Charter School Revolving Loan Fund.

Senator Richardson's proposal to modify California's Charter School Revolving Loan Fund doubles the maximum loan amount available to charter schools from $250,000 to $500,000 and expands eligibility to include schools converting from existing institutions. The legislation adjusts the fund's interest rate structure, establishing a minimum rate of 3% while allowing rates to reflect either the Pooled Money Investment Account return or half the state's most recent general obligation bond rate, whichever is lower.

The bill creates a three-tier priority system for loan approvals, with new charter schools receiving first consideration, followed by schools affected by state-declared natural disasters, and then all other charter schools. In cases of default, both the charter school and its managing entity would share repayment responsibility. Repayment periods extend up to five years for most recipients, with disaster-affected schools eligible for up to eight years.

The California School Finance Authority must provide annual fund condition reports to legislative committees and the Department of Finance. A special analysis due October 2029 will examine how loan recipients used funds disbursed after July 2026, including expenditures on facilities, staffing, equipment, and student services. The bill maintains existing provisions requiring the Controller to deduct loan repayments from schools' annual apportionments and deposit interest payments into the Charter School Security Fund.