BILL ANALYSIS Ó
SB 111
Page 1
Date of Hearing: July 1, 2015
ASSEMBLY COMMITTEE ON EDUCATION
Patrick O'Donnell, Chair
SB
111 (Fuller) - As Amended June 2, 2015
SENATE VOTE: 40-0
SUBJECT: School facilities: military installations.
SUMMARY: Expresses the intent of the Legislature that
assistance be provided to school districts in the 2015-16 fiscal
year to meet the matching share requirement of a school
construction grant made by the Office of Economic Adjustment of
the federal Department of Defense (DoD) to construct, renovate,
repair, or expand elementary and secondary public schools
located on military installations. Requires the Department of
Finance (DOF) to explore options on how best to assist school
districts in meeting the matching share requirement of the
federal school construction grant. Requires the options to
include, but not necessarily be limited to, making low-interest
loans available to school districts through the California
Infrastructure and Economic Development Bank (IBank).
EXISTING LAW:
1)Establishes the Leroy F. Greene School Facilities Act of 1998
(SB 50, Chapter 407, Statutes of 1998), also known as the
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School Facility Program (SFP), which governs the
administration, allocation, and use of state school facilities
bond funds.
2)Provides that a school district's ongoing eligibility for new
construction funding is determined by making calculations
related to certain factors, including, but not limited to,
enrollment projections by utilizing a cohort survival
enrollment projection system, the number of students that may
be adequately housed in the existing school building capacity
of the district, and increases or decreases in enrollment
resulting from receipt of funding from the Year-Round School
Grant Program.
3)Provides that a school district is eligible to receive an
apportionment for the modernization of a permanent school
building that is more than 25 years old or a portable
classroom that is at least 20 years old. A school district is
eligible to receive an additional apportionment for
modernization of a permanent school building every 25 years
after the date of the previous apportionment or a portable
classroom every 20 years after the previous apportionment.
4)Requires a 50% local match for new construction projects and
40% local match for modernization projects.
5)Establishes the IBank within the Governor's Office of Business
and Economic Development 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.
6)Provides that the IBank has broad authority to issue
tax-exempt and taxable revenue bonds, provide financing to
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public agencies, provide credit enhancements, acquire or lease
facilities, and leverage State and Federal funds.
FISCAL EFFECT: According to the Senate Appropriations
Committee, unknown cost pressure to implement the option
identified by the DOF. Costs for the DOF to explore options are
minor and absorbable.
COMMENTS: DoD Public Schools on Military Installations (PSMI)
Grant Program. Congress has allocated a total of $945 million -
$250 million in 2011, $250 million in 2012, $270 million in
2013, and $175 million in 2015 - for the construction,
renovation, repair or expansion of public schools on military
installations. In 2010, the DoD conducted an assessment of the
almost 160 schools on military installations across the nation
and established a priority list based on schools with the
greatest need. California has 11 schools located in six school
districts in the top 33 of the "Public Schools on Military
Installations Priority" list, eligible for a total of $242.2
million in federal funds.
The schools are required to provide a 20% match. The match can
come from local funds or state funds. The amount of funds
needed to meet the 20% match for the 11 schools is estimated at
$60.5 million. According to the author's office, the DoD has
given the DoD Office of Economic Adjustment the authority to
drop schools on the priority list if local educational agencies
or the states the schools are located in are unable to provide
the match. If the match is not produced, funds for all
California schools are in jeopardy. Of all the projects, one
project may have local matching funds from local bonds. Four
projects have eligibility for state bond funds, but only one
project has enough eligibility to cover most of its match.
California's state bond program, however, has been out of New
Construction and Modernization funds since 2012. Even if funds
are available, the SFP does not authorize funding to provide a
match.
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Prior efforts. Since 2012, varying legislative efforts have
been undertaken in an attempt to secure funds for the local
match. The State Allocation Board (SAB), the body that oversees
the allocation of state bond funds, formed a subcommittee in
April 2012 to explore funding options to assist five school
districts serving seven schools on military bases eligible for
funding in the first two federal funding cycles. The
subcommittee considered reserving bond authority, transferring
bond authority, providing loans, waiving local matches, and
facility hardship funding for districts with health and safety
problems. Legal counsel advised the SAB that the SFP does not
offer flexibility to accommodate the federal match under the
options explored by the subcommittee. The subcommittee's
recommendation was to recommend to the Legislature that future
bond funds be made available specifically for DoD schools.
There are two bond bills pending in the Legislature currently
and neither contains set asides for this purpose, although it is
unclear when a state bond initiative will be before voters and
whether it will take place soon enough to meet the federal match
timeline.
Last year, the author of this bill introduced SB 1421, which
would have prioritized state bond funds for applications
submitted by the school districts eligible for federal DoD
funds. The bill was held on the Assembly Appropriations
Committee suspense file.
What does this bill do? Prior versions of this bill would have
appropriated $61 million from the General Fund to provide the
match. The current version of the bill, amended in the Senate
Appropriations Committee, requires the DOF to explore options on
how best to assist these schools, including, but not limited to,
making low-interest loans available to school districts through
the IBank. The Governor's May Revise indicates that the
Administration is exploring funding options, including loans
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through the IBank. According to the DOF, DOF is working with
the school districts to see if there is interest in
participating in the Ibank's Infrastructure State Revolving Fund
low-interest loan program to help fund the local match. The
Ibank has provided local match funding for other federal
programs and these types of school construction and renovation
projects would be eligible. Although this bill is uncodified,
the Committee may wish to consider whether this bill is
necessary.
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|INSTALLATION|DISTRICT |NAME OF |TOTAL |FEDERAL |LOCAL |
| | |SCHOOL |PROJECT |ELIGIBILITY|MATCH |
| | | |COST | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Sierra |Murray |$39.5 |$31.6 |$7.9 |
|Weapons |Sands |Middle |million |million |million |
|Station |Unified | | | | |
|China Lake | | | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Edwards Air |Muroc |Branch |$27.3 |$21.8 |$5.5 |
|Force Base |Joint |Elementar|million |million |million |
| |Unified |y | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Sierra |Burroughs|$31.9 |$25.5 |$6.4 |
|Weapons |Sands | High |million |million |million |
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|Station |Unified | | | | |
|China Lake | | | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Camp |Fallbrook |Mary |$47 |$37.6 |$9.4 |
|Pendleton |Union |Faye |million |million |million |
| | |Pendleton| | | |
| | | | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Camp |Fallbrook |San |$43 |$34.5 |$8.6 |
|Pendleton |Union |Onofre |million |million |million |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Base |San Diego |Miller |$20 |$16 |$4 |
|San Diego |Unified |Elementar|million |million |million |
| | |y | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Travis Air |Travis |Scandia |$13.6 |$10.9 |$2.7 |
|Force Base |Unified |Elementar|million |million |million |
| |School |y | | | |
| |District | | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Central |Akers |$21 |$16.9 |$4.2 |
|Station |Union | |million |million |million |
|Lemoore | | | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Base |San Diego |Hancock |$24 |$19.2 |$4.8 |
|San Diego |Unified |Elementar|million |million |million |
| | |y | | | |
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| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Edwards Air |Muroc |Desert |$35.2 |$28.2 |$7 |
|Force Base |Joint |Junior - |million |million |million |
| |Unified |Senior | | | |
| | |High (2 | | | |
| | |schools) | | | |
| | | | | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Total | | |$302.5 |$242.2 |$60.5 |
| | | |million |million |million |
| | | | | | |
| | | | | | |
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IBank. According to the IBank's Internet Web site, "The
Infrastructure State Revolving Fund (ISRF) Program provides
financing to public agencies and non-profit corporations for a
wide variety of infrastructure and economic development
projects. ISRF Program funding is available in amounts ranging
from $50,000 to $25,000,000, with loan terms of up to 30 years.
Eligible project categories include, but are not limited to,
city streets, county highways, state highways, drainage, water
supply and flood control, educational facilities, environmental
mitigation measures, parks and recreational facilities, port
facilities, public transit, sewage collection and treatment,
solid waste collection and disposal, water treatment and
distribution, defense conversion, public safety facilities, and
power and communications facilities."
The author states, "The majority of the PSMI eligible school
districts in California cannot raise the required 20% match
through bond elections due to the fact that property owners
outside the base are not willing to tax themselves for base
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schools and in many areas there is low assessed valuation. All
other school projects [in other states] have come up with
required match funds from local/state sources. In every case,
states have provided match funds when local funds were
unavailable; in some cases state funding exceeded 20%. These
schools serve our nation's military families and warriors, those
sacrificing overseas for protection of our freedom."
REGISTERED SUPPORT / OPPOSITION:
Support
Brigadier General Edward Banta, Commanding General of Marine
Corps Installations West-Marine Corps Base Camp Pendleton
California Teachers Association
Central Union School District
P.J. Lorge, Rear Admiral, U.S. Navy Commander
Solano County Board of Supervisors
Travis Unified School District
Several individuals
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Opposition
None on file
Analysis Prepared by:Sophia Kwong Kim / ED. / (916)
319-2087