BILL ANALYSIS Ó
AB 581
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Date of Hearing: April 29, 2015
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Rudy Salas, Chair
AB 581
(Gomez) - As Amended April 21, 2015
SUBJECT: State Facilities Renewal Bond Act of 2016
SUMMARY: Authorizes the issuance of $2 billion in general
obligation bonds for deferred maintenance projects on
state-owned buildings, if approved by the voters at the June 7,
2016, statewide primary election. Specifically, this bill:
1)Authorizes the issuance of $2 billion in general obligation
bonds for the purpose of addressing deferred maintenance
projects on state-owned property.
2)Creates the State Facilities Renewal Bond Fund (Fund) and
requires the proceeds of bonds issued and sold pursuant to
this bill to be deposited in the fund.
3)Requires bonds deposited in the Fund to be appropriated
annually by the Legislature and appropriated to state agencies
as part of their respective budgets.
4)Clarifies that monies appropriated to a state agency must
supplement, not supplant, the agency's existing deferred
maintenance spending and expresses legislative intent that the
projects funded by these bonds have a useful life of at least
20 years.
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5)Directs the Governor to propose appropriations from the Fund
as part of his or her January budget proposal.
6)Requires the Department of Finance to report specified
information about bond funding allocations and criteria to the
fiscal committees of the Legislature within 10 days after the
release of the Governor's budget proposal.
7)Directs an agency for which the Governor proposes an
appropriation from the Fund to report specified information
about its deferred maintenance to the fiscal committees of the
Legislature within 30 days after the release of the Governor's
budget proposal.
8)Contains the usual fiscal and procedural provisions governing
the application of the state's bond laws and the sale of the
bonds.
9)Defines various terms for purposes of this measure, including
that "state agency" means any state agency, department,
office, division, bureau, board, commission, district
agricultural association, the California State University, the
University of California, and the Judicial Council.
10)Requires this measure to be submitted to the voters at the
June 7, 2016, statewide primary election.
EXISTING LAW establishes the Building and Property Management
Branch within the Department of General Services (DGS) to
provide building management and administration, operations,
maintenance, janitorial, grounds keeping, and repair services
necessary to support the state's real estate assets.
FISCAL EFFECT: Unknown
COMMENTS: This bill would place a $2 billion general obligation
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bond measure on the June 2016 ballot to fund deferred
maintenance in state-owned facilities. According to the author,
if approved by voters, the bond funds would enable the state to
make a significant dent in its deferred maintenance backlog.
The author notes that the Governor's 2015 Five-Year
Infrastructure Plan estimates the state's current backlog at
about $6.1 billion, not including the state highway system. The
author states that addressing the most critical infrastructure
needs in state buildings, such as roof and boiler repairs or
water and sewer line replacements, will lead to long-term
savings by avoiding more expensive emergency repairs and
disruption to program delivery.
The Governor's proposed 2015-16 Budget includes $125 million
from the General Fund for one-time deferred maintenance
infrastructure needs, including a one-time increase of $5
million towards addressing DGS' backlog of maintenance projects.
According to a March 2015 report by the Legislative Analyst's
Office (LAO) of deferred maintenance in state office buildings,
DGS has struggled to consistently maintain the 58 state office
buildings it owns and its current maintenance backlog totals
$138 million.
The LAO report notes that the proposed $5 million allocation to
DGS is a step in the right direction, given that deferred
maintenance from improperly maintained buildings can result in
significant repair costs in the future and a shorter useful life
of the buildings. The LAO recommends that DGS develop a
long-term strategy for maintaining state facilities by
addressing a number of other factors that have contributed to
the accumulation of delayed projects, such as understaffing,
reduced maintenance funding, inadequate preventive maintenance,
and limited ability for DGS to contract for maintenance staff to
fill ongoing vacancies.
This bill envisions the bond funding to be used for projects
with a useful life of at least 20 years and requires the bond
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funds to be repaid within that time. The allocation of bond
funds would occur as part of the annual budget process. Any
state agency with state property would have to report to the
Legislature on its deferred maintenance funding priorities and
the extent to which its current maintenance budget is
inadequate. The funds appropriated from the Legislature would
have to be used to supplement, not supplant, the agency's
existing deferred maintenance expenditures.
REGISTERED SUPPORT / OPPOSITION:
Support
Associated General Contractors
Construction Employers' Association
University of California
Western Fairs Association
Opposition
None on file
Analysis Prepared by:Cassie Royce / A. & A.R. / (916) 319-3600
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