BILL ANALYSIS Ó
AB 1433
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Date of Hearing: April 28, 2015
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Jose Medina, Chair
AB 1433
(Gray) - As Introduced February 27, 2015
SUBJECT: Higher education facilities: Recommitment to Higher
Education Bond Act of 2016
SUMMARY: Enacts the Recommitment to Higher Education Bond Act
of 2016. Specifically, this bill:
1)Authorizes an unspecified amount of state general obligation
bonds, as scheduled, to provide aid to the California
Community Colleges (CCC), the California State University
(CSU), the University of California (UC), and the Hastings
College of the Law to construct and modernize education
facilities.
2)Specifies that the proceeds of these bonds would be deposited
in the 2016 CCC Capital Outlay Bond Fund and the 2016
University Capital Outlay Bond Fund, as established by this
measure.
3)Specifies that this bond act would become operative only if
approved by the voters during the November 8, 2016 statewide
general election; and, provides for the submission to the
voters at said election.
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FISCAL EFFECT: Unknown
COMMENTS: Background. Since the late 1980s, the Legislature
has placed on the ballot and voters have approved bonds for
public higher education every two to four years. The last
statewide general obligation bond, Proposition 1D (AB 127, Núñez
and Perata, Chapter 35, Statutes of 2006), was approved by
voters in November 2006, authorizing the sale of $10.4 billion
in general obligation bonds of which $3.087 billion was
earmarked for higher education facilities. Of this amount, $1.5
billion was provided for CCC facilities, $890 million was
provided for UC, and $690 million was provided for CSU. All
Proposition 1D higher education facilities funds have been
depleted and K-12 funds have almost been exhausted.
Since 2006, as the state's fiscal condition continued to
deteriorate, legislation needed to authorize education bonds was
not enacted. Instead, since 2008 the higher education segments
have received capital funding from lease-revenue bonds through
the annual budget acts; however, these funds have met less than
half of the segments' capital needs. Bond funds, whether
lease-revenue or G.O., are allocated through the budget process
in accordance with the segments' five-year capital facility
plans.
Additionally, in November 2012, California voters approved
Proposition 39 to close a corporate tax loophole and increase
the state's annual corporate tax revenues by as much as $1.1
billion. Proposition 39 specified that half of the revenue
generated from 2013-2018, up to $550 million, should support
energy efficiency and alternative energy projects at public
schools, colleges, universities and other public buildings, as
well as related public-private partnerships and workforce
training.
Need for this measure. According to the author, higher
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education institutions have found themselves unable to meet
enrollment and workforce demands. The author states,
"Additional state funding has been called for but gone
unanswered. From 2007-2013, state support for the UC and CSU
feel by 30 percent, even as enrollment grew. Funding has not
kept up with the cost of higher education, and campuses often
find themselves falling behind in classroom space and up to date
facilities."
The author contends that higher education is truly a public
benefit; and that our students, communities, and entire state
benefit from a vibrant public higher education system. This
measure will reinvest in the UC, CSU, and CCC systems for
ongoing needs of modernization and construction of educational
facilities.
Capital needs. The segments (UC, CSU, and CCC) report the
following capital needs:
1)UC: Has identified four year needs of approximately $550
million per year. This breaks down to approximately $450
million per year for UC general campuses and $100 million for
medical centers.
2)CSU: Has identified a five year total need of $7 billion for
renovation and/or replacement of existing infrastructure and
for new buildings to provide growth to increase lecture and
laboratory seating capacity. This breaks down to
approximately $400 to $500 million per year.
To note: 48 percent of their buildings are 40 years old and
34 percent are over 50 years old; and, a backlog of their
deferred maintenance funding is nearly at $1.8 billion.
3)CCC: Has identified a need of approximately $35 billion over
the next 10 years for construction and modernization of
facilities.
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To note: Of the $35 billion needed, the CCC Office of the
Chancellor estimates that $19.1 billion of local bond funds
remain available, leaving over $15.9 billion in unmet need.
This breaks down to approximately $3.2 billion needed from a
state bond every two years.
Prior and related legislation. Several bills have been
introduced since 2009 in an effort to authorize bond measures to
fund facility construction projects for K-12 schools and public
postsecondary educational institutions. These include the
following:
1)AB 148 (Holden), which is awaiting a hearing in the Assembly
Education Committee, would, among others, enact the K-14
School Investment Bond Act of 2016 to authorize an unspecified
amount of state general obligation bonds, as scheduled, to
provide aid to school districts, county superintendents of
schools, county boards of education, charter schools, and CCC
to construct and modernize education facilities.
2)AB 1088 (O'Donnell), which is awaiting a hearing in the
Assembly Education Committee, would, among others, enact the
Kindergarten-University Public Education Facilities Bond Act
of an unspecified year to authorize an unspecified amount of
state general obligation bonds to provide aid to school
districts, county superintendents of schools, county boards of
education, charter schools, the CCC, the UC, the Hastings
College of the Law, and the CSU to construct and modernize
education facilities.
3)AB 2235 (Buchanan and Hagman), which was introduced in 2014,
would have changed the existing School Facility Program and
authorize the Kindergarten-University Public Education
Facilities Bond Act of 2014 to provide for the issuance of $9
billion in general obligation bonds for construction and
modernization of education facilities (to become effective
only if approved by voters), and require its submission to
voters at the November 4, 2014, statewide general election.
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AB 2235 was held in the Senate Appropriations Committee.
4)AB 41 (Buchanan), which was introduced in 2013, expressed the
Legislature's intent to place a Kindergarten-University
facilities bond on the 2014 ballot. AB 41 was held by the
author in the Assembly Education Committee.
5)SB 45 (Corbett), which was introduced in 2013, expressed 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.
6)SB 301 (Liu), which was introduced in 2013, expressed the
Legislature's intent to place a Kindergarten-University
facilities bond on the 2014 ballot. SB 301 was held by the
author in the Senate Rules Committee.
7)AB 331 (Brownley), which was introduced in 2011, expressed the
Legislature's intent to place a Kindergarten-University
facilities bond on the 2012 ballot. AB 331 was held in the
Assembly Appropriations Committee in 2012.
8)AB 822 (Block), which was introduced in 2011, would have
placed a higher education facilities bond on the November 2012
ballot. AB 822 was held in the Assembly Appropriations
Committee in 2012.
9)AB 220 (Brownley), which was introduced in 2009, would have
placed a $6.1 billion Kindergarten-University facilities bond
on the November 2010 ballot. AB 220 was held in the Senate
Appropriations Committee.
10)SB 271 (Ducheny), which was introduced in 2009, would have
placed a $8.6 billion higher education facilities bond on the
November 2010 ballot. SB 271 was held in the Senate
Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION:
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Support
California Community Colleges Chancellor's Office
California State University
Community College Facility Coalition
University of California
Opposition
None on file.
Analysis Prepared by:Jeanice Warden / HIGHER ED. / (916)
319-3960
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