BILL ANALYSIS
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THIRD READING
Bill No: AB 552
Author: Solorio (D)
Amended: 4/6/10 in Senate
Vote: 27 - Urgency
SENATE PUBLIC SAFETY COMMITTEE : 5-0, 3/23/10
AYES: Leno, Cedillo, Hancock, Steinberg, Wright
NO VOTE RECORDED: Cogdill, Huff
SENATE APPROPRIATIONS COMMITTEE : 8-1, 4/26/10
AYES: Kehoe, Cox, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Denham
NO VOTE RECORDED: Walters, Wyland
ASSEMBLY FLOOR : Not relevant
SUBJECT : Correctional facilities: AB 900 revisions
SOURCE : Department of Corrections and Rehabilitation
DIGEST : This bill makes technical and substantive
changes to the requirements of the Department of
Corrections and Rehabilitation construction projects
authorized by AB 900 (Solorio), Chapter 7, Statutes of
2007. Specifically, this bill (1) expressly includes the
development of medical and mental health beds and treatment
space, as specified, in the and expressly states that these
beds will be supported with rehabilitative programming, (2)
authorizes the renovation of existing buildings for
approved beds and reentry program facilities, (3) expressly
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includes ancillary improvements to provide dental, medical
and mental health treatment, in specified construction
authority, and (4) changes Phase II conditional language
requiring that at least 4,000 beds from Phase I be "under
construction" to instead require that at least 4,000 beds
be "established by the by State Public Works Board."
ANALYSIS : Current law, as enacted in 2007 by AB 900
(Solorio), Chapter 7, Statutes of 2007, generally
authorizes $6.2 billion in lease-revenue bond financing for
construction of 40,000 new state prison beds and $1.2
billion for an estimated 13,000 new county jail beds,
phased-in over time and contingent upon a series of
construction and rehabilitation program implementation
benchmarks. (Section 15819.40 et seq. of the Government
Code)
Current law specifically authorizes the Department of
Corrections and Rehabilitation (CDCR) to "design,
construct, or renovate housing units, support buildings,
and programming space in order to add up to 12,000 beds at
facilities under its jurisdiction." (Section
15819.40(a)(1)(A) of the Government Code) CDCR is required
to "complete site assessments at facilities at which it
intends to construct or renovate additional housing units,
support buildings, and programming space. The department
may use the funding provided ? to complete these site
assessments. After completing these site assessments, the
department shall define the scope and cost of each project
(as specified) ?" (Id.)
Current law provides that the authority described above
"may be used to develop new beds including appropriate
programmatic space (as specified) ..." (Id,
para.(a)(1)(B).)
Current law further requires that any new beds constructed
pursuant to the provisions described above "shall be
supported by rehabilitative programming for inmates,
including, but not limited to, education, vocational
programs, substance abuse treatment programs, employment
programs, and prerelease planning." (Id, para.(a)(2).)
Current law further provides that the purpose of beds
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constructed pursuant to the provisions described above "is
to replace the temporary beds currently in use, and they
are not intended to house additional inmates. For the
purposes of this section, 'temporary beds' shall be defined
as those that are placed in gymnasiums, classrooms,
hallways, or other public spaces that were
not constructed for the purpose of housing inmates." (Id,
para.(a)(3).)
This bill alters existing statutes that authorize CDCR
prison construction project, enacted in 2007 by AB 900
(Solorio). The most substantive effect of these changes is
to allow greater flexibility in the use of bonds authorized
by the statute. While, often, changes that allow previously
authorized bonds to be issued for a wider variety of
projects and/or expedite their issuance are considered by
this committee to create additional bond pressure (to
expend the full amount of approved bond funding), the
changes proposed in this bill will likely result in
substantial cost savings because of external factors
governing prison construction decisions.
AB 900 authorized multiple project types, with bond funding
amount distinguished for each general project category, and
construction phase. "Infill" funding for construction of
new beds in state prisons was enacted to help reduce
overcrowding, and specified that the new beds created are
intended to replace temporary beds, and not to house
additional inmates. Existing law generally authorizes $6.2
billion in lease-revenue bond financing for the
construction of 40,000 new state prison beds, phased-in
over time and contingent upon a series of construction and
rehabilitation program implementation benchmarks. (Section
15819.40 et seq. of the Government Code)
CDCR prison health care is currently in federal
receivership. In 2005, the United States District Court
for the Northern District of California established a
Receivership to take control of the delivery of medical
services to all CDCR inmates. In its order, the Court set
forth comprehensive duties for the Receiver, including
leadership and executive management of the California
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prison medical health care delivery system. The Court
expressly ordered the Receiver to "exercise all powers
vested by law in the Secretary of the CDCR as they relate
to the administration, control, management, operation, and
financing of the California Medical health care system."
The Court suspended the Secretary's exercise of these
powers for the duration of the Receivership. Moreover, the
Court's order expressly provides that, "(a)ll costs
incurred in the implementation of the policies, plans, and
decisions of the Receiver relating to the fulfillment of
his duties under this Order shall be borne by (the state).
(The state) shall also bear all costs of establishing and
maintaining the Office of Receiver, including the
compensation of the Receiver and his staff."
This bill expressly allows medical and mental health beds
to be constructed with infill money, in order to give the
Receiver access to authorized bond funding to build medical
and mental health beds to satisfy the Court. CDCR and the
Receiver have established a plan to construct sufficient
beds, with the specified bond funding, to fulfill the court
order without using any current General Fund. In an April
5, 2010 letter to the Committee, the Receiver indicated
that the negotiated plan "will fully satisfy the need for
medical/mental health/dental construction within the
original AB 900 allocation and subsequent funding will not
be necessary."
In the absence of this bill, CDCR has existing statutory
authority to build general population (Level 4) beds from
these bonds, in order to ease general overcrowding, and
intends to do so. The Receiver, simultaneously, has the
authority to demand funding for this project to be paid
from the General Fund, if other funding is not made
available by the state. If CDCR and the Receiver are not
given authority to implement their compromise, the state
will likely be required to spend additional money on
medical and mental health construction from the General
Fund. Furthermore, to the extent that the Court's
requirements are fulfilled more quickly, prison health care
authority can be returned to CDCR, and current costs to
operate the Office of the Receiver will be eliminated.
In addition to the bond flexibility previously discussed,
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this bill specifically authorizes bond expenditure for the
renovation of properties, rather than only new
construction, to build additional approved beds.
Renovating existing facilities is typically less expensive
than new construction, and CDCR believes intends to utilize
renovation projects as a cost savings measure. CDCR has
existing facilities, primarily its vacant juvenile
facilities, and plans to convert them to adult facilities
because it would be less expensive to use land and basic
infrastructure already owned by the state to convert to new
beds for adult inmates than to build new facilities. On
its own, the authority granted in this bill would likely
produce savings over new construction. In real world
implementation, CDCR already has construction plans that
assume this authority. In the absence of that authority,
CDCR would have to (at least partially) start over and
establish new plans that fall within the original AB 900
authority, which would result in additional costs.
This bill also changes a condition for the release of
specified Phase II funding. Current law specifies that
Phase II funding for CDCR construction may not be released
by the Public Works Board until a three-member panel
verifies that specifically enumerated conditions have been
met. (Section 7021 of the Penal Code.) One of those
conditions is that "at least 4,000 beds authorized in
subdivision (a) of Section 15819.40 of the Government Code
(Phase I) are under construction." (Section 7021(a)(1) of
the Penal Code.) This bill revises this language to
instead require that at least 4,000 beds "have been
established by the by State Public Works Board."
If the Public Works Board has established the project, a
loan will be issued from the Pooled Money Investment
Account (PMIA), and CDCR will be functionally committed to
that project. (If CDCR were to stop the project, it would
be responsible for repaying the PMIA loan from its
operations budget). Allowing Phase II funding to be
released at that point, instead of waiting for construction
to end, would begin Phase II projects more quickly. CDCR
estimates that those projects could be completed 12-18
months earlier than if the funding was not available until
after Phase I construction has begun.
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Prior Legislation
SB 4 X2 (Cogdill), Chapter 2, Statutes of 2009-10, Second
Extraordinary Session, passed the Senate with a vote of
30-4 on February 14, 2009.
SB 14 X3 (Ducheny), Chapter 16, Statutes of 2009-10, Third
Extraordinary Session, passed the Senate with a vote of
32-6 on February 19, 2009.
SB 81 (Senate Budget and Fiscal Review Committee), Chapter
175, Statues of 2007.
AB 900 (Solorio), Chapter 7, Statutes of 2007, passed the
Senate with a vote of 27-10 on April 26, 2007.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Phase II conditional No cost; possibly
significant savings Bond*/
language change General
Receiver costs averted Substantial savingsGeneral
Renovation authorization Potentially significant
savings Bond*
* Lease-revenue bonds for prison construction are
ultimately repaid by the General Fund
SUPPORT : (Verified 4/27/10)
California Department of Corrections and Rehabilitation
(source)
California Fence Association
California Prison Federal Receiver
California State Council of Labor
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California State Sheriffs Association
Engineering Contractors Association
ARGUMENTS IN SUPPORT : The bill's sponsor, the CDCR,
states in part:
"AB 552 is technical cleanup legislation that will
provide consistency between Phase I and Phase II funding
authority and provide conforming changes to recognize the
use of design-build project delivery authority provided
in 2009. Specifically the measure would:
Provides that funding in the AB 900 Infill
appropriation may be used to develop beds and
treatment space serving inmates requiring medical or
mental health services, and that rehabilitative
programming for these beds shall be consistent with
the medical or mental health services being provided
to these inmates.
Modifies the authorization by the Public Works
Board, rather than the commencement of construction,
as a pre-requisite to release of Phase II funding.
This will allow Infill, Reentry and Medical projects
funded from Phase II to begin approximately 12 months
(or more) sooner then would occur under existing law.
Provides consistency between the scope of AB 900
Phase I and Phase II funding authorities. Phase I
Medical funding should include renovation (already
included in phase II), and both phases should
reference necessary ancillary improvements. Phase II
Reentry funding should include renovation and land
acquisition (already included in phase I).
Authorizes the Public Works Board to perform
oversight of projects utilizing design-build authority
? by referencing Government Code Section 13332.19."
RJG:mw 5/10/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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