BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 346
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          Date of Hearing:   April 1, 2009

                           ASSEMBLY COMMITTEE ON EDUCATION
                                Julia Brownley, Chair
                   AB 346 (Torlakson) - As Amended:  March 24, 2009
           
          SUBJECT  :   School facilities:  Joint-use projects

           SUMMARY  :   Expands the type of projects, partners, and local  
          contribution that are allowed by the Joint-Use Facilities  
          Program.  Specifically,  this bill  :   

          1)Authorizes the joint-use funds to construct facilities  
             adjacent to  a kindergarten and grades 1-12 (K-12) schoolsite  
            that is owned by a state or local governmental entity.

          2)Requires the joint-use agreement to construct facilities on  
            land owned by a state or local governmental agency to provide  
            that the land be leased to the school district for a time  
            period that reflects the useful life of the facility  
            constructed.

          3)Expands the types of joint-use projects authorized for funding  
            to include a child health and wellness clinic, career  
            technical building or shop, science and technology laboratory,  
            science center with exhibits or educational program that meet  
            current state content standards, historical or cultural  
            education center with exhibits or educational programs that  
            meet current state content standards, performing arts center,  
            physical education and outdoor recreation site development,  
            and parking facility.

          4)Authorizes a school district to enter into a joint-use  
            agreement with one or a combination of existing authorized  
            entities.  Adds as an authorized local joint-use partner, an  
            entity renting or leasing school facilities through the local  
            joint use program, which includes other school districts;  
            educational agencies, except private educational institutions  
            which maintain kindergarten or grades 1 to 12, inclusive;  
            governmental units; nonprofit organizations; community  
            agencies; professional agencies; commercial and noncommercial  
            firms; corporations; partnerships; businesses; and  
            individuals.  Specifies that prior to entering into a  
            joint-use agreement, the local governing board shall determine  
            all of the following:  








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             a)   The shared use of the facility will not interfere with  
               the educational program or activities of a school or class  
               conducted on the real property or in a building;
             
             b)   The shared use of the facility will not jeopardize the  
               safety of the pupils of the school; and

             c)   The shared use of the facility and the joint-use  
               agreement benefit the school district and the public at  
               large through beneficial and efficient land use, through a  
               savings, or with the generation of revenue for the school  
               district. 

          5)Authorizes the inclusion of the value of land or real property  
            as part of the local contribution for a joint-use project if  
            the land or real property is district property not paid or  
            acquired with state funds, or if the district does not own the  
            land or real property but will be given the land free of  
            charge.

          6)Clarifies that a school district can provide the full 50  
            percent local match from a local bond that specifies that the  
            proceeds of the sale are to be used for joint use projects in  
            general, rather than for specified projects.

          7)Authorizes a portion of the joint-use partner's contribution,  
            up to 10 percent of eligible project costs, to include  
            equipment with an average useful life expectancy of at least  
            10 years if the contribution is part of a career technical  
            education joint-use project.  

          8)Specifies that a facility created by the joint-use agreement  
            shall be a public facility with access to the facility  
            guaranteed for public use and requires the joint-use agreement  
            to ensure that the school district maintains priority for use  
            of the facilities.

          9)Specifies that a Joint-Use Facilities Project grant shall not  
            exceed $1.25 million per project per elementary schoolsite,  
            $1.875 million per project per middle schoolsite, or $2.5  
            million per project per high schoolsite.  Requires the grant  
            amounts to be adjusted annually for construction cost changes.

           EXISTING LAW  :








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          1)Establishes the Joint-Use Facilities program within the School  
            Facility Program (SFP) for both school and community purposes  
            to improve academic achievement.

          2)Specifies that a joint-use project is a part of an application  
            for new construction funding and will increase the size or  
            extra cost of the project.

          3)Specifies that the joint-use project proposes to either  
            reconfigure existing school buildings or construct new school  
            buildings or both, and the project will be located at a school  
            that does not have the type of facility for which funds are  
            requested or the existing facility is inadequate.

          4)Specifies that an eligible joint-use project includes a  
            multipurpose room, gymnasium, child care facility, library, or  
            teacher education facility.

          5)Specifies the eligibility requirements for funding, including:

             a)   The school district has entered into a joint-use  
               agreement with a governmental agency, public community  
               college, public college or university, or a nonprofit  
               organization approved by the State Allocation Board (SAB).

             b)   The joint-use agreement specifies the method of sharing  
               capital and operating costs, relative responsibilities for  
               the operation and staffing of the facility, and the manner  
               in which the safety of the pupils will be ensured.

             c)   The joint-use agreement specifies the amount of the  
               contribution to be made by the school district and the  
               joint-use partner toward the 50% local share.  Requires the  
               joint-use partner to contribute no less than 25% of  
               eligible project costs, unless the school district has  
               passed a local bond which specifies that such funds are to  
               be use for the joint-use project, in which case the  
               district may opt to provide up to the full 50% local share.

          6)Requires the SAB to establish standards for determining the  
            amount of supplemental grant funding to be made available for  
            each project.  

           7)Requires the SAB to annually adjust grant levels according to  








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            the statewide cost index for class B construction to reflect  
            construction cost changes.  

           8)Provides that the provisions of this bill shall become  
            operative only if the voters approve a statewide general  
            obligation bond act for the purpose of providing aid to school  
            districts to construct and modernize educational facilities at  
            a statewide election on or after January 1, 2010.  
           
           FISCAL EFFECT  :   Unknown

           COMMENTS  :    Background  .  AB 16 (Hertzberg), Chapter 33, Statutes  
          of 2002, established the joint-use program and allocated $50  
          million each from Proposition 47, passed by voters in 2002, and  
          Proposition 55, passed by voters in 2004.  AB 16, developed by a  
          Senate and Assembly conference committee, limited the use of  
          joint-use funds to a multipurpose room, gymnasium, child care  
          facility, library, or teacher education facility.  The bill also  
          required the projects to be part of the schoolsite, and limited  
          joint-use partners to governmental agencies, public community  
          colleges, public colleges or universities, or nonprofit  
          organizations approved by the SAB.  All the funds from  
          Proposition 47 and Proposition 55 have been apportioned.  

          Proposition 1D, the Kindergarten-University Public Education  
          Facilities Bond Act of 2006, passed by voters in November, 2006,  
          provided $29 million for this purpose and authorized the  
          transfer of $21 million from unused Leased Purchase Program  
          funds for joint-use projects.  AB 127 also authorized the  
          transfer of any remaining funds derived from the sale of bonds  
          issued or before January 1, 2006 to be transferred to any SFP  
          program.  The SAB has increased the program by a total of $23  
          million through this authorization.  As of March 25, 2009, a  
          total of $8.5 million remain.  

          This bill expands joint-use projects to sites  adjacent  to a  
          schoolsite if the land is owned by a  state or local  
          governmental agency and expands the type of projects allowable  
          to include career technical building or shop, science and  
          technology laboratory, science center with exhibits or  
          educational program that meet current state content standards,  
          historical or cultural center with exhibits or educational  
          program that meet current state content standards, performing  
          arts center, physical education and outdoor recreation site  
          development, and parking facility.  








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          This bill also provides more flexibility in negotiations with a  
          joint-use partner by expanding the type of contribution a  
          joint-use partner can provide to include, up to 10 percent of  
          eligible project costs, equipment with an average useful life  
          expectancy of at least 10 years if the project is a career  
          technical education facility.  

          AB 346 is substantially similar to SB 35 (Torlakson), which was  
          vetoed by the Governor in 2007 with the following message:

          "I am supportive of the joint-use facilities projects when they  
          actually encourage creative mutually beneficial relationships  
          between school districts and community partners.  However, I am  
          concerned that this bill would expand the Joint-Use Facilities  
          Program (Program) without ensuring that any additional funding  
          will be available for its purposes.

          Furthermore, the Program's intent to fund joint-use ventures  
          with equal local and State contributions could be undermined if  
          joint-use partners were able to contribute something other than  
          fiscal resources, such as equipment with a 10-year useful life,  
          where as the State share of the project is being funded with  
          30-year General Obligation Bonds.

          Finally, any changes to the Program should be debated within the  
          context of a future bond measure, to assure that these projects  
          are not funded at the expense of other educational facility  
          priorities."

          AB 346 varies from last year's SB 35 in the following ways:

          1)AB 346 authorizes construction of joint-use facilities on  
            property owned by a  state  governmental entity adjacent to a  
            K-12 schoolsite.  SB 36 limited the authority to  local   
            governmental entities.

          2)AB 346 expands joint-use partners to include professional  
            agencies, commercial and noncommercial firms, corporations,  
            partnerships, businesses, and individuals.

          3)AB 346 does not authorize a joint-use partner to contribute  
            less than 25 percent while SB 35 did.

          4)AB 346 limits the 10 percent of contribution of equipment only  








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            to career technical education projects while SB 35 provided  
            the authorization for all projects.

           Intent of program  .  Over the last year, the SAB has questioned  
          the legitimacy of some of the joint-use partners used in the  
          applications for funding.  For example, while district education  
          foundations do meet the eligibility criteria as a nonprofit, SAB  
          members questioned whether they meet the intent of the program.   
          The intent of the Joint-Use Facilities Program is to expand  
          partnerships with and facilities use to public higher education,  
          local governments, and community organizations to benefit the  
          local community.  SAB members were concerned that educational  
          foundations are simply extensions of a school or school district  
          and therefore do not meet the intent of expanding partnerships  
          with community organizations or local governmental entities.  At  
          the February, 2008 Board meeting, the SAB adopted regulations to  
          specify that a nonprofit organization joint partner must operate  
          programs and services for the community and pay for additional  
          ongoing operational costs or program services associated with  
          the joint-use purposes and/or a minimum of 25 percent of the  
          project costs.

          This bill expands partnerships to entities renting or leasing  
          school facilities through the local joint-use program.  While  
          many of these entities are already authorized partners  
          (educational institutions, governmental agencies), this  
          provision expands the types of partners to include private, for  
          profit entities, except for private K-12 schools, professional  
          agencies, and individuals.  It can be argued that private, for  
          profit entities and individuals also do not meet the spirit and  
          intent of the program.  Moreover, depending on how the private,  
          for profit entity and individual use the facility, who uses it,  
          and for what purpose the facility is used for, districts may be  
          violating California's Constitution prohibiting any public  
          agency from making "any gift of any public money or thing of  
          value to any individual, municipal or other corporation  
          whatever." Staff recommends striking lines 33 through 39 on page  
          4 and lines 1 through 6 on page 5.

          The sponsor, Coalition for Adequate School Housing (CASH),  
          argues that private, for profit entities can participate in the  
          non-funding local joint use program - which enables private and  
          public parties to rent or lease public school facilities - and  
          therefore should be authorized to participate in the funding  
          program.  








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           Local bond  .  Current law requires the joint-use partner to  
          provide 25 percent of the 50 percent local match, but allows the  
          districts to pay the full 50 percent through local bond funds if  
          the bond specifies that proceeds shall be used for the joint-use  
          project.  This bill changes the requirement that the local bond  
          specify the project and instead authorizes the bond language to  
          say that proceeds from the sale of bond funds shall be used for  
          joint-use projects generally.  

          Funding caps  .  Funding caps for projects serving elementary ($1  
          million), middle ($1.5 million), and high ($2 million) pupils  
          are established by the SAB through regulations.  According to  
          the author, "since these regulatory caps were established, they  
          have not been adjusted for increased construction costs.  OPSC  
          [Office of Public School Construction] found that the base  
          per-pupil grants, as well as the square-footage allowances for  
          Joint-Use Projects, have been increased by approximately 33  
          percent (2003-2008) in accordance with the Class B Construction  
          Cost Index [CCI].  AB 346 provides a 25% increase to the current  
          funding caps with the requirement to adjust them annually per  
          the CCI."  This bill proposes to increase the grants to $1.25  
          million for elementary school projects, $1.875 million for  
          middle school projects and $2.5 million for high school  
          projects.  Current law requires the SAB to adjust per pupil  
          grants annually using a Class B Construction Cost Index.  This  
          bill provides the same annual adjustment to this program.

           Arguments in Support  .  The author states, "The traditional  
          education model in California is evolving where the core  
          instructional spaces and traditional facilities may no longer be  
          adequate or appropriate to meet the educational needs of a given  
          community.  Allowing for joint enterprises to build the  
          aforementioned facilities, in partnership with the State, seeks  
          to maximize the use of limited local and state resources."

           Prior Legislation.   In addition to SB 35, SB 1677 (Torlakson)  
          was a similar bill that was vetoed by the Governor in 2006.

          Earlier versions of AB 2446 (Montanez), introduced in 2004,  
          added cultural arts center, recreational center, technology  
          center, health clinic, park, preschool facilities, or athletic  
          field as eligible joint-use facilities.  The version vetoed by  
          the Governor removed teacher education facilities as an eligible  
          joint-use facility project and allowed park and preschool  








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          facilities as eligible joint-use facilities.  The Governor  
          vetoed the bill stating that there are higher priority needs for  
          school bond funds, including relieving overcrowding.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Heart Association
          Antioch Unified School District
          Coalition for Adequate School Housing (sponsor)
          California Immigrant Policy Center
          California Pan-Ethnic Health Network
          California Park & Recreation Society
          California School Boards Association
          California School Health Centers Association
          Long Beach Unified School District
          Los Angeles Unified School District
          San Francisco Unified School District

          Opposition 
           
          None on file
           
          Analysis Prepared by  :    Sophia Kwong Kim / ED. / (916) 319-2087