C.A.S.H. Legislative Update – October 2013

October 16, 2013

The Legislature completed its business and went into interim recess on September 13, and the Governor had until midnight on October 13 to sign or veto bills passed by the Legislature.  The Legislature reconvenes on January 6, 2014, to begin the second year of the 2013-14 legislative session.  Below is an update on priority legislation for C.A.S.H.

Bills for Governor’s Consideration

 

The following bills met legislative deadlines in 2013 and made it successfully to the Governor’s desk for his consideration.

 

AB 182 (Buchanan) – Capital Appreciation Bonds (CABs)

This bill stipulates restrictions on Capital Appreciation Bonds (CABs) including:

-          A maximum term of 25 years.

-          A debt service ratio limit of 4:1 for each series.

-          Interest rate capped at 8%.

-          Requires the option for CABs to be callable after 10 years.

The bill also includes additional transparency requirements for CABs and Current Interest Bonds (CIBs) with maturities between 30 and 40 years.  While prior versions of the bill also limited the use of CIBs, the version that ultimately went to the Governor maintained existing Government Code authority to issue CIBs with a 40-year maximum term.  These amendments were heavily influenced by the concerns voiced by C.A.S.H. and other education advocacy organizations, and as a result C.A.S.H. removed opposition.

POSITION:    Oppose Unless Amended (prior version); C.A.S.H. removed opposition and adopted a Neutral position

STATUS:     Signed by Governor.

 

AB 56 (Weber) – Carbon Monoxide Devices

This bill requires the State Fire Marshal to propose regulations to the Building Standards Commission requiring the installation of carbon monoxide devices in school buildings with a fossil fuel burning furnace.

POSITION:    Watch

STATUS:     Signed by Governor.

 

AB 120 (Alejo) – Underground Storage Tanks (UST) Program

This bill would expand access to the School District Account in the UST program by waiving permit criteria if school districts certify that petroleum was not delivered to the tank on or after January 1, 2003, or if the tank was removed prior to that date.

POSITION:    Support

STATUS: Signed by Governor.

 

AB 308 (Hagman) – Sale of Surplus Property

This bill authorizes the State Allocation Board to establish a program related to the sale of surplus property.  The program would require school districts to return the state share used for New Construction, Modernization, or site acquisition for sites sold as surplus property.  This return of state funds would not apply if: sale proceeds are used for capital outlay purposes; the site is sold to a charter school or public agency for child care purposes; or the site was purchased or improved with state funds ten years prior to the sale.  C.A.S.H. monitored this bill closely but did not take a position.

POSITION:    Watch

STATUS:     Signed by Governor.

 

AB 327 (Perea) – Net Energy Metering

This bill would restructure the rate design for residential electric customers, create a new net energy metering (NEM) program, and specify that the California Public Utilities Commission (CPUC) may require the procurement of eligible renewable energy resources in amounts greater than what is required in statute.  C.A.S.H. raised concerns that the NEM provisions could affect schools with existing contracts by subjecting them to the new rules to be developed by the CPUC.

POSITION:    Oppose Unless Amended

STATUS: Signed by Governor.

 

AB 341 (Dickinson) – Green Building Standards

This bill requires the existing CalGreen Code to be incorporated into the appropriate sections of the Title 24 California Building Code, and it requires the Building Standards Commission and other code-writing agencies to allow for input by other state agencies with green building expertise.

POSITION:    Watch

STATUS: Signed by Governor.

 

SB 43 (Wolk) – Shared Renewables

This bill would provide an alternative option for schools that are not able to utilize their own buildings or sites for generation projects.  SB 43 would allow all independently-owned utility power customers and one municipal facility to choose to have a portion of their power come from an off-site renewable energy facility.

POSITION:    Support

STATUS:     Signed by Governor.

 

SB 581 (Wyland) – Bond Accountability

SB 581 requires submission of final Proposition 39 (55% vote) audits to the Citizen’s Oversight Committee (COC) at the same time they are submitted to the school district.  It also requires the governing board to provide the COC a response to any and all findings, recommendations, and concerns addressed in the Proposition 39 audit within three months of receiving the audit.  The bill is intended to help COCs better fulfill their oversight role.

POSITION:    Watch

STATUS:     Signed by Governor.

 

SB 584 (Wyland) – Audit Provisions

SB 584 requires local Proposition 39 (55% vote) financial and performance audit scope to be submitted for inclusion in the annual K-12 audit guide beginning in Fiscal Year 2015-16, with the intent of standardizing these audits.  This bill originally required school districts to submit independent financial and performance audits to the State Allocation Board (SAB) for review; given concerns about duplicative and confusing state audit jurisdictions, this component was stricken from the bill.  C.A.S.H. previously had an “oppose unless amended” position on the bill, but we altered this to a “neutral” position once the SAB audit review requirement was removed.

POSITION:    Oppose Unless Amended (prior version); C.A.S.H. removed opposition and adopted a Neutral position

STATUS:     Signed by Governor.

 

SB 594 (Hill)Use of Public Resources

The bill was an end-of-session gut-and-amend to prohibit nonprofit organizations from using funds received from local agencies for campaign activities.   This bill resulted in heavy lobbying by the League of California Cities, the California State Association of Counties, and others.  C.A.S.H. adopted an oppose position, fearing that the bill would cause a chilling effect on local bond campaigns and ballot advocacy.  After a number of iterations, schools were ultimately exempted from the bill.

POSITION:    Oppose (no position since amendments)

STATUS: Signed by Governor.

 

SB 731/SB 743 (Steinberg) – CEQA Modernization

Senator Steinberg’s CEQA reform bill, SB 731, was an end-of-session casualty resulting from negotiations with the Governor.  Steinberg agreed to hold SB 731 in favor of moving forward SB 743, a narrower bill aimed at streamlining the new Sacramento Kings arena CEQA process.  Some broader components from SB 731 were included in SB 743, such as a provision related to alternative metrics for assessing traffic impacts.  Given its focus on infill development, SB 743 may provide some CEQA relief for urban school districts.

 

C.A.S.H. participated with a major public works coalition effort to support the concept of streamlining CEQA while maintaining environmental protections, but we stopped short of supporting SB 731 as drafted.  While SB 731 included some beneficial elements, it also contained provisions that would increase administrative and cost burdens for lead agencies, such as noticing and online concurrent record preparation components.

POSITION:    SB 731 – Oppose Unless Amended

SB 743 – No position

STATUS:     SB 731 – In Assembly – Two-year bill

SB 743 – Signed by Governor.

 

Proposition 39

Major elements of Proposition 39 implementation were included in the enacted 2013-14 Budget Act.  The key trailer bill outlining the Proposition 39 framework is SB 73.

 

The budget provides $381 million in grants to K-12 schools in FY 2013-14, to be allocated on an ADA basis, with 15% distributed on the basis of Free- and Reduced-Price Meals.  The budget also provides $28 million in FY 2013-14 to the Energy Conservation Assistance Account (ECAA) for a program to provide low- and no-interest loans.  Guidelines are being developed by the California Energy Commission (CEC), in consultation with CDE, the Chancellor’s Office, and the Public Utilities Commission, for further implementation to address issues such as contracts, energy benefit estimates, cost assumptions for energy savings, benchmarks, energy surveys and audits, and cost-effectiveness determination.

 

Two key Proposition 39 implementation bills, AB 39 (Skinner) and SB 39 (De Leon), also moved through the legislative process this year.  C.A.S.H. supported both bills and their emphasis on providing Proposition 39 funds to schools.  After passage of SB 73, AB 39 was amended to extend the sunset on the ECAA program but ultimately did not pass out of the Legislature.  SB 39 was gutted and amended and no longer deals with Proposition 39 or school facilities issues.

 

School Nutrition/Cafeteria Funds

There are two bills to address child nutrition program and cafeteria fund expenditures, in response to updated federal standards and the recent Senate Office of Oversight and Outcomes report titled Food Fight: Small Team of State Examiners No Match for Schools that Divert School Meal Funds.

 

AB 626 (Skinner) provides conformity with the federal Healthy and Hunger Free Kids Act, with implications for the eligible uses of cafeteria funds.  Among other things, AB 626 repeals the authority to use cafeteria funds for the construction or alteration of a central food processing plant.

 

SB 302 (Cannella) would implement the various recommendations made by the Senate report regarding the use of cafeteria funds, including audit requirements.

 

Both bills also delete the authority to establish and maintain a cafeteria fund reserve for the purchase, lease, maintenance, or replacement of cafeteria equipment.  AB 86, the education budget trailer bill, also included this provision.  The budget provides $1.4 million for the State Auditor’s Office to conduct an independent audit of the use of cafeteria funds.

POSITION:    Watch

STATUS:    AB 626 – Signed by Governor.

SB 302 – Held in Assembly Appropriations Committee – Two-year bill.

 

Inactive/Two-Year Bills/GUT & AMENDS

 

The following bills did not meet legislative deadlines and are now technically classified as two-year bills.  They will have a second chance to move forward in the legislature in 2014.

 

Statewide School Bond Vehicles

Three vehicles for a 2014 statewide school bond were introduced, but none of these met the deadline to be heard and passed by policy committees.  Bills include:

-          AB 41 (Buchanan)

-          SB 45 (Corbett)

-          SB 301 (Liu)

 

School Safety Legislation

SB 316 (Block)Interior Door Locks

The bill requires all SFP Modernization projects submitted to DSA after January 1, 2016 to include locks that are lockable from the inside for all classrooms and rooms with occupancy of five or more.  It also requires that, if Federal funding for school safety becomes available, districts should first consider using these funds for interior door locks.  Prior versions of the bill required interior locks to be installed on all doors prior to January 1, 2017; due to significant cost considerations, the author struck this provision.  C.A.S.H. staff worked closely with Senator Block’s office to tie the bill to a discrete funding source; amendments were taken in the Senate Appropriations Committee to tie the requirements to a future bond and to require the SAB to adopt regulations to adjust the modernization per-pupil grant to reflect the costs associated with installing these locks.  Given this, C.A.S.H. adjusted its “oppose unless amended” position to a “neutral” position.

POSITION:    Oppose Unless Amended; C.A.S.H. removed opposition and adopted a Neutral position

STATUS:     Held in Assembly Appropriations Committee – Two-year bill.

 

SB 49 (Lieu and Steinberg) – School Safety Plans

The authors intend to provide some “teeth” to the current school safety plan process, but the bill remains a work in progress.  SB 49 specifies the addition of active shooter elements to the school safety plan and requires CDE to monitor compliance with school safety plan requirements using an “existing monitoring framework,” which is not specified.  Additionally it would stipulate that school safety plans must be reviewed every three years rather than annually, as currently required.  C.A.S.H. submitted a letter voicing concerns with this bill, based on the increased cost pressures and lack of funding sources for maintenance departments to implement school safety requirements.

POSITION:    Concern

STATUS:     Held in Assembly Appropriations Committee – Two-year bill.

 

AB 202 (Donnelly) – School Marshal Plan

AB 202 would establish the California School Marshal Plan, authorizing the use of general purpose funds to provide firearm training for school personnel.

POSITION:    Watch

STATUS:     Assembly Education Committee – Two-year bill.

 

AB 470 (Mullin)School Safety and Teacher Training

AB 470 would preserve $321,000 from the School Safety Consolidated Grant program for personnel to support statewide school safety training workshops. C.A.S.H. supported an earlier version of this bill, which would have pulled the School Safety Consolidated Grant out of the categorical flexibility budget item.

POSITION:    Support (prior version); now no position

STATUS:     Held in Assembly Appropriations Committee – Two-year bill.

 

AB 1076 (Olsen) – Panic Buttons

This bill authorizes the installation of panic buttons in classrooms and other school facilities, if Federal funding became available for that purpose.

POSITION:    Watch

STATUS:     Held in the Assembly Appropriations Committee – Two-year bill.

 

Local Financing Vote Thresholds

There were a number of legislative proposals for constitutional amendments that would lower the vote threshold for special taxes from two-thirds to 55%, including two that would directly affect schools: SCA 3 (Leno) and SCA 11 (Hancock).  C.A.S.H. supported both bills.

 

SCA 3 applied specifically to school parcel taxes and would also have extended the authority to issue parcel taxes to County Offices of Education; it has been gutted and amended and no longer deals with vote thresholds for special taxes.  SCA 11 applies to all local agency special taxes, including those pursued by school districts.  The Senate plans to consider all of the related constitutional amendment proposals as part of a larger policy discussion.  They are not subject to regular legislative deadlines.

POSITION:    SCA 11 – Support

SCA 3 – No position (since amendments)

STATUS:     SCA 11 – Senate Appropriations Committee – Two-year bill

SCA 3 – Gut and amend.

 

Other Legislation

AB 503 (Wieckowski) – State Surplus Property Sale

Previously, AB 503 was a narrow bill regarding a specific state property transfer to a school district.  The bill has been expanded and allows the transfer of surplus state property to a local agency at a price below fair market value when the property will be used solely for public school purposes.

POSITION:    Support

STATUS:     Held in Senate Appropriations Committee – Two-year bill.

 

AB 621 (Wagner) – Bond Campaign Services

This bill prohibits firms that provide bond campaign services from providing bond financial services, such as underwriting.  When the bill was heard in the Senate Governance & Finance Committee, the author refused to take the amendment sought by Chair Senator Wolk, which would create an exemption if the contract is awarded through a competitive process to the lowest responsible bidder.  Additionally, the State Treasurer has requested an opinion from the Attorney General on the matter.

POSITION:    Watch

STATUS:     Senate Governance & Finance Committee – Two-year bill.

 

AB 1014 (Williams) – Shared Renewables

This is a second bill that would provide an alternative option for schools that are not able to utilize their own buildings or sites for generation projects.  AB 1014 would create a pilot program to allow shared renewable energy facilities to enter into agreements with multiple electricity subscribers.

POSITION:    Support

STATUS:     In Senate – Two-year bill.

 

AB 1015 (Hagman) Asset Management Incentives

C.A.S.H. sponsored legislation to incentivize the use of joint occupancy agreements and the re-investment of proceeds from the lease or sale of surplus property into other capital improvements, using a tax credit mechanism and expanding access to High Performance Incentive Grants.  The author decided not to proceed with the measure this year and it was not heard in policy committee.

POSITION:    Sponsor

STATUS:     Assembly Education Committee – Two-year bill.

 

AB 1032 (Gordon) – Charter School Facilities Requests

This bill would revise and clarify the Proposition 39 school facility request process for charter schools.  Provisions included prohibiting the displacement of district students when accommodating a charter school facility request, and amending the “reasonably equivalent” calculation to more accurately reflect usable space for the school site comparison.

POSITION:    Support

STATUS:     Held in Assembly Appropriations Committee – Two-year bill.

 

AB 1212 (Levine) – “Or Equal” Bid Substitutions

This bill would prohibit bid specifications from requiring substantiation of “or equal” items prior to the bid award, an effort that C.A.S.H. has consistently opposed.  Due to the strength of opposition efforts, the author chose not to proceed with the bill this year, and it was never heard in policy committee.

POSITION:    Oppose

STATUS:     Assembly Accountability and Administrative Review – Two-year bill.

 

AB 1245 (V. Manuel Perez) – State Agency Reviews

AB 1245 has been gutted and amended and now no longer pertains to school facilities.  Previously, AB 1245 addressed the fees charged for expedited state agency reviews for repair or reconstruction of a school that has been damaged by a natural disaster, and it would have established a cap on the fees associated with these reviews, specifying a maximum fee of three percent of the project’s total cost.

POSITION:    Support (prior version); C.A.S.H. now has no position

STATUS:     Gut and amend/Signed by Governor (new version).

 

AB 1320 (Bloom) – RDA Pass-Throughs

This bill addresses the issue of early termination of pass-through payments once a redevelopment agency’s debts have been paid and its successor agency has been dissolved.  The bill would ensure that schools continue to receive the revenues they would have received via pass-through payments for the full life of a redevelopment project plan, holding schools harmless.

POSITION:    Support

STATUS:     Assembly Local Government Committee – Two-year bill.