AB 581, as introduced, Gomez. State Facilities Renewal Bond Act of 2016.
The annual Budget Act appropriates funds to state agencies for operations as part of their respective agency budgets. Existing law requires the Department of General Services to report to the Legislature, as specified, on expenditures for seismic hazard abatement for state buildings and facilities, in connection with the Earthquake Safety and Public Buildings Rehabilitation Bond Act of 1990.
This bill would enact the State Facilities Renewal Bond Act of 2016, which, if adopted by the voters at the June 7, 2016, statewide primary election, would authorize the issuance of bonds in the amount of $2,000,000,000, pursuant to the State General Obligation Bond Law, to finance deferred maintenance on state-owned property, subject to appropriation by the Legislature in the annual Budget Act.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Chapter 11.2 (commencing with Section 8852)
2is added to Division 1 of Title 2 of the Government Code, to read:
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(a) This chapter shall be known as the State Facilities
9Renewal Bond Act of 2016.
As used in this chapter, the following terms have the
11following meanings:
12(a) “Committee” means the State Facilities Renewal Bond
13Finance Committee created pursuant to Section 8852.31.
14(b) “Fund” means the State Facilities Renewal Bond Fund
15created pursuant to Section 8852.2.
16(c) “State agency” means any state agency, department, office,
17division, bureau, board, commission, the California State
18University, the University of California, and the Judicial Council.
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(a) The proceeds of bonds issued and sold pursuant
23to this chapter shall be deposited in the State Facilities Renewal
24Bond Fund, which is hereby created. Fund moneys shall only be
25used to address deferred maintenance on state-owned property and
26shall be made available for expenditure only upon appropriation
27by the Legislature in the annual Budget Act. Funds shall be
28appropriated to state agencies as part of their respective agency
29budgets for state operations. It is the intent of the Legislature that
30the projects funded by these bonds shall have a useful life of at
31least 20 years.
32(b) A state agency for which the Governor proposes an
33appropriation from the State Facilities Renewal Bond Fund as part
34of his or her January 10 budget proposal
shall report, within 60
35days following the release of the budget proposal, the following
36to the respective budget committees of the Legislature:
37(1) The agency’s total deferred maintenance backlog.
P3 1(2) A list of deferred maintenance projects proposed to be
2undertaken by the agency with moneys from the fund proposed
3for appropriation.
4(3) The extent to which the agency’s current budget for
5maintenance is insufficient to prevent an increase in the agency’s
6deferred maintenance backlog.
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Bonds in the total amount of two billion dollars
11($2,000,000,000), or so much thereof as is necessary, not including
12the amount of any refunding bonds, or so much thereof as is
13necessary, may be issued and sold to provide a fund to be used for
14carrying out the purposes expressed in this chapter and to reimburse
15the General Obligation Bond Expense Revolving Fund pursuant
16to Section 16724.5. The bonds, when sold, shall be and constitute
17a valid and binding obligation of the State of California, and the
18full faith and credit of the State of California is hereby pledged
19for the punctual payment of both principal of, and interest on, the
20bonds as the principal and interest become due and payable. The
21bonds issued pursuant to this chapter shall be repaid within 20
22years from the date they are
issued.
The bonds authorized by this chapter shall be
24prepared, executed, issued, sold, paid, and redeemed as provided
25in the State General Obligation Bond Law (Chapter 4 (commencing
26with Section 16720) of Part 3 of Division 4 of Title 2), and all of
27the provisions of that law apply to the bonds and to this chapter
28and are hereby incorporated in this chapter as though set forth in
29full in this chapter, except subdivisions (a) and (b) of Section
3016727.
(a) Solely for the purpose of authorizing the issuance
32and sale pursuant to the State General Obligation Bond Law of
33the bonds authorized by this chapter, the State Facilities Renewal
34Bond Finance Committee is hereby created. For purposes of this
35chapter, the State Facilities Renewal Bond Finance Committee is
36“the committee” as that term is used in the State General Obligation
37Bond Law. The committee consists of the Controller, Director of
38Finance, and treasurer, or their designated representatives.
39(b) The treasurer shall serve as chairperson of the committee.
40(c) A majority of the committee may act for the committee.
The committee shall determine whether or not it is
2necessary or desirable to issue bonds authorized pursuant to this
3chapter in order to carry out the actions specified in Section 8852.2
4and, if so, the amount of bonds to be issued and sold. Successive
5issues of bonds may be authorized and sold to carry out those
6actions progressively, and it is not necessary that all of the bonds
7authorized to be issued be sold at any one time.
There shall be collected each year and in the same
9manner and at the same time as other state revenue is collected,
10in addition to the ordinary revenues of the state, a sum in an amount
11required to pay the principal of, and interest on, the bonds each
12year. It is the duty of all officers charged by law with any duty in
13regard to the collection of the revenue to do and perform each and
14every act that is necessary to collect that additional sum.
Notwithstanding Section 13340, there is hereby
16appropriated from the General Fund in the State Treasury, for the
17purposes of this chapter, an amount that will equal the total of the
18following:
19(a) The sum annually necessary to pay the principal of, and
20interest on, bonds issued and sold pursuant to this chapter, as the
21principal and interest become due and payable.
22(b) The sum necessary to carry out Section 8852.36,
23appropriated without regard to fiscal years.
For the purposes of carrying out this chapter, the
25Director of Finance may authorize the withdrawal from the General
26Fund of an amount not to exceed the amount of the unsold bonds
27that have been authorized by the committee to be sold for the
28purpose of carrying out this chapter. Any amounts withdrawn shall
29be deposited in the fund. Any money made available under this
30section shall be returned to the General Fund, with interest at the
31rate earned by the money in the Pooled Money Investment
32Account, from proceeds received from the sale of bonds for the
33purpose of carrying out this chapter.
All money deposited in the fund that is derived from
35premium and accrued interest on bonds sold shall be reserved in
36the fund and shall be available for transfer to the General Fund as
37a credit to expenditures for bond interest.
Pursuant to Chapter 4 (commencing with Section
3916720) of Part 3 of Division 4 of Title 2, the cost of bond issuance
P5 1shall be paid out of the bond proceeds. These costs shall be shared
2proportionally by each program funded through this bond act.
The committee may request the Pooled Money
4Investment Board to make a loan from the Pooled Money
5Investment Account, including other authorized forms of interim
6financing that include, but are not limited to, commercial paper,
7in accordance with Section 16312, for purposes of carrying out
8this chapter. The amount of the request shall not exceed the amount
9of the unsold bonds that the committee, by resolution, has
10authorized to be sold for the purpose of carrying out this chapter.
11The committee shall execute any documents required by the Pooled
12Money Investment Board to obtain and repay the loan. Any
13amounts loaned shall be deposited in the fund to be allocated by
14the board in accordance with this chapter.
The bonds may be refunded in accordance with Article
166 (commencing with Section 16780) of Chapter 4 of Part 3 of
17Division 4 of Title 2, which is a part of the State General Obligation
18Bond Law. Approval by the voters of the state for the issuance of
19the bonds described in this chapter includes the approval of the
20issuance of any bonds issued to refund any bonds originally issued
21under this chapter or any previously issued refunding bonds.
Notwithstanding any other provision of this chapter,
23or of the State General Obligation Bond Law, if the treasurer sells
24bonds pursuant to this chapter that include a bond counsel opinion
25to the effect that the interest on the bonds is excluded from gross
26income for federal tax purposes, subject to designated conditions,
27the treasurer may maintain separate accounts for the investment
28of bond proceeds and for the investment of earnings on those
29proceeds. The treasurer may use or direct the use of those proceeds
30or earnings to pay any rebate, penalty, or other payment required
31under federal law or take any other action with respect to the
32investment and use of those bond proceeds required or desirable
33under federal law to maintain the tax exempt status of those bonds
34and to obtain any other advantage under federal law on behalf
of
35the funds of this state.
The Legislature hereby finds and declares that,
37inasmuch as the proceeds from the sale of bonds authorized by
38this chapter are not “proceeds of taxes” as that term is used in
39Article XIII B of the California Constitution, the disbursement of
P6 1these proceeds is not subject to the limitations imposed by that
2article.
Section 1 of this act shall take effect upon the approval
4by the voters of the State Facilities Renewal Bond Act of 2016, as
5set forth in Section 1 of this act.
Section 1 of this act shall be submitted to the voters
7at the June 7, 2016, statewide primary election in accordance with
8provisions of the Government Code and the Elections Code
9governing the submission of a statewide measure to the voters.
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