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 charter 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 instead would authorize loans from the fund to be made indirectly to a chartering authority for one or more charter schools, would restrict loans that are made directly to a charter school to those charter schools formed as a nonprofit corporation, and would additionally authorize loans to be made indirectly to an entity managing a charter school, as provided. The 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 increase the maximum repayment period of a loan from 5 years to instead be 15 years, 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 interest rate is prohibited from being set at a rate lower than 3%. By expanding the eligibility for and purposes of previously appropriated funds, the bill would make an appropriation.

Statutes affected:
SB 631: 41365 EDC, 41366.5 EDC
02/20/25 - Introduced: 41365 EDC, 41366.5 EDC