BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 148


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          Date of Hearing:  May 20, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          148 (Holden) - As Amended May 6, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill enacts the Kindergarten-University Public Education  
          Facilities Bond Act of 2016, to be operative only if approved by  
          voters on the November 2016 general election.  Makes changes to  
          the School Facility Program (SFP).  Specifically, this bill: 








                                                                     AB 148


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          1)Authorizes an unspecified amount of general obligation (GO)  
            school facility bond to be placed on 2016 statewide general  
            election ballot, for kindergarten through grade 12 (K-12) and  
            Community Colleges (CCC) new construction and modernization   
            projects, including replacement of structures. Makes up to 5%  
            of the unspecified amount available for charter facilities.

          2)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.  

          3)Makes changes to the SFP relative to new construction and  
            modernization, including seismic mitigation authorization and  
            increased flexibility in design and construction of  
            facilities. Also requires each school district that elects to  
            participate in a new construction or modernization program to  
            reestablish eligibility, as specified, and to conduct an  
            inventory of existing facilities for purposes of maintaining a  
            statewide school facilities inventory.

          4)Requires the State Department of Education, the Division of  
            the State Architect, the Office of Public School Construction,  
            and the Department of Toxic Substances Control to convene for  
            purposes of developing an interagency plan to streamline the  
            school facilities construction application, review, and audit  
            processes in order to reduce the time and improve the  
            efficiency of the school facilities construction process.  
            Requires this interagency plan be submitted to the Legislature  
            on or before July 1, 2017

          FISCAL EFFECT:


          1)Bond debt is unknown as the bill does not specify the amount  
            of the GO bond.  The state pays principal and interest during  








                                                                     AB 148


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            the repayment period.  Cost will depend on factors such as the  
            actual interest rate paid, the timing of the bond sales (bonds  
            are often sold over a number of years), and the time period  
            over which the bonds are repaid. For illustration, assuming a  
            5% interest rate with a 30-year repayment period, the state  
            would pay about $65 million annually in principal and interest  
            costs for each $1 billion borrowed. 

          2)One-time General Fund printing costs of at least $220,000 for  
            the Secretary of State to include the analysis, arguments for  
            and against, and the text of the measure in the state voter  
            information guide.

          COMMENTS:


          1)Purpose. This bill places a bond on an unspecified statewide  
            election in 2016 to fund K-12 and California Community  
            Colleges facilities.  The amount of the bond is unspecified.   
            According to the author, the amounts will be determined  
            pending further examinations of need and discussions with the  
            Administration and other parties.


            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. This funding has been nearly exhausted. According to  
            the Office of Public School Construction (OPSC), as of April  
            15, 2015, approximately $195.4 million remains in bond  
            authority from the 2002, 2004, and 2006 bonds.


          2)Related legislation. 


             a)   AB 1088 (O'Donnell), pending in this committee, places a  
               Kindergarten-University Public Education Facilities Bond  








                                                                     AB 148


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               Act on an unspecified statewide general election, to be  
               operative only if approved by voters at the unspecified  
               statewide general election. The author has indicated this  
               will be a two-year bill.


             b)   AB 1433 (Gray), pending in this 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.  


             c)   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.





          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081