BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 128 (Lowenthal)
          
          Hearing Date: 05/26/2011        Amended: 03/22/2011
          Consultant: Jacqueline Wong-HernandezPolicy Vote: Education 7-1
          
















































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          BILL SUMMARY: SB 128 would expand the use of modernization 
          funding under the School Facility Program (SFP) to include the 
          cost of designs and materials that promote the characteristics 
          of high-performance schools. This bill would also expand 
          eligibility for funding from the High Performance Incentive 
          (HPI) grant to include projects approved to receive a Career 
          Technical Education Facilities Program (CETEFP) grant.
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                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           Expands SFP eligibility            -----Potentially substantial 
          cost pressure---     General*

          Expands HPI eligibility             -----Potentially significant 
          cost pressure----     General*

          *Proposition 1D or other future K-12 construction bonds
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          STAFF COMMENTS: SUSPENSE FILE.

          Proposition 1D, approved by the voters in November 2006, 
          provided $7.3 billion for K-12 education facilities and 
          allocated specified amounts from the sale of these bonds for 
          funding grants for school districts to acquire school sites, 
          construct new school facilities, or modernize existing school 
          facilities. Funding for projects approved in the SFP comes 
          exclusively from statewide Government Obligation (GO) bonds 
          approved by the voters through Proposition 1D. The two major 
          funding types available are "new construction" and 
          "modernization". The new construction grant provides funding on 
          a 50/50 State and local match basis. The modernization grant 
          provides funding on a 60/40 match basis.

          Modernization grants currently provide funds for improvements to 
          educationally enhance school facilities.  Projects eligible 
          under this program include such modifications as air 
          conditioning, plumbing, lighting, and electrical systems.  

          This bill would expand the potential uses of a modernization 
          apportionment to include the cost of designs and materials that 










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          promote the efficient use of energy and water, the maximum use 
          of natural lighting and indoor air quality, the use of recycled 
          materials and materials that emit a minimum of toxic substances, 
          the use of acoustics conducive to teaching and learning, and 
          other characteristics of high-performance schools. Under 
          existing law, these costs would not be eligible for 
          modernization grant funding.

          Expanding the possible uses for specified bond funding creates 
          cost pressure to expend those funds and incur debt service 
          charges earlier. Additionally, by allowing districts to use 
          modernization funds on components that may not extend the useful 
          life of school facilities (such as "maximum use of natural 
          lighting") at the expense of currently eligible

          projects, this bill increases cost pressure on future bonds to 
          maintain, repair, and replace facilities if Proposition 1D bond 
          funding is used for other purposes.

          Proposition 1D also allocated $100 million in GO bond funding 
          for HPI grants to augment the funding of new construction and 
          modernization projects for the use of designs and materials that 
          promote characteristics of high performance schools. The purpose 
          of the HPI grants was to promote the use of designs and 
          materials in new construction and modernization projects that 
          include the attributes of high-performance schools, including, 
          but not limited to, designs and materials that promote energy 
          and water efficiency, maximize the use of natural lighting, 
          improve indoor air quality, utilize recycled materials and 
          materials that emit a minimum of toxic substances, and employ 
          acoustics conducive to teaching and learning. (EC �17070.96) 

          This bill would allow CTEFP projects to receive the HPI grant as 
          an augmentation to other project funding. Making another group 
          of projects eligible for an apportionment from the $100 million, 
          puts additional cost pressure on HPI funds and could allow CTEFP 
          projects to be funded above the current CTEFP cap.
















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