BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          SB 1421 (Fuller) - School Facilities: Schoolsites on Military  
          Bases
          
          Amended: April 21, 2014         Policy Vote: Education 6-0
          Urgency: No                     Mandate: No
          Hearing Date: May 23, 2014      Consultant: Jacqueline  
          Wong-Hernandez
          
          SUSPENSE FILE. AS AMENDED.
          
          
          Bill Summary: SB 1421 requires that school construction projects  
          on military installations that are eligible for specified  
          federal grants be given priority for funding under the state's  
          School Facility Program (SFP). 

          Fiscal Impact (as approved on May 23, 2014):   
              Regulations: Likely minor costs to the Office of Public  
              School Construction (OPSC) to develop regulations to  
              determine how to prioritize military base schools.
              Priority funding: Prioritizing SFP bond funding for certain  
              military base school projects, could result in schools being  
              given priority for $5 million in bond funding for which they  
              would not otherwise be eligible, and which would otherwise  
              fund other schools' facilities projects. 

          Background: Existing law establishes the SFP under which the  
          state provides general obligation bond funding for various  
          school construction projects. AB 127 (Nunez and Perata), the  
          Kindergarten-University Public Education Facilities Bond Act of  
          2006, authorized Proposition 1D a statewide general obligation  
          bond proposal for $10.4 billion.  Proposition 1D, approved by  
          the voters in November 2006, provided $7.3 billion for K-12  
          education facilities and allocated specified amounts from the  
          sale of these bonds for modernization, new construction, charter  
          schools, career technical education facilities, joint use  
          projects, new construction on severely overcrowded school sites,  
          and high performance incentive grants to promote energy  
          efficient design and materials.  In addition, portions of the  










          SB 1421 (Fuller)
          Page 1

          amounts allocated for new construction and modernization were  
          authorized for purposes of funding smaller learning communities  
          and small high schools and for seismic retrofit projects.  
          (Education Code § 17078.70-17078.72)

          Proposed Law: This bill establishes priority for funding under  
          the SFP for construction projects that are on military  
          installations, and are eligible for United States Department of  
          Defense Office of Economic Adjustment school construction  
          grants. 

          Staff Comments: According to the OPSC, approximately $351  
          million remains in bond authority in the SFP. At its March 2014  
          meeting, the SAB took action to reserve $52.7 million of  
          existing bond authority for the ongoing administration of the  
          program over the next five years, reducing the remaining bond  
          authority to $298.4 million. The majority of this bond authority  
          exists for the Seismic Mitigation and Charter School programs  
          (about $259 million).  Bond authority for new construction and  
          modernizations programs has essentially been depleted,  
          respectively, since July 2012 and May 2012.  
               
          Since 2009, the State Allocation Board (SAB) has been making  
          "unfunded approvals" which represented approved projects waiting  
          to convert to funding apportionments when bonds are sold and  
          cash becomes available. In addition, since November 1, 2012, the  
          SAB has maintained an "Applications Received Beyond Bond  
          Authority" list. 
          
          This bill seeks to prioritize projects that are on military  
          installations, and are eligible for United States Department of  
          Defense Office of Economic Adjustment school construction  
          grants. The purpose is to assist these schools in drawing down  
          approximately $205 million in federal grant funding, by using  
          SFP funds for their required 20% match ($41 million).

          The SFP considers projects for funding in the order those  
          requests were received. The SAB recently adopted a new  
          "priorities in funding" process which gives priority for funding  
          to construction-ready projects, allowing these projects to  
          essentially move to the front of the line. Projects on the "lack  
          of authority" and "beyond authority" lists advance as bond funds  
          become available. Under this bill, school construction projects  









          SB 1421 (Fuller)
          Page 2

          on military bases would (to a degree determined by the SAB/OPSC)  
          be prioritized over other projects currently awaiting funding,  
          and those projects would move further down the list.
               
          Committee amendments further limit priority eligibility to  
          schools which have already applied for SFP funding for their  
          projects, and which agree to refrain from applying for SFP  
          funding for 3 subsequent years.