BILL ANALYSIS                                                                                                                                                                                                    






                          SENATE COMMITTEE ON EDUCATION
                                Jack Scott, Chair
                            2007-2008 Regular Session
                                         

          BILL NO:       SB 156
          AUTHOR:        Simitian
          INTRODUCED:    January 30, 2007
          FISCAL COMM:   Yes            HEARING DATE:  March 28, 2007
          URGENCY:       No             CONSULTANT:Beth Graybill

           SUBJECT  :  California Reading and Literacy Improvement and  
          Public Library
                              Construction and Renovation Bond Act of  
          2008
          
           SUMMARY:   

          This bill enacts the California Reading and Literacy  
          Improvement and Public Library Construction and Renovation  
          Bond Act of 2008 to be submitted to the voters at the 2008  
          statewide primary election.  If approved by the voters, the  
          Act would authorize the issuance of $4 billion in general  
          obligation bonds for public library construction and  
          renovation, 

           BACKGROUND  

          In 1988, the voters approved $75 million in state general  
          obligation bonds under the California Library Construction  
          and Renovation Bond Act of 1988 to establish a grant fund for  
          the acquisition, construction, remodeling, or rehabilitation  
          of public library facilities.  These funds have been fully  
          expended.

          In 2000, the voters approved $350 million in state general  
          obligation bonds under the California Reading and Literacy  
          Improvement and Public Library Construction and Renovation  
          Bond Act of 2000 (Proposition 14) for the purpose of  
          financing public library construction and renovation.  All of  
          these funds have been allocated.

           ANALYSIS  

           This bill  :

          1)   Places a $4 billion general obligation bond measure on  



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               the February 5, 2008 ballot to finance a library  
               construction and renovation program.  

          2)   Authorizes the California Public Library Construction  
               Board to adopt rules, regulations, and policies for the  
               bond program and review grant applications.

          3)   Requires recipients to provide matching funds in an  
               amount equal to 35 percent of the costs of the project  
               and limits state funding available to a maximum of $30  
               million per project.

          4)   Requires 5 percent of the total bond amount to be made  
               available for joint-use projects.  

          5)   Establishes criteria and procedures for the allocation  
               of grant funds. 

           STAFF COMMENTS  

             1)     Need for the bill  :  Proponents contend that current  
                 library construction is not keeping pace with the  
                 growth of quickly expanding communities.  Some  
                 libraries are too old to be wired for essential  
                 technological advances such as computers and the  
                 internet.  In its last round of awards, the California  
                 Public Library Construction and Renovation Board  
                 reviewed proposals for 72 projects and funded 12 of  
                 the 21 applications rated as "outstanding" in the  
                 grant review.  The 2999 Bond Act provided funding for  
                 45 projects statewide.  The chart below shows the  
                 grants awarded and projects funded in each cycle.  



           -------------------------------------------- 
          |Project Applications   |Grant Awards        |
           -------------------------------------------- 
          |----+-------+----------+-----+--------------|
          |Cycl|#      |State     |Proje|State Funds   |
          |e   |Projects |Funds     |cts  |Allocated     |
          |    |       |Requested |     |              |
          |    |       |          |     |              |
          |----+-------+----------+-----+--------------|
          |Cycl|     61|$530,430,8|   17|  $145,395,447|
          |e 1 |       |        15|     |              |




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          |    |       |          |     |              |
          |----+-------+----------+-----+--------------|
          |Cycl|     66|$547,149,5|   16|  $108,157,632|
          |e 2 |       |        19|     |              |
          |----+-------+----------+-----+--------------|
          |Cycl|     72|$586,692,4|   12|   $80,588,293|
          |e 3 |       |        42|     |              |
          |----+-------+----------+-----+--------------|
          |    |       |Total     |   45|  $334,141,372|
          |    |       |Funded:   |     |              |
          |----+-------+----------+-----+--------------|
          |    |       |Sq Ft.:   |     |    $1,503,471|
          |----+-------+----------+-----+--------------|
          |    |       |Avg.      |     |$7,425,364    |
          |    |       |State     |     |              |
          |    |       |Grant:    |     |              |
           -------------------------------------------- 

                 A 2003 needs assessment, conducted by the California  
                 State Library, indicated there were more than 575  
                 public library projects that need to be built or  
                 renovated, totaling over $4 billion.  The State  
                 Library expects to complete an update of this needs  
                 assessment by April 2007.  


             2)     Prior legislation  :  This bill is similar to SB 1161  
                 (Alpert, Chapter 698, 2004) that proposed the  
                 California Reading and Literacy Improvement and Public  
                 Library Construction and Renovation Bond Act of 2006.   
                 Proposition 81 failed on the June 2006 ballot, with  
                 52.7% of voters voting against the initiative.  

             3)     Funding priorities  .  Proposition 81 would have  
                 required that priority be given to eligible projects  
                 that were not funded in the third application cycle of  
                 the 2000 bond program, effectively earmarking 50% of  
                 the $600 million of the funds that would have been  
                 available through the Act.  While this bill requires  
                 that at least 5% of total bond funds be reserved for  
                 joint-use projects, it does not require that priority  
                 be given to projects that were not funded in the 2000  
                 bond program.  Representatives of some unfunded  
                 library projects argue that this bill forces them to  
                 "lose their place in line" and start over in the  
                 planning process.  The Author's office notes that  




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                 rising construction costs and new building codes  
                 effectively make the old applications outdated and  
                 that the new bond program should begin with a level  
                 playing field.  

             4)     Infrastructure Bonds  .  In November 2006, voters  
                 approved $42.7 billion in general obligation bonds to  
                 fund infrastructure projects in transportation,  
                 education, resources, and housing.  The LAO estimates  
                 that when combined with existing bond authorizations,  
                 the debt-service costs to the General Fund will rise  
                 from $4.7 billion in 2007-08 to a peak of $7.5 billion  
                 in 2014-15.  SB 156 could increase these annual  
                 debt-service costs.  

           SUPPORT
           
          Board of Library Trustees, City of Burbank
          California Library Association
          California Special Districts Association
          California State PTA
          County of Santa Clara Board of Supervisors
          Fresno County Board of Supervisors
          Individual Letter
          Pleasanton Library Commission
          Santa Cruz Public Joint Powers Authority Board

           OPPOSITION
           
          California Taxpayers' Association
          Howard Jarvis Taxpayers Association