California Legislature—2015–16 Regular Session

Assembly Bill No. 1433

Introduced by Assembly Member Gray

February 27, 2015

An act to add Part 70 (commencing with Section 101100) to Division 14 of Title 3 of the Education Code, relating to higher education facilities, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds.

LEGISLATIVE COUNSEL’S DIGEST

AB 1433, as introduced, Gray. Higher education facilities: Recommitment to Higher Education Bond Act of 2016.

Existing law, the California Constitution, prohibits the Legislature from creating a debt or liability that singly or in the aggregate with any previous debts or liabilities exceeds the sum of $300,000, except by an act that (a) authorizes the debt for a single object or work specified in the act, (b) has been passed by a 2⁄3 vote of all the members elected to each house of the Legislature, (c) has been submitted to the people at a statewide general or primary election, and (d) has received a majority of all the votes cast for and against it at that election.

This bill would enact the Recommitment to Higher Education Bond Act of 2016 to authorize an unspecified amount of state general obligation bonds, as scheduled, to provide aid to the California Community Colleges, the University of California, the Hastings College of the Law, and the California State University to construct and modernize education facilities. The proceeds of these bonds would be deposited in the 2016 California Community Colleges Capital Outlay Bond Fund and the 2016 University Capital Outlay Bond Fund, which this bill would establish.

The bond act would become operative only if approved by the voters at the November 8, 2016, statewide general election, and the bill would provide for its submission to the voters at that election.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Part 70 (commencing with Section 101100) is
added to Division 14 of Title 3 of the Education Code, to read:

 

PART 70.  RECOMMITMENT TO HIGHER EDUCATION
BOND ACT OF 2016

 

Chapter  1. General

 

101100.  

This part shall be known and may be cited as the
Recommitment to Higher Education Bond Act of 2016.

101101.  

The incorporation of, or reference to, any provision
of California statutory law in this part includes all acts amendatory
thereof and supplementary thereto.

101102.  

(a) Bonds in the total amount of____ dollars ($____),
not including the amount of any refunding bonds issued in
accordance with Sections 101130, 101139, and 101159, or so much
thereof as is necessary, may be issued and sold to provide a fund
to be used for carrying out the purposes expressed in this part and
to reimburse the General Obligation Bond Expense Revolving
Fund pursuant to Section 16724.5 of the Government Code. The
bonds, when sold, shall be and constitute a valid and binding
obligation of the State of California, and the full faith and credit
of the State of California is hereby pledged for the punctual
payment of the principal of, and interest on, the bonds as the
principal and interest become due and payable.

(b) Pursuant to this section, the Treasurer shall sell the bonds
authorized by the State School Building Finance Committee
established by Section 15909 or the Higher Education Facilities
Finance Committee established pursuant to Section 67353, as the
case may be, at any different times necessary to service
expenditures required by the apportionments.

 

Chapter  2. California Community College Facilities

 

Article 1.  General

 

101132.  

(a) The 2016 California Community College Capital
Outlay Bond Fund is hereby established in the State Treasury for
deposit of funds from the proceeds of bonds issued and sold for
the purposes of this chapter.

(b) The Higher Education Facilities Finance Committee
established pursuant to Section 67353 is hereby authorized to create
a debt or debts, liability or liabilities, of the State of California
pursuant to this chapter for the purpose of providing funds to aid
the California Community Colleges.

 

Article 2.  California Community College Program Provisions

 

101133.  

(a) From the proceeds of bonds issued and sold
pursuant to Article 3 (commencing with Section 101134), the sum
of ____ dollars ($____) shall be deposited in the 2016 California
Community College Capital Outlay Bond Fund for the purposes
of this article. When appropriated, these funds shall be available
for expenditure for the purposes of this article.

(b) The purposes of this article include assisting in meeting the
capital outlay financing needs of the California Community
Colleges.

(c) Proceeds from the sale of bonds issued and sold for the
purposes of this article may be used to fund construction on
existing campuses, including the construction of buildings and the
acquisition of related fixtures, construction of facilities that may
be used by more than one segment of public higher education
(intersegmental), the renovation and reconstruction of facilities,
site acquisition, the equipping of new, renovated, or reconstructed
facilities, which equipment shall have an average useful life of 10
years; and to provide funds for the payment of preconstruction
costs, including, but not limited to, preliminary plans and working
drawings for facilities of the California Community Colleges.

 

Article 3.  California Community College Fiscal Provisions

 

101134.  

(a) Of the total amount of bonds authorized to be
issued and sold pursuant to Chapter 1 (commencing with Section
101100), bonds in the total amount of ____ dollars ($____), not
including the amount of any refunding bonds issued in accordance
with Section 101139, or so much thereof as is necessary, may be
issued and sold to provide a fund to be used for carrying out the
purposes expressed in this chapter and to reimburse the General
Obligation Bond Expense Revolving Fund pursuant to Section
16724.5 of the Government Code. The bonds, when sold, shall be
and constitute a valid and binding obligation of the State of
California, and the full faith and credit of the State of California
is hereby pledged for the punctual payment of the principal of, and
interest on, the bonds as the principal and interest become due and
payable.

(b) It is the intent of the Legislature that the California
Community Colleges annually consider, as part of their annual
capital outlay planning process, the inclusion of facilities that may
be used by more than one segment of public higher education
(intersegmental), and, that on or before May 15 of each year, those
entities report their findings to the budget committees of each
house of the Legislature.

(c) Pursuant to this section, the Treasurer shall sell the bonds
authorized by the Higher Education Facilities Finance Committee
established pursuant to Section 67353 at any different times
necessary to service expenditures required by the apportionments.

101134.5.  

(a) The bonds authorized by this chapter shall be
prepared, executed, issued, sold, paid, and redeemed as provided
in the State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code), and all of the provisions of that law, except
Section 16727 of the Government Code to the extent that it
conflicts with this part, apply to the bonds and to this chapter and
are hereby incorporated into this chapter as though set forth in full
within this chapter.

(b) For the purposes of the State General Obligation Bond Law,
each state agency administering an appropriation of the 2016
Community College Capital Outlay Bond Fund is designated as
the “board” for projects funded pursuant to this chapter.

(c) The proceeds of the bonds issued and sold pursuant to this
chapter shall be available for the purpose of funding aid to the
California Community Colleges for the construction on existing
or new campuses, and their respective off-campus centers and joint
use and intersegmental facilities, as set forth in this chapter.

101135.  

The Higher Education Facilities Finance Committee
established pursuant to Section 67353 shall authorize the issuance
of bonds under this chapter only to the extent necessary to fund
the apportionments for the purposes described in this chapter that
are expressly authorized by the Legislature in the annual Budget
Act. Pursuant to that legislative direction, the committee shall
determine whether or not it is necessary or desirable to issue bonds
authorized pursuant to this chapter in order to carry out the
purposes described in this chapter and, if so, the amount of bonds
to be issued and sold. Successive issues of bonds may be authorized
and sold to carry out those actions progressively, and it is not
necessary that all of the bonds authorized to be issued be sold at
any one time.

101135.5.  

There shall be collected each year and in the same
manner and at the same time as other state revenue is collected,
in addition to the ordinary revenues of the state, a sum in an amount
required to pay the principal of, and interest on, the bonds each
year. It is the duty of all officers charged by law with any duty in
regard to the collection of the revenue to do and perform each and
every act which is necessary to collect that additional sum.

101136.  

Notwithstanding Section 13340 of the Government
Code, there is hereby appropriated from the General Fund in the
State Treasury, for the purposes of this chapter, an amount that
will equal the total of the following:

(a) The sum annually necessary to pay the principal of, and
interest on, bonds issued and sold pursuant to this chapter, as the
principal and interest become due and payable.

(b) The sum necessary to carry out Section 101137.5,
appropriated without regard to fiscal years.

101136.5.  

The board, as defined in subdivision (b) of Section
101134.5, may request the Pooled Money Investment Board to
make a loan from the Pooled Money Investment Account or any
other approved form of interim financing, in accordance with
Section 16312 of the Government Code, for the purpose of carrying
out this chapter. The amount of the request shall not exceed the
amount of the unsold bonds that the committee, by resolution, has
authorized to be sold for the purpose of carrying out this chapter.
The board, as defined in subdivision (b) of Section 101134.5, shall
execute any documents required by the Pooled Money Investment
Board to obtain and repay the loan. Any amounts loaned shall be
deposited in the fund to be allocated by the board in accordance
with this chapter.

101137.  

Notwithstanding any other provision of this chapter,
or of the State General Obligation Bond Law, if the Treasurer sells
bonds pursuant to this chapter that include a bond counsel opinion
to the effect that the interest on the bonds is excluded from gross
income for federal tax purposes, subject to designated conditions,
the Treasurer may maintain separate accounts for the investment
of bond proceeds and for the investment earnings on those
proceeds. The Treasurer may use or direct the use of those proceeds
or earnings to pay any rebate, penalty, or other payment required
under federal law or take any other action with respect to the
investment and use of those bond proceeds required or desirable
under federal law to maintain the tax-exempt status of those bonds
and to obtain any other advantage under federal law on behalf of
the funds of this state.

101137.5.  

(a) For the purposes of carrying out this chapter,
the Director of Finance may authorize the withdrawal from the
General Fund of an amount not to exceed the amount of the unsold
bonds that have been authorized by the Higher Education Facilities
Finance Committee to be sold for the purpose of carrying out this
chapter. Any amounts withdrawn shall be deposited in the 2016
California Community College Capital Outlay Bond Fund
consistent with this chapter. Any money made available under this
section shall be returned to the General Fund, plus an amount equal
to the interest that the money would have earned in the Pooled
Money Investment Account, from proceeds received from the sale
of bonds for the purpose of carrying out this chapter.

(b) Any request forwarded to the Legislature and the Department
of Finance for funds from this bond issue for expenditure for the
purposes described in this chapter by the California Community
Colleges shall be accompanied by the five-year capital outlay plan
that reflects the needs and priorities of the community college
system and is prioritized on a statewide basis. Requests shall
include a schedule that prioritizes the seismic retrofitting needed
to significantly reduce, in the judgment of the particular college,
seismic hazards in buildings identified as high priority by the
college.

101138.  

All money deposited in the 2016 California
Community College Capital Outlay Bond Fund that is derived
from premium and accrued interest on bonds sold shall be reserved
in the fund, and shall be available for transfer to the General Fund
as a credit to expenditures for bond interest.

101139.  

The bonds may be refunded in accordance with Article
6 (commencing with Section 16780) of Chapter 4 of Part 3 of
Division 4 of Title 2 of the Government Code, which is a part of
the State General Obligation Bond Law. Approval by the voters
of the state for the issuance of the bonds described in this chapter
includes the approval of the issuance of any bonds issued to refund
any bonds originally issued under this chapter or any previously
issued refunding bonds.

101139.5.  

The Legislature hereby finds and declares that,
inasmuch as the proceeds from the sale of bonds authorized by
this chapter are not “proceeds of taxes” as that term is used in
Article XIII B of the California Constitution, the disbursement of
these proceeds is not subject to the limitations imposed by that
article.

 

Chapter  3. University Facilities

 

Article 1.  General

 

101140.  

(a) The system of public universities in this state
includes the University of California, the Hastings College of the
Law, and the California State University, and their respective
off-campus centers.

(b) The 2016 University Capital Outlay Bond Fund is hereby
established in the State Treasury for deposit of funds from the
proceeds of bonds issued and sold for the purposes of this chapter.

(c) The Higher Education Facilities Finance Committee
established pursuant to Section 67353 is hereby authorized to create
a debt or debts, liability or liabilities, of the State of California
pursuant to this chapter for the purpose of providing funds to aid
the University of California, the Hastings College of the Law, and
the California State University.

 

Article 2.  Program Provisions Applicable to the University of
California and the Hastings College of the Law

 

101141.  

(a) From the proceeds of bonds issued and sold
pursuant to Article 4 (commencing with Section 101150), the sum
of ____ dollars ($____) shall be deposited in the 2016 University
Capital Outlay Bond Fund for the purposes of this article. When
appropriated, these funds shall be available for expenditure for the
purposes of this article.

(b) The purposes of this article include assisting in meeting the
capital outlay financing needs of the University of California and
the Hastings College of the Law.

(c) Proceeds from the sale of bonds issued and sold for the
purposes of this article may be used to fund construction on
existing campuses, including the construction of buildings and the
acquisition of related fixtures, construction of facilities that may
be used by more than one segment of public higher education
(intersegmental), the renovation and reconstruction of facilities,
site acquisition, the equipping of new, renovated, or reconstructed
facilities, which equipment shall have an average useful life of 10
years; and to provide funds for the payment of preconstruction
costs, including, but not limited to, preliminary plans and working
drawings for facilities of the University of California and the
Hastings College of the Law.

 

Article 3.  Program Provisions Applicable to the California State
University

 

101142.  

(a) From the proceeds of bonds issued and sold
pursuant to Article 4 (commencing with Section 101150), the sum
of ____ dollars ($____) shall be deposited in the 2016 University
Capital Outlay Bond Fund for the purposes of this article. When
appropriated, these funds shall be available for expenditure for the
purposes of this article.

(b) The purposes of this article include assisting in meeting the
capital outlay financing needs of the California State University.

(c) Proceeds from the sale of bonds issued and sold for the
purposes of this article may be used to fund construction on
existing campuses, including the construction of buildings and the
acquisition of related fixtures, construction of facilities that may
be used by more than one segment of public higher education
(intersegmental), the renovation and reconstruction of facilities,
site acquisition, the equipping of new, renovated, or reconstructed
facilities, which equipment shall have an average useful life of 10
years; and to provide funds for the payment of preconstruction
costs, including, but not limited to, preliminary plans and working
drawings for facilities of the California State University.

 

Article 4.  University Fiscal Provisions

 

101150.  

(a) Of the total amount of bonds authorized to be
issued and sold pursuant to Chapter 1 (commencing with Section
101100), bonds in the amount of ____ dollars ($_____), not
including the amount of any refunding bonds issued in accordance
with Section 101159, or so much thereof as is necessary, may be
issued and sold to provide a fund to be used for carrying out the
purposes expressed in this chapter and to reimburse the General
Obligation Bond Expense Revolving Fund pursuant to Section
16724.5 of the Government Code. The bonds, when sold, shall be
and constitute a valid and binding obligation of the State of
California, and the full faith and credit of the State of California
is hereby pledged for the punctual payment of the principal of, and
interest on, the bonds as the principal and interest become due and
payable.

(b) It is the intent of the Legislature that the University of
California and the California State University annually consider,
as part of their annual capital outlay planning process, the inclusion
of facilities that may be used by more than one segment of public
higher education (intersegmental), and, that on or before May 15
of each year, those entities report their findings to the budget
committees of each house of the Legislature.

(c) Pursuant to this section, the Treasurer shall sell the bonds
authorized by the Higher Education Facilities Finance Committee
established pursuant to Section 67353 at any different times
necessary to service expenditures required by the apportionments.

101151.  

(a) The bonds authorized by this chapter shall be
prepared, executed, issued, sold, paid, and redeemed as provided
in the State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code), and all of the provisions of that law, except
Section 16727 of the Government Code to the extent that it
conflicts with this part, apply to the bonds and to this chapter and
are hereby incorporated into this chapter as though set forth in full
within this chapter.

(b) For the purposes of the State General Obligation Bond Law,
each state agency administering an appropriation of the 2016
University Capital Outlay Bond Fund is designated as the “board”
for projects funded pursuant to this chapter.

(c) The proceeds of the bonds issued and sold pursuant to this
chapter shall be available for the purpose of funding aid to the
University of California, the Hastings College of the Law, and the
California State University, for the construction on existing or new
campuses, and their respective off-campus centers and joint use
and intersegmental facilities, as set forth in this chapter.

101152.  

The Higher Education Facilities Finance Committee
established pursuant to Section 67353 shall authorize the issuance
of bonds under this chapter only to the extent necessary to fund
the apportionments for the purposes described in this chapter that
are expressly authorized by the Legislature in the annual Budget
Act. Pursuant to that legislative direction, the committee shall
determine whether or not it is necessary or desirable to issue bonds
authorized pursuant to this chapter in order to carry out the
purposes described in this chapter and, if so, the amount of bonds
to be issued and sold. Successive issues of bonds may be authorized
and sold to carry out those actions progressively, and it is not
necessary that all of the bonds authorized to be issued be sold at
any one time.

101153.  

There shall be collected each year and in the same
manner and at the same time as other state revenue is collected,
in addition to the ordinary revenues of the state, a sum in an amount
required to pay the principal of, and interest on, the bonds each
year. It is the duty of all officers charged by law with any duty in
regard to the collection of the revenue to do and perform each and
every act which is necessary to collect that additional sum.

101154.  

Notwithstanding Section 13340 of the Government
Code, there is hereby appropriated from the General Fund in the
State Treasury, for the purposes of this chapter, an amount that
will equal the total of the following:

(a) The sum annually necessary to pay the principal of, and
interest on, bonds issued and sold pursuant to this chapter, as the
principal and interest become due and payable.

(b) The sum necessary to carry out Section 101157, appropriated
without regard to fiscal years.

101155.  

The board, as defined in subdivision (b) of Section
101151, may request the Pooled Money Investment Board to make
a loan from the Pooled Money Investment Account or any other
approved form of interim financing, in accordance with Section
16312 of the Government Code, for the purpose of carrying out
this chapter. The amount of the request shall not exceed the amount
of the unsold bonds that the committee, by resolution, has
authorized to be sold for the purpose of carrying out this chapter.
The board, as defined in subdivision (b) of Section 101151, shall
execute any documents required by the Pooled Money Investment
Board to obtain and repay the loan. Any amounts loaned shall be
deposited in the fund to be allocated by the board in accordance
with this chapter.

101156.  

Notwithstanding any other provision of this chapter,
or of the State General Obligation Bond Law, if the Treasurer sells
bonds pursuant to this chapter that include a bond counsel opinion
to the effect that the interest on the bonds is excluded from gross
income for federal tax purposes, subject to designated conditions,
the Treasurer may maintain separate accounts for the investment
of bond proceeds and for the investment earnings on those
proceeds. The Treasurer may use or direct the use of those proceeds
or earnings to pay any rebate, penalty, or other payment required
under federal law or take any other action with respect to the
investment and use of those bond proceeds required or desirable
under federal law to maintain the tax-exempt status of those bonds
and to obtain any other advantage under federal law on behalf of
the funds of this state.

101157.  

(a) For the purposes of carrying out this chapter, the
Director of Finance may authorize the withdrawal from the General
Fund of an amount not to exceed the amount of the unsold bonds
that have been authorized by the Higher Education Facilities
Finance Committee to be sold for the purpose of carrying out this
chapter. Any amounts withdrawn shall be deposited in the 2016
University Capital Outlay Bond Fund consistent with this chapter.
Any money made available under this section shall be returned to
the General Fund, plus an amount equal to the interest that the
money would have earned in the Pooled Money Investment
Account, from proceeds received from the sale of bonds for the
purpose of carrying out this chapter.

(b) Any request forwarded to the Legislature and the Department
of Finance for funds from this bond issue for expenditure for the
purposes described in this chapter by the University of California,
the Hastings College of the Law, or the California State University
shall be accompanied by the five-year capital outlay plan. Requests
forwarded by a university or college shall include a schedule that
prioritizes the seismic retrofitting needed to significantly reduce,
in the judgment of the particular university or college, seismic
hazards in buildings identified as high priority by the university
or college.

101158.  

All money deposited in the 2016 University Capital
Outlay Bond Fund that is derived from premium and accrued
interest on bonds sold shall be reserved in the fund, and shall be
available for transfer to the General Fund as a credit to expenditures
for bond interest.

101159.  

The bonds may be refunded in accordance with Article
6 (commencing with Section 16780) of Chapter 4 of Part 3 of
Division 4 of Title 2 of the Government Code, which is a part of
the State General Obligation Bond Law. Approval by the voters
of the state for the issuance of the bonds described in this chapter
includes the approval of the issuance of any bonds issued to refund
any bonds originally issued under this chapter or any previously
issued refunding bonds.

101160.  

The Legislature hereby finds and declares that,
inasmuch as the proceeds from the sale of bonds authorized by
this chapter are not “proceeds of taxes” as that term is used in
Article XIII B of the California Constitution, the disbursement of
these proceeds is not subject to the limitations imposed by that
article.

SEC. 2.  

The Secretary of State shall submit Section 1 of this
act to the voters at the November 8, 2016, statewide general
election.

SEC. 3.  

The provisions of this act are severable. If any
provision of this act or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.

SEC. 4.  

Section 1 of this act shall become operative only if the
voters approve the Recommitment to Higher Education Bond Act
of 2016, as set forth in Section 1 of this act.