Allocation Of Federal Funds And Federal Tax Credit Bond Volume Cap - Administration Of Federal Programs—state Board Of Education - CA Education

Section § 12000

This law outlines how federal education funds should be managed and distributed in California when not specified by Congress. It states that the state board is responsible for applying for federal funds and ensuring their allocation to school districts, following federal guidelines. Additionally, it mandates that state agencies must allow schools to use an indirect cost rate set by the department, unless a lower rate is required by federal law. It also specifies that "school districts" includes various educational agencies eligible under state and federal laws.

(a) If, by any act of Congress, funds are provided as federal aid to education to the several states and the disposition of the funds is not otherwise provided for by or under the act of Congress or by or under any law of this state, the apportionment and distribution of those funds to school districts shall, insofar as consistent with the requirements prescribed by the federal law and implementing rules and regulations, be governed by the standards set forth in this article.

(b) If a federal law designates a state educational agency or other agency or officer primarily responsible for state supervision of public schools, that designation shall be deemed to refer to the state board. The state board shall make timely application for any federal funds made available, and shall, pursuant to the federal law and this article, direct the allocation and apportionment of the federal funds to school districts.

(c) The department and any other state agency that administers a grant or allocation of federal funds to a school district, shall allow an indirect cost rate, as that term is defined in Section 33338, that is not less than the indirect cost rate established by the department for each school district, unless federal law requires a lower indirect cost rate for school districts that receive federal funds.

(d) For purposes of this section and Section 12001, “school districts” include school districts, county offices of education, and other educational agencies or entities deemed eligible pursuant to state and federal law.

federal aid to education state board school districts funding allocation of federal funds indirect cost rate state educational agency public schools supervision grant administration educational agencies eligibility county offices of education

(Amended (as amended by Stats. 2012, Ch. 587, Sec. 1) by Stats. 2015, Ch. 344, Sec. 1. (AB 1064) Effective January 1, 2016.)

Section § 12001

This law requires the state board to set up rules for giving federal funds to school districts. When making these rules, they should think about how much effort the local area puts in and what educational programs the districts already have. The process should be based on need and the board should closely look at the capabilities and efforts of each district.

The state board shall adopt rules and regulations for the allocation of federal funds to school districts entitled to receive federal funds for the support of schools. In determining the rules and regulations by which those allocations are to be made, the state board shall consider all factors of local effort and all educational programs maintained by those school districts. The rules and regulations adopted pursuant to this section shall be based upon need, and the state board shall carefully scrutinize the abilities and efforts of the affected school districts.

federal funds allocation school districts local effort educational programs rules and regulations state board needs-based district capabilities effort scrutiny financial support for schools

(Amended by Stats. 2012, Ch. 162, Sec. 28. (SB 1171) Effective January 1, 2013.)

Section § 12001.5

This law deals with how California is using certain federal tax credits to pay for school construction projects. These tax credits come from the American Recovery and Reinvestment Act of 2009 and aren't considered federal funds by California standards. The State Department of Education got $700 million in tax credits to distribute to school districts, while $73.5 million were assigned to the California School Finance Authority for charter schools. If these bonds aren't issued by certain deadlines, they either get added to the next year's credits or reallocated. The law also says that these allocations don't need to follow normal rulemaking procedures, making it faster to issue the bonds. The goal is to ensure fair and consistent distribution of these credits.

(a) The Legislature hereby finds and declares that the federal tax credit bond volume cap for qualified school construction bonds designated for the state by the federal American Recovery and Reinvestment Act of 2009 (Public Law 111-5), together with Internal Revenue Service Notice 2009-35 issued pursuant thereto, does not constitute federal moneys, federal funds, or funds of any kind for any purpose under this code.

(b) There is hereby assigned to the State Department of Education, seven hundred million dollars ($700,000,000) of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds, to be further assigned and distributed to or for the benefit of school districts and county offices of education in the state, as the State Department of Education shall determine.

(c)

(1) There is hereby assigned to the California School Finance Authority, established pursuant to Section 17172, seventy-three million five hundred twenty-five thousand dollars ($73,525,000) of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds, to be issued for the benefit of charter schools, or to be further assigned and distributed to one or more issuers in the state for the benefit of charter schools, as the authority shall determine.

(2) The parameters specified in “Borrowing Authority Parameters and Application,” dated February 10, 2010, as developed by the California School Finance Authority and referenced in Resolution 10-04 of the authority, shall apply to all applications submitted to the California School Finance Authority for the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds. If an applicant uses any 2009 federal tax credit bond volume cap in conjunction with a bond that will serve as a local match for purposes of the Charter School Facilities Program established by Section 17078.52, the applicant, in addition to the requirements of this section, shall comply with all of the requirements of the Charter School Facilities Program.

(d)

(1) Any of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds assigned to the State Department of Education pursuant to subdivision (b) that has not resulted in the issuance of qualified school construction bonds by December 31, 2009, shall be added to the state’s volume cap for 2010, in accordance with subsection (e) of Section 54F of the Internal Revenue Code, and assigned as set forth in this section. Those districts and county offices of education that received an assignment from the State Department of Education by December 31, 2009, and notification from the State Department of Education that they were granted an extension to issue bonds through March 31, 2010, shall have an additional 120 days from the effective date of this legislation to issue bonds.

(2) Any of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds originally assigned to the State Department of Education in 2009 pursuant to subdivision (b) that does not result in the issuance of qualified school construction bonds within 120 days from the effective date of this legislation shall revert to the state, and shall be reallocated in accordance with the process established pursuant to state law for allocating the 2010 federal tax credit bond volume cap for qualified school construction bonds.

(3) The department shall reassign to a school district any 2009 federal tax credit bond volume cap for qualified school construction bonds that was directly allocated to the district by the United States Internal Revenue Service pursuant to Internal Revenue Service Notice 2009-35, did not result in the issuance of qualified school construction bonds by December 31, 2009, and was reallocated by the district to the state no later than 30 days after the effective date of this section. The department shall grant the school district 120 days from the effective date of this section to issue the qualified school construction bonds. Any of the state’s federal tax credit bond volume cap for qualified school construction bonds assigned to a school district described in this paragraph that does not result in the issuance of qualified school construction bonds within 120 days from the effective date of this section shall revert to the state and shall be reallocated by the department in accordance with the process established pursuant to state law for allocating the 2010 federal tax credit bond volume cap for qualified school construction bonds.

(e)

(1) Any of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds assigned to the California School Finance Authority pursuant to subdivision (c) that has not resulted in the issuance of qualified school construction bonds by December 31, 2009, shall be added to the state’s volume cap for 2010, in accordance with subsection (e) of Section 54F of the Internal Revenue Code, and allocated as set forth in this section. Any charter school that received an allocation from the California School Finance Authority prior to December 31, 2009, shall retain its allocation pursuant to the resolution of the California School Finance Authority.

(2) Any of the state’s 2009 federal tax credit bond volume cap for qualified school construction bonds originally allocated to the California School Finance Authority in 2009 pursuant to subdivision (c) that does not result in the issuance of qualified school construction bonds by December 31, 2010, shall be retained by the California School Finance Authority, and reallocated in accordance with the qualified school construction bond parameters established by the California School Finance Authority.

(f) Notwithstanding any other provision of law, in order to further the purposes of the federal American Recovery and Reinvestment Act of 2009, and allow school districts to issue federal tax credit bonds as expeditiously as possible, the assignment and distribution of the federal tax credit bond volume cap by the State Department of Education and the California School Finance Authority under this section are exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(g) It is the intent of the Legislature that the parameters and conditions adopted by the department and the California School Finance Authority be comparable where practical and applicable in order to ensure consistency and equity in the state level assignment and distribution of the federal tax credit bond volume cap, including, but not limited to, maximum tax credit amounts per project or school district.

(h) Notwithstanding any other provision of this section, issuers within the state may issue qualified school construction bonds in any manner permitted by federal law, including, but not limited to, as tax credit bonds or federal subsidy bonds.

federal tax credit bond school construction American Recovery and Reinvestment Act State Department of Education California School Finance Authority charter schools tax credits bond issuance deadlines IRS Notice 2009-35 Charter School Facilities Program volume cap reallocation process exemption from rulemaking equity in distribution federal subsidy bonds

(Added by Stats. 2010, Ch. 11, Sec. 2. (SB 205) Effective March 25, 2010.)

Section § 12001.6

This law sets the guidelines for distributing California's federal tax credit bond volume cap, which is money from the federal government to help build or fix schools, under the American Recovery and Reinvestment Act of 2009. It explains that this money isn't the same as federal funds for other programs. The state can assign this money to various school districts and county education offices to improve school facilities. School districts and offices with fewer students or those that could not use their 2009 allocation can apply, but there are conditions, like funding through voter-approved bonds or other financing options. The money is mainly given out on a first-come, first-served basis, but if there's a lot of interest, priority goes to projects that have shown readiness, like having architectural approval or serving schools with many low-income students. Charter schools also have a designated portion of the funding, with criteria focusing on their good standing, financial soundness, and ability to issue bonds. Applications for this funding require specific documentation and deadlines, and any money not used in time goes back to the state for redistribution.

(a) The Legislature hereby finds and declares that the federal tax credit bond volume cap for qualified school construction bonds designated to California by the federal American Recovery and Reinvestment Act of 2009 (P.L. 111-5), together with Internal Revenue Service Notice 2010-17 issued pursuant thereto, does not constitute federal moneys, federal funds, or funds of any kind for any purpose under this code.

(b) The department is authorized to assign and distribute the state’s 2010 federal tax credit bond volume cap for qualified school construction bonds to or for the benefit of school districts and county offices of education in the state.

(c) There is hereby assigned to the department six hundred fifty-one million six hundred fifty-two thousand dollars ($651,652,000) of the state’s 2010 federal tax credit bond volume cap for qualified school construction bonds.

(1) A school district or county office of education may apply for the federal tax credit bond volume cap for qualified school construction bonds if the project is funded by local voter-approved bonds issued by the school district or bond anticipation notes as authorized by Section 15150. A county office of education and a school district with an enrollment of 2,500 or less may use other forms of financing with the submission of a resolution adopted by the county board of education or governing board of the school district authorizing the issuance of the financing.

(2) A school district or county office of education that received a 2009 allocation but did not make any issuance may apply for 2010 federal tax credit bond volume cap for qualified school construction bonds nine months after the effective date of this section.

(3) A school district or county office of education that received a 2009 or 2010 federal tax credit bond volume cap for qualified school construction bond allocation from the United States Department of the Treasury is not eligible to apply.

(4) Five business days after the enactment Section 2 of Chapter 266 of the Statutes of 2010, the department shall post the application form on its Internet Web site.

(A) An application must be submitted via certified mail.

(B) An application shall not be postmarked until 30 business days after the enactment of Section 2 of Chapter 266 of the Statutes of 2010.

(C) An application shall include the total number of enrolled pupils who qualify for the federal free and reduced price meal program and the total overall pupil enrollment for the 2008–09 school year.

(5) An application not meeting the conditions set forth in paragraphs (1) and (4) shall be returned to the applicant.

(6) Applications meeting the conditions set forth in paragraphs (1) and (4) shall be accepted on a first-come-first-served basis by date of postmark. If this program is oversubscribed, order of allocation shall be established using the following criteria:

(A) First, earliest date of postmark.

(B) Second, the project for which the federal qualified school construction bond authorization will be applied received approval from the Division of the State Architect before the application was submitted.

(C) Third, the greater percentage of pupils who qualify for the federal free and reduced price meals program and are enrolled in the applying school district or county office of education in the 2008–09 school year. The department shall certify the number of pupils who qualify and the overall enrollment and calculate the percentage to the nearest one-hundredth of 1 percent.

(7) The department shall authorize the 2010 federal tax credit bond volume cap for qualified school construction bonds no sooner than December 1, 2010.

(8) The department shall maintain a waiting list of eligible school districts and county offices of education that did not receive an allocation in the order established pursuant to paragraph (6).

(9) An applicant may not apply for more than twenty-five million dollars ($25,000,000) of 2010 federal tax credit bond volume cap for qualified school construction bonds.

(10) A school district or county office of education applying for 2010 federal tax credit bond volume cap for qualified school construction bonds authorization shall certify in its application that it will fulfill all of the federal qualified school construction bond program requirements, including both of the following requirements:

(A) Within six months of the date of issuance, the school district or county office of education shall enter into a contract or contracts for use of an amount of bond proceeds equal to 10 percent of the authorization.

(B) Within three years of the date of issuance, the school district or county office of education shall spend 100 percent of the bond proceeds for a qualified purpose.

(11) Fifteen days after bond issuance, the school district or county office of education shall submit to the department a copy of the appropriate federal Internal Revenue Service Form, Information Return for Tax-Exempt Bonds, as confirmation of issuance.

(12) Thirty days after the completion of the expenditure the recipient shall submit a completion report to the department. The completion report must be certified by the bond counsel of the school district or county office of education.

(13) If any or all of the federal qualified school construction bond authorizations to a school district or county office of education are not issued within six months from the date of authorization, any or all unused federal qualified school construction bond authorizations shall revert to the department. No extensions shall be provided.

(A) The department shall reallocate any remaining federal qualified school construction bond allocation to school districts or county offices of education that were eligible and applied for the authorization but did not receive an allocation.

(B) Reverted 2010 federal tax credit bond volume cap for qualified school construction bonds shall be allocated to school districts or county offices of education pursuant to the order of priority established by paragraph (6).

(C) The department shall allocate reverted federal qualified school construction bond authorizations as they are available and until all are issued.

(d) The California School Finance Authority, established pursuant to Section 17172, is authorized to assign and distribute the state’s 2010 federal tax credit bond volume cap for qualified school construction bonds to or for the benefit of charter schools, or to be further assigned and distributed to one or more issuers in the state for the benefit of charter schools, as determined by the authority.

(1) There is hereby assigned to the California School Finance Authority, established pursuant to Section 17172, sixty-eight million four hundred six thousand dollars ($68,406,000) of the state’s 2010 federal tax credit bond volume cap for qualified school construction bonds, to be issued for the benefit of charter schools, or to be further assigned and distributed to one or more issuers in the state for the benefit of charter schools, as the authority shall determine.

(2) A charter school may apply for the federal qualified school construction bond volume cap if it meets all of the following criteria:

(A) The charter school is operated as, or is operated by, a nonprofit entity.

(B) The charter school has an approved charter in place that is current at the time of application and continuously through the date of bond issuance.

(C) The chartering authority certifies that the charter school is in good standing and is in compliance with the terms of its charter.

(D) The charter school provides the level of classroom-based instruction specified in paragraph (1) of subdivision (e) of Section 47612.5.

(E) The applicant has completed at least three full school years of instructional operation as a charter school as of the end of the previous school year.

(3) Five business days after the effective date of this section, the California School Finance Authority shall post the application form and fee schedule on its Internet Web site.

(4) An application shall not be postmarked until 30 business days after the effective date of this section.

(5) Following a review of all applications and a preliminary award of borrowing authority, the California School Finance Authority shall ask applicants to provide additional information as necessary for the issuance of the bonds.

(6) Applications that meet the conditions set forth in paragraph (2) shall be considered by the California School Finance Authority on a first-come-first-served basis by date of postmark. If the program is oversubscribed, staff shall present a priority list to the authority pursuant to paragraph (7).

(7) If the program is oversubscribed, priority shall be assigned first to those charter schools that are best able to demonstrate to the California School Finance Authority, in its sole discretion, that they will be capable of accessing the capital markets or be privately placed with an investor. The order of allocation shall be established using the following criteria:

(A) Applicants that are able to obtain credit enhancement for a qualified school construction bond financing, including a bank letter of credit, or contribute substantial equity to a project, or are otherwise able to obtain investment-grade credit ratings shall receive priority over other applicants.

(B) If multiple applicants satisfy the criteria described in subparagraph (A), priority shall be assigned to applications with the earliest postmark date. An application that is hand delivered and does not have a postmark date will be ranked based on the time the application is received by the California School Finance Authority.

(8) Applicants shall not apply for more than twenty-five million dollars ($25,000,000) of qualified school construction bond authorization per project.

(9) Subsequent application cycles may be considered if borrowing authority for qualified school construction bonds remains available after the initial application period.

(10) Subject to the sole discretion of the California School Finance Authority, authorization to borrow qualified school construction bond proceeds is contingent on the issuance of the qualified school construction bonds by December 31, 2011, after which time the authorization expires and the authority may allocate the authorization to another qualified applicant.

(11) The California School Finance Authority shall allocate reverted federal qualified school construction bond authorization as it becomes available and until all of the authorization is issued.

(12) If an applicant uses any federal tax credit bond volume cap in conjunction with a bond that will serve as a local match for purposes of the Charter School Facilities Program established by Section 17078.52, the applicant, in addition to the requirements of this section, shall comply with all of the requirements of the Charter School Facilities Program.

tax credit bond qualified school construction bonds American Recovery and Reinvestment Act federal tax credit California school funding voter-approved bonds charter schools school district applications Division of the State Architect free and reduced price meals bond allocation California School Finance Authority Charter School Facilities Program deadline for bond issuance federal Internal Revenue Service Form

(Amended by Stats. 2011, Ch. 296, Sec. 49. (AB 1023) Effective January 1, 2012.)

Section § 12001.7

If a charter school in California wants to apply for certain federal bonds to improve or change school district property, it must inform the local district superintendent and governing board in writing at least 30 days before applying.

Notwithstanding any other law, if a charter school applies for the federal qualified school construction bond volume cap, or any other federal bond borrowing authority, the charter school shall notify, in writing and at least 30 days before submitting the application, the district superintendent of schools and the governing board of the school district in which the charter school is physically located of its intent to rehabilitate, encumber, or otherwise alter school district property.

charter school federal bonds qualified school construction bond volume cap borrowing authority rehabilitate encumber alter property notify district written notice 30 days notice district superintendent governing board

(Added by Stats. 2012, Ch. 80, Sec. 1. (AB 1859) Effective January 1, 2013.)

Section § 12002

This law establishes the Auxiliary State School Fund within California's State Treasury. It specifies that federal money given to the state for education, which isn't designated to go elsewhere by federal or state law, can be placed into this fund.

There is hereby created in the State Treasury the Auxiliary State School Fund. Any funds received under act of Congress as federal aid to education, and not required by such act or any law of this state to be otherwise deposited, may be deposited in the Auxiliary State School Fund.

Auxiliary State School Fund federal aid to education State Treasury education funding federal money finance allocation education finance funding deposit Congressional funds California education Federal education support fund management state fund treasury fund federal aid management

(Enacted by Stats. 1976, Ch. 1010.)