally require the California School Finance Authority to notify the applicable chartering authority and the school district in which the charter school was geographically located of a charter schools application for grant funding. The bill would, commencing January 1, 2023, impose new grant program conditions on charter school facilities owned by related parties, as defined. The bill would prohibit charter school facilities owned by related parties from receiving grant funding for any facility that exceeds 100% of the cost of the facility. As a condition of receiving additional grant funding, the bill would require charter school grant applicants, upon a charter school facility owned by a related party receiving grant program funds exceeding 50% of the costs of the applicable facility, to certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder, as provided. The bill would, as applied to charter school facilities owned by related parties that are no longer occupied by the charter school, require owners of facilities that sell or lease the facility for any purpose other than of public, nonsectarian education within 10 years after receiving grant program funds to reimburse the Charter School Facility Grant Program Fund for all grant program funds received since January 1, 2023, as provided.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) Charter schools are publicly funded by California taxpayers. (b) When a charter school closes unexpectedly, its pupils education is disrupted and taxpayer investments in that school are lost.(c) Charter school facilities are funded by taxpayers through grants, tax-exempt bonds, lottery revenue, and state and local tax apportionments.(d) Charter school facilities are public infrastructure investments to be held in trust for the benefit of the public school system.SEC. 2. Section 47607.9 is added to the Education Code, to read:47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.SEC. 3. Section 47614.5 of the Education Code is amended to read:47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.SEC. 4. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all of the following:(a) Charter schools are publicly funded by California taxpayers. (b) When a charter school closes unexpectedly, its pupils education is disrupted and taxpayer investments in that school are lost.(c) Charter school facilities are funded by taxpayers through grants, tax-exempt bonds, lottery revenue, and state and local tax apportionments.(d) Charter school facilities are public infrastructure investments to be held in trust for the benefit of the public school system.
SECTION 1. The Legislature finds and declares all of the following:(a) Charter schools are publicly funded by California taxpayers. (b) When a charter school closes unexpectedly, its pupils education is disrupted and taxpayer investments in that school are lost.(c) Charter school facilities are funded by taxpayers through grants, tax-exempt bonds, lottery revenue, and state and local tax apportionments.(d) Charter school facilities are public infrastructure investments to be held in trust for the benefit of the public school system.
SECTION 1. The Legislature finds and declares all of the following:
### SECTION 1.
(a) Charter schools are publicly funded by California taxpayers.
(b) When a charter school closes unexpectedly, its pupils education is disrupted and taxpayer investments in that school are lost.
(c) Charter school facilities are funded by taxpayers through grants, tax-exempt bonds, lottery revenue, and state and local tax apportionments.
(d) Charter school facilities are public infrastructure investments to be held in trust for the benefit of the public school system.
SEC. 2. Section 47607.9 is added to the Education Code, to read:47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.
SEC. 2. Section 47607.9 is added to the Education Code, to read:
### SEC. 2.
47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.
47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.
47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.(b) Before closing, a charter school shall comply with both of the following requirements:(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).(2) Report the number of displaced pupils to the department.
47607.9. (a) (1) Upon a charter school notifying its chartering authority of the closing of the charter school and dissolving of the nonprofit public benefit corporation, school, the school district in which the charter school was geographically located shall become the designated entity for the disposal of any remaining net assets of the charter school if there exists no designated entity for the disposal of any remaining net assets of the charter school.
(2) Paragraph (1) shall also apply to assets of a closing charter school that are maintained by limited liability corporations managed by the governing body of the charter school.
(b) Before closing, a charter school shall comply with both of the following requirements:
(1) Update all pupil records in the California Longitudinal Pupil Achievement Data System (CALPADS).
(2) Report the number of displaced pupils to the department.
SEC. 3. Section 47614.5 of the Education Code is amended to read:47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.
SEC. 3. Section 47614.5 of the Education Code is amended to read:
### SEC. 3.
47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.
47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.
47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.(c) For purposes of this section, the California School Finance Authority shall do all of the following:(1) Inform charter schools of the grant program.(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.(3) Inform charter schools of their grant eligibility.(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.(d) For purposes of this section:(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.(B) The verified facility agreement shall be subject to either of the following conditions:(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.(2) For purposes of this subdivision, the following definitions apply:(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.
47614.5. (a) The Charter School Facility Grant Program is hereby established, and shall be administered by the California School Finance Authority. The grant program is intended to provide assistance with facilities rent and lease costs for pupils in charter schools.
(b) (1) Commencing with the 201718 fiscal year, and subject to available funding in the annual Budget Act, eligible charter schools shall receive an amount equivalent to one of the following, whichever is less:
(A) Seventy-five percent of annual facilities rent and lease costs for the charter school.
(B) For the 201718 fiscal year, an amount equal to one thousand one hundred seventeen dollars ($1,117) per unit of average daily attendance, as certified at the second principal apportionment. Commencing with the 201819 fiscal year, the amount of funding provided per unit of average daily attendance in the preceding fiscal year, as adjusted by the percentage change in the annual average value of the Implicit Price Deflator for State and Local Government Purchases of Goods and Services for the United States, as published by the United States Department of Commerce for the 12-month period ending in the third quarter of the prior fiscal year. This percentage change shall be determined using the latest data available as of May 10 of the preceding fiscal year compared with the annual average value of the same deflator for the 12-month period ending in the third quarter of the second preceding fiscal year, using the latest data available as of May 10 of the preceding fiscal year, as reported by the Department of Finance.
(2) In any fiscal year, if the funds appropriated for purposes of this section by the annual Budget Act are insufficient to fully fund the approved amounts, the California School Finance Authority shall apportion the available funds on a pro rata basis.
(c) For purposes of this section, the California School Finance Authority shall do all of the following:
(1) Inform charter schools of the grant program.
(2) Upon application by a charter school, determine eligibility, based on the geographic location of the charter schoolsite, pupil eligibility for free or reduced-price meals, and a preference in admissions, as appropriate. Eligibility for funding shall not be limited to the grade level or levels served by the school whose attendance area is used to determine eligibility. A charter schoolsite is eligible for funding pursuant to this section if the charter schoolsite meets either of the following conditions:
(A) The charter schoolsite is physically located in the attendance area of a public elementary school in which 55 percent or more of the pupil enrollment is eligible for free or reduced-price meals and the charter schoolsite gives a preference in admissions to pupils who are currently enrolled in that public elementary school and to pupils who reside in the elementary school attendance area where the charter schoolsite is located.
(B) Fifty-five percent or more of the pupil enrollment at the charter schoolsite is eligible for free or reduced-price meals.
(3) Inform charter schools of their grant eligibility.
(4) Make apportionments to a charter school for eligible expenditures according to the following schedule:
(A) An initial apportionment by October 31 of each fiscal year, provided the charter school has submitted a timely application for funding, as determined by the California School Finance Authority. The initial apportionment shall be 50 percent of the charter schools estimated annual entitlement as determined by this section.
(B) A second apportionment by March 1 of each fiscal year. This apportionment shall be 75 percent of the charter schools estimated annual entitlement, as adjusted for any revisions in cost, enrollment, and other data relevant to computing the charter schools annual entitlement, less any funding already apportioned to the charter school.
(C) A third apportionment within 30 days of the end of each fiscal year or 30 days after receiving the data and documentation needed to compute the charter schools total annual entitlement, whichever is later. This apportionment shall be the charter schools total annual entitlement less any funding already apportioned to the charter school.
(D) Notwithstanding subparagraph (A), the initial apportionment in the 201314 fiscal year shall be made by October 15, 2013, or 105 days after enactment of the Budget Act of 2013, whichever is later.
(5) Notify the chartering authority and the school district in which the charter school was geographically located of a charter schools application for funding.
(d) For purposes of this section:
(1) The California School Finance Authority shall use prior year data on pupil eligibility for free or reduced-price meals to determine eligibility pursuant to paragraph (2) of subdivision (c). A new charter school that was not operational in the prior year shall be eligible in the current year if it meets the free or reduced-price meal eligibility requirements specified in paragraph (2) of subdivision (c) based on current year data. Prior year rent or lease costs provided by charter schools shall be used to determine eligibility for the grant program until actual rent or lease costs become known or until June 30 of each fiscal year.
(2) If prior year rent or lease costs are unavailable, and the current year lease and rent costs are not immediately available, the California School Finance Authority shall use rent or lease cost estimates provided by the charter school.
(3) (A) The California School Finance Authority shall verify costs associated with facility rents or leases, as evidenced by an executed rental or lease agreement.
(B) The verified facility agreement shall be subject to either of the following conditions:
(i) Reimbursable facility rent or lease costs do not exceed the prior years costs on file with the authority as of the 201617 fiscal year, subject to a cost-of-living adjustment consistent with subparagraph (B) of paragraph (1) of subdivision (b).
(ii) The rent or lease costs of new facility agreements are at or below market rate based on an independent appraisal paid for by the charter school.
(4) The California School Finance Authority shall verify that the grant amount awarded to each charter school is consistent with eligibility requirements as specified in this section and in regulations adopted by the authority. If it is determined by the California School Finance Authority that a charter school did not receive the proper grant award amount, either the charter school shall transfer funds back to the authority as necessary within 60 days of being notified by the authority, or the authority shall provide an additional apportionment as necessary to the charter school within 60 days of notifying the charter school, subject to the availability of funds.
(e) Funds appropriated for purposes of this section shall not be apportioned for any of the following:
(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (e) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.
(2) Charter schools occupying existing school district or county office of education facilities, except that charter schools shall be eligible for the portions of their facilities that are not existing school district or county office of education facilities.
(3) Charter schools receiving reasonably equivalent facilities from their chartering authorities pursuant to Section 47614, except that charter schools shall be eligible for the portions of their facilities that are not reasonably equivalent facilities received from their chartering authorities.
(f) Funds appropriated for purposes of this section shall first be used for costs associated with facilities rents and leases, consistent with the definitions used in the California School Accounting Manual or regulations adopted by the California School Finance Authority. These funds also may be used for costs, including, but not limited to, costs associated with remodeling buildings, deferred maintenance, initially installing or extending service systems and other built-in equipment, and improving sites.
(g) If an existing charter school located in an elementary attendance area in which less than 50 percent of pupil enrollment is eligible for free or reduced-price meals relocates to an attendance area identified in paragraph (2) of subdivision (c), admissions preference shall be given to pupils who reside in the elementary school attendance area into which the charter school is relocating.
(h) The California School Finance Authority annually shall report to the department and the Director of Finance, and post information on its internet website, regarding the use of funds that have been made available during the fiscal year to each charter school pursuant to the grant program.
(i) The California School Finance Authority shall annually allocate the facilities grants to eligible charter schools according to the schedule in paragraph (4) of subdivision (c) for the current school year rent and lease costs.
(j) It is the intent of the Legislature that the funding level for the Charter School Facility Grant Program for the 201213 fiscal year be considered the base level of funding for subsequent fiscal years.
(k) The Controller shall include instructions appropriate to the enforcement of this section in the audit guide required by subdivision (a) of Section 14502.1.
(l) The California School Finance Authority, effective with the 201314 fiscal year, shall be considered the senior creditor for purposes of satisfying audit findings pursuant to the audit instructions to be developed pursuant to subdivision (k).
(m) The California School Finance Authority may adopt regulations to implement this section. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of the Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare.
(n) Notwithstanding any other law, a charter school shall be subject, with regard to this section, to audit conducted pursuant to Section 41020.
(o) (1) Commencing January 1, 2023, the following requirements shall apply to charter school facilities owned by related parties:
(A) (i) A charter school facility owned by related parties shall not, over the lifetime of the grant program, receive grant funding for the facility that exceeds 100 percent of the cost of the facility.
(ii) The California School Finance Authority shall track lifetime grant program funding received for charter school facilities owned by related parties.
(iii) This subparagraph shall not restrict a charter school applicants ability to seek grant program funds to reimburse costs associated with facility improvements as described in subdivision (f).
(B) Upon receipt by a charter school facility owned by a related party of grant program funds from the California School Finance Authority exceeding 50 percent of the costs of the applicable facility, the charter school applicant shall, as a condition of receiving any additional grant funding, certify that a deed restriction by the owner of the facility requiring the facility be used for public, nonsectarian educational purposes has been filed with the applicable county recorder.
(C) The following conditions shall apply to charter school facilities owned by related parties that are no longer occupied by the charter school due to voluntary closure or due to revocation or nonrenewal of its schools charter:
(i) If the owner of the charter school facility sells or leases the facility for any purpose other than that of public, nonsectarian education within 10 years after receiving grant program funds, that owner shall reimburse the Charter School Facility Grant Program Fund, after honoring other financial obligations, for all grant program funds received since January 1, 2023.
(ii) The reimbursement due to the Charter School Facility Grant Program Fund described in clause (i) shall be on a schedule to be determined by the California School Finance Authority, by not beyond 30 years from the date of the facility sale or lease.
(2) For purposes of this subdivision, the following definitions apply:
(A) Charter school facility owned by related parties means a charter school facility that is held by a party or parties related to, or solely owned by, the charter school operators or its management organization, including a corporate entity formed exclusively for the purpose of managing or providing support to the charter school or group of related charter schools and any direct or indirect wholly owned subsidiary of any such corporate entity. Related parties may be identified in a charter schools audited financial statements according to generally accepted accounting principles recognized in the United States.
(B) Cost of the facility means the purchase price of the facility at the time that the facility was purchased by its current, related party owner.
SEC. 4. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
### SEC. 4.