BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON EDUCATION
                              Senator Carol Liu, Chair
                                2015 - 2016  Regular 

          Bill No:              AB 1260            
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          |Author:    |Thurmond                                             |
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          |Version:   |July 1, 2015                                Hearing  |
          |           |Date:     July 8, 2015                               |
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          |Urgency:   |No                     |Fiscal:     |Yes             |
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          |Consultant:|Kathleen Chavira                                     |
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          Subject:  Joint Exercise of Powers Act

          NOTE:   This bill has been referred to the Committee on  
          Education and the Committee on Governance and Finance.  A "do  
          pass" motion should include referral to the Committee on  
          Governance and Finance.

            SUMMARY
          
          This bill authorizes the University of California (UC) to enter  
          into a joint powers agreement with the City of Richmond, or an  
          enhanced infrastructure financing a district created by the City  
          of Richmond, for financing infrastructure and other improvements  
          within the area of the South Shoreline Specific Plan and the  
          Berkeley Global Campus at Richmond Bay, if the agreement  
          includes specified provisions benefitting the local community.

            BACKGROUND
          
          Existing law:

          1)Establishes UC as a public trust and confers the full powers  
            of the UC upon the UC Regents.  The Constitution establishes  
            that the UC is subject to legislative control only to the  
            degree necessary to ensure the security of its funds and  
            compliance with the terms of its endowments.  Judicial  
            decisions have held that there are three additional areas in  
            which there may be limited legislative intrusion into  
            university operations: 1) authority over the appropriation of  
            state moneys; 2) exercise of the general police power to  







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            provide for the public health, safety and welfare; and, 3)  
            legislation on matters of general statewide concern not  
            involving internal university affairs.  (Constitution of  
            California, Article IX, Section 9)

          2)Authorizes, under the Joint Exercise of Powers Act, two or  
            more public agencies (i.e. federal government, any state, any  
            state department or agency, county, county board of education,  
            county superintendent of schools, city, public corporation,  
            public district, and regional transportation commission in any  
            state) to enter into a Joint Powers Authority (JPA) to jointly  
            exercise any power common to the contracting parties, as  
            specified, if authorized by their legislative or other  
            governing bodies. (Government Code § 6502)

          3)Establishes the California Infrastructure and Economic  
            Development Bank (IBank) to finance public infrastructure and  
            private development that promote a healthy climate for jobs,  
            contribute to a strong economy and improve the quality of life  
            in California communities.  IBank has broad authority to issue  
            tax-exempt and taxable revenue bonds, provide financing to  
            public agencies, provide credit enhancements, acquire or lease  
            facilities, and leverage State and Federal funds.  
            (Government Code § 63000, et seq.)

          4)Defines an "enhanced infrastructure financing district" as a  
            legally constituted governmental entity separate and distinct  
            from the city or county that established it for the sole  
            purpose of financing public facilities or other projects,  
            (Government Code § 53398.50) and, upon its creation, requires  
            preparation and adoption of an infrastructure financing plan  
            consistent with the general plan of the city or county within  
            which the district is located.  The plan is required to  
            include, among other things, the date on which the district  
            will cease to exist, by which time all tax allocation to the  
            district will end, and provides that the date be no more than  
            45 years from the date on which bond or loan issuances for  
            project financing are approved by a 55 percent of the voters  
            that reside within the district or approved by the governing  
            board of a local agency pursuant to specified provisions of  
            the Government Code.  (Government Code § 53398.63)

            ANALYSIS
          








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          This bill:

       1)Authorizes the University of California (UC) to enter into a  
            joint powers agreement with the City of Richmond, or an  
            enhanced infrastructure financing district created by the City  
            of Richmond, for financing infrastructure and other  
            improvements within the area of the South Shoreline Specific  
            Plan and the Berkeley Global Campus at Richmond Bay if the  
            agreement includes all the following provisions:  

               a)        Creation of an Anti-Displacement Fund allocated  
               for construction of affordable housing. 

               b)        Vocational training programs for residents of the  
               City of Richmond.

               c)        A policy that wages paid on the Richmond Global  
               Campus be at least 30 percent above the minimum wage.

               d)        An agreement with the Contra Costa Building and  
               Construction Trades Council to provide for compensation and  
               working conditions of employees engaged in construction of  
               the Richmond Global Campus.

               e)        An agreement that all Richmond Global Campus jobs  
               comparable to jobs performed at the UC Berkeley campus will  
               be employed under the same terms and conditions as UC  
               Berkeley employment.

               f)        Creation of a Youth Opportunity and Education  
               fund.

               g)        A policy providing preferential procurement  
               opportunities for small businesses located in the City of  
               Richmond.

               h)        Provisions for local hire requirements. 

       2)Requires, if such a Joint Powers Authority (JPA) is formed, that:

               a)        The area of the South Shoreline Specific Plan and  
               the Berkeley Global Campus be deemed a disadvantaged  
               community for purposes of the Greenhouse Gas Reduction Fund  
               Investment Plan and Communities Revitalization Act.  








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               b)        The date on which the financing district created  
               by the JPA ceases to exist, and all tax allocations end, be  
               no more than 55 years, (rather than 45 years as required  
               under current law) from the date that bond or loan  
               issuances for project financing are approved by the local  
               agency governing board. 

       3)Requires that a loan issued to the City of Richmond or the  
            enhanced financing district by the California Infrastructure  
            and Economic Development Bank (IBank) be interest free.

          STAFF COMMENTS
          
       1)Need for the bill.  This bill is focused on two development  
            projects under consideration, the South Shoreline Specific  
            Area and the Berkeley Global Campus at Richmond Bay.   
            According to the author, the goal of the bill is to ensure  
            that the City of Richmond and UC Berkeley work together on the  
            two projects keeping the Richmond community's best interest as  
            a center point for collaboration. 

       2)Is this bill necessary?  This bill authorizes the City of  
            Richmond and the University of California (UC) to enter into a  
            JPA, as specified. Current law already authorizes two or more  
            public agencies to enter into a JPA.  According to the UC, UC  
            Berkeley is already working with the City of Richmond and the  
            local community through the Richmond Community Partnership  
            Working Group to ensure the project meets the needs of the  
            campus and the local community. The committee may wish to  
            clarify what this bill accomplishes that is not already being  
            negotiated at the local level. 

       3)Unintended consequences?  This bill, among other things, would  
            statutorily establish the elements of a JPA between a city and  
            the UC.  The UC reports that the proposed campus is many years  
            from potential groundbreaking.  According to the UC the  
            Working Group is jointly developing actionable recommendations  
            for this project relative to education, employment,  
            procurement and workforce training in Richmond.  It is unclear  
            whether the provisions of this bill are consistent with the  
            recommendations expected to emerge from the yearlong efforts  
            of the Working Group.  Would these provisions undermine the  
            willingness of the UC to enter into a JPA with the City of  








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            Richmond and the ultimate success of this project? 

       4)Double-referral.  This bill authorizes an enhanced infrastructure  
            financing district to be created by the City of Richmond and  
            deems it to be a "disadvantaged community" for the purposes of  
            accessing specified funds.  It also requires that any loans  
            made to the district by the IBank carry a zero percent  
            interest rate.  This bill has been double-referred to the  
            Senate Committee on Governance and Finance which has  
            jurisdiction over state and local government revenue  
            mechanisms, and can more appropriately consider these  
            provisions.

            SUPPORT

          None received.

            OPPOSITION

          Air Conditioning Trade Association 
          Associated Builders and Contractors of California 
           Associated Builders and Contractors of California - San Diego  
          Chapter
          Plumbing-Hearing-Cooling Contractors Association of California
          University of California 
          Western Electrical Contractors Association
           
           
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