BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 1157
AUTHOR: Hancock
AMENDED: April 21, 2014
FISCAL COMM: Yes HEARING DATE: April 30, 2014
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : School facilities funding.
SUMMARY
This bill prohibits the transfer of funds from the Seismic
Mitigation Program for any other purpose, and requires that
any High Performance Schools funds transferred as the result
of a Budget action in 2014 be used only for projects that meet
the original intent of the funds.
BACKGROUND
School Facility Program
Current law establishes the School Facility Program (SFP)
under which the state provides general obligation bond funding
for various school construction projects. AB 127 (Nunez and
Perata), the Kindergarten-University Public Education
Facilities Bond Act of 2006, authorized Proposition 1D a
statewide general obligation bond proposal for $10.4 billion.
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
modernization, new construction, charter schools, Career
Technical Education Facilities, joint use projects, new
construction on severely overcrowded schoolsites, and high
performance incentive grants to promote energy efficient
design and materials. In addition, portions of the amounts
allocated for new construction and modernization were
authorized for purposes of funding smaller learning
communities and small high schools and for seismic mitigation.
(Education Code � 17078.70-17078.72)
Proposition 1D
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Current law authorizes the Legislature to amend the provisions
of Proposition 1D to adjust the amounts to be expended for
each program within the SFP, but prohibits the increase of
decrease of the total amount of funding to be expended under
the Proposition. (EC �101012)
Seismic Mitigation Program
AB 300 (Corbett, Chapter 622, Statutes of 1999) required the
Department of General Services (DGS) to conduct a seismic
safety inventory of California's
K-12 school buildings. In 2002, Department of General
Services and the Division of the State Architect released the
report "Seismic Safety Inventory of California Schools." The
report identified 7,537 buildings that were of 12 construction
types, collectively known as Category 2 construction that
would not perform well in an earthquake.
Proposition 1D, as part of new construction funding, provided
up to $199.5 million for seismic mitigation of school
facilities that are the most vulnerable Category 2 buildings
(as defined in the report "Seismic Safety Inventory of
California Schools") and that pose an unacceptable risk of
injury to students during a seismic event.
High Performance Incentive Grant Program
Proposition 1D provided $100 million for high performance
incentive grants to promote the use of designs and materials
in school facility new construction and modernization projects
that include the attributes of high performance schools,
pursuant to regulations adopted by the State Allocation Board.
(Education Code �101012)
Current law defines high performance attributes as including
the use of 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)
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ANALYSIS
This bill :
1) Prohibits the transfer of funds identified for the repair
or replacement of seismically vulnerable school
facilities for use for any other new construction
purpose.
2) Provides, in the event of a Budget Act of 2014 action to
transfer funds remaining in the High Performance Schools
Account fund for new construction or modernization
projects, that the funds be used for projects that:
a) Promote the use of designs and
materials in these projects that include the
attributes of high-performance schools.
b) Include high performance attributes
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 that are conducive to teaching and
learning.
STAFF COMMENTS
1) Need for the bill . According to the author, this bill is
intended to ensure a legislative discussion of the
Governor's proposal to sweep funds from the various
school facility programs into the new construction and
modernization program.
2) Related budget activity . The Governor's 2014-15 budget
proposes the transfer of bond authority from four
specialized school facility programs to the new
construction and modernization programs. These include
the Overcrowded Relief Grant, Seismic Mitigation, Career
Technical Education, and High Performance Schools
programs. Under the proposal, half of any remaining bond
authority on June 30, 2014 would be equally redirected to
new construction and modernization. Any funds that
revert to these programs from rescinded projects or
project savings in the future would also be equally
redirected. The chart below summarizes the disposition of
funds in the programs proposed for transfer.
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3) Current status of the SFP . According to the Office of
Public School Construction (OPSC), as of March 26, 2014,
approximately $351.1 million remained in bond authority
in the SFP. At its March, 2014 meeting, the State
Allocation Board (SAB) took action to reserve $52.7
million of existing bond authority for the ongoing
administration of the program over the next five years,
reducing the remaining bond authority to $298.4 million.
The majority of this bond authority exists for the
Seismic Mitigation and Charter School programs (about
$259 million). Bond authority for new construction and
modernizations programs has essentially been depleted,
respectively, since July 2012 and May 2012.
In addition, since November 1, 2012, the SAB has
maintained an "Applications Received Beyond Bond
Authority" list. This list is presented to SAB for
acknowledgement, but not approval. Because the
applications are not fully processed for final grant
determination, the project funding amounts on the list
are only estimates. As of March 31, 2014, the list
indicated new construction applications totaling $237
million and modernizations applications of $198 million.
These applications are currently unable to be funded
unless projects are rescinded or monies revert back to
the fund.
4) Seismic Mitigation Program . Up to $199.5 million (10
percent) of new construction funding was originally
approved by the voters for the purpose of seismic
mitigation. Eligibility for the program is determined by
the Division of the State Architect (DSA).
The program requires an initial application to DSA in
order to determine eligibility of the project before
application for funding. Only certain buildings are
eligible (Category 2 Building Type, as defined in SFP
regulations), and these must be located on a site where
there is a potential for collapse due to ground shaking,
to be verified through a geological professional report
and a letter of concurrence with the report from the
California Geological Survey. Project approval requires
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that the DSA concur with a report by a structural
engineer identifying the structural deficiencies that
pose an unacceptable risk of collapse. In 2011, the
California Seismic Commission provided a $200,000 grant
to the SAB to be used to assist school districts in
conducting these engineering studies.
After the project has been reviewed and approved by the
DSA, the district may choose to submit an application for
conceptual approval to the OPSC. Once the proposed
project has final plan approval from the DSA, the
district may submit an application for funding to the
OPSC. For a project that has been granted conceptual
approval, the district has 18 months to submit an
approved application for funding, and 24 months if the
project includes site acquisition.
5) Current status of the Seismic Mitigation Program (SMP) .
In July 2013, OPSC staff indicated that there were
approximately $100 million in eligible buildings going
through the DSA initial approval process. At that time,
OPSC staff estimated a potential need of approximately
$120.9 million in SMP funding for those buildings that
moved beyond the preliminary DSA review. Of this amount,
about $15 million was for applications for funding of
projects that included DSA approved plans already
submitted to the OPSC.
According to the OPSC, the SAB has approved conceptual
approval of four projects under the SMP. A conceptual
approval does not constitute a reservation of funds or
bond authority.
Although prior adjustments to the regulations have been
made, concerns continue to be raised that the limited use
of these funds is due to narrowly constructed eligibility
requirements, rather than the need for, and interest in,
seismic mitigation of school facilities. According to
the author, requests for an update on the current status
of these funds as a presentation to the SAB have not yet
been accommodated.
6) Recent SAB activity . At its March 2014 meeting, the
State Allocation Board took action to include the
Overcrowded Relief Grant (ORG), Career Technical
Education (CTE), and Charter School Programs (CSFP) in
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the Priority Funding Process.
The priority funding process was created to allow
projects that receive unfunded approval by the SAB to
receive an apportionment with accelerated timelines. A
district that participates must be able to enter into 50
percent of the contracts for the project within 90 days
of the apportionment. Any project that is unable to do
so or opts not to participate in the funding round,
twice, is removed from the Unfunded List, and the
priority funding apportionment is rescinded, allowing
other construction-ready projects to move forward on the
list.
As a result of these changes, some school districts have
undertaken extensive and costly efforts to accelerate
their construction schedules to ensure their receipt of
funding under the new process. It is unclear whether the
shift of funds proposed by the Governor will compromise
the ability of these projects to realize funding.
The provisions of this bill attempt to address concerns
about the shift of funds from the SMP and High
Performance Incentive Grant Program. Should the bill's
provisions be expanded to address the shift of funds from
the remaining three programs as well?
Staff recommends the bill be amended to delay
implementation of the shifts from the ORG, CTE and CSFP
programs until the projects currently eligible for the
remaining bond authority have had the opportunity to
participate in the Priorities in Funding processes as
recently established by the SAB.
7) Prior legislation . Several legislative efforts to
facilitate the use of funds from the SMP have been
considered by this committee.
a) SB 305 (Corbett, 2009) would have statutorily
established the specific technical criteria to be
met by a building in order to qualify as a "most
vulnerable Category 2 building," and to be eligible
for funding under the state Seismic Mitigation
Program. SB 305 was subsequently amended to update a
seismic safety inventory of school buildings in
order to inform the determination of eligibility
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criteria for the SMP. SB 305 was ultimately vetoed
by the Governor who's veto message read:
"This bill would require the Office of the State
Architect to update an existing report. Nothing in
current law precludes this from occurring, and it is
already being done. Therefore, this bill is
unnecessary."
b) SB 375 (Hancock, 2009) would have authorized
the SAB to review and adopt regulations for
apportioning funds provided under the Seismic
Mitigation Program and required the use of these
funds to repair, reconstruct, or replace school
facilities. It would also have authorized the use of
funds for structural evaluations and interim housing
costs for displaced pupils. SB 375 was heard and
passed by this committee on April 1, 2009, by a vote
of 7-0, but was subsequently held in the Senate
Appropriations Committee.
SUPPORT
None received.
OPPOSITION
None received.