Chapter 8. Urban School Construction Aid Law Of 1968 of California Education Code >> Division 1. >> Title 1. >> Part 10. >> Chapter 8.

This chapter may be cited as the "Urban School Construction Aid Law of 1968."

The Legislature hereby declares that it is in the interest of the state and of the people thereof for the state to aid urban school districts of the state in reconstructing, modernizing, or replacing schoolsites and buildings for pupils of the public school system who are now housed in substandard schools constructed prior to 1943.

As used in this chapter:
  (a) "Board" means the State Allocation Board.
  (b) "Director" means the Director of Education.
  (c) "Project" means the purpose or purposes for which a school district has applied for an apportionment or apportionments.
  (d) "Apportionment" means an apportionment made under this chapter unless the context otherwise requires.
  (e) "Urban district" means any school district, the boundaries of which are substantially identical to or which encompass the boundaries of a city having a population in 1960 of not less than 50,000 persons.

The Director of General Services shall administer this chapter and shall provide any assistance to the board that it may require.

The State Allocation Board is continued in existence for the purposes of this chapter. The members of the board and the Members of the Legislature meeting with the board shall receive no compensation for their services under this chapter but shall be reimbursed for their actual and necessary expenses incurred in connection with the performance of their duties hereunder, to be paid out of the Urban School Construction Aid Fund.

The board by the adoption of rules shall give priority in allocating funds to urban districts to those districts where the children will benefit most from schoolhouse facilities. This priority shall be based upon the age of existing buildings and the acuteness of overcrowding at the school or schools where the construction or reconstruction will occur, the density of population in the attendance areas affected, or any other factors that will insure that the greatest need will be served.

In addition to any other powers and duties that are granted the board by this chapter, the board shall:
  (a) Establish any qualifications not in conflict with other provisions of this chapter that it deems will best serve the purposes of this chapter for determining the eligibility of school districts to apportionments of funds under this chapter.
  (b) Establish any procedures and policies in connection with the administration of, and the expenditure of funds made available for the purpose of, this chapter that it deems necessary.
  (c) Adopt any rules and regulations for the administration of this chapter, requiring any procedure, forms, and information, that it may deem necessary.

The board shall prescribe instructions specifying the manner in which property, real or personal, being replaced through the apportionment, shall be disposed of, and compliance with the instructions shall be a condition upon the making of the apportionment. The net proceeds derived from the disposition shall be contributed in reduction of any apportionment. Any school district affected shall comply with instructions prescribed by the board. The board may require a district to transfer to the state, by any instruments deemed appropriate by the board, title to the replaced property, whereupon, the board shall dispose of the property in any manner it deems appropriate to insure the highest return to the state, and apply the proceeds therefrom in reduction of apportionments to the district. The district affected shall do all things deemed necessary by the board to implement the disposition.

Apportionments from the Urban School Construction Aid Fund created by Section 16728 shall be limited to urban districts and shall be made for the sole purpose of reconstructing or replacing existing substandard buildings constructed prior to 1943. The apportionments shall be made in the manner and subject to the conditions herein provided and in accordance with policies adopted by the board for the following purposes:
  (1) The acquisition, by purchase or lease, and the installation and equipping portable classrooms for instructional purposes.
  (2) The acquisition and development of schoolsites.
  (3) The construction and equipping of permanent school buildings and facilities.
  (4) The reconstruction, renovation, or remodeling of existing school buildings and facilities.
  (5) Any combination of the above. As a part of these purposes, where a district is required by a contract entered into between itself and a contractor, to obtain at its own expense insurance covering risks incurred during any construction, reconstruction, or alteration for which an apportionment has been made, the cost thereof may be paid either directly, or by way of reimbursement, to the district out of the apportionment, or out of any apportionment made specifically covering the insurance, provided that in other respects the apportionments are eligible for payment under this chapter. A leasehold or use permit interest held by a school district in land owned in fee simple by the government of the United States may, for all purposes of this chapter, be deemed a purchase of land by the district and to vest title and ownership in the district.

The board shall not make any apportionment with respect to an application for replacing inadequate school facilities unless it has first investigated and made a finding that it would not be economical or good practice to rehabilitate the facilities.

In addition to the purposes for which apportionments may be made to school districts under Section 16708, apportionments may also be made to school districts for the construction, repair, attachment, or development of offsite facilities, utilities, or improvements which the board determines are necessary to the proper operation or functioning of the school facilities for which apportionments are made, all of which purposes are hereby declared to be, and are, public works.

(a) In making applications for, and in expending apportionments of funds under this chapter, a school district acts as an agent of the state and all sites purchased and improved, all equipment purchased, and all buildings constructed, reconstructed, altered, or added to through the expenditure of funds apportioned under this chapter, are declared to be, and are, the property of the state.
  (b) The Director of General Services shall file with the county recorder of the county in which any site purchased or improved through the expenditure of funds apportioned under this chapter is located a certificate, properly acknowledged, indicating the state's interest in real property of the district by virtue of this section, without the necessity of particularizing the real property. The recorder shall record and index the certificate in the same manner as abstracts of judgments and the certificate shall constitute constructive notice of the state's interest in the particular real property affected. The certificate shall as to any party thereafter acquiring real property or any interest therein in the county from the school district have the same force, effect and priority as if it had been a judgment lien imposed upon real property which was not exempt from execution. That effect shall commence upon recordation and continue until the certificate is discharged or released as provided herein.
  (c) Upon request, the Director of General Services shall issue either of the following:
  (1) A release of the state's interest in any real property or a portion thereof that the district has been authorized by the board to dispose of under this chapter, provided that delivery of the release may be subject to any conditions that may be prescribed by the board to protect the state's interest.
  (2) A disclaimer of the state's interest in any real property or a portion thereof of the district, the disposition of which the board is not required to consent to under this chapter, provided that the delivery of the disclaimer may be subject to any conditions that the board deems appropriate to protect the interests of the state, including conditions relating to the amount of consideration to be received from the disposition if the board asserts an interest in the proceeds of the disposition under other provisions of this chapter. The release or disclaimer shall conclusively protect any third party relying upon the same and shall be acknowledged to permit recordation by the county recorder.
  (d) Upon payment by the district of all amounts required to be paid by it or on its behalf to the state under this chapter both of the following shall occur:
  (1) The Director of General Services shall file with the recorder a release of any certificate. The release shall be recorded and indexed in the same index as the certificate.
  (2) The title to personal property purchased by such school district with funds apportioned under this chapter shall revert thereto without further action by the state.

A school district shall not expend money apportioned under this chapter unless the contracts under which the funds are expended have been let after competitive bids thereafter pursuant to this code.

Each school district which desires an apportionment shall submit through its governing board to the board an application therefor in the form and number of copies as the board shall prescribe. Each copy of the application shall be accompanied by a statement of the estimated cost of the project certified by an architect or structural engineer, and by layout plans showing the entire construction project for which the district desires an apportionment. Estimates of costs for new construction or equipment appearing in an application shall not exceed typical current costs of comparable new construction or equipment by school districts in the same area not receiving an apportionment under this chapter, as determined by the Director of General Services, or if there has been no new construction by school districts in the area, the estimates of costs shall not exceed the reasonable current cost of similar construction or equipment in the area as determined by the Director of General Services. A school district may at any time file an application or amend or supplement an application. Upon receipt of any application, the Director of General Services shall as promptly as possible prepare a report and recommendation with respect to the application after having received recommendations from the director in respect to any matter which is subject to the jurisdiction or approval of the director or State Department of Education. The board shall, subject to the provisions of this chapter, approve, in whole or in part, or reject each application referred to it by the Director of General Services. If the board approves of the application, either in whole or in part, it shall, by a resolution adopted by it, apportion to the district from the Urban School Construction Aid Fund the amount applied for, or a portion thereof as the board may determine appropriate. However, it may order that the apportionment or any part thereof shall be paid in progressive installments at times and under conditions as it may then prescribe.

The board may approve, in whole or in part, an application submitted by a school district under Section 19263 and in any amount, not exceeding the amount applied for, that the board may deem appropriate. The board may, upon approval of the application, in whole or in part, and subsequently from time to time, make a conditional apportionment or conditional apportionments not exceeding in the aggregate the total amount approved in the application of the district by the board to the applicant school district from the Urban School Construction Aid Fund for any portion or portions of the project that the board determines the district is ready to proceed with. If the board has approved an application and made an apportionment as to a portion or portions of a project, the board may approve the remaining portion or portions of the project and make an additional apportionment or apportionments as it deems appropriate. If the board determines that the actual cost is in excess of the estimated cost of the specific school plant facilities or sites for which an apportionment to a district has been made, or for which a district's application has been approved in whole or in part pursuant to this section, the board may make an additional apportionment to the district in an amount equal to the excess even though the additional apportionment will result in the total apportionments to the district exceeding the amount of the application originally approved by the board. Approval of an application under this section shall not be construed as creating or implying any obligation, commitment or promise on the part of the board or the state to make apportionments under this chapter.

No apportionment shall be made for new construction, the area of which exceeds the area of the unsafe buildings being replaced under Section 16708. The area of school buildings shall be computed in a uniform manner as prescribed by the board.

Payment shall be made in accordance with the terms of an apportionment, either directly or by way of reimbursement, to a school district for expenditures, or commitments therefor, which have been made by the district subsequent to the effective date of this chapter for any items approved by the board in the apportionment. However, if expenditures were made for, or work was commenced with respect to, any item so approved, prior to the time the application of the district containing the item was received by the board, payment or reimbursement for the item, either with state funds or with district funds which the district is required to contribute by the apportionment, shall be made only upon authorization of the board by special resolution citing this section.

Notwithstanding any provision to the contrary, the board, with the approval of the Director of General Services, shall, pursuant to this section, fix the rate of interest to be paid by the districts on the sums apportioned during that fiscal year. Beginning each fiscal year the board shall compute the average of the rates of interest which the state pays upon the state school reconstruction and replacement bonds, sold at the three sales of state school reconstruction and replacement bonds occurring immediately prior to that fiscal year, or, if the board so determines, at all of the sales of the bonds occurring in the two years immediately prior thereto, giving effect to the price at which the state school reconstruction and replacement bonds sold at the sales, and the premium, if any paid, thereon. If an apportionment is made prior to the sale of state school reconstruction and replacement bonds, the board shall use the computed average rate of interest which the state paid on the last sale of state school building bonds. The average rate shall be adjusted to the next highest one-tenth of 1 percent to cover the cost of sale and issuance of the bonds and costs of administration. The adjusted average rate shall be the rate paid by districts on apportionments received during that fiscal year, and shall be compounded annually through the 30th day of June of each year.

Apportionments may be made irrespective of whether there is on deposit at the time thereof a sufficient amount in the Urban School Construction Aid Fund to permit the payment of the apportionments. Disbursements may be made under any apportionment from any funds in the Urban School Construction Aid Fund irrespective of whether there exists at the time of the disbursement a sufficient amount in the fund to permit the payment in full of all apportionments previously made. However, no disbursements shall be made from any funds in the Urban School Construction Aid Fund required by law to be transferred to the General Fund, or from any moneys therein which the Controller deems necessary to satisfy appropriations from the fund for purposes other than apportionments.

No apportionment shall be made to a district for the construction, reconstruction, or alteration of, or addition to, school buildings if the requirements prescribed by this code for the construction of school buildings are not met by the plans for the entire building program of the district in connection with which the district applied for an apportionment.

Each district to which an apportionment or apportionments has been made under this chapter shall repay a portion or all of the principal amount of such apportionment or apportionments and the accrued interest thereon in 30 equal annual payments, as shall be determined by the Controller pursuant to this section. If more than one apportionment is made the annual amount payable shall be the sum of the amounts which would be payable on each apportionment if computed separately. The Controller shall determine the portion of the principal amount of the apportionment or apportionments made to each district to be repaid by the district by diminishing the principal amount by the product of the ratio which the assessed valuation of the district per unit of average daily attendance of pupils in the grades maintained by the district during the preceding fiscal year bears to the assessed valuation per unit of average daily attendance in the same type of districts in the state and one-half of the principal amount of the apportionment or apportionments, except that the amount to be repaid shall not exceed the amount of the principal apportionment or apportionments. The Controller shall make the computation to determine the annual repayment due in the next fiscal year following the fiscal year in which the apportionment is made. In any year prior to the 1980-81 fiscal year in which the annual repayment exceeds the amount which may be raised by a three-cent ($0.03) tax rate per one hundred dollars ($100) of assessed valuation in the district, the governing board of the school district shall so certify to the Controller whereupon the Controller shall grant a deferment of the annual repayment which is in excess of the amount that would be produced by a tax rate of three cents ($0.03) per one hundred dollars ($100) of assessed valuation of the district. In any year, beginning with the 1981-82 fiscal year, in which the annual repayment exceeds the amount which may be raised by a levy of 0.0075 percent of the full value in the district, the governing board of the school district shall so certify to the Controller whereupon the Controller shall grant a deferment of the annual repayment which is in excess of the amount that would be produced by a tax of 0.0075 percent of the full value of the district. The amount deferred shall be added to the annual repayment for the next succeeding fiscal year.

The Controller shall, during the next fiscal year following that in which he determines the annual repayment as herein provided, deduct the total amount of the annual repayment of each district in equal amounts from each of the February, March, April, and May installments of the apportionments made to the district from the State School Fund and, on order of the State Controller, the amount so deducted shall be transferred to the Urban School Construction Aid Fund. All money transferred to the Urban School Construction Aid Fund under this section shall be available only for transfer to the General Fund.

The Controller shall determine and maintain a record of the amount due the state in connection with each apportionment made to a district under this chapter. He or she shall compute interest, at the rate fixed by the board, on each amount disbursed by the state pursuant to the apportionment, from the date of issuance of the Controller's warrant covering the payment to the county treasurer of the amount until the first day of July of the fiscal year next succeeding that in which the warrant was issued. Thereafter, interest shall accrue to and be compounded as a part of the principal amount due the state pursuant to the apportionment, through the 30th day of the following June of each year, until the principal and interest have been paid.

Upon computing in any fiscal year the amount to be deducted from the apportionments to the district from the State School Fund during the succeeding fiscal year, the Controller shall notify the governing board of the district and the county auditor of the county, the county superintendent of which has jurisdiction over the district, of the amount to be deducted.

The board of supervisors of the county, the county superintendent of which has jurisdiction over any district which under this chapter will have moneys withheld by the Controller from the apportionments to be made to it from the State School Fund during any fiscal year, shall annually at the time the board of supervisors makes the levy of taxes for county purposes, levy a tax upon the property in the district sufficient to raise for the district the amount of money to be withheld by the Controller during the fiscal year in which the tax is levied. The tax, when collected, shall be paid into the county treasury of the county, the county superintendent of schools of which has jurisdiction over the district for which the tax was levied, to the credit of the general fund of the district.

The board shall prescribe in the detail that it deems necessary, the purposes for which moneys apportioned by it or which it requires the district to contribute toward, or in reduction of the cost of a project, may be expended, and the prescription shall be binding upon the governing board of the district, except that it may be changed or modified by the board for any cause that it sees fit.

An urban school construction fund is hereby created in the county treasury in each county for each school district in the county. The county treasurer of each county shall pay into the urban school construction fund of each school district, exactly as apportioned by the board, all moneys received by him or her under this chapter with respect to each school district.

Interest earned on those portions of deposits in an urban school construction fund representing allocations from the proceeds of state school reconstruction and replacement bonds received by the county treasurer for the benefit of a school district under this chapter shall be paid into the Urban School Construction Fund created by Section 16728.

A fund in the State Treasury is hereby created, to be known as the Urban School Construction Aid Fund. All money in the Urban School Construction Aid Fund, including any money deposited the fund from any source whatsoever is hereby continuously appropriated without regard to fiscal years for expenditure pursuant to apportionments made under the provisions of this chapter.

The governing board of each school district to which an apportionment has been made under this chapter shall expend the moneys in the urban school construction fund of the school district exactly as apportioned by the board and only for the purposes for which the moneys were apportioned to the district, and for no other purpose, and shall make the reports relating to the expenditure of the moneys that the board and the Controller shall require.

It shall be the duty of the Controller to make any audit or audits of the books and records of counties and school districts receiving apportionments under this chapter, that he or she may deem necessary from time to time, for the purpose of determining that the money received by school districts as apportionments hereunder has been expended for the purposes and under the conditions authorized by this chapter.

Whenever the Controller determines that any money apportioned to a school district has been expended by the school district for purposes not authorized by this chapter, or exceeds the final cost of the project which is authorized by this chapter to be paid therefrom, the Controller shall furnish written notice to the board, the governing board of the school district, the county superintendent of schools, the county auditor, and the county treasurer of the county whose county superintendent of schools has jurisdiction over the school district, directing the school district and the county treasurer to pay into the State Treasury the amount of the unauthorized expenditures, or the amount of the excess apportionment, as the case may be. Upon receipt of the notice, the governing board shall order the county treasurer to pay to the Treasurer, out of any moneys in the county treasury available to the school district for that purpose, the amount set forth in the notice. The amount shall, upon order of the Controller, be deposited in the State Treasury to the credit of the Urban School Construction Aid Fund, to be reapportioned by the board. It shall be the duty of the governing body and the county treasurer to make the payments to the Treasurer as provided in this section, and it shall be the duty of the Controller to enforce the collection on behalf of the state. If the district fails to make the payment specified within one year after written notice of the amount due, the Controller shall deduct the amount thereof with interest from date of the notice from the February payment made to the district under Section 14041 in the next succeeding fiscal year.

(a) As used in this chapter:
  (1) "State-aided district" means a district to which an apportionment has been made under this chapter.
  (2) "Acquiring district" means a district in which all or a part of, a state-aided district or an applicant district has been included.
  (3) "Original district" means a state-aided or applicant district included in whole or in part in an acquiring district.
  (b) For the purposes of this article as it applies to an original district or to an acquiring district, the effective date of any change of boundaries, annexation, formation of a new district, or other reorganization shall be the date the action became effective for the purposes of Section 4060.

Whenever, subsequent to the date of an apportionment to a district, the state-aided district is included in whole or in part in another district, the acquiring district in which a state-aid project is located shall, on the effective date of the inclusion, succeed to and be vested with all of the duties, powers, purposes, jurisdiction, and responsibilities of the state-aided district with respect to any apportionment or apportionments for such project and the property acquired or to be acquired from funds provided thereby, and all funds in the urban school construction fund of the state-aided district shall be transferred to the urban school construction fund of the acquiring district. All amounts which would, after the effective date of the inclusion, have been otherwise paid to the state-aided district under the terms of or pursuant to the apportionment, shall be paid to the acquiring district. In addition, the acquiring district shall, on the effective date of the inclusion of the state-aided district in the acquiring district become liable for the annual repayments and other payments due the state under this chapter.