BILL ANALYSIS �
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Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2235 (Buchanan and Hagman) - As Introduced: February 21,
2014
Policy Committee: EducationVote:7-0
Higher Education 13-0
Urgency: Yes State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill 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)Authorizes an unspecified amount of general obligation (GO)
bonds 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 for New Construction, Modernization and
the Charter Schools Facilities Program.
b) An unspecified amount for higher education facilities
allocated to the California Community Colleges (CCC), the
University of California (UC), the Hastings College of Law,
and California State University (CSU).
2)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.
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,
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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 changes to the SFP including: authorization for the SAB
to require each school district to reestablish eligibility to
participate in the new construction program and reestablish
baseline eligibility to participate in the modernization
program. Requires the Office of Public School Construction
(OPSC), in consultation with the California Department of
Education (CDE), to recommend regulations to the SAB
addressing flexibility in designing instructional facilities.
FISCAL EFFECT
1)Bond debt unknown as the bill does not specify the amount of
the GO bond. The state pays principal and interest during the
repayment period. Cost will depend on factors such as the
actual interest rate paid, the timing of the bond sales (bonds
are often sold over a number of years), and the time period
over which the bonds are repaid. For illustration, assuming a
5% interest rate with a 30-year repayment period, the state
would pay about $65 million annually in principal and interest
costs for each $1 billion borrowed.
2)One-time GF costs to the Secretary of State of about $200,000
for preparation of a statewide ballot pamphlet, assuming four
pages.
COMMENTS
1)Purpose . The last education bond on the statewide ballot was
Proposition 1D, which was passed by voters on the November
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2006 ballot. Proposition 1D provided $10.416 billion for K-12
and higher education facilities and established new K-12 grant
programs.
This bill places a K-12 and higher education school facilities
bond on the November 4, 2014 statewide ballot. The bill
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.
2)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. With regard to New Construction, the OPSC
conducted an analysis of remaining eligibility and estimates a
need of $12.6 billion, however, OPSC cautions the eligibility
numbers may not be updated. For Modernization, OPSC estimates
a need of $4.4 billion however, OPSC cautions this estimate is
based only on 36% of schoolsites that have established
eligibility so this estimate may be low.
With regard to Higher Education:
1) UC: Has identified four-year needs of approximately
$550 million per year. This breaks down to approximately
$450 million per year for campuses and $100 million for
medical centers.
2) CSU: Has identified a five-year total need of $7
billion for renovation and/or replacement of existing
infrastructure and for new buildings to provide growth to
increase lecture and laboratory seating capacity. This
breaks down to approximately $400 to $500 million per year.
3) CCC: Has identified an unmet need of $15.9 billion.
This breaks down to approximately $3.2 billion every two
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years.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081