BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 114 (Liu) - Education facilities: Kindergarten Through Grade
12 Public Education Facilities Bond Act of 2016
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|Version: April 7, 2015 |Policy Vote: ED. 6 - 0, GOV. & |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Jillian(SAPR) |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill makes changes to the existing school
facility program and authorizes the Kindergarten Through Grade
12 Public Education Facilities Bond Act of 2016 to provide for
the issuance of an unspecified amount of general obligation
bonds for construction and modernization of education facilities
to become effective if approved by voters at the November 8,
2016 statewide general election.
Fiscal
Impact:
Bonds: Unknown, but assuming similar bond authority
amounts authorized in past measures, it will likely result
in state costs in the low tens of billions of dollars in
principal and interest over 30 years (mid hundreds of
millions General Fund annually).
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Administration: Substantial new workload for the
California Department of Education (CDE) and the Department
of General Services (DGS). The level of new work would
depend the size of the bond. The DGS estimates that its
Office of Public School Construction (OPSC) would require
significant staffing increases of over 100 positions if
assuming a $7.3 billion bond. This measure will also drive
significant workload at the CDE related to review and
approval of site selection and construction plans.
Administrative workload would likely be bond-funded.
Interagency Agreement: Department of Toxic Substances
Control estimates costs ranging from $85,000 to $120,000
for its participation in developing an interagency
agreement as required by this bill.
Ballot costs: Likely $200,000 General Fund for a
statewide ballot pamphlet, assuming 4 pages.
Background: Existing law establishes the School Facility Program (SFP)
under which the state provides general obligation bond funding
for various school construction projects, including new
construction, modernization, joint-use facilities, and programs
to specifically address the construction needs of overcrowded
schools, charter schools, career technical education facilities,
and seismic mitigation. (Education Code § 17070.10 - 17070.99)
The last statewide general obligation bond, Proposition 1D was
approved by voters in November 2006. Proposition 1D, authorized
$7.3 billion for K-12 education facilities and $3.087 billion
for higher education facilities and allocated specified amounts
from the sale of these bonds for modernization, new
construction, charter schools, career technical education
facilities, joint use, projects for new construction on severely
overcrowded schoolsites, and high performance incentive grants
to promote energy efficient designs and materials. In addition,
portions of the amounts allocated for new construction and
modernization were authorized for purposes of funding smaller
learning communities and high schools and for seismic retrofit
projects. (EC §101010-101031)
Since 1998, voters have approved approximately $35 billion in
statewide general obligation bonds to construct or renovate K-12
school facilities and almost $10 billion for higher education
facilities. This bill would authorize an unspecified amount of
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bonds for this purpose.
Proposed Law:
This bill establishes the Kindergarten Through Grade 12 Public
Education Facilities Bond Act of 2016 to provide for the
issuance of an unspecified amount of general obligation (GO)
bonds for construction and modernization of education
facilities, to take effect only if approved by voters at the
November 8, 2016, statewide general election.
This bill requires, as a condition of participation in the
school facilities program, a school district to:
Comply with existing deferred maintenance provisions.
Certify that it has a long-range school facilities
master plan consistent with the regional sustainable
communities strategy plans established pursuant to
specified Government Code provisions.
Conduct an inventory of existing facilities and submit
this information to the State Allocation Board (SAB) for
purposes of maintaining a statewide school facilities
inventory.
This bill directs the OPSC, in consultation with the California
Department of Education (CDE), to recommend regulations to the
SAB that provide school districts with flexibility in the
design, construction of, and modernization of school facilities.
The recommendations must propose revisions to any regulations
that limit the ability of school districts to use new
construction grants to construct approved instructional space
and must ensure that school districts have the ability to design
a facility that provides a flexible learning environment and the
integration of technology.
This bill authorizes a grant for new construction and a
modernization apportionment to be used for seismic mitigation
purposes and for related design, study, and testing costs. An
applicant that receives funding in either case must ensure that
the project incorporates designs and materials that promote the
efficient use of energy and water, and other characteristics of
high-performance schools.
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Furthermore, this bill expands the definition of modernization
to include "replacement" and authorizes the use of the
apportionment to demolish and construct on the existing site if
the total cost of providing a new building, including land,
would not protect the economic interest of the state and school
district. A replacement project would also be eligible for the
same grant amount as that authorized for a new construction
project.
This bill eliminates the requirement that a joint-use facility
partner contribute no less than 25 percent of project costs if
the joint-use agreement specifies the partner will be
responsible for 100 percent of the operational costs for the
project for a term of no less than 10 years.
As the only provision of this bill that if it is enacted, is not
contingent upon voters approving the bond, the CDE, Division of
the State Architect (DSA), Office of Public School Construction
(OPSC), and Department of Toxic Substances Control are required
to develop an interagency plan, by July 1, 2016, to: (1)
streamline the school facility construction application, review
and audit processes and (2) identify a single entity within the
CDE as a full-service agency to assist school districts in
navigating the school facilities construction process.
Legislative intent provides that the SAB review and revise
operative regulatory language before July 1, 2016, to reduce
duplicative review, approval and audit processes.
Related
Legislation:1. AB 148 (Holden, 2015), AB 1088 (O'Donnell, 2015), and AB 1433
(Gray, 2015) all relate to placing bond measures before voters
for school facilities in kindergarten through university. AB
148 specifies an amount of $1.1 billion.
AB 2235 (Buchanan, 2014) made changes to the School Facility
Program and authorized the Kindergarten-University Public
Education Facilities Bond Act of 2014 to provide for the
issuance of $4.3 billion in general obligation (GO) bonds for
construction and modernization of education facilities, to
become effective only if approved by voters at the November 4,
2014, statewide general election. Some provisions of AB 2235
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were similar to those in this bill. AB 2235 awaited action on
the Senate Floor but was subsequently moved to the Inactive
File.
A number of other measures expressed the Legislature's intent to
place, or would have authorized placement of
Kindergarten-University facilities bonds on several previous
ballots. In particular, AB 220 (Brownley, 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. SB 271 (Ducheny, 2009) would have
placed an $8.6 billion higher education facilities bond on the
November 2010 ballot. SB 271 was held in this committee.
Staff
Comments: This bill will result in direct state General Fund
costs of about $200,000 to place the Kindergarten Through Grade
12 Public Education Facilities Bond Act of 2016 on the November
8, 2016 statewide ballot. If enacted by voters, this measure
will result in substantial additional state costs.
As currently written, this bill asks voters to approve the
issuance (and repayment) of an unspecified amount of state GO
bonds, but the amount decided upon is likely to be in the
billions of dollars, based on past bond measures. Until the
amounts are specified, the fiscal impact of this bill is
unknown. However, presumably this bond will be in low billions
of dollars. Staff notes for reference, that assuming an
interest rate of 5% with a 30 year repayment period, the state
will pay in the mid hundreds of millions for a $7.3 billion
bond. Over the 30 years, costs would likely be in the low tens
of billions.
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