Ed. Code, § 17006

(a) The board shall not enter into any lease with respect to an application for replacing inadequate school facilities unless it first has investigated and made a finding, or the governing board of a self-certifying district, as applicable, first certifies that it has investigated and made a finding, consistent with guidelines adopted by the board, that one or both of the following conditions exists:

(1) It would not be economical or good practice to rehabilitate those facilities.

(2) The school facilities are inadequate due to their susceptibility to repeated flooding. The board shall develop and adopt regulations that define inadequacy of school facilities on the basis of susceptibility to repeated flooding. The building area of any facility found to be inadequate pursuant to this subdivision shall be excluded, for the purposes of any application for the replacement of any facility, from the calculation under this chapter of the area of adequate school construction existing in the applicant school district.

(b) The self-certifying district shall maintain documentation of each investigation and finding it conducts pursuant to subdivision (a) as may be required by the board, and the investigation and finding shall be subject to subsequent audit as the board may direct.

(c) For purposes of this chapter, a “self-certifying district” as to any project to be funded under this chapter, is an applicant district that provides 50 percent or more of the cost of the project from funding sources other than any state program administered by the board.