BILL ANALYSIS Ó
AB 148
Page 1
Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
AB 148
(Holden) - As Amended March 26, 2015
SUBJECT: School facilities: K-14 School Investment Bond Act of
2016
SUMMARY: Enacts the K-14 School Investment Bond Act of 2016, to
be operative only if approved by voters at an unspecified 2016
statewide election. Specifically, this bill:
1)Establishes the 2016 State School Facilities Fund and
authorizes the State Allocation Board (SAB) to apportion funds
to school districts from funds transferred to the 2016 State
School Facilities Fund from any source for the purposes
specified in the SFP.
2)Authorizes an unspecified amount of general obligation (G.O.)
school facilities bond to be placed on an unspecified
statewide general election and specifies the funds to be
allocated as follows:
a) An unspecified amount for kindergarten through grade 12
(K-12) allocated to the following programs:
i) New Construction; and,
ii) Modernization.
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b) Specifies that up to 5% of the amount for New
Construction and Modernization shall be available for
charter school facilities.
c) An unspecified amount allocated to the California
Community Colleges (CCC).
3)Makes the following changes to the SFP:
a) Specifies that the requirement for the SAB to require
school districts to make all necessary repairs to ensure
that a project is maintained in good repair shall be as a
condition of participation in the SFP.
b) Strikes obsolete provision relating to deferred
maintenance.
c) Strikes an obsolete provision requiring the SAB to
conduct an evaluation on the costs of new construction and
modernization of small high schools.
d) Requires the SAB to require a school district that
elects to participate in the new construction and
modernization programs to conduct an inventory of existing
facilities and submit this information to the SAB for the
purposes of maintaining a statewide school facilities
inventory.
e) Repeals the provisions that do the following:
i) Requires, for the purpose of determining existing
school building capacity, the calculation to be adjusted
for first priority status as that calculation would have
been made under the policies of the SAB in effected
immediately preceding September 1, 1998.
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ii) Requires the maximum school building capacity for
each applicant district be increased by the number of
pupils reported by the Superintendent of Public
Instruction (SPI) as excess capacity as a result of
participation in the Year-Round School Grant Program.
Repeals the requirement that the adjustment be calculated
on the basis, at the district's option, of either the
district as a whole or the appropriate attendance area.
iii) Requires each school on a multitrack year-round
calendar that has a density of 200 or more pupils
enrolled per acre that is located in a school district
with 40 percent of its pupils attending multitrack
year-round schools be exempted from the increase in
school building capacity required by Education Code (EC)
Section 17071.35.
f) Authorizes a new construction grant to be used for
seismic mitigation purposes and related design, study, and
testing costs.
g) Specifies that in the development and guidelines and
regulations for new construction and modernization, the SAB
shall provide a school district with maximum flexibility in
the design, construction, and modernization of school
facilities.
h) Requires the Office of Public School Construction
(OPSC), in consultation with the California Department of
Education (CDE), to recommend to the SAB regulations that
will provide school districts with flexibility in designing
instructional facilities. These recommendations shall
propose revisions to any regulations that limit the ability
of school districts to use new construction grants to
construct instructional space approved by the State
Department of Education. The proposed revisions shall
ensure that a school district has the ability to design a
facility that provides a flexible learning environment,
provides for the integration and use of technology, and
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serves as an instructional space and learning environment
that supports and enhances the educational delivery
process.
i) Authorizes a modernization apportionment to be used for
the following purposes:
i) Seismic mitigation purposes and related design,
study, and testing costs; and,
ii) Demolish and construct a building(s) on an existing
schoolsite if the total cost of providing a new school
building, including land, on a new site would not protect
the economic interest of the state and school district.
Authorizes such a project to be eligible for grant equal
to the New Construction grant level. Requires the SAB to
establish additional requirements necessary to ensure the
economic interest of the state and the educational
interests of children are protected.
j) Requires the CDE, Division of State Architect (DSA), the
OPSC, and the Department of Toxic Substances Control (DTSC)
to convene for the purposes of developing an interagency
plan to streamline the school facility construction
application, review, and audit processes in order to reduce
the time and improve the efficiency of the school
facilities construction process. Requires the interagency
plant to be submitted to the Legislature before July 1,
2017.
aa) Expresses the intent of the Legislature that operative
regulatory language adopted by the SAB before the effective
date of this section be reviewed and revised before July 1,
2016, to ensure that the SFP is being implemented in a
manner that reduces duplicative processes for the review,
approval, and audit of school facility new construction and
modernization projects.
4)Transfers the unencumbered balance of the amount available for
seismic repair, reconstruction, or replacement from the 2006
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bond to the 2016 State School Facilities Fund for allocation
on the date that the bond proposed by this bill, if approved
by voters, becomes operative.
5)Requires the SAB to assign the following priorities:
a) Highest priority for bond funding to applicant school
districts whose projects are emergency facility needs as
defined in the Emergency Repair Program.
b) Priority for funding to applicant school districts that
demonstrate participation in a community-based effort to
coordinate educational, developmental, family, health, and
other comprehensive services by engaging in public and
private partnerships with local public entities and other
nonprofit or private community partners. Criteria that
demonstrate this participation shall include all of the
following:
i) Institutionalized structures for cross-agency
collaboration, including, but not limited to, memoranda
of understanding to coordinate activities and services.
ii) Agreements for joint use and operations of school
facilities that provide for extended hours of use for
pupils, families, and the community, integration of
libraries, early childhood education, child care centers,
senior centers, outdoor recreation or environmental
education, arts education, and career technical education
and adult education offerings for pupils and community
members.
iii) Participation in the State Community Schools
Network.
iv) Participation in technical assistance and training,
including professional development, for full-service
community schools.
v) Certification that the district's school facilities
master plan is consistent with the regional sustainable
communities strategy established pursuant to Section
65080 of the Government Code.
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6)Expresses the intent of the Legislature that the State School
Building Finance Committee consider a pay-as-you-go model of
financing that increases actual money for construction by
issuing short-term debt with faster repayment plans to lessen
the amount of state funds spent on interest and reduce overall
state debt.
EXISTING LAW:
1)Requires, under the Leroy F. Greene School Facilities Act of
1998, the SAB to allocate to applicant school districts
prescribed per-unhoused-pupil state funding for construction
and modernization of school facilities, including hardship
funding, and supplemental funding for site development and
acquisition.
2)Provides that a school district's ongoing eligibility for new
construction funding is determined by making calculations
related to certain factors, including, but not limited to,
enrollment projections by utilizing a cohort survival
enrollment projection system, the number of students that may
be adequately housed in the existing school building capacity
of the district, and increases or decreases in enrollment
resulting from receipt of funding from the Year-Round School
Grant Program.
3)Provides that a school district is eligible to receive an
apportionment for the modernization of a permanent school
building that is more than 25 years old or a portable
classroom that is at least 20 years old. A school district is
eligible to receive an additional apportionment for
modernization of a permanent school building every 25 years
after the date of the previous apportionment or a portable
classroom every 20 years after the previous apportionment.
FISCAL EFFECT: Unknown
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COMMENTS: This bill places a bond on an unspecified statewide
election in 2016 to fund kindergarten through California
Community Colleges facilities. The amount of the bond is
unspecified. This bill is nearly identical to the introduced
version of SB 114 (Liu), pending in the Senate Appropriations
Committee. The major difference is that SB 114 has been amended
to remove funding for California Community Colleges and is now a
K-12 bill. This bill remains a K-14 bill.
Background. The construction and rehabilitation of public
kindergarten through grade 12 (K-12) facilities are funded by a
combination of state and local G.O. bonds, developer's fees and
local assessments such as Mello Roos community facilities
districts. The New Construction program requires a 50% match
from local educational agencies (LEAs), unless the LEA qualifies
for financial hardship, which pays up to 100% of project costs.
Modernization funds are awarded at 60% with a 40% match. Since
the inception of the SFP in 1998, voters have approved $35.4
billion in state G.O. bonds for K-12 schools.
-----------------------------------------------------------------
| Ballot | Measure | Amount | % Passage |
| | | | |
| | | | |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$9.2 billion | 62.5 |
|1998 |1A | | |
| | | | |
| | | ($6.7 billion | |
| | |K-12 + | |
| | | | |
| | | | |
| | | $2.5 billion | |
| | |Higher Ed) | |
| | | | |
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| | | | |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$13.05 billion | 59.1 |
|2002 |47 | | |
| | | | |
| | | ($11.4 billion | |
| | |K-12 + | |
| | | | |
| | | | |
| | | $1.65 billion | |
| | |Higher Ed) | |
| | | | |
| | | | |
|-------------+-------------+-----------------------+-------------|
|March 2004 |Proposition |$12.3 billion | 50.9 |
| |55 | | |
| | | | |
| | | ($10 billion K-12 | |
| | |+ | |
| | | | |
| | | | |
| | | | |
| | | $2.3 billion | |
| | |Higher Ed) | |
| | | | |
| | | | |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$10.416 billion |56.9 |
|2006 |1D | | |
| | | | |
| | | ($7.329 K-12 + | |
| | | | |
| | | | |
| | | $3.087 billion | |
| | |Higher Ed) | |
| | | | |
| | | | |
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The last education bond on the statewide ballot was Proposition
1D, which was passed by voters on the November 2006 ballot.
Proposition 1D provided $10.416 billion for K-12 and higher
education facilities and established new K-12 grant programs,
specified through the following allocations:
1)$7.329 billion for K-12 facilities as follows:
a) $1.9 billion for new construction projects (of which up
to $199.5 million can be set aside for seismic repairs);
b) $3.3 billion for modernization projects;
c) $1 billion for overcrowding relief grants through the
removal of portables;
d) $500 million for charter school facilities;
e) $500 million for career technical education (CTE)
facilities and equipment;
f) $100 million for high performance (green) projects; and,
g) $29 million for joint-use projects.
2)$3.087 billion for higher education facilities as follows:
a) $1.507 billion for CCC;
b) $890 million for UC, of which $200 million was available
for medical education programs; and,
c) $690 million for CSU.
K-12 remaining bond authority. Due to the state's budget crisis
and poor credit ratings, the Pool Money Investment Board halted
the regular sale of all G.O. bonds in December 2008 and slowed
the disbursement of funds. The SAB, comprised of ten members
that include appointments by the Governor, the Speaker of the
Assembly and the Senate President pro Tem, is the body that
allocates bond funds and oversees the administration of the SFP
staffed by the OPSC, within the Department of General Services.
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The SAB has been making unfunded approvals since 2009 to enable
districts to continue their facilities planning. The unfunded
approvals are converted to apportionments when bonds are sold
and cash becomes available.
According to the OPSC, as of April 15, 2015, approximately
$195.4 million remains in bond authority from the 2002, 2004,
and 2006 bonds, as follows:
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| Remaining Bond Authority - as of April 15, 2015 |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
|Program |Amount in millions |
| | |
| | |
|--------------------------------+--------------------------------|
|New Construction |$17.8* |
| | |
| | |
|Modernization |$4.5* |
| | |
| | |
|Seismic Mitigation |$141.2 |
| | |
| | |
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|Career Technical Education |$2.3 |
| | |
| | |
|Charter |$27.1 |
| | |
| | |
|High Performance |$.5 |
| | |
| | |
|Overcrowding Relief |$2 |
| | |
| | |
|--------------------------------+--------------------------------|
|Total |$195.4 |
| | |
| | |
|*Due to project rescissions | |
| | |
| | |
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Source: Office of Public School Construction
The majority of remaining authority is derived from funds for
seismic projects. Proposition 1D authorized up to 10.5% of New
Construction funds to be used for seismic repair,
reconstruction, or replacement. Seismic dollars have gone out
slowly, partly due to fairly narrow eligibility criteria. New
Construction and Modernization funds have been exhausted since
2012. The funds currently available are due to funds returned
to the program.
SFP changes. The bill makes a number of changes to the SFP that
are also contained in SB 114, with the exception of three
provisions:
Seismic funds: The bill transfers any unencumbered balance from
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Proposition 1D authorized to be used for seismic purposes to the
2016 bond. It is unclear why this is necessary. Proposition 1D
authorizes up to 10.5% of the New Construction funds to be used
for seismic; it is not a standalone program. The SAB can
redirect the funds for New Construction purposes anytime.
Emergency facility needs: The bond act in this bill requires
the SAB to give the "highest priority" for funding for emergency
facility projects consistent with those funded by the Emergency
Repair Program pursuant to the Williams v. California
settlement. The SFP, under EC Section 17075.10, authorizes
funding for facility hardship projects that pose health and
safety risks to pupils. Funds approved as facility hardship are
not charged to a school district's eligibility for New
Construction or Modernization. The SAB is currently placing
facility hardship projects at the top of the unfunded approvals
list. If enacted, it will create confusion in the
implementation of the SFP. It is also unclear what "highest
priority" means. Projects are funded as applications are
submitted as long as there is bond authority. Giving priority
makes sense when there is lack of funding. It is not clear how
priority is given when funding is available. Staff recommends
urging the author to remove this provision or amend the facility
hardship provision to incorporate repairs in the ERP that may
not be covered under facility hardship.
School Building Finance Committee: The bond act in the bill
expresses the intent of the Legislature that the State School
Building Finance Committee consider a pay-as-you-go model of
financing that increases actual money for construction by
issuing short-term debt with faster repayment plans to lessen
the amount of state funds spent on interest and reduce overall
state debt. The author may be urging the School Building
Finance Committee to consider issuing shorter-term bonds, but it
is unclear.
Other SFP changes. Program changes include requiring school
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districts to provide information to establish a statewide
inventory, requiring state agencies to create an interagency
plan to streamline the process, authorizing New Construction and
Modernization apportionments to be used for seismic projects,
requiring the OPSC to develop regulations that will provide
school districts flexibility in designing school facilities.
The bond act in this bill requires the SAB to give priority for
funding to school districts that demonstrate participation in a
community-based effort to coordinate educational, developmental,
family, health, and other comprehensive services through all of
the following:
1)Institutionalized structures for cross-agency collaboration,
including, but not limited to, memoranda of understanding to
coordinate activities and services.
2)Agreements for joint use and operations of school facilities
that provide for extended hours of use for pupils, families,
and the community, integration of libraries, early childhood
education, child care centers, senior centers, outdoor
recreation or environmental education, arts education, and
career technical education and adult education offerings for
pupils and community members.
3)Participation in the State Community Schools Network.
4)Participation in technical assistance and training, including
professional development, for full-service community schools.
5)Certification that the district's school facilities master
plan is consistent with the regional sustainable communities
strategy established pursuant to Section 65080 of the
Government Code.
While the goal of encouraging school districts to work in a
larger context with the community is a good goal, the Committee
may wish to consider whether these requirements may be
challenging to meet. It is also unclear what "assigning
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priority" means. Projects are funded as applications are
submitted as long as there is bond authority. Giving priority
makes sense when there is lack of funding. It is not clear how
priority is given when funding is available. By enacting this
provision in the bond act rather than in the SFP, if and when
funding is limited, the SAB may not be able to prioritize health
and safety projects without going back to the voters. Staff
recommends amending the bill to provide additional funds for
school districts that meet all of the conditions, rather than
making it a priority for funding.
Governor's Budget. The Governor has indicated concerns
regarding the use of bonds to fund school facilities and
questions whether the State should have any role in student
housing. The Governor has also highlighted problems he sees
with the SFP, including the processes for plan approvals and
funding. The 2015-16 budget suggests increasing local
contribution while minimizing state participation.
Specifically, the Governor proposes to provide limited state
support for districts that may not be able to generate local
bond dollars due to low assessed valuations. The proposal
does not specify the threshold for eligibility, level of
funding or source of funding (presumably General Fund). The
Governor also proposes to lift Proposition 39 rate caps to
increase funds generated through local bonds, adjust
developer fees, and authorize districts to use funds set
aside for maintenance of facilities for construction and
modernization. Some of the provisions in this bill,
including the provisions to streamline the process and
establish a facilities inventory, attempt to address some of
the concerns of the Governor.
Related legislation. AB 1088 (O'Donnell), also scheduled for
the April 29, 2015 hearing, places a Kindergarten-University
Public Education Facilities Bond Act on an unspecified statewide
general election, to be operative only if approved by voters at
the unspecified statewide general election.
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AB 1433 (Gray), pending in the Assembly Higher Education
Committee, places the Recommitment to Higher Education Bond Act
of 2016 with unspecified amounts for higher education facilities
on the November 8, 2016 statewide general election.
SB 114 (Liu), pending in the Senate Appropriations Committee,
would place the Kindergarten Through Grade 12 Public Education
Facilities Bond Act of 2016 with unspecified dollar amounts on
the November 8, 2016 ballot.
Prior legislation. AB 2235 (Buchanan), would have authorized
the Kindergarten-University Public Education Facilities Bond Act
of 2014 to provide for the issuance of $4.3 billion in G.O.
bonds for construction and modernization of school facilities,
to become effective only if approved by voters at the November
4, 2014, statewide general election. The bill also made changes
to the SFP. The bill was held on the Senate Floor by the
author.
AB 41 (Buchanan), introduced in 2013, expresses the
Legislature's intent to place a Kindergarten-University
facilities bond on the 2014 ballot. The bill was held by the
author in the Assembly Education Committee.
SB 45 (Corbett), introduced in 2013, expresses the Legislature's
intent to place a Kindergarten-University facilities bond on the
next statewide general election. The bill was held by the
author in the Senate Rules Committee.
SB 301 (Liu), introduced in 2013, expresses the Legislature's
intent to place a Kindergarten-University facilities bond on the
2014 ballot. The bill was held by the author in the Senate
Rules Committee.
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AB 331 (Brownley), introduced in 2011, expressed the
Legislature's intent to place a Kindergarten-University
facilities bond on the 2012 ballot. The bill was held in the
Assembly Appropriations Committee in 2012.
AB 822 (Block), introduced in 2011, would have placed a higher
education facilities bond on the November 2012 ballot. The bill
was held in the Assembly Appropriations Committee in 2012.
AB 220 (Brownley), introduced in 2009, would have placed a $6.1
billion Kindergarten-University facilities bond on the November
2010 ballot. The bill was held in the Senate Appropriations
Committee.
SB 271 (Ducheny), introduced in 2009, would have placed an $8.6
billion higher education facilities bond on the November 2010
ballot. The bill was held in the Senate Appropriations
Committee.
Arguments in support. The author states, "Historically under
the school facilities program, the state has paid 50 percent
of the cost of new school facilities, 80 percent of the cost
of modernizing existing facilities, and 100 percent of the
cost of either new facilities or modernization in "hardship
cases." Presently, there is less than $300 million in
remaining bond authority and the State Allocation Board is
not accepting any applications for school facilities
projects. This situation is forcing school districts to
either additionally finance the state's share of school
construction or not be able to meet the growing need for new
schools and modernizing aging school facilities."
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REGISTERED SUPPORT / OPPOSITION:
Support
County School Facilities Consortium
Opposition
None on file
Analysis Prepared by:Sophia Kwong Kim / ED. / (916) 319-2087