BILL ANALYSIS
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CONFERENCE COMPLETED
Bill No: AB 16
Author: Hertzberg (D), et al
Amended: Conference Report No. 1, 3/20/02
Vote: 27 - Urgency
SENATE EDUCATION COMMITTEE : 11-1, 8/22/01
AYES: Vasconcellos, McPherson, Alarcon, Alpert, Chesbro,
Karnette, O'Connell, Ortiz, Scott, Sher, Vincent
NOES: Knight
SENATE FLOOR : 26-7, 8/27/01
AYES: Alarcon, Alpert, Bowen, Burton, Chesbro, Costa,
Dunn, Escutia, Figueroa, Karnette, Kuehl, Machado,
McPherson, Murray, O'Connell, Ortiz, Peace, Perata,
Polanco, Romero, Scott, Sher, Soto, Speier, Torlakson,
Vasconcellos
NOES: Ackerman, Brulte, Haynes, Knight, Margett,
McClintock, Oller
CONFERENCE COMMITTEE VOTE : 4-0, 3/20/02
AYES: Senate Members: Alpert and Chesbro
Assembly Members: Strom-Martin and Goldberg
ASSEMBLY FLOOR : 71-8, 3/21/02 - See last page for vote
SUBJECT : Kindergarten-University Public Education
Facilities Bond
Acts of 2002 and 2004
SOURCE : Author
CONTINUED
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DIGEST : This bill enacts the Kindergarten-University
Public Education Facilities Bond Acts of 2002 and 2004, and
specifies procedures for the expenditure of the funds.
Conference Committee Amendments add all provisions relating
to the bond acts. The bill previously contained intent
language.
ANALYSIS : Under current law, the State School Facilities
Program (SFP), funding for construction of new schools and
modernization of old schools comes from both state and
local sources. State funding comes from voter-approved
General Obligation bonds and is allocated to school
districts by the State Allocation Board (SAB) pursuant to
the Leroy F. Greene School Facilities Act of 1998 (SB 50,
Chapter 407, Statutes of 1998), which was designed to be
less complex then was the previous law. Local funding
comes from a variety of sources including local General
Obligation bonds, Mello-Roos bonds and developer fees.
In November 1998, the voters approved Proposition 1A that
authorized a total of $9.2 billion in state General
Obligation bonds for education facilities. $2.5 billion of
the amount was for higher education facilities and the
remaining $6.7 billion was for K-12 facilities. These
state bond funds will be fully allocated by mid-2002.
Education Facility Bond Provisions :
1. Authorizes two statewide general obligation (GO) bond
elections, one in 2002 and one in 2004, in the total
amounts of $13.05 billion and $12.3 billion
respectively.
2. Specifies that the bonds would be known as the
Kindergarten-University Public Education Facilities Bond
Act of 2002 and the Kindergarten-University Public
Education Facilities Bond Act of 2004 respectively.
3. Specifies that the $13.05 billion 2002 bond would be
allocated as follows:
A. $11.4 billion in GO bonds would be for K-12
education facilities as follows:
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(1) $4.8 billion for new construction and
modernization projects that have been filed with
the State by February 1, 2002 (also known as the
"pipeline" projects).
(2) $3.45 billion for new school construction related
to growth. Of this amount: (a) $100 million is
for charter schools, subject to subsequent
legislation; and, (b) $25 million is for school
fee relief, if the housing bond is not approved by
the voters at the November 2002 election.
(3) $1.4 billion for modernization of older schools.
(4) $1.7 billion for Critically Overcrowded Schools
(COS).
(5) $50 million for joint-use facilities.
A. $1.65 billion in GO bonds would be for higher
education facilities as follows:
(1) $408.2 million for the University of California
(UC),
(2) $495.9 million for the California State
University (CSU), and
(3) $745.9 million for the California Community
Colleges (CCC).
1. Appropriates $651 million in lease revenue bonds for
higher education projects. Of this amount approximately
$279 million is for UC projects, $191 million is for CSU
projects, and $170.5 is for CCC projects. (The combined
GO and lease revenue amounts total $2.3 billion for
higher education.)
2. Specifies that the $12.3 billion 2004 GO bond would be
allocated as follows:
A. $10 billion would be for K-12 education facilities
as follows:
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(1) $5.26 billion for new school construction related
to growth. Of this amount: (a) $300 million is
for charter schools, subject to subsequent
legislation; and, (b) $25 million is for school
fee relief, if the housing bond is not approved
by the voters at the November 2002 election.
(2) $2.25 billion for modernization of older schools.
(3) $2.44 billion for Critically Overcrowded Schools
(COS).
(4) $50 million for joint-use facilities.
A. $2.3 billion would be for higher education
facilities as follows:
(1) $690 million for UC;
(2) $690 million for CSU; and,
(3) $920 million for CCC.
Construction Program Reforms :
1. The bill proposes other changes in school facility
construction as follows:
A. Expands the membership of the State Allocation
Board from 7 to 10 members by adding one member of
the Senate to be appointed by the Senate Rules
Committee, one member of the Assembly to be appointed
by the Speaker, and one member appointed by the
Governor. Requires that the Senate and Assembly
members consist of two members from the majority
party and one member from the minority party.
B. Requires the Seismic Safety Commission to
establish an advisory group to determine if
regulations can be developed that would bring
existing commercial buildings into compliance with
the seismic safety standards of the Field Act.
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Requires the Seismic Safety Commission to report to
the Legislature and the Governor by January 8, 2003.
If the Seismic Safety Commission reports that such
regulations can be developed, the State Architect
shall promulgate such emergency regulations by April
1, 2003.
C. Eliminates the priority point system contained in
current law.
D. Extends permanently the "small district
assistance" program. Provides that small rural
districts will be able to use their approved
eligibility for three years.
E. Requires that the state modernization grants be
matched by the school districts on a 60%
(state)-to-40% (local) basis for projects filed after
March 15, 2002. This is an increase from the current
80-20 match. However, the dollar amount of the state
per-pupil modernization grant will remain the same.
F. Defers the implementation of "level 3" developer
fees until the state no longer has funding for new
construction apportionments after the 2004 primary
election.
G. Tightens standards to qualify for financial
hardship funding by placing into statute the recently
adopted State Allocation Board (SAB) regulations
which require districts to hold an election for a
local bond measure and require a district to bond
itself to 60% of capacity.
H. Eliminates the eligibility reduction imposed on
high school districts which assumes a percentage of
Multi Track Year Round Education (MTYRE) (the "6%
hit").
I. Provides that SAB will develop regulations to
supplement modernization grants for buildings that
are 50 years or older.
J. Provides that public schools are authorized to
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receive an allowance not to exceed 5% of the total
construction or modernization cost under this section
to maximize the use of energy efficiency,
conservation, and renewable energy technologies in
all new school construction and school modernization
projects, towards the goal of ultimately achieving
zero-energy-use schools in California.
(1) Establishes a joint use program of $50 million in
2002 and $50 million in 2004 to build facilities
that are jointly used by the school and the
community.
(2) Establishes a set aside of funds for COS to allow
qualifying districts (districts with schoolsites
that have high numbers of students per acre)
additional time to file their application for a
final apportionment. Specifics related to the COS
program:
(a)The 2002 bond includes $1.7 billion for COS;
and the 2004 bond includes $2.44 billion for
COS.
(b)Projects may receive a preliminary
apportionment for four years, with a single
one-year extension permitted.
(c)If funds remain unused after preliminary
apportionments have been made, the unneeded
funds will be transferred to the regular new
construction program.
(d)Districts qualify to participate in COS set
aside if existing schools in the district
exceed, by 210%, the recommended numbers of
students per acre (site density standards).
(e)A district receiving funds from COS is required
to build in the general location of the
qualifying densely overcrowded schools and must
enroll at least 75% of its pupils from such
overcrowded schools.
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(1) Requires that as a part of its application for
large construction and modernization projects, a
school district shall certify that it has
considered the need for vocational and career
technical facilities to adequately meet its
program needs consistent with current law.
(2) Sets aside funds for facilities for charter
schools, subject to subsequent legislation, in the
amounts of $100 million in the 2002 bond and $300
million in the 2004 bond.
Comments
1. Estimate of Need for Additional Bond Resources .
According to the Office of Public School Construction,
over the next four years, there is a need for $21.1
billion in state bonds for school facilities to meet
increasing enrollment demand and modernization needs.
According to higher education officials, $9 billion is
needed over the next four years for the facility needs of
the University of California, California State University
and the California Community Colleges.
2. Previous Voter-Approved State Education Bonds .
California voters have voted on the following state
propositions to provide General-Obligation bonds for
K-12 school construction. The only one that has failed,
as noted below, was Proposition 1B in June 1994, which
failed by .4 percent of the vote.
November 1982 Proposition
1 $500 million
November 1984 Proposition
2 450 million
November 1986 Proposition
53 800 million
June 1988
Proposition 75 800 million
November 1988 Proposition
79 800 million
June 1990
Proposition 123 800 million
November 1990 Proposition
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146 800 million
June 1992
Proposition 152 1.9 billion
November 1992 Proposition
155 900 million
June 1994 (Failed) Proposition 1B 1.0
billion
March 1996 Proposition
203 3.0 billion
($2.025 billion K-12 + $975
million Higher Ed.)
November 1998 Proposition
1A 9.2 billion
($6.7 billion K-12 + $2.5 million
Higher Ed.)
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
General Fund debt service costs would vary depending on the
rate at which the bonds would be sold (many of these bonds
may not be sold for several years). According to the
Legislative Analyst for every $1 billion of GO bonds sold
with a 25 year term with level debt payments at an average
interest rate of 5%, the annual debt service would be $71
million.
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Ashburn, Bates, Briggs, Calderon,
Bill Campbell, Canciamilla, Cardenas, Cardoza, Cedillo,
Chan, Chavez, Chu, Cogdill, Cohn, Corbett, Correa, Cox,
Daucher, Diaz, Dickerson, Dutra, Firebaugh, Florez,
Frommer, Goldberg, Harman, Havice, Hertzberg, Horton,
Jackson, Keeley, Kehoe, Kelley, Koretz, La Suer, Leach,
Leonard, Leslie, Liu, Longville, Lowenthal, Maddox,
Maldonado, Matthews, Migden, Nakano, Nation, Negrete
McLeod, Oropeza, Robert Pacheco, Papan, Pavley, Reyes,
Richman, Runner, Salinas, Shelley, Simitian, Steinberg,
Strickland, Strom-Martin, Thomson, Vargas, Washington,
Wayne, Wiggins, Wright, Wyland, Wesson
NOES: Aanestad, Bogh, John Campbell, Hollingsworth,
Mountjoy, Rod Pacheco, Wyman, Zettel
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NC:jk 4/3/02 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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