BILL ANALYSIS �
AB 822
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Date of Hearing: January 10, 2012
ASSEMBLY COMMITTEE ON HIGHER EDUCATION
Marty Block, Chair
AB 822 (Block) - As Introduced: February 17, 2011
SUBJECT : Public postsecondary education facilities:
Kindergarten-University Public Education Facilities Bond Act of
2012.
SUMMARY : Establishes the Kindergarten-University Public
Education Facilities Bond Act of 2012 (Act) and related
provisions to authorize an unspecified dollar amount of public
higher education facility general obligation (GO) bonds to be
submitted to the voters at the November 2012 election.
Specifically, this bill :
1)Establishes the 2012 California Community College (CCC)
Capital Outlay Bond Fund and authorizes the deposit of an
unspecified dollar amount from the proceeds of bonds issued
and sold pursuant to this bill to be deposited into the fund
for the purposes of construction, renovation and
reconstruction of CCC facilities.
2)Establishes the 2012 University Capital Outlay Bond Fund and
authorizes the deposit of an unspecified dollar amount from
the proceeds of bonds issued and sold pursuant to this bill to
be deposited into the fund for the purposes of construction,
renovation, and reconstruction of the University of California
(UC), California State University (CSU), and Hastings College
of the Law facilities.
3)Authorizes the proceeds from the sale of bonds sold for the
purposes of this bill to be used for the following purposes:
a) To fund construction on existing campuses, including the
construction of buildings and the acquisition of related
fixtures.
b) Construction of facilities that may be used by more than
one segment of public higher education.
c) Renovation and reconstruction of facilities.
d) Site acquisition.
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e) Equipping of new, renovated, or reconstructed
facilities, which equipment shall have an average useful
life of 10 years.
f) To provide funds for the payment of preconstruction
costs, including, but not limited to, preliminary plans and
working drawings for facilities.
4)States legislative intent that UC, CSU, CCC, and Hastings
College of the Law consider the inclusion of joint use
facilities in their annual capital outlay planning process and
report their findings to the budget committees of each house
of the Legislature by May 15 of each year.
5)Requires the bonds be submitted to voters for approval at the
November 6, 2012 statewide election, in accordance with
statutes governing the submission of a statewide measure to
voters.
FISCAL EFFECT : Unknown but potentially significant.
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,
Nunez, Chapter 35, Statutes of 2006), was approved by voters in
November 2006, authorizing the sale of $10.4 billion in GO 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 apportioned. The provisions of this
bill are identical to the higher education-related provisions of
AB 127.
Since 2006, as the state's fiscal condition continued to
deteriorate, legislation needed to authorize education bonds was
not enacted. Instead, since 2008 the 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
GO, are allocated through the budget process in accordance with
the segments' five-year capital facility plans.
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Need for this bill . According to the author, this bill is
focused on gaining more resources for the higher education
segments' capital outlay programs and will be amended to include
a specified dollar amount when UC, CSU and CCC have negotiated
an agreement. The author also notes that capital outlay bonds
are particularly important for CSU, which cannot raise local
bond revenues like K-12 and CCC districts or sell its own bonds,
as can UC.
Capital needs . The segments report the following capital needs:
1)UC: In its 2012-13 State Capital Financial plan, UC notes its
support for a four-year GO bond in 2012 and requests $1.3
billion in state funding in its 2012-13 capital budget request
for the following purposes: 52% for seismic and life-safety
improvements, 18% for program improvements, 17% for facilities
to meet enrollment needs, 12% for infrastructure deficiencies
and building renewal, and 1% facilities and infrastructure to
address future enrollment growth at the Merced and Riverside
campuses.
2)CSU: From 2010-11 through 2014-15, CSU will need approximately
$6.57 billion based on current fundable project
proposals-approximately $1.63 billion per year. These funds
are needed to increase space to accommodate enrollment growth,
make life-safety and seismic improvements in existing
facilities, and to modernize facilities to maintain a quality
learning environment.
3)CCC: CCC estimates a $19.4 billion capital need over the next
10 years, which equates to a need for $3.9 billion of state GO
bond funding every two years. CCC's 2012-13 capital budget
request includes 260 projects totaling $1.9 billion and
includes 86 state-funded projects at $785 million, including
$460 million of state funding and $325 million of local
funding. The remaining 174 projects are funded solely by the
districts at an additional $1.09 billion. The majority of
CCC's capital needs are to increase instructional capacity and
to modernize instructional space.
November ballot deadline . The last day for a legislative
measure to qualify for the November 6, 2012 General Election
ballot is June 28, 2012.
Related legislation . There have been several efforts in recent
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years to authorize a Kindergarten-University GO bond, which have
failed to reach the Governor's desk due to the state's fiscal
situation. Currently, AB 331 (Brownley), which is pending in the
Assembly Education Committee, states legislative intent to
authorize a Kindergarten-University GO bond.
REGISTERED SUPPORT / OPPOSITION :
Support
Antelope Valley Community College District
California Community Colleges, Chancellor's Office
Community College League of California
California State University
Glendale Community College District
Los Rios Community College District
Mt. San Jacinto Community College District
Yosemite Community College District
Opposition
None on file.
Analysis Prepared by : Sandra Fried / HIGHER ED. / (916)
319-3960