BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 UNFINISHED BUSINESS


          Bill No:  SB 365
          Author:   Wolk (D)
          Amended:  9/11/13
          Vote:     21

           
          PRIOR VOTES NOT RELEVANT

           ASSEMBLY FLOOR  :  Not available


           SUBJECT  :    Jail construction:  funding

           SOURCE  :     Author


           DIGEST  :    This bill makes changes to jail construction and  
          juvenile facility funding which is allocated by the Board of  
          State Community Corrections (BSCC).

           Assembly Amendments  delete the Senate version of the bill, which  
          dealt with corporation taxes, and add the current language.

           ANALYSIS  :    

          Existing law:

          1.Authorizes the Department of Corrections and Rehabilitation  
            (CDCR), a participating county, and the State Public Works  
            Board (SPWB) to acquire, design, and construct a local jail  
            facility approved by the Corrections Standards Authority (CSA,  
            now the BSCC), as specified, or a site or sites owned by, or  
            subject to a lease or option to purchase held by, a  
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            participating county. The ownership interest of a  
            participating county in the site or sites for a local jail  
            facility must be determined by the SPWB to be adequate for  
            purposes of its financing in order to be eligible under this  
            chapter. 

          2.Authorizes the SPWB to issue up to $445.771 million in revenue  
            bonds, notes, or bond anticipation notes, as specified, to  
            finance the acquisition, design, or construction, and a  
            reasonable construction reserve, of approved local jail  
            facilities, as specified, and any additional amount to pay for  
            the cost of financing, as specified. Proceeds from the revenue  
            bonds, notes, or bond anticipation notes may be used to  
            reimburse a participating county for the costs of acquisition,  
            preliminary plans, working drawings, and construction for  
            approved projects. 

          3.Allows a participating county that has received a conditional  
            award under this financing program to relinquish its  
            conditional award, provided that no state moneys have been  
            encumbered in contracts let by the county, and may reapply for  
            a conditional award under the financing program set forth in  
            this chapter. 

          4.Authorizes the SPWB to issue up to $774.229 million in revenue  
            bonds, notes, or bond anticipation notes, to finance the  
            acquisition, design, or construction, and a reasonable  
            construction reserve, of approved local jail facilities, as  
            specified, to pay for the cost of financing. Proceeds from the  
            revenue bonds, notes, or bond anticipation notes may be used  
            to reimburse a participating county for the costs of  
            acquisition, preliminary plans, working drawings, and  
            construction for approved projects. 

          5.Authorizes the SPWB to issue up to $300 million in revenue  
            bonds, notes, or bond anticipation notes to finance the  
            acquisition, design, renovation, or construction, and a  
            reasonable construction reserve, of approved local youthful  
            offender rehabilitative facilities. 

          6.Establishes the BSCC, abolishes the CSA, and states that  
            references in statute to the CSA shall now refer to the BSCC. 

          This bill: 

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          1.Moves $80 million from AB 900 Phase I funding to AB 900 Phase  
            II funding. 

          2.Allows a county which has been conditionally awarded financing  
            to construct a juvenile facility to apply to the BSCC for  
            redirection of the conditional award to another county that  
            will be the lead county if the original county determines that  
            joint participation in a shared regional facility would  
            benefit the needs of the counties involved. 

          3.Authorizes BSCC to redirect the conditional award if it  
            determines that redirection would result in cost savings,  
            regional efficiencies, increased services, and improved  
            outcomes. 

          4.Specifies that redirection may only be considered prior to any  
            approval or establishment of the project by the board. 

           Background
           
          AB 900 (Solorio, Chapter 7, Statutes of 2007) authorized $1.2  
          billion in state lease revenue bond funding for the construction  
          of local jail facilities.  AB 900 split the funding into two  
          phases.  The first phase of funding was allocated as conditional  
          awards in November 2009 and approximately $620 million was  
          awarded to the following counties: San Bernardino, San Joaquin,  
          Kern, Santa Barbara, San Diego, San Luis Obispo, Solano, Madera,  
          Calaveras, Amador, and San Benito. 

          Phase I originally included $750 million, but since only $620  
          million was awarded, the remaining funds were shifted to Phase  
          II in AB 111 (Budget Committee).  AB 111 also removed  
          requirements that 4,000 local jail beds and 2,000 reentry beds  
          be constructed prior to making the Phase II jail funds  
          available. AB 111 also changed the preferences for counties  
          seeking jail construction funding to the counties that have the  
          largest percentage of inmates in state prison in 2010.  
          Previously, preference had been given to counties that helped to  
          site reentry facilities, establish mental health day treatment  
          and crisis care, and establish continuum of care programs for  
          parolees. 

          Subsequent legislation, AB 94 (Budget Committee, Chapter 23,  

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          Statutes of 2011) allowed participating counties that received  
          Phase 1 conditional awards to relinquish the awards and reapply,  
          provided that no state moneys have been encumbered.  AB 94 also  
          added a funding preference to counties that relinquish their  
          conditional awards, provided that those counties continue to  
          assist the state in siting reentry facilities. 

          Most recently, under SB 1022 (Budget Committee), Chapter 42,  
          Statutes of 2012, up to $500 million in financing authority is  
          conditionally available. The BSCC released a request for  
          proposals regarding use of SB 1022 jail construction money in  
          July 2013.  (See SB 1022 - Request for Proposals Background,  
          .)   
          SB 1022 also shifted $171.3 million from AB 900 Phase I to Phase  
          II. 

          This bill reduces the Phase I authorization to $365.771 million  
          and increase the Phase II authorization to $854.229 million;  
          effectively shifting $80 million from Phase I to Phase II.   
          These funds became available because San Joaquin County recently  
          relinquished an award of $80 million. 

          SB 81 (Budget Committee, Chapter 175, Statutes of 2007)  
          authorized $100 million in lease revenue bonds for the  
          construction of new local facilities for youthful offenders.   
          The purpose of this financing program was to support the  
          rehabilitation of youthful offenders at the local level.  As  
          such, rehabilitation must be a core component of the operational  
          philosophy of the facility subject to construction, expansion or  
          renovation. In 2010, AB 1628 (Budget Committee, Chapter 729,  
          Statutes of 2010) added $200 million in lease-revenue bond  
          financing authority to this construction financing program. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  9/12/13)

          Chief Probation Officers of California
          Monterey County Board of Supervisors
          Monterey County Sheriff's Office
          Sonoma County Board of Supervisors
          Sutter County Board of Supervisors
          Yuba County Board of Supervisors

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           ARGUMENTS IN SUPPORT  :    According to the author, "The  
          amendments to SB 365 would free-up some funds that are currently  
          stranded for county public safety projects. 

          "The Board of State and Community Corrections (BSCC) has  
          authority to issue lease-revenue bonds to fund the construction  
          of county jails. As you know, many counties received funds under  
          AB 900. However, one county that was awarded funds later decided  
          to relinquish their award. 

          "The relinquishing of AB 900 funds occurred after both phases of  
          AB 900 awards had occurred. Due to the timing, these returned  
          funds are now stranded, as the BSCC has no authority under  
          existing law to reissue these funds. 

          "The first provision of the proposed amendments would adjust the  
          amount of lease revenue bonds that the BSCC can issue, to  
          reflect the relinquished funds and repurposing them. According  
          to the BSCC, the immediate beneficiaries of this provision would  
          be Monterey and Sonoma Counties, as those counties are next in  
          line to receive awards as funds become available. This would not  
          allow any county to 'jump the line' - just the opposite, the  
          BSCC would simply keep working down their existing list of  
          potential grantees. 

          "The second provision of SB 365 would authorize a county that  
          was awarded funds from SB 81 for juvenile facilities to pool  
          resources with one or more other counties to build a regional  
          facility to serve juveniles. The bill also authorizes the funds  
          to be used outside of the recipient county, if the regional  
          facility would improve and enhance services. Colusa County was  
          awarded such a grant but the juvenile justice realignment has  
          resulted in very few juvenile wards being in custody, making the  
          construction of a Colusa-only facility inefficient from a cost  
          and programming perspective. Yuba and Sutter Counties already  
          operate a joint facility. Section 2 of the bill would allow  
          Colusa to join the Yuba-Sutter JPA and pool their county  
          resources to expand and upgrade the joint facility in Yuba to  
          serve all three counties. This facility may also be able to  
          serve juveniles from other parts of the state as well. 

          "At this crossroads in the County-State fiscal relationship with  
          regard to public safety, prison overcrowding and realignment,  

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          the proposed amendments to SB 365 will free -up already  
          appropriated funding and provides counties autonomy to work  
          together to address capacity is deeply appreciated and much  
          needed." 


          JG:nl  9/12/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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