BILL ANALYSIS Ó
AB 1433
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1433 (Gray) - As Introduced February 27, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill:
1)Authorizes an unspecified amount of general obligation bonds
AB 1433
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to finance the construction and renovation of facilities at
the California Community Colleges (CCC), the California State
University (CSU), the University of California (UC), and the
Hastings College of the Law (HCL).
2)Places the bond measure for voter approval on the November
2016 statewide general election ballot.
FISCAL EFFECT:
1)Assuming 30-year bonds would be sold at an average interest
rate of 5%, and assuming at least $3 billion in authorized
bonds. Total General Fund debt service costs for principal and
interest would be about $5.8 billion, or an average of $190
million per year. A majority of the bonds would likely be sold
over about five years, so debt repayments would last for 35
years.
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)Background. Starting in the late 1980s, and for almost 20
years, the Legislature placed on the ballot, and voters
approved, bonds for public higher education facilities every
two to four years. The last statewide general obligation
bond, however, was Proposition 1D, which was approved by
voters in November 2006, and authorized the sale of $10.4
billion in bonds, of which $3.1 billion was earmarked for
higher education facilities.
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2)Capital Needs. The three public segments have an enormous
inventory of buildings and infrastructure, much of which is
several decades old. Each report significant capital outlay
needs for renovation and new construction.
a) UC estimates five-year needs of $550 million per
year--$450 for its general campuses and $100 million for
the medical centers.
b) CSU has identified a five-year total of $7 billion. CSU
notes that almost one-half of their buildings are more than
40 years old, and one-third are more than 50 years old. The
system estimates a deferred maintenance backlog of $1.8
billion.
c) CCC estimates a need of $35 billion over 10 years, of
which 19 billion can be covered by locally-approved general
obligation bonds, leaving an unmet need of $16 billion.
3)Related Legislation. AB 148 (Holden), pending in this
committee, authorizes an unspecified amount of bonds for K-14
facilities.
AB 1088 (O'Donnell), also pending in this committee,
authorizes an unspecified amount of bonds for K-12 and higher
education facilities.
4)Prior Legislation. In 2014, AB 2235 (Buchanan and Hagman),
which authorized $9 billion for K-12 and higher education
facilities, was held in the Senate.
AB 1433
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Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081