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:

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:

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:

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.

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.

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.