Official Summary Text
SB 631, Richardson.
Charter School Revolving Loan Fund.
Existing law establishes the Charter School Revolving Loan Fund, under the administration of the California School Finance Authority, and authorizes loans to be made from the fund to (1) a chartering authority for charter schools that are not a conversion of an existing school or (2) directly to a charter school that qualifies to receive specified funding and is not a conversion of an existing school. Under existing law, moneys appropriated to the fund remain available for purposes of the fund until reappropriated or reverted by the Legislature. Existing law limits the amount loaned to a qualifying charter school from the fund to $250,000 over the lifetime of the charter school and authorizes a qualifying charter school to receive money obtained from multiple loans made directly to the charter school or to the school’s chartering authority from the fund, as long as the total amount
received from the fund over the lifetime of the charter school does not exceed $250,000. Existing law requires the Controller, commencing with the first fiscal year following the fiscal year the charter school receives the loan, to deduct from apportionments made to the chartering authority or charter school, as appropriate, an amount equal to the annual repayment of the amount loaned to the chartering authority or charter school for the charter school and to pay the same amount into the fund, as provided. Existing law requires moneys in the fund to be loaned at the interest rate earned by the moneys in the Pooled Money Investment Account as of the date of disbursement of the funds to the charter school.
This bill, among other
things, would increase the maximum loan amount and the maximum lifetime loan limitation by $250,000 to instead be $500,000, would revise and recast the maximum repayment period of a loan, as specified, would no longer make the charter school solely liable for repayment of a loan in the event of a default, and would revise criteria for receiving priority in the granting of loans. The bill would require moneys in the fund to instead be loaned at the interest rate described above or at a rate equal to 50% of the interest rate paid by the state on the most recent sale of state general obligation bonds, whichever is less, except that the bill would prohibit the interest rate from being set at a rate lower than 3%.
Existing law creates the Charter School Security Fund,
under the administration of the California School Finance Authority, and requires moneys in the fund to be available for deposit into the Charter School Revolving Loan Fund in case of default on any loan made from the Charter School Revolving Loan Fund. Existing law requires the California School Finance Authority, by October 1 of each year, to provide detailed fund condition information for the Charter School Revolving Loan Fund and the Charter School Security Fund to the Department of Finance and the Legislative Analyst’s Office.
This bill would require the above-described annual report to also be provided to specified committees of the Legislature. The bill would require the report due by October 1, 2029, to additionally include an analysis and summary of the expenditures of loan funds made by the charter school loan recipient for loans issued on or after July 1, 2026, as provided.