BILL ANALYSIS �
AB 1556
Page 1
Date of Hearing: May 7, 2012
ASSEMBLY COMMITTEE ON BUDGET
Bob Blumenfield, Chair
AB 1556 (Cook) - As Amended: April 16, 2012
SUBJECT : Financing of county jail facilities.
SUMMARY : Appropriates $16 million from AB 900 lease revenue bond
funds to San Bernardino County. Specifically, this bill :
1)Makes a statutory change that allows San Bernardino County to
qualify for an additional payment of $16 million in bond funds
authorized under the Local Jail Construction Financing Program.
2)Specifies that any such awards shall be made by December 31, 2012.
3)Specifies that any amount received by a qualified county shall be
deposited into the county's General Fund.
EXISTING LAW authorizes the Department of Corrections and
Rehabilitation, participating counties, and the State Public Works
Board (SPWB) to acquire, design, and construct local jail facilities
approved by the Corrections Standards Authority. Existing law
authorizes the SPWB to issue revenue bonds, notes, or bond
anticipation notes in specified amounts to finance the acquisition,
design, or construction, and a reasonable construction reserve, of
approved local jail facilities, as specified.
Authorizes a participating county that has received a conditional
award under one specified jail facilities financing program to
relinquish its conditional award, provided that no state moneys have
been encumbered in contracts let by the county, and reapply for a
conditional award under a separate financing program that requires
the county to contribute 10% of the total project costs. Moneys
derived under the separate financing program are continuously
appropriated for the acquisition, design, or construction of
approved jail facilities.
FISCAL EFFECT : This bill would have no new net impact on the state.
However, considering that the bond funds authorized by the Local
Jail Construction Financing Program have already been conditionally
awarded, altering the use of this authority would result in at least
one county losing all or a part of their conditional award. This
AB 1556
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bill does not specify which county or counties this would impact.
COMMENTS : The purpose of this bill is to provide $16 million to San
Bernardino County from the Local Jail Construction Financing
Program. The author of this bill contends that without this
measure, San Bernardino County will continue to be the only county
barred from leveraging the enhanced funding structure as provided
under AB 94 (Budget Committee) Chapter 23, Statutes of 2011. The
author also argues that the funding appropriated in this measure
would address the difference between the county share of costs San
Bernardino incurred (twenty-five percent) and the county share
identified for counties that accessed phase two of the program (ten
percent).
According to the Department of Finance (DOF), San Bernardino is not
the only county that accessed the Jail Construction funding at the
25 percent county match. San Diego, Solano, San Luis Obispo, and
San Joaquin Counties all accessed Jail Construction funds at the 25%
match level, the same as San Bernardino. This measure would not
offer relief to these counties.
In addition, this bill would allow San Bernardino to have the lowest
county share of cost for the Local Jail Construction Financing
program, of only 5.9 percent. San Bernardino County was initially
awarded $100 million, which is the maximum allowed under the Local
Jail Construction Financing Program, to use toward their county jail
construction project which was estimated to cost roughly $125
million. However, as a result of lower than expected construction
costs, San Bernardino's entire project costs came in at roughly $84
million. This change in costs resulted in San Bernardino's share of
costs being reduced from roughly $25 million to roughly $21 million.
This bill will, in effect, allow San Bernardino County to reduce its
portion of an $84 million county jail construction cost from
twenty-five percent ($21 million) to just under six percent ($5
million). Ultimately, this bill will give San Bernardino County the
lowest local cost sharing rate in the state (5.9 percent).
Finally, according to the the DOF and the CDCR, the Local Jail
Construction Financing Program funding has been fully allocated.
Therefore this measure could only be implemented by reducing the
allocations of this funding to other counties. The bill does not
offer a process to identify which counties would lose funding.
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Related Legislation . AB 900 (Solorio), Chapter 7, Statutes of 2007,
created "The Public Safety and Offender Rehabilitation Services Act
of 2007," which authorized $7.4 billion in lease-revenue bond
financing for construction of 40,000 new state prison beds and
13,000 new county jail beds, phased-in and contingent upon a series
of rehabilitation programming benchmarks; authorized the Department
of Corrections and Rehabilitation (CDCR) to temporarily house up to
8,000 inmates in out-of-state facilities for up to three years; and,
required CDCR to implement and significantly enhance anti-recidivism
programming including substance abuse treatment, mental health care,
and academic and vocational education.
AB 111 (Budget Committee), Chapter 16, Statutes of 2011, included
necessary statutory and technical changes to implement changes to
the Budget Act of 2011 and made changes that made it easier for
locals to access jail construction funding.
AB 94 made technical changes to AB 111 and allowed participating
counties that received phase I conditional awards to relinquish the
awards and reapply, provided that no state moneys had been
encumbered. AB 94 also reduced county contribution of project costs
from 25 percent to 10 percent and specified that participating
counties shall not receive awards greater than $100 million.
REGISTERED SUPPORT / OPPOSITION :
Support
County of San Bernardino
San Bernardino County Sheriff's Department
Opposition
None on file.
Analysis Prepared by : Marvin Deon / BUDGET / (916) 319-2099