Education Code section 41365
(a)
The Charter School Revolving Loan Fund is hereby created in the State Treasury. The Charter School Revolving Loan Fund shall be composed of federal funds obtained by the state for charter schools and any other funds appropriated or transferred to the fund through the annual budget process. Funds appropriated to the Charter School Revolving Loan Fund shall remain available for purposes of the fund until reappropriated or reverted by the Legislature through the annual Budget Act or any other act.(b)
Commencing with the 2013–14 fiscal year, the administration of the Charter School Revolving Loan Fund shall be transferred to the California School Finance Authority.(c)
Upon application and approval by the California School Finance Authority, loans may be made from moneys in the Charter School Revolving Loan Fund to a chartering authority for one or more charter schools, none of which are a conversion of an existing school, or directly to a charter school that qualifies to receive funding pursuant to Chapter 6 (commencing with Section 47630) of Part 26.8 of Division 4 that is not a conversion of an existing school. Money loaned to a chartering authority for a charter school, or directly to a charter school, pursuant to this section shall be used only to meet the purposes of the charter granted pursuant to Section 47605. The loan to a chartering authority for a charter school, or directly to a charter school, pursuant to this subdivision shall not exceed five hundred thousand dollars ($500,000) over the lifetime of the charter school receiving the benefit of the loan. A charter school may receive money obtained from multiple loans made directly to the charter school or to the charter school’s chartering authority from the Charter School Revolving Loan Fund, as long as the total amount received from the fund over the lifetime of the charter school does not exceed five hundred thousand dollars ($500,000).(d)
The California School Finance Authority may consider all of the following when making a determination to approve a charter school’s loan application:(1)
The soundness of the financial business plans of the applicant charter school.(2)
Availability of the charter school of other sources of funding.(3)
Geographic distribution of loans made from the Charter School Revolving Loan Fund.(4)
The impact that receipt of funds received pursuant to this section will have on the charter school’s receipt of other private and public financing.(5)
Plans for creative uses of the funds received pursuant to this section, such as loan guarantees or other types of credit enhancements.(6)
The financial needs of the charter school.(e)
Priority for loans from the Charter School Revolving Loan Fund shall be given in the following order:(1)
To new charter schools for startup costs.(2)
Until July 1, 2029, to charter schools that were damaged, destroyed, or closed for 10 or more schooldays as a result of conditions of disaster or of extreme peril in response to which the Governor has proclaimed a state of emergency pursuant to Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code.(f)
(1)Commencing with the first fiscal year following the fiscal year the charter school receives the loan, the Controller shall 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 under this section and pay the same amount into the Charter School Revolving Loan Fund in the State Treasury. Repayment of the full amount loaned to the chartering authority or charter school shall be deducted by the Controller in equal annual amounts over a number of years agreed upon between the loan recipient and the state agency authorized to administer the Charter School Revolving Loan Fund and the Charter School Security Fund.(2)
Charter schools that meet the priority criteria of paragraph (2) of subdivision (e) may request to start payments no later than the first fiscal year after the most recent full year of operation, subject to the approval of the California School Finance Authority.(3)
(A)The number of repayment years pursuant to paragraph (1) shall not exceed five years.(B)
Notwithstanding subparagraph (A), the number of repayment years pursuant to paragraph (1) shall not exceed eight years for charter schools that meet the priority criteria of paragraph (2) of subdivision (e).(g)
(1)Notwithstanding any other law, a loan may be made directly to a charter school pursuant to this section only in the case of a charter school that is established and operating pursuant to Part 26.8 (commencing with Section 47600) of Division 4.(2)
Notwithstanding any other law, in the case of default of a loan made directly to a charter school pursuant to this section, the charter school and the entity managing the charter school, as defined in Section 47604.1, shall be liable for repayment of the loan.(h)
The California School Finance Authority may adopt any necessary rules and regulations for the implementation of this section and Section 41366.6 and 41367. Any regulations adopted pursuant to this section may be adopted as emergency regulations in accordance with the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). The adoption of these regulations shall be deemed to be an emergency and necessary for the immediate preservation of public peace, health and safety, or general welfare.
Source:
Section 41365, https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC§ionNum=41365. (updated Jan. 1, 2026; accessed Dec. 22, 2025).
