BILL ANALYSIS �
AB 2235
Page 1
Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
AB 2235 (Buchanan and Hagman) - As Introduced: February 21,
2014
[Note: This bill is double referred to the Assembly Higher
Education Committee and will be heard by that committee as it
relates to issues under its jurisdiction.]
SUBJECT : Education facilities: Kindergarten-University Public
Education Facilities Bond Act of 2014
SUMMARY : Enacts the Kindergarten-University Public Education
Facilities Bond Act of 2014, to be operative only if approved by
voters at the November 4, 2014 statewide general election.
Makes changes to the School Facility Program (SFP).
Specifically, this bill :
1)Establishes the 2014 State School Facilities Fund and
authorizes the State Allocation Board (SAB) to apportion funds
to school districts from funds transferred to the 2014 State
School Facilities Fund from any source for the purposes
specified in the SFP.
2)Authorizes an unspecified amount of general obligation (G.O.)
school facilities bond to be placed on the November 4, 2014
statewide general election and specifies the funds to be
allocated as follows:
a) An unspecified amount for kindergarten through grade 12
(K-12) allocated to the following programs:
i) New Construction;
ii) Modernization; and,
iii) Charter School Facilities Program.
b) An unspecified amount for higher education facilities
allocated to the following:
i) California Community Colleges (CCC);
ii) University of California (UC) and the Hastings
College of Law; and,
iii) California State University (CSU).
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3)Establishes the 2014 California Community College Capital
Outlay Bond Fund and authorizes the deposit of funds 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; site
acquisition; the equipping of new, renovated or reconstructed
facilities; and to provide funds for the payment of
preconstruction costs, including, but not limited to,
preliminary plans and working drawings for CCC facilities.
4)Establishes the 2014 University Capital Outlay Bond Fund and
authorizes the deposit of funds 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 facilities; site acquisition; the equipping
of new, renovated or reconstructed facilities; and to provide
funds for the payment of preconstruction costs, including, but
not limited to, preliminary plans and working drawings for
facilities of the UC, CSU, and Hastings College of Law.
5)Makes the following changes to the SFP:
a) Strikes an obsolete provision requiring the SAB to
conduct an evaluation on the costs of new construction and
modernization of small high schools.
b) Authorizes the SAB to require each school district that
elects to participate in the new construction program
funded by the proceeds of any bond approved by voters after
November 1, 2014 to reestablish eligibility pursuant to
regulations adopted by the SAB.
c) Requires the Office of Public School Construction
(OPSC), in consultation with the California Department of
Education (CDE) to recommend to the SAB regulations that
will provide school districts with flexibility in designing
instructional facilities.
d) Authorizes the SAB to require each school district that
elects to participate in the modernization program funded
by the proceeds of any bond approved by voters after
November 1, 2014 to reestablish baseline eligibility for
each schoolsite pursuant to regulations adopted by the SAB.
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e) Repeals the provisions that do the following:
i) Requires, for the purpose of determining existing
school building capacity, the calculation to be adjusted
for first priority status as that calculation would have
been made under the policies of the SAB in effected
immediately preceding September 1, 1998.
ii) Requires the maximum school building capacity for
each applicant district be increased by the number of
pupils reported by the Superintendent of Public
Instruction (SPI) as excess capacity as a result of
participation in the Year-Round School Grant Program.
Repeals the requirement that the adjustment be calculated
on the basis, at the district's option, of either the
district as a whole or the appropriate attendance area.
iii) Requires each school on a multitrack year-round
calendar that has a density of 200 or more pupils
enrolled per acre that is located in a school district
with 40 percent of its pupils attending multitrack
year-round schools be exempted from the increase in
school building capacity required by Education Code (EC)
Section 17071.35.
EXISTING LAW :
1)Requires, under the Leroy F. Greene School Facilities Act of
1998, the SAB to allocate to applicant school districts
prescribed per-unhoused-pupil state funding for construction
and modernization of school facilities, including hardship
funding, and supplemental funding for site development and
acquisition.
2)Provides that a school district's ongoing eligibility for new
construction funding is determined by making calculations
related to certain factors, including, but not limited to,
enrollment projections by utilizing a cohort survival
enrollment projection system, the number of students that may
be adequately housed in the existing school building capacity
of the district, and increases or decreases in enrollment
resulting from receipt of funding from the Year-Round School
Grant Program.
3)Provides that a school district is eligible to receive an
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apportionment for the modernization of a permanent school
building that is more than 25 years old or a portable
classroom that is at least 20 years old. A school district is
eligible to receive an additional apportionment for
modernization of a permanent school building every 25 years
after the date of the previous apportionment or a portable
classroom every 20 years after the previous apportionment.
4)Requires an increase in a school district's capacity if the
school district receives funds from the Year-Round School
Grant Program.
5)Exempts schools receiving operational grants that have a
density of 200 or more pupils enrolled per acre that is
located in a school district with 40 percent of its pupils
attending multitrack year-round schools from losing
eligibility.
FISCAL EFFECT : Unknown
COMMENTS : Background . The construction and rehabilitation of
public kindergarten through grade 12 (K-12) facilities are
funded by a combination of state and local G.O. bonds,
developer's fees and local assessments such as Mello Roos
community facilities districts. The New Construction program
requires a 50% match from local educational agencies (LEAs),
unless the LEA qualifies for financial hardship, which pays up
to 100% of project costs. Modernization funds are awarded at
60% with a 40% match. Since the inception of the SFP in 1998,
voters have approved $35.4 billion in state G.O. bonds for K-12
schools.
-----------------------------------------------------------------
| Ballot | Measure | Amount | % Passage |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$9.2 billion | 62.5 |
|1998 |1A | ($6.7 billion | |
| | |K-12 + | |
| | | $2.5 billion | |
| | |Higher Ed) | |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$13.05 billion | 59.1 |
|2002 |47 | ($11.4 billion | |
| | |K-12 + | |
| | | $1.65 billion | |
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| | |Higher Ed) | |
|-------------+-------------+-----------------------+-------------|
|March 2004 |Proposition |$12.3 billion | 50.9 |
| |55 | ($10 billion K-12 | |
| | |+ | |
| | | | |
| | | $2.3 billion | |
| | |Higher Ed) | |
|-------------+-------------+-----------------------+-------------|
|November |Proposition |$10.416 billion |56.9 |
|2006 |1D | ($7.329 K-12 + | |
| | | $3.087 billion | |
| | |Higher Ed) | |
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The last education bond on the statewide ballot was Proposition
1D, which was passed by voters on the November 2006 ballot.
Proposition 1D provided $10.416 billion for K-12 and higher
education facilities and established new K-12 grant programs,
specified through the following allocations:
1)$7.329 billion for K-12 facilities as follows:
a) $1.9 billion for new construction projects (of which up
to $199.5 million can be set aside for seismic repairs);
b) $3.3 billion for modernization projects;
c) $1 billion for overcrowding relief grants through the
removal of portables;
d) $500 million for charter school facilities;
e) $500 million for career technical education (CTE)
facilities and equipment;
f) $100 million for high performance (green) projects; and,
g) $29 million for joint-use projects.
2)$3.087 billion for higher education facilities as follows:
a) $1.507 billion for CCC;
b) $890 million for UC, of which $200 million was available
for medical education programs; and,
c) $690 million for CSU.
K-12 remaining bond authority . Due to the state's budget crisis
and poor credit ratings, the Pool Money Investment Board halted
the regular sale of all G.O. bonds in December 2008 and slowed
the disbursement of funds. The SAB, comprised of ten members
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that include appointments by the Governor, the Speaker of the
Assembly and the Senate President pro Tem, is the body that
allocates bond funds and oversees the administration of the SFP
staffed by the OPSC, within the Department of General Services.
The SAB has been making unfunded approvals since 2009 to enable
districts to continue their facilities planning. The unfunded
approvals are converted to apportionments when bonds are sold
and cash becomes available.
According to the OPSC, as of March 26, 2014, approximately
$351.1 million remains in bond authority from the 2002, 2004,
and 2006 bonds, as follows:
-----------------------------------------------------------------
| Remaining Bond Authority - as of March 26, 2014 |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
|Program |Amount in millions |
|--------------------------------+--------------------------------|
|New Construction |$20.6* |
|Modernization |$15.4* |
|Seismic Mitigation |$159.1 |
|Career Technical Education |$3.7 |
|Charter |$100.5 |
|High Performance |$35.2 |
|Overcrowding Relief |$16.6 |
|--------------------------------+--------------------------------|
|Total |$351.1 |
|*Due to project rescissions | |
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Source: Office of Public School Construction
The majority of remaining authority is derived from funds for
seismic projects and charter schools. Seismic dollars have gone
out slowly, partly due to fairly narrow eligibility criteria.
Charter schools have up to five years to complete projects. The
timeline was extended due to the budget crisis and slowing of
bond sales, while a few projects have been rescinded. With bond
authority almost exhausted, the SAB, at its March, 2014 meeting,
decided to reserve $52.7 million of existing bond authority for
the ongoing administration of the program over the next five
years. This reduces the remaining bond authority to $298.4
million. This amount does not take into consideration
applications that have been submitted to OPSC.
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This bill will place a K-12 and higher education school
facilities bond on the November 4, 2014 statewide ballot. The
bill currently contains unspecified amounts for K-12 and higher
education. According to the authors, the amounts will be
determined pending further examinations of need and discussions
with the Administration and other parties. Contrary to the
three prior bonds, this bill proposes to fund just the basic
programs: New Construction, Modernization and Charter School
Facilities Program (charter Schools do not receive funds from
New Construction or Modernization). The authors state that
while special programs have merit and have provided many
benefits to students and their communities, they anticipate this
bond to be at a low to moderate level, and as such, need to
prioritize the basic programs.
Need . The amount of funding needed for K-12 school facilities
is hard to calculate, as there is no statewide inventory or
mechanism to collect projected need information from LEAs and
charter schools. Eligibility for New Construction is done using
the cohort survival projection method, which, generally, is
based on projected need after accounting for existing capacity
(or seats). LEAs established their baseline eligibility in
1999, and update the eligibility as needed, usually prior to
submitting an application for funding. The OPSC conducted an
analysis of remaining eligibility and estimates a need to $12.6
billion. However, OPSC cautions that the eligibility numbers
may not be updated.
LEAs are eligible for Modernization funds based on the age of a
building - 25 years for permanent buildings and 20 years for
portable buildings - and enrollment at the schoolsites. Based
on the number of schoolsites that have established eligibility,
OPSC estimates a need of $4.4 billion for Modernization.
However, OPSC cautions that this estimate is based only on 36%
of schoolsites that have established eligibility. The $4.4
billion estimate may be low.
Another factor to take into consideration is the amount in
funding requests submitted to the OPSC despite lack of funds for
New Construction or Modernization. Since 1998, voters have
authorized $17.6 billion for New Construction and $11.23 billion
for Modernization projects. Bond authority for the New
Construction program has been depleted since July, 2012 and
Modernization since May, 2012. According to the OPSC, the
annual average funding approved by the SAB annual is $1.237.5
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billion for New Construction and $788 million for Modernization.
Applications received since 2012 were initially placed on an
Unfunded "Lack of Authority" list. Since November 1, 2012, the
SAB established an "Application Received Beyond Bond Authority"
list. A total of $806 million have been submitted between the
"Lack of Authority" and the "Beyond Bond Authority" lists.
There are likely many districts not submitting applications
because no funding is available and it is unclear whether
applications on either list will receive funding.
SFP changes . In 2012, the SAB formed a Program Review
Subcommittee that spent more than a year meeting monthly to
review various aspects of the SFP. In January, 2014, the
Subcommittee, of which Assemblymember Buchanan was the chair and
Assemblymember Hagman a member, submitted recommendations to the
SAB, including the following regarding a new bond: "There is
demand for new construction and modernization funding. The
Subcommittee recognizes that the State has appropriately been a
partner in building new schools and modernizing aging
facilities. To date, the School Facility Program has
successfully provided $33.93 billion for 11,106 projects and
should be continued." The Subcommittee also made a number of
recommendations relating to New Construction, Modernization,
financial hardship, special programs, portable buildings,
facility maintenance, statewide school facilities inventory, and
county offices of education. This bill incorporates several of
the recommendations made by the Subcommittee, as follows:
New Construction eligibility . As mentioned previously, the
baseline eligibility was established in 1999, after the
enactment of the SFP in 1998. School districts update the
baseline eligibility on an ongoing basis, or when they are
applying for funding. The Subcommittee members acknowledge that
the reported eligibility may be inaccurate. School districts
that have not applied for funding have not updated their
eligibility. School districts may have constructed facilities
using local funds that affect their eligibility for state
funding. New developments that may have been captured in the
eligibility calculation may have changed due to the housing
downturn. This bill gives the SAB the authority to require
school districts interested in seeking future bond funds (any
bond passed after November 1, 2014) to reestablish eligibility.
Modernization eligibility . LEAs submit modernization
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eligibility for specific schoolsites prior to or when seeking
bond funding. As mentioned previously, eligibility is based on
the age of the building and enrollment at the site. The
Subcommittee had similar concerns that modernization eligibility
may not be updated. This bill gives the SAB authority to
require LEAs seeking modernization funds from any bonds passed
by voters after November 1, 2014 to reestablish modernization
eligibility.
Instructional facilities flexibility . Based on regulations
adopted by the CDE, the SFP generally funds classrooms that are
960 square foot spaces. Teaching and learning have changed over
time. Teachers do not stand in front of a classroom with a
blackboard six hours a day anymore. Today, teachers may utilize
more project based learning, with students working in small
groups, which require larger common areas with movable
furniture. The Subcommittee recommends aligning the SFP
regulations with the CDE regulation to give LEAs more
flexibility. This bill directs the OPSC to make recommendations
to the SAB that will provide school districts with flexibility
in designing instructional facilities.
Multi-track year-round education (MTYRE) . This bill repeals
provisions affecting MTYRE programs that are used by overcrowded
school districts to increase capacity at school sites. A MTYRE
school divides pupils into three or more tracks that rotate
attendance so that during the school year, at least one track is
on vacation while the other tracks are in session. The CDE
estimates that MTYRE schedule can increase capacity by 20-30%.
The Year-Round School Grant Program, a former categorical
program, provided financial assistance to school districts to
maintain MTYRE programs. A schoolsite must exceed capacity by
at least 5% in order to be eligible for an operational grant,
used to offset costs associated with increasing the number of
students at a schoolsite. As a condition for receipt of funds,
school districts must forfeit an equivalent amount of
eligibility for state school construction funding, the argument
being that the increased capacity at a schoolsite avert the need
to build new seats for these students at a new school. Schools
with a density of 200 or more pupils per acre and where 40% of a
district's students attend MTYRE schools are exempted from
losing eligibility.
Research has shown that MTYRE programs affect predominantly
minority and low-income students and offer inferior educational
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programs when compared with traditional school calendars. Over
the last ten years, school districts have reduced the reliance
on MTYRE to relieve overcrowding. In 2006-07, 62 districts with
578 schools enrolled 569,969 students in MTYRE programs. Today,
only a handful of districts continue to use MTYRE, enrolling an
estimated 35,000 students. The Legislature has also enacted
legislation to require school districts to cease operation of a
specified type of MTYRE called Concept 6, which reduces a school
year by days, and has terminated the Year-Round School Grant
Program. The SFP provisions should be updated to reflect
current priorities and practices. This bill repeals the
provisions in the SFP that reduce a school district's
eligibility for receipt of Year-Round School Grant Program
funds.
Governor's Budget . The Governor's January proposed budget
suggested the Administration's willingness to discuss the future
of school facilities program, but raises concerns about the
current structure of the program and the reliance on bonded
indebtedness. The budget summary argues that the program is
overly complex, the eligibility outdated, gives advantages to
certain districts, and does not provide adequate control to
school district in designing facilities. The changes to New
Construction and Modernization eligibility and the provision to
give school districts flexibility in designing instructional
facilities proposed by this bill appear to address some of the
concerns. The Governor also proposes to transfer $211 million
of the remaining funds from special programs (seismic, career
technical education, high performance, and overcrowding relief)
to New Construction and Modernization.
Impact of school facilities on student learning . Studies have
found a positive relationship between condition of school
facilities and student achievement. According to the CDE,
facility condition, design and utilization affect student and
staff attendance, retention of teachers, student disruptions,
time teachers and students spend on instruction/learning
activities, curriculum offerings, teacher and student time in
school (school calendar), participation by staff and students in
extra-curricular activities, parent visits, and extent of local
school program innovations. Students cannot focus on learning
if they are too cold or too hot in a classroom. They cannot
learn if poor air quality affects their health. Students also
cannot focus on learning when classrooms are so overcrowded that
they do not have their own desks. According to the CDE, a 2007
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report indicates that half of school funding equity lawsuits
nationally have included or focused on conditions of school
facilities.
Arguments in support . The author states, "The state is an
important partner with school districts and the developer
community in ensuring that students have adequate and safe
school facilities. Voters understand this and have consistently
shown support for school bonds, and voters pass local bonds with
the expectation of receiving state matching funds. This has been
an extremely successful program. The $35 billion in K-12 bonds
passed since 1998 has been matched by over $70 billion in local
bonds and developer fees. These bonds also give a boost to our
state economy by creating thousands of jobs. State bond funds
are depleted for New Construction and Modernization, and almost
depleted for the other programs. Rarely do the Chamber of
Commerce, building industry, construction contractors, labor -
both union and non-union - and the education community agree on
a bill. They all agree that it's time to put another school
facilities bond on the ballot."
Related legislation . AB 41 (Buchanan), introduced in 2013,
expresses the Legislature's intent to place a
Kindergarten-University facilities bond on the 2014 ballot. The
bill was held by the author in the Assembly Education Committee.
SB 45 (Corbett), introduced in 2013, expresses the Legislature's
intent to place a Kindergarten-University facilities bond on the
next statewide general election. The bill was held by the
author in the Senate Rules Committee.
SB 301 (Liu), introduced in 2013, expresses the Legislature's
intent to place a Kindergarten-University facilities bond on the
2014 ballot. The bill was held by the author in the Senate
Rules Committee.
Previous legislation . AB 331 (Brownley), introduced in 2011,
expressed the Legislature's intent to place a
Kindergarten-University facilities bond on the 2012 ballot. The
bill was held in the Assembly Appropriations Committee in 2012.
AB 822 (Block), introduced in 2011, would have placed a higher
education facilities bond on the November 2012 ballot. The bill
was held in the Assembly Appropriations Committee in 2012.
AB 220 (Brownley), introduced in 2009, would have placed a $6.1
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billion Kindergarten-University facilities bond on the November
2010 ballot. The bill was held in the Senate Appropriations
Committee.
SB 271 (Ducheny), introduced in 2009, would have placed a $8.6
billion higher education facilities bond on the November 2010
ballot. The bill was held in the Senate Appropriations
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Advancement Project
American Council of Engineering Companies California
Associated General Contractors
Association of California Construction Managers
Association of California School Administrators
Baldwin Park Unified School District
Barstow Community College District
Butte County Office of Education
Cabrillo Community College
California Apartment Association
California Association of School Business Officials
California Association of Sheet Metal and Air Conditioning
Contractors' National Association
California Association of Suburban School Districts
California Building Industry Association
California Chamber of Commerce
California Community Colleges
California School Boards Association
Central Valley Education Coalition
Central Valley Higher Education Consortium
Coalition for Adequate School Housing
College of the Desert
College of the Redwoods
Community College Facility Coalition
Community College League of California
Contra Costa County Office of Education
County School Facilities Consortium
El Dorado County Office of Education
Foothill-De Anza Community College District
Fresno Unified School District
Glendale Community College District
Imperial County Office of Education
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John Swett Unified School District
Kern Community College District
Kern County Superintendent of Schools
Lake Tahoe Community College
Los Angeles Community College District
Los Angeles Unified School District
Los Rios Community College District
Madera County Office of Education
Merced County Office of Education
Monterey County Office of Education
Napa County Office of Education
Palos Verdes Peninsula Unified School District
Paramount Unified School District
Pasadena City College
Peralta Community College District
Regional Asthma Management and Prevention
Rio Hondo Community College District
Riverside County Superintendent of Schools
San Benito County Office of Education
San Bernardino Community College District
San Diego County Superintendent of Schools Dr. Randy Ward
San Diego Unified School District
San Francisco Unified School District
San Luis Obispo County Office of Education
Santa Ana Unified School District
Santa Barbara County Office of Education
Santa Clara County Office of Education
Santa Clarita Community College District
Santa Cruz County Office of Education
School Employers Association of California
School Energy Coalition
Sierra College
Siskiyou Joint Community College District
Small School Districts' Association
Sonoma County Office of Education
South Orange County Community College District
St. Helena Unified School District
State Building and Construction Trades Council, AFL-CIO
Superintendent of Public Instruction Tom Torlakson
Visalia Unified School District
West Hills Community College District
West Kern Community College District
William S. Hart Union High School District
Yosemite Community College District
Yuba Community College District
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Opposition
None on file
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087