AGC of California is proud to serve as a co-sponsor of Assembly Bill 2067 (AB 2067), introduced by Assembly Member Patel on February 18, 2026. This important legislation would extend California’s competitive lease-leaseback school construction program by five years, preventing the program’s current sunset and ensuring that school districts across the state can continue to partner with qualified contractors to build and modernize school facilities.
Why This Matters
The lease-leaseback delivery method, authorized under Education Code Section 17406, has been one of California’s most effective tools for delivering public school construction. Under this model, a school district leases its property to a qualified contractor, who constructs or renovates school facilities and then leases them back to the district. The program allows school districts to spread construction costs over time without taking on traditional government debt, enables early contractor involvement that improves cost and schedule certainty, and supports thousands of skilled trades jobs for AGC members and their subcontractors statewide.
Following years of litigation and statutory reform, the Legislature in prior sessions established a competitive best-value solicitation process for lease-leaseback contracts. That reformed, competitive program, now the model for how these projects are procured, is currently set to expire. Without AB 2067, the authority for school districts to use this delivery method would become inoperative on July 1, 2027, and be repealed entirely on January 1, 2028.
What AB 2067 Would Do
AB 2067 amends Education Code Section 17406 to extend the current lease-leaseback provisions by five years. Specifically, the bill would:
- Move the program’s inoperative date from July 1, 2027 to July 1, 2032; and
- Move the repeal date from January 1, 2028 to January 1, 2033.
This is a clean, targeted extension. No new mandates, no fiscal impact, and no changes to the competitive solicitation framework that was carefully negotiated in prior legislation. It simply ensures that school districts and contractors have continued access to a delivery method that works.
The Stakes
If this program sunsets, school districts would lose one of their most flexible and cost-effective construction tools at a time when California’s school infrastructure needs are greater than ever. For AGC members, the expiration of the lease-leaseback program would mean the loss of a significant pipeline of school construction work that supports good-paying skilled trades jobs in communities across the state.
