A 1998 law that builders hoped would keep a lid on school impact fees is instead becoming a tool for some districts to charge far higher fees than builders envisioned. The 1998 measure, known as SB 50, capped school fees at $1.93 per square foot. The Legislature passed SB 50 as part of a deal in which developers then agreed to support a $9.2 billion school facility bond on the November 1998 state ballot. Voters subsequently approved Proposition 1A. (See CP&DR June 1999.) However, SB 50 allows for school districts to charge "Level Two" fees in excess of $1.93 per square foot, and numerous school districts are going through the process. For instance, Modesto City Schools intends to adopt a fee of $3.73 this month, said Debbe Bailey, the district's director of planning and research. To go beyond the $1.93 limit, districts must prepare a five-year school facilities needs analysis as spelled out in the legislation, and must apply and be eligible for state funds. Then the district also must meet one of four criteria: 40 % of students enrolled in multi-track, year round school; or 50 % to two-thirds voter approval for a general obligation bond in the district during the last four years (meaning it failed); or 20 % of teaching stations in portable classrooms; or certain debt ceilings having been reached by the district. As of next year, districts must meet two of these criteria. Bailey's district cleared the portable classroom and bond indebtedness hurdles, but the required needs analysis was a challenge. "It's not a real needs analysis, it's a fee formula," she said. "Our district has probably one of the best data bases in the state, and it has taken us almost a year to get the information together." Several school districts in the San Diego area are preparing to levy Level Two fees of $2 to $5 per square foot, said Tom May, an attorney who assists with school financing. The requirements regarding portable classrooms and a failed local bond that got 50% of the vote are particularly easy to meet, May said. When Proposition 1A's $2.9 billion earmarked for additional K-12 schools runs out, districts may charge builders the full cost of new facilities, minus locally dedicated school monies, Bailey added.