Amended in Senate March 26, 2014

Senate Bill No. 1455

Introduced by Senator DeSaulnier

February 21, 2014

An act to add Chapter 12.5 (commencing with Section 20020) to Part 11 of Division 1 of Title 1 of the Education Code, relating to financing a public library construction and renovation program by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California, and by providing for the handling and disposition of those funds.

LEGISLATIVE COUNSEL’S DIGEST

SB 1455, as amended, DeSaulnier. California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2014.

Existing law establishes the California Library Construction and Renovation Bond Act of 1988 and the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2000. Existing law authorizes the issuance of bonds, pursuant to the State General Obligation Bond Law, in the amount of $72,405,000 in the 1988 bond act and in the amount of $350,000,000 in the 2000 bond act, for the purpose of financing library construction and renovation.

This bill would enact the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2014, for submission to the voters at the 2014 statewide general election. The bill, if approved by the voters, would authorize the issuance, pursuant to the State General Obligation Bond Law, of an unspecified amount of bonds for the purpose of financing library construction and renovation pursuant to a program administered by the State Librarian.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Chapter 12.5 (commencing with Section 20020)
is added to Part 11 of Division 1 of Title 1 of the Education Code,
to read:

 

Chapter  12.5. California Reading and Literacy
Improvement and Public Library Construction and
Renovation Bond Act of 2014

 

Article 1.  General Provisions

 

20020.  

This chapter shall be known, and may be cited, as the
California Reading and Literacy Improvement and Public Library
Construction and Renovation Bond Act of 2014.

20021.  

The Legislature finds and declares all of the following:

(a) Reading and literacy skills are fundamental to success in
our economy and our society.

(b) Public libraries are a vital part of the educational system.
They provide resources and services for all residents of California,
including preschoolers, out-of-school adults, senior citizens, at-risk
youth, and those attending schools at all levels.

(c) In many cases, libraries serve as a community’s only public
point of access to resources for learning and by extension,
self-sufficiency.

(d) The construction and renovation of public library facilities
is necessary to expand access to reading and literacy programs in
the state public education system and to expand access to public
library services for all residents of California.

(e) The need for library facilities continues to grow. A begin delete recent end delete
begin insert 2007 end insert needs assessment compiled by the begin insert California end insert State Library
found that there is a need for over begin delete ____ dollars ($____) end delete begin insert eight billion
dollars ($8,000,000,000) end insert in public library funding.

(f) In March 2000, California voters approved a bond measure
of three hundred fifty million dollars ($350,000,000) for library
construction and renovation.

(g) Due to the overwhelming response by applicants, the
California Public Library Construction and Renovation Board was
forced to deny approximately 75 percent of all applications due to
lack of additional bond funding.

20022.  

As used in this chapter, the following terms have the
following meanings:

(a) “Board” means the California Public Library Construction
and Renovation Board of 2014 established pursuant to Section
20023.

(b) “Committee” means the California Library Construction
and Renovation Finance Committee established pursuant to Section
19972 and continued in existence pursuant to Section begin delete 20039 end delete begin insert 20038 end insert
for purposes of this chapter.

(c) “Fund” means the California Public Library Construction
and Renovation Fund of 2014 established pursuant to Section
20024.

20023.  

(a) The California Public Library Construction and
Renovation Board of 2014 is hereby established.

(b) The board is comprised of the State Librarian, the Treasurer,
the Director of Finance, an Assembly Member appointed by the
Speaker of the Assembly, a Senator appointed by the Senate
Committee on Rules, and two members appointed by the Governor.

(c) Legislative members of the board shall meet with, and
participate in, the work of the board to the extent that their
participation is not incompatible with their duties as Members of
the Legislature. For the purpose of this chapter, Members of the
Legislature who are members of the board constitute a joint
legislative committee on the subject matter of this chapter.

 

Article 2.  Program Provisions

 

20024.  

The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the California Public Library
Construction and Renovation Fund of 2014, which is hereby
established.

20025.  

All moneys deposited in the fund, except as provided
in Section begin delete 20049, end delete begin insert 20048, end insert are continuously appropriated to the State
Librarian, notwithstanding Section 13340 of the Government Code,
and are available for grants to any city, county, city and county,
or library district that is authorized at the time of the project
application to own and maintain a public library facility for the
purposes set forth in Section 20026.

20026.  

The grant funds authorized pursuant to Section 20025
and the matching funds provided pursuant to Section begin delete 20032 end delete begin insert 20031 end insert
shall be used by the recipient for any of the following purposes:

(a) Acquisition or construction of new facilities or additions to
existing public library facilities.

(b) Acquisition of land necessary for purposes of subdivision
(a).

(c) Remodeling or rehabilitation of existing public library
facilities or of other facilities for the purpose of their conversion
to public library facilities. All remodeling and rehabilitation
projects funded with grants authorized pursuant to this chapter
shall include necessary upgrading of electrical and
telecommunications systems to accommodate Internet and similar
computer technology.

(d) Procurement or installation, or both, of furnishings and
equipment required to make a facility fully operable if the
procurement or installation is part of a construction or remodeling
project funded pursuant to this chapter.

(e) Payment of fees charged by architects, engineers, and other
professionals, whose services are required to plan or execute a
project authorized pursuant to this chapter.

(f) Service charges if the services in question are required by
the applicant jurisdiction to be provided by a public works or
similar department, or by other departments providing professional
services if the costs are billed directly to the project pursuant to
this chapter.

20027.  

Grant funds authorized pursuant to Section 20025, or
matching funds provided pursuant to Section begin delete 20032, end delete begin insert 20031, end insert shall
not be used by a recipient for any of the following purposes:

(a) Books and other library materials.

(b) Administrative costs of the project, including, but not limited
to, the costs of any of the following:

(1) Preparation of the grant application.

(2) Procurement of matching funds.

(3) Conduct of an election for obtaining voter approval of the
project.

(c) Except as set forth in this chapter, including, but not limited
to, Section begin delete 20047, end delete begin insert 20046, end insert interest or other carrying charges for
financing the project, including, but not limited to, costs of loans
or lease-purchase agreements in excess of the direct costs of any
of the authorized purposes specified in Section 20026.

(d) Ongoing operating expenses for the facility, its personnel,
supplies begin insert , end insert or any other library operations.

20028.  

All construction contracts for projects funded in part
through grants awarded pursuant to this chapter shall be awarded
through competitive bidding pursuant to Part 3 (commencing with
Section 20100) of Division 2 of the Public Contract Code.

20029.  

This chapter shall be administered by the State
Librarian. The board shall adopt rules, regulations, and policies
for implementation of this chapter.

20030.  

A city, county, city and county, or library district may
apply to the State Librarian for a grant pursuant to this chapter as
follows:

(a) Each application shall be for a project for a purpose
authorized by Section 20026.

(b) An application shall not be submitted for a project for which
construction bids already have been advertised.

(c) The applicant shall request not less than five hundred
thousand dollars ($500,000) per project.

begin delete

20031.  

In making the awards, the board shall consider
applications for construction or rehabilitation of public library
facilities submitted pursuant to Section 20030 and the funding
shall be allocated in the following manner:

(a) First priority shall be given to applications designated
“Outstanding” and deemed eligible by the State Librarian, that
were submitted but not funded in the third application cycle of the
California Reading and Literacy Improvement and Public Library
Construction and Renovation Bond Act of 2000. The total grant
amount awarded by the board for these eligible applications shall
not exceed one hundred fifty million dollars ($150,000,000).

(b) Until regulations are adopted pursuant to Section 20029,
regulations adopted pursuant to the California Reading and Literacy
Improvement and Public Library Construction and Renovation
Bond Act of 2000 (Chapter 12 (commencing with Section 19985))
govern the administration of this chapter, except that a maximum
of thirty million dollars ($30,000,000) instead of twenty million
dollars ($20,000,000) may be granted through allocations from
the fund for the applications from the third cycle of the California
Reading and Literacy Improvement and Public Library
Construction and Renovation Bond Act of 2000.

(c) First priority applicants, as described in subdivision (a), shall
be allowed the opportunity to adjust their original application for
cost inflators since the application initially was filed with the State
Librarian, but adjustments shall not affect a change in the scope,
scale, or quality of the project, nor shall the application exceed the
thirty million dollar ($30,000,000) allocation cap established in
Section 20032 for the fund.

(d) Funds not awarded for the third application cycle pursuant
to the California Reading and Literacy Improvement and Public
Library Construction and Renovation Bond Act of 2000 shall be
awarded on a competitive basis pursuant to this chapter.

(e) Except as set forth in paragraph (2), an amount of at least 5
percent of the total bond amount shall be made available for
joint-use projects that meet all of the following requirements:

(1) The joint-use project is with one or more public educational
institutions. For the purpose of this section, “public educational
institution” means any of the following:

(A) A school district maintaining any combination of educational
settings from kindergarten to grade 12, inclusive.

(B) A county office of education.

(C) A community college district.

(D) A campus of the California State University.

(E) A campus of the University of California.

(2) The public educational institution or institutions participating
as a joint-use partner or partners provide at least 50 percent of the
35 percent local matching funds required pursuant to subdivision
(a) of Section 20032.

(3) Consideration may be given to a proposed joint-use project
to be located in a low-income area.

(4) Consideration may be given to a proposed joint-use project
to be located in an area where public schools have low scores on
the Academic Performance Index.

(f) If, by June ____, 2016, the total dollar amount of all approved
applications for joint-use projects pursuant to this section exceeds
the total dollar amount made available for joint-use projects
pursuant to subdivision (e), joint-use projects also may be funded
from other funds available to the board pursuant to this chapter.

(g) If, by June ____, 2016, the total dollar amount of all
approved applications for joint-use projects pursuant to this section
is less than the total dollar amount made available for joint-use
projects pursuant to subdivision (e), any remaining funds under
subdivision (e) shall be made available for any other grants under
this chapter awarded on a competitive basis in the same manner
as set forth in subdivision (e).

end delete

begin delete 20032. end delete
begin insert 20031. end insert   

(a) Each grant recipient shall provide matching funds
from any available source in an amount equal to 35 percent of the
costs of the project. The remaining 65 percent of the costs of the
project, up to a maximum of thirty million dollars ($30,000,000)
per project, shall be provided through allocations from the fund.

(b) Qualifying matching funds shall be cash expenditures in the
categories specified in Section 20026 that are made not earlier
than five years before the submission of the application to the State
Librarian. Except as otherwise provided in subdivision (c), in-kind
expenditures do not qualify as matching funds.

(c) Land donated or otherwise acquired for use as a site for the
facility, including, but not limited to, land purchased more than
five years before the submission of the application to the State
Librarian, may count towards the required 35 percent local fund
contribution at its appraised value as of the date of the application.
This subdivision does not apply to land acquired with funds
authorized pursuant to Part 68 (commencing with Section 100400),
Part 68.1 (commencing with Section 100600), Part 68.2
(commencing with Section 100800), or Part 69 (commencing with
Section 101000), of Division 14 of Title 3.

(d) Expenditures for payment of architect fees for plans and
drawings for library renovation and new construction, including,
but not limited to, plans and drawings purchased more than five
years before the submission of the application to the State
Librarian, may count towards the required 35 percent local funds
contribution.

begin delete 20033. end delete
begin insert 20032. end insert   

(a) The estimated costs of a project for which an
application is submitted shall be consistent with normal public
construction costs in the geographic area of the applicant.

(b) An applicant wishing to construct a project having costs that
exceed normal public construction costs in the area may apply for
a grant in an amount not to exceed 65 percent of the normal costs
up to a maximum of thirty million dollars ($30,000,000) per project
if the applicant certifies that it is capable of financing the remainder
of the project costs from other sources.

begin delete 20034. end delete
begin insert 20033. end insert   

(a) After an application is approved by the board and
included in the request of the State Librarian to the committee, the
amount of the funding to be provided to the applicant shall not be
increased. Actual changes in project costs are the responsibility
of the applicant. If the amount of funding that is provided is greater
than the cost of the project, the applicant shall return that amount
of funding that exceeds the cost of the project to the fund. If an
applicant is awarded funding by the board, but decides not to
proceed with the project, the applicant shall return all of the funding
to the fund.

(b) If the State Librarian determines that a grant recipient has
not complied with the terms of its grant award or its grant award
agreement with the begin insert California end insert State Library, the board may
withdraw a grant award and award the funds previously granted
to the recipient to other eligible applicants. The State Librarian
shall notify the affected grant recipient at least 90 days before a
board meeting where the withdrawal of a grant award will be
considered.

begin delete 20035. end delete
begin insert 20034. end insert   

(a) In reviewing applications, begin delete as part of establishing
the priorities set forth in Section 20031, end delete the board shall consider
all of the following factors:

(1) The needs of urban, suburban, and rural areas.

(2) The age and condition of existing library facilities within
an area.

(3) The degree to which existing library facilities are inadequate
in meeting the needs of the residents in the library service area.

(4) The degree to which the proposed project responds to the
needs of the residents in the library service area.

(5) The degree to which the library integrates appropriate
electronic technologies into the proposed project.

(6) The financial commitment of the local agency submitting
the application to open, operate, and maintain the proposed library
project upon its completion.

(b) If, after an application has been submitted, material changes
occur that would alter the evaluation of an application, the State
Librarian may accept an additional written statement from the
applicant for consideration by the board.

begin insert

(c) It is the intent of the Legislature that the State Librarian and
the board develop an application process that is sufficiently
streamlined to decrease application costs and provide incentives
for a high number of library applicants to participate.

end insert

begin delete 20036. end delete
begin insert 20035. end insert   

(a) A facility, or a part of a facility, acquired,
constructed, remodeled, or rehabilitated with grants received
pursuant to this chapter shall be dedicated to public library direct
service use for a period of at least 20 years following completion
of the project.

(b) The financial interest that the state may have in the land or
facility, or both, resulting from the funding of a project under this
chapter, as described in subdivision (a), may be transferred by the
State Librarian through an exchange for a replacement site and
facility acquired or constructed for the purpose of providing public
library direct service.

(c) If the facility, or a part of the facility, acquired, constructed,
remodeled, or rehabilitated with grants received pursuant to this
chapter ceases to be used for public library direct service before
the expiration of the period specified in subdivision (a), the board
shall be entitled to recover from the grant recipient, or the successor
of the recipient, an amount that bears the same ratio to the value
of the facility, or appropriate part of the value of the facility, at
the time it ceased to be used for public library direct service, as
the amount of the original grant bore to the original cost of the
facility, or to an appropriate part of the facility. For purposes of
this subdivision, the value of the facility, or appropriate part of the
facility, shall be determined by the mutual agreement of the board
and the grant recipient or successor, or through an action brought
for that purpose in the superior court.

(d) Notwithstanding subdivision (f) of Section 16724 of the
Government Code, any money recovered pursuant to subdivision
(c) shall be deposited in the fund, and shall be available for the
purpose of awarding grants for other projects.

 

Article 3.  Fiscal Provisions

 

begin delete 20037. end delete
begin insert 20036. end insert   

Bonds in the total amount not to exceed ____ dollars
($____), exclusive of refunding bonds issued in accordance with
Section begin delete 20045, end delete begin insert 20044, end insert or so much of refunding bonds as is
necessary, may be issued and sold for deposit in the fund to be
used in accordance with, and for carrying out the purposes
expressed in, this chapter, including all acts amendatory of this
chapter and supplementary to this chapter, and to be used to
reimburse the General Obligation Bond Expense Revolving Fund
pursuant to Section 16724.5 of the Government Code. The bonds,
when sold, shall be and constitute a valid and binding obligation
of the State of California, and the full faith and credit of the State
of California is hereby pledged for the punctual payment of both
principal and interest on bonds as the principal and interest become
due and payable.

begin delete 20038. end delete
begin insert 20037. end insert   

The bonds authorized by this chapter shall be prepared,
executed, issued, sold, paid, and redeemed as provided in the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), and all of the provisions of that law apply to the bonds and
to this chapter and are hereby incorporated in this chapter as though
set forth in full in this chapter, except Section 16727 of the
Government Code to the extent that it may be inconsistent with
this chapter.

begin delete 20039. end delete
begin insert 20038. end insert   

(a) For purposes of this chapter, the California Library
Construction and Renovation Finance Committee established
pursuant to Section 19972 is continued in existence and is the
“committee” as that term is used in the State General Obligation
Bond Law for purposes of this chapter.

(b) For purposes of the State General Obligation Bond Law, the
California Public Library Construction and Renovation Board of
2014 established pursuant to Section 20023 is designated the board.

begin delete 20040. end delete
begin insert 20039. end insert   

The committee shall determine whether or not it is
necessary or desirable to issue bonds authorized pursuant to this
chapter in order to carry out the actions specified in this chapter,
including all acts amendatory of this chapter and supplementary
to this chapter, and, if so, the amount of bonds to be issued and
sold. Successive issues of bonds may be authorized and sold to
carry out those actions progressively, and it is not necessary that
all of the bonds authorized to be issued be sold at any one time.

begin delete 20041. end delete
begin insert 20040. end insert   

There shall be collected each year and in the same
manner and at the same time as other state revenue is collected,
in addition to the ordinary revenues of the state, a sum in an amount
required to pay the principal of, and interest on, the bonds each
year. It is the duty of all officers charged by law with any duty in
regard to the collection of the revenue to do and perform each and
every act that is necessary to collect that additional sum.

begin delete 20042. end delete
begin insert 20041. end insert   

Notwithstanding Section 13340 of the Government
Code, there is hereby appropriated from the General Fund in the
State Treasury, for purposes of this chapter, an amount that will
equal the total of the following:

(a) The sum annually necessary to pay the principal of, and
interest on, bonds issued and sold pursuant to this chapter, as the
principal and interest become due and payable.

(b) The sum necessary to carry out Section begin delete 20043, end delete begin insert 20042, end insert
appropriated without regard to fiscal years.

begin delete 20043. end delete
begin insert 20042. end insert   

For purposes of carrying out this chapter, the Director
of Finance may authorize the withdrawal from the General Fund
of an amount or amounts not to exceed the amount of the unsold
bonds that have been authorized to be sold for purposes of carrying
out this chapter. Amounts withdrawn shall be deposited in the
fund. Money made available under this section shall be returned
to the General Fund, with interest at the rate earned by the money
in the Pooled Money Investment Account during the time the
money was withdrawn from the General Fund pursuant to this
section, from money received from the sale of bonds for purposes
of carrying out this chapter.

begin delete 20044. end delete
begin insert 20043. end insert   

The board may request the Pooled Money Investment
Board to make a loan from the Pooled Money Investment Account
or any other approved form of interim financing, in accordance
with Section 16312 of the Government Code, for purposes of
carrying out this chapter. The amount of the request shall not
exceed the amount of the unsold bonds that the committee, by
resolution, has authorized to be sold for purposes of carrying out
this chapter. The board shall execute any documents required by
the Pooled Money Investment Board to obtain and repay the loan.
Any amounts loaned shall be deposited in the fund to be allocated
by the board in accordance with this chapter.

begin delete 20045. end delete
begin insert 20044. end insert   

Bonds issued and sold pursuant to this chapter may be
refunded by the issuance of refunding bonds in accordance with
Article 6 (commencing with Section 16780) of Chapter 4 of Part
3 of Division 4 of Title 2 of the Government Code. Approval by
the electors of the state for the issuance of bonds under this chapter
shall include the approval of the issuance of any bonds issued to
refund bonds originally issued or previously issued refunding
bonds.

begin delete 20046. end delete
begin insert 20045. end insert   

Notwithstanding any other provision of this chapter,
or of the State General Obligation Bond Law, if the Treasurer sells
bonds pursuant to this chapter that include a bond counsel opinion
to the effect that the interest on the bonds is excluded from gross
income for federal tax purposes, subject to designated conditions,
the Treasurer may maintain separate accounts for the investment
of bond proceeds and for the investment earnings on those
proceeds. The Treasurer may use or direct the use of those proceeds
or earnings to pay a rebate, penalty, or other payment required
under federal law or take any other action with respect to the
investment and use of those bond proceeds required or desirable
under federal law to maintain the tax-exempt status of those bonds
and to obtain any other advantage under federal law on behalf of
the funds of this state.

begin delete 20047. end delete
begin insert 20046. end insert   

All money deposited in the fund that is derived from
premium and accrued interest on bonds sold pursuant to this chapter
shall be reserved in the fund and shall be available for transfer to
the General Fund as a credit to expenditures for bond interest.

begin delete 20048. end delete
begin insert 20047. end insert   

The Legislature hereby finds and declares that,
inasmuch as the proceeds from the sale of bonds authorized by
this chapter are not “proceeds of taxes” as that term is used in
Article XIII B of the California Constitution, the disbursement of
these proceeds is not subject to the limitations imposed by that
article.

begin delete 20049. end delete
begin insert 20048. end insert   

Amounts deposited in the fund pursuant to this chapter
may be appropriated in the annual Budget Act to the State Librarian
for the actual amount of office, personnel, and other customary
and usual expenses incurred in the direct administration of grant
projects pursuant to this chapter, including, but not limited to,
expenses incurred by the State Librarian in providing technical
assistance to an applicant for a grant under this chapter.

SEC. 2.  

(a) Section 1 of this act shall take effect upon the
adoption by the voters of the California Reading and Literacy
Improvement and Public Library Construction and Renovation
Bond Act of 2014, as set forth in Section 1 of this act.

(b) Section 1 of this act shall be submitted to the voters at the
2014 statewide general election in accordance with provisions of
the Elections Code and the Government Code governing
submission of statewide measures to voters.

SEC. 3.  

(a) Notwithstanding any other law, all ballots of the
election shall have printed on the ballot and in a square of the
ballot, the words: “California Reading and Literacy Improvement
and Public Library Construction and Renovation Bond Act of
2014” and in the same square under those words, the following in
8-point type: “This act provides for a bond issue in an amount not
to exceed a total of ____ dollars ($____) to provide funds for the
construction and renovation of public library facilities in order to
expand access to reading and literacy programs in California’s
public education system and to expand access to public library
services for all residents of California.” Opposite the square, there
shall be left spaces in which the voters may place a cross in the
manner required by law to indicate whether they vote for or against
the act.

(b) If the voting in the election is done by means of voting
machines used pursuant to law in the manner that carries out the
intent of this section, the use of the voting machines and the
expression of the voters’ choice by means of the voting machines
are in compliance with this section.