SB 740 Charter School Facility Grants and Funding Determinations

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The Charter School Facility Grant Program was enacted by Senate Bill (SB) 740 (Chapter 892, Statutes of 2001, Education Code Section 47614.5) in 2001, and provides funding assistance to charter schools for rent and lease expenditures that meet specific eligibility criteria. The law was updated in 2015 by the state budget bill, codified in statute by Assembly Bill (AB 104). To be eligible charter schools must serve a student population with at least 55 percent of their pupils eligible for free or reduced price meals (FRL), or they must be physically located in the attendance area of a public elementary school with 55 percent or more FRL qualified students. Charter schools may be reimbursed $750 per ADA or up to 75 percent of their total lease or rental costs, whichever amount is lower. Funds may not be used to purchase facilities or for lease/purchase agreements.

Charter schools occupying school district, state, or federal facilities, or charter schools receiving facilities through Proposition 39 (in accordance with Education Code Section 47614 ) are not eligible for reimbursement through SB 740. Non-classroom based charter schools are not eligible for lease reimbursements.

Education Code 47614.5 (d) states:

Funds appropriated for purposes of this section shall not be apportioned for any of the following:
(1) Units of average daily attendance generated through nonclassroom-based instruction as defined by paragraph (2) of subdivision (d) of Section 47612.5 or that does not comply with conditions or limitations set forth in regulations adopted by the state board pursuant to this section.
(2) Charter schools occupying existing school district or county office of education facilities.
(3) Charter schools receiving reasonably equivalent facilities from their chartering authority pursuant to Section 47614.

Read the text of Education Code Section 47614.5.

CCSA has been working diligently and recent changes have greatly expanded the eligibility criteria for this program.

  • A change in the 2015-16 State Budget now allows for schools that serve a population with 55 percent or more free and reduced price meal (FRPM) students to be eligible for this program.
  • This change includes schools geographically located in the attendance area of a public elementary school in which 55 percent or more of pupils qualify for free or reduced-price meals.
  • The changes in the budget came along with $20 million in additional funding, bringing the total amount allocated to this program for 2015-16 from $92 million to $112 million.

For additional details about this grant, see the California School Finance Authority webpage.

SB 740 Funding Determination

A charter school which offers more than 20 percent of its instruction outside of a classroom setting, or a charter school who serves fewer than 80 percent of its students in a non-classroom setting, is classified as a non-classroom school in accordance with Education Code Section 47612.5. All non-classroom based charters must file an SB 740 Funding Determination Form to receive state and federal funding. Schools must file annually unless they receive multi year determinations (up to five years).

In general, unless otherwise exempt, the following three criteria must be met in order for non-classroom based charters to be guaranteed full funding levels: (1) at least 80 percent of total revenues must be spent on instruction or classroom support, (2) at least 50 percent of public revenues must be spent on certificated staff salaries and benefits, and (3) the pupil-teacher ratio must be equal to or lower than the pupil-teacher ratio in the largest unified school district in the county or counties in which the school operates or the school must maintain a minimum of 25:1 ratio. A school that fails to meet these requirements may receive substantial cuts in its funding level.

Find more information about SB 740 non-classroom based determinations and access the determination form from the CDE page.

Definition of FTE (Full Time Equivalent)

A "Full Time Equivalent" is defined by Section IV. Supplemental Information of Instructions for the Nonclassroom-Based Funding Determination Form Fiscal Year 2014-15 as, "a FTE certificated employee means an employee who is required to work a minimum six-hour day and 175 days per Fiscal Year. PT positions shall generate a partial FTE on a proportional basis." One person cannot generate more than one FTE position. For example, if you have a teacher working four hours a day this will represent 4/6 or 2/3 of an FTE. If combined with a teacher working two hours a day, the two positions would represent one FTE.

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