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HomeMy WebLinkAboutMINUTES - 02252003 - C53-C55 TO: BOAPD OFSUPERVISORS „fir. ,k. Contra r Costa FROM: Dennis M. Barry,AICD „ , County Community Development Director s _� i.�+► DATE: February 25,2003 i.�► SUBJECT: Bush Administration Proposal To Exempt Dividend Income From Federal income Taxes And Its Negative Impact On Affordable Housing Production SPECIFIC REQUEST(S)OR RECOMMENDATIONS(S)& BACKGROUND AND JUSTIFICATION RECOMMENDATIONS AUTHORIZE the Chair of the Board of Supervisors to execute letters to Contra Costa County's federal legislative representatives in opposition to the Bush Administration's proposal to exempt corporate dividend earnings from federal income taxes, FISCAL IMPACT No General Fund impact. BACKGROUND/REASONS FOR RECOMMENDATIONS The Bush Administration is proposing to exempt shareholders from tax on corporate dividends. This tax exemption would seriously jeopardize the production of low-income rental housing in the nation and in Contra Costa County. The proposal effectively creates a financial disincentive for corporations to contribute to the nation's primary affordable housing development program,the Low Income Housing Tax Cre it(LIHTC). CONTINUED ON ATTACHMENT: K YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR COMMEN A ION OF BOA COMMITTEE ,iOPROVE OTHER 1 SIGNATURE(S)" , ACTION OF BOARD ON z e 25, 200 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS (ABSENT Now TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN, Contact: Jim Kennedy, 335-1255 ATTESTED Febmay 25, 2003 Orig: Community Development JOHN SWEETEN,CLERK cc: County Administrator OF THE BOARD OF SUPERVISORS County Counsel AND COUNTY ADMINISTRATOR Auditor-Controller BY �`� � ,DEPUTY The LIHTC significantly contributes to the financing of 50 to 100 affordable rental domes annually in Contra Costa County. The exemption of dividend income from federal income tax would also result in tax exempt bonds generally more expensive i.e. a higher interest rate. This would include County borrowing for facilities, short-term cash flow and conduit financings (multi-family housing, single-family housing and industrial development). The LIHTC works by allowing investors to secure a direct, dollar-for-dollar reduction in their federal income taxes when they invest in affordable rental housing for low-and moderate-income families. The Administration's proposal would provide a tax exemption for shareholder dividends. The amount of the exemption depends upon the amount of income taxes a corporation pays the higher the taxes paid by a corporation,the greater the tax-free dividend benefit to shareholders. As a result, corporations could avoid investing in LIHTC,pay at the full tax rate, and increase the shareholder income in amounts that more than offset the tax benefit from the LIHTC. Two years ago, Congress expanded the LIHTC by 40 percent,with the bi-partisan support of 86 percent of the Congress. Goal 3 of the Housing Element of the General Plan is to increase the supply of housing with a priority on affordable housing. There is an extreme shortage of rental housing in.Contra Costa County,particularly for lower income renters. Less than 20 percent of the rental stock is affordable to renter households earning no more than 50 percent of the area median income. There are 1,275 public housing units countywide and a waiting list of over 4,363 households. The average vacancy rate for rental housing is less than three percent. As a result,44 percent of renters overpay for housing. In Contra Costa County,housing tax credits often provide 50 to 70 percent of a projects development cost. The remaining financing comes from private lenders and public subsidy. Public subsidy dollars are limited and insufficient to address the County's affordable housing needs. A decrease of as little as 5 percent of tax credit equity could increase the local subsidy requirement by 10 to 50 percent, resulting in a proportional decrease in affordable housing production. Letters to the County's federal legislative delegation supporting the successful LIHTC and opposing the dividend earnings tax exemption are an important step in preserving this critical program. Attachment KD HAkdouglas\ ew\Board Orders\2403\Dividend Bd Ordr.doc John The Board of Supervisors Contra Clerk lerk sweBoart a€the Board Costa and County Administration Building County gdministralor 651 Pine Street,Room 146 (925)335.1900 Martinez,California 94553-1293 County John Gioia,i st District Gayle B.Uiikema,2nd District Donna Gerber,3rd District Mark DeSaulnier,4th District � Federal Glover,5th District j4 February 25, 2003 Senator Diane Feinstein 331 Hart Senate Office Building Washington D.C. 20510 Re: Tax Dividend Plan Threatens Affordable Housing Production Dear Ms. Feinstein: The Contra Costa County Board of Supervisors urge you to oppose the Bush Administration's proposal to exempt shareholders from tax on corporate dividends. This tax exemption would seriously jeopardize the production of low-income rental housing in the nation and in Contra Costa County. The proposal effectively creates a financial disincentive for corporations to contribute to the nation's primary affordable housing development program, the Low Income Housing Tax Credit, which finances more than 75 affordable rental homes annually in Contra Costa. The Housing Credit works by allowing investors to secure a direct,dollar-for-dollar reduction in their federal income taxes when they invest in affordable rental housing for low- and moderate-income families, The Administration's proposal would provide a tax exemption for shareholder dividends.The amount of the exemption depends upon the amount of income taxes a corporation pays the higher the taxes paid by a corporation, the greater the tax-free dividend benefit to shareholders. As a result, corporations could avoid investing in the Housing Credit,pay at the full tax rate, and increase the shareholder income in amounts that more than offset the tax benefit from the Housing Credit. Two years ago,Congress expanded the Housing Credit by 40 percent, with the bi- partisan support on 86 percent of the Congress. There is an extreme shortage of rental housing in Contra Costa County,particularly for lower income renters. Less than 20 percent of the rental stock is affordable to renter households earning no more than 50 percent of the area median income. 'Where are 1,275 public housing units countywide and a waiting list of over 4,363 households. The average vacancy rate for rental housing is less than three percent. As a result,44 percent of renters overpay for housing. In Contra CostwCounty,housing tax credits often provide 50 to 70 percent of a projects development cast. The remaining financing comes from private lenders and public subsidy.As you know,public subsidy dollars are limited and insufficient to address the County's affordable housing needs.A decrease of as little as 5 percent of tax credit equity could increase the local subsidy requirement by 10 to 50 percent. Senator Feinstein,we need your help to continue to address the housing crisis in Contra Costa County and nationwide. We urge you to take whatever steps necessary to preserve the integrity of the Low-Income Housing Tax Credit. Sincerely, W4& %;X� Mark DeSaulnier Chair, Board of Supervisors cc: NALHFA Community Development Department File G2.6(c) The Board of Supervisorsor�tr John Sweeten Clerk of the Board Coa County Administration Building 1. and County Rdrnlnisiratar 651 Fine Street,Room 906 (925)335•t9aa Martinez,California 94553-1293 County o nt f .John Gioia,1 st District / {,j �lV Gayle S.Uilkema,2nd District Donna Gerber,3rd District Mark DeSaulnler,4th District Federal Glover,5th District tit 'm. February 25, 2003 Congressman George Miller 2205 Rayburn Office wilding Washington D.C. 20515 Re: Tax Dividend Plan Threatens Affordable Housing Production Dear Mr. Miller: The Contra Costa County Board of Supervisors urge you to oppose the Bush Administration's proposal to exempt shareholders from tax on corporate dividends. This tax exemption would seriously jeopardize the production of low-income rental housing in the nation and in Contra Costa County. The proposal effectively creates a financial disincentive for corporations to contribute to the nation's primary affordable housing development program, the Low Income Housing Tax Credit, which finances more than 75 affordable rental homes annually in Contra Costa. The Housing Credit works by allowing investors to secure a direct, dollar-for-dollar reduction in their federal income taxes when they invest in affordable rental housing for low- and moderate-income families. The Administration's proposal would provide a tax exemption for shareholder dividends. The amount of the exemption depends upon the amount of income taxes a corporation pays---the higher the taxes paid by a corporation, the greater the tax-free dividend benefit to shareholders. As a result, corporations could avoid investing in the Housing Credit,pay at the full tax rate, and increase the shareholder income in amounts that more than offset the tax benefit from the Housing Credit. Two years ago,Congress expanded the Housing Credit by 40 percent,with the bi- partisan support on 86 percent of the Congress. There is an extreme shortage of rental housing in Contra Costa County,particularly for lower income renters. Less than 20 percent of the rental stock is affordable to renter households earning no more than 50 percent of the area median income. There are 1,275 public housing units countywide and a waiting list of over 4,363 households. The average vacancy rate for rental housing is less than three percent. As a result, 44 percent of renters overpay for housing. In Contra Costa County,housing tax credits often provide 50 to 70 percent of a projects development cost. The remaining financing comes from private lenders and public subsidy.As you know,public subsidy dollars are limited and insufficient to address the County's affordable housing needs.A decrease of as little as 5 percent of tax credit equity could increase the local subsidy requirement by 10 to 50 percent. Congressman Miller,we need your help to continue to address the housing crisis in Contra Costa County and nationwide. We urge you to take whatever steps necessary to preserve the integrity of the Low-Income Housing Tax Credit. Sincerely, Mark DeSaulnier Chair, Board of Supervisors cc: NALHFA Community Development Department File G2.6(c) The Board of rupEervisors Contra Joan Sweeten Clerk of the Board Costa and County Administration Building County and 651 Fine Street,Room 106 (925)335-1900 Martinez,California 94553-1293 / Count John Gioia,1 st District County Gayle S.Ultkerna,2nd District Donna Gerber,3rd District Dark DeSaulnier,4th District Federal Glover,5th District February 25,2003 Senator Barbara Boxer 112 Hart Senate Office Building Washington D.C. 20510 Re: Tax Dividend Plan Threatens Affordable Housing Production Dear Ms. Boxer: The Contra Costa County Board of Supervisors urge you to oppose the Bush Administration's proposal to exempt shareholders from tax on corporate dividends. This tax exemption would seriously jeopardize the production of low-income rental housing in the nation and in Contra Costa County. The proposal effectively creates a financial disincentive for corporations to contribute to the nation's primary affordable housing development program,the Low Income Housing Tax Credit,which finances more than 75 affordable rental homes annually in Contra Costa. The Housing Credit works by allowing investors to secure a direct, dollar-for-dollar reduction in their federal income taxes when they invest in affordable rental housing for low-and moderate-income families.The Administration's proposal would provide a tax exemption for shareholder dividends. The amount of the exemption depends upon the amount of income taxes a corporation pays—the higher the taxes paid by a corporation, the greater the tax-free dividend benefit to shareholders. As a result,corporations could avoid investing in the Housing Credit,pay at the full tax rate, and increase the shareholder income in amounts that more than offset the tax benefit from the Housing Credit. Two years ago, Congress expanded the Housing Credit by 40 percent,with the bi- partisan support on 86 percent of the Congress. There is an extreme shortage of rental housing in Contra Costa County,particularly for lower income renters. Less than 20 percent of the rental stock is affordable to renter households earning no more than 50 percent of the area median income. There are 1,275 public housing units countywide and a waiting list of over 4,363 households. The average vacancy rate for rental housing is less than three percent. As a result,44 percent of renters overpay for housing. In Contra'Costa County, housing tax credits often provide 50 to 70 percent of a projects development cost. The remaining financing comes from private lenders and public subsidy. As you know,public subsidy dollars are limited and insufficient to address the County's affordable housing needs.A decrease of as little as 5 percent of tax credit equity could increase the local subsidy requirement by 10 to 50 percent. Senator Boxer,we need your help to continue to address the housing crisis in Contra Costa County and nationwide. We urge you to take whatever steps necessary to preserve the integrity of the Low-Income Housing Tax Credit. Sincerely, vwk:!V��� Mark DeSaulnier Chair, Board of Supervisors cc: NALHFA Community Development Department File G2.6(c) Tits Board of Supervisors Centra ClekoSweeten ostc� and County Administration Building County Administrator 651 Pine Street,Room 1016 County �y 1925}335-1900 Martinez,California 94553-1293 1 ount j John Gioia,ist District v `� Gayle B.Uilketna,2nd District Donna Gerber,3rd District Mark de$aulnier,4th District Federal Glover,5th District February 25, 2003 Congresswoman Ellen Tauscher 1239 Longworth House Office Building Washington D.C. 20515 Re: Tax Dividend Plan Threatens Affordable Housing Production Dear Ms. Tauscher: The Contra Costa County Board of Supervisors urge you to oppose the Bush Administration's proposal to exempt shareholders from tax on corporate dividends. This tax exemption would seriously jeopardize the production of low-income rental housing in the nation and in Contra Costa County. The proposal effectively creates a financial disincentive for corporations to contribute to the nation's primary affordable housing development program, the Low Income Housing Tax Credit,which finances more than 75 affordable rental homes annually in Contra Costa. The Housing Credit works by allowing investors to secure a direct,dollar-for-dollar reduction in their federal income taxes when they invest in affordable rental housing for low-and moderate-income families. The Administration's proposal would provide a tax exemption for shareholder dividends.The amount of the exemption depends upon the amount of income taxes a corporation pays—the higher the taxes paid by a corporation, the greater the tax-free dividend benefit to shareholders. As a result,corporations could avoid investing in the Housing Credit,pay at the full tax rate, and increase the shareholder income in amounts that more than offset the tax benefit from the Housing Credit. Two years ago, Congress expanded the Housing Credit by 40 percent, with the bi- partisan support on 86 percent of the Congress. There is an extreme shortage of rental housing in Contra Costa County,particularly for lower income renters. Less than 20 percent of the rental stock is affordable to renter households earning no more than 50 percent of the area median income.There are 1,275 public housing units countywide and a waiting list of over 4,363 households. The average vacancy rate for rental housing is less than three percent.As a result,44 percent of renters overpay for housing. In Contra Costa-County, housing tax credits often provide 50 to 70 percent of a projects development cost. The remaining financing comes from private lenders and public subsidy. As you know,public subsidy dollars are limited and insufficient to address the County's affordable housing needs. A decrease of as little as 5 percent of tax credit equity could increase the local subsidy requirement by 10 to 50 percent. Congresswoman Tauscher,we need your help to continue to address the housing crisis in Contra Costa County and nationwide. We urge you to take whatever steps necessary to preserve the integrity of the Low-Income Housing Tax Credit. Sincerely, Mark DeSaulnier "` Chair,Board of Supervisors cc: NALHFA Community Development Department File G2.6(c) TO: BOARD OF SUPERVISORS " Contra FROM: Anne Cain,County Librarian � (�' Gi ost�i fir/ DATE: February 25, 2003 ; �- County SUBJECT: Assembly Bill 222 iw.►� SPECIFIC REQUESTS)OR RECOMMENDATION(S)&13ACKGROUND AND JUSTIFICATION RECOMMENDATION SUPPORT AB 222(Assembly Member Corbett),that would enact the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2004,as recommended by the County Librarian. FINANCIAL IMPACT None BACKGROUND Existing law authorizes the issuance of bonds in the amount of$75,000,000 in the 1988 act and in the amount of $350,000,000 in the 2000 act, for the purpose of financing library construction and renovation. The City of Clayton was awarded funding for a new library from the 1988 act. The City of Hercules was awarded funding for a new library in the first cycle of the 2000 act. The cities of Walnut Creek and Antioch plan to submit applications in the second cycle,due in March 2003. The cities of Pleasant Hill, Lafayette,and San Ramon are preparing applications for the third cycle,due in January 2004. Due to the overwhelming need for public library construction and renovation statewide,the California Public Library Construction and Renovation Board anticipates having to deny 75%of qualified applications due to the lack additional band funding. If passed, Assembly Bill 222 would be submitted to the voters at the 2004 primary election and would authorize the issuance of bonds for the purpose of financing library construction and renovation. The bill does not specify the amount of the bond issuance, deferring that decision to future legislative action. CSAC has taken a support position on AB 222. CONTINUED ON ATTACHMENT: ❑ YES SIGNATURE: ��,L. 0 a. -, RECOMMENDATION OF COUNTY ADMINISTRATOR ❑RECOMMENDATION OF BOARD COMMITTEE 2 APPROVE ❑OTHER h ,�^ SIGNATURES) j ACTION OF BOA D.�NN Febnjry 25, 2073 APPROVED AS RECOMMENDED 11OTHER 1. VOTE OF SUPERVISORS: 1 HEREBY CERTIFY THAT THIS IS A TRUE ARID CORRECT COPY OF X UNANIMOUS(ABSENT NOne } AN ACTION TAKEN AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON TETE BATE SHOWN. AYES: NOES: ABSENT: ABSTAIN: \\nt-filesw\admin\BOS\TEMPLATE\REGULAR\Board order AB222.doc 1 '',I,,.,,,,,,......................................................I....................I................. ............................................................ ATTESTED Contact: JOHN SWEETEN,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: County Library County Admbfttrator County Auditor I Deputy By L-rd Ll --1411tr- k\nt-filesvt\admin\BOS\TEMPLATE\REGULAR\Board order AB222.doe CALIFORNIA LEGISLATURE- 2003 04 REGULAR SESSION ASSEMBLY BILL No. 222 Introduced by Assembly Member Corbett January 29, 2003 An act to add Chapter 12.5 (commencing with Section 20020)to Part 11 of the Education Code, relating to financing a public library construction and renovation program, making an appropriation therefor, and by providing the funds necessary therefor through an election for, and the issuance and sale of, bonds of the State of California, and by providing for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 222, as introduced, Corbett. California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2004. Existing law establishes the California Library Construction and Renovation Bond Act of 1988 and the California Reading and Literacy Improvement Construction and Renovation Bond Act of 2000. Existing law authorizes the issuance of bonds, pursuant to the State General Bond Law, in the amount of$75,000,000 in the 1988 act and in the amount of$350,000,000 in the 2000 act, for the purpose of financing library construction and renovation. This bill would enact the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2004, for submission to the voters at the 2004 direct primary election. If approved by the voters, this bill would authorize the issuance, pursuant to the State General Bond Law, of bonds in the amount not to exceed a total of$ for the purpose of financing 99 AB 222 —2— library 2-- library construction and renovation pursuant to a program administered by the State Librarian. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: 1 SECTION 1. Chapter 12.5 (commencing with Section 2 20020) is added to Part I 1 of the Education Code, to read: 3 4 CHAPTER 12.5. CALIFORNIA READING AND LITERACY 5 IMPROVEMENT AND PUBLIC LIBRARY CONSTRUCTION AND 6 RENOVATION BOND ACT OF 2004 7 8 Article 1. General Provisions 9 10 20020. This chapter shall be known and may be cited as the 11 California Reading and Literacy Improvement and Public Library 12 Construction and Renovation Bond Act of 2004. 13 20022. As used in this chapter, the following terms have the 14 following meanings: 15 (a) "Committee" means the California Library Construction 16 and Renovation Finance Committee established pursuant to 17 Section 19972 and continued in existence pursuant to Section 18 20040 for the purposes of this chapter. 19 (b) "Fund" means the California Public Library Construction 20 and Renovation Fund of 2004 established pursuant to Section 21 20024. 22 (c) "Board" means the California Public Library Construction 23 and Renovation Board of 2004 established pursuant to Section 24 20023. 25 20023. (a) The California Public Library Construction and 26 Renovation Board of 2004 is hereby established. 27 (b) The board is comprised of the State Librarian, the 28 Treasurer, the Director of Finance, an Assembly Member 29 appointed by the Speaker of the Assembly,a Senator appointed by 30 the Senate Committee on Rules, and two members appointed by 31 the Governor. 99 F -3— AB 222 1 (c) Legislative members of the board shall meet with, and 2 participate in, the work of the board to the extent that their 3 participation is not incompatible with their duties as Members of 4 the Legislature. For the purpose of this chapter, Members of the 5 Legislature who are members of the board constitute a joint 6 legislative committee on the subject matter of this chapter. 7 8 Article 2. Program Provisions 9 10 20024. The proceeds of bonds issued and sold pursuant to this II chapter shall be deposited in the California Public Library 12 Construction and Renovation Fund of 2004, which is hereby 13 established. 14 20025. All moneys deposited in the fund,except as provided 15 in Section 20050, are continuously appropriated to the State 16 Librarian, notwithstanding Section 13340 of the Government 17 Code,and are available for grants to any city and county,or library 18 district that is authorized at the time of the project application to 19 own and maintain a public library facility for the purposes set forth 20 in Section 20026. 21 20026. The grant funds authorized pursuant to Section 20025, 22 and the matching funds provided pursuant to Section 20033, shall 23 be used by the recipient for any of the following purposes: 24 (a) Acquisition or construction of new facilities or additions to 25 existing public library facilities. 26 (b) Acquisition of land necessary for the purposes of 27 subdivision (a). 28 (c) Remodeling or rehabilitation of existing public library 29 facilities or of other facilities for the purpose of their conversion 30 to public library facilities. All remodeling and rehabilitation 31 projects funded with grants authorized pursuant to this chapter 32 shall include any necessary upgrading of electrical and 33 telecommunications systems to accommodate Internet and similar 34 computer technology. 35 (d) Procurement or installation, or both, of furnishings and 36 equipment required to make a facility fully operable, if the 37 procurement or installation is part of a construction or remodeling 38 project funded pursuant to this section. 99 AB 222 —4- 1 ---4-1 (e) Payment of fees charged by architects, engineers,and other 2 professionals, whose services are required to plan or execute a 3 project authorized pursuant to this chapter. 4 (f) Service charges where the services in question are required 5 by the applicant jurisdiction to be provided by a public works or 6 similar department, or by other departments providing 7 professional services where the costs are directly billed to the 8 project pursuant to this chapter. 9 20027. (a) An applicant for a grant for the acquisition, 10 construction, remodeling, or rehabilitation of public library 11 facilities under this chapter on land not currently possessed by that 12 applicant, for a project that does not include an application for a 13 grant to acquire that land pursuant to subdivision (b) of Section 14 20026, shall be deemed to comply with any administrative 15 condition adopted pursuant to this chapter that the applicant own 16 the land if the application is accompanied by a copy of a court order 17 issued in an eminent domain action pursuant to Section 1255.410 18 of the Code of Civil Procedure that entitles the applicant to 19 possession of the land. 20 (b) the terms "purchase of land" and "acquisition of land" as 21 used in this chapter,or in any rule,regulation or policy adopted by 22 the board pursuant to Section 20031, include, but are not limited 23 to, the acquisition of land by eminent domain.For that purpose,the 24 eligible cost of acquisition shall be the fair market value of the 25 property as defined by Article 4 (commencing with Section 26 1263.310) of Chapter 9 of Title 7 of Part 3 of the Code of Civil 27 Procedure, except that, if title to the land will not be transferred 28 until after the application is submitted for a grant for the 29 acquisition of the land, the eligible cost of acquisition may not 30 exceed the appraised value of the land. 31 20028. Any grant funds authorized pursuant to Section 32 20025, or matching funds provided pursuant to Section 20033, 33 may not be used by a recipient for any of the following purposes: 34 (a) Books and other library materials. 35 (b) Administrative costs of the project, including, but not 36 limited to, the costs of any of the following: 37 (1) .Preparation of the grant application. 38 (2) Procurement of matching funds. 39 (3) Conduct of an election for obtaining voter approval of the 40 project. 99 -5— AB 222 1 (c) Except as set forth in this chapter,including,but not limited 2 to, Section 20048, interest or other carrying charges for financing 3 the project, including, but not limited to, costs of loans or 4 lease-purchase agreements in excess of the direct costs of any of 5 the authorized purposes specified in Section 20026. 6 (d) Any ongoing operating expenses for the facility, its 7 personnel, supplies or any other library operations. 8 20029. All construction contracts for projects funded in part 9 through grants awarded pursuant to this chapter shall be awarded 10 through competitive bidding pursuant to Part 3 (commencing with 11 Section 20100) of Division 2 of the Public Contract Code. 12 20030. This chapter shall be administered by the State 13 Librarian. The board shall adopt rules,regulations,and policies for 14 the implementation of this chapter. 15 20031. A city, county, city and county,or library district may 16 apply to the State Librarian for a grant pursuant to this chapter as 17 follows: 18 (a) Each application shall be for a project for a purpose 19 authorized by Section.20026. 20 (b) An application may not be submitted for a project for which 21 construction bids already have been advertised. 22 (c) The applicant shall request not less than five hundred 23 thousand dollars ($500,000) per project. 24 20032. in making the awards, the board shall consider 25 applications for construction. or rehabilitation of public library 26 facilities submitted pursuant to Section 20031 and the funding 27 shall be allocated in the following manner: 28 (a) First priority shall be given to applications deemed eligible 29 by the State Librarian, that were submitted but not funded in the 30 third application cycle of the California Reading and Literacy 31 Improvement and Public Library Construction and Renovation 32 Bond Act of 2000. Amounts awarded by the board for these 33 applications may not exceed 50 percent of the total amount 34 authorized pursuant to Section 20038. 35 (b) Chant awards shall be made within 60 days after the awards 36 are made for the third cycle of the California Reading and Literacy 37 Improvement and Public Library Construction and Renovation 38 Bond Act of 2000. 39 (c) Until regulations are adopted pursuant to Section 20030, 40 regulations adopted pursuant to the California Reading and 99 AB 222 —6- 1 6-1 Literacy Improvement and Public Library Construction and 2 Renovation. Bond Act of 2000 (Chapter 12 (commencing with 3 Section 19985)) govern the administration of this chapter. 4 (d) Funds not awarded for the third application cycle pursuant 5 to the California Reading and Literacy Improvement and Public 6 Library Construction and Renovation Bond Act of 2000, shall be 7 awarded on a competitive basis pursuant to this chapter. 8 (e) (1) Up to twenty-five million dollars ($25,000,000) shall 9 be made available for joint-use projects that meet all of the 10 following requirements: 11 (A) The joint-use project is with one or more school districts 12 that serves K-12 pupils. 13 (B) The school district or districts participating as a joint-use 14 partner or partners provide at least 50 percent of the 35 percent 15 local matching funds required pursuant to subdivision (a) of 16 Section 20033. 17 (2) If grant awards for the amount allocated for joint-use 18 projects have not been made by March 2, 2008, any remaining 19 funds shall be made available for grants awarded on a competitive 20 basis in the same manner as set forth in subdivision(d), 21 20033. (a) Each grant recipient shall provide matching funds 22 from any available source in an amount equal to 35 percent of the 23 costs of the project. The remaining 65 percent of the costs of the 24 project, up to a maximum of twenty million dollars($20,000,000) 25 per project shall be provided through allocations from the fund. 26 (b) Qualifying matching funds shall be cash expenditures in the 27 categories specified in Section 20026 which are made not earlier 28 than five years prior to the submission of the application to the 29 State Librarian. Except as otherwise provided in subdivision(e), 30 in-kind expenditures do not qualify as matching funds. 31 (c) Land donated or otherwise acquired for use as a site for the 32 facility,including but not limited to,land purchased more than five 33 years prior to the submission of the application to the State 34 Librarian, may count towards the 35 percent matching funds 35 requirement at its appraised value as of the date of the application. 36 This subdivision does not apply to land acquired with funds 37 authorized pursuant to Part 68 (commencing with Section 38 100400), Part 68.1 (commencing with Section 100600), or Part 39 68.2 (commencing with Section 100800) if approved by the 40 voters. 99 1 -7— AB 222 1 (d) Architect fees for plans and drawings for library renovation 2 and new construction, including, but not limited to, plans and 3 drawings purchased more than five years prior to the submission 4 of the application to the State Librarian,may count towards the 35 5 percent matching funds requirement. 6 20034. (a) The estimated costs of a project for which an 7 application is submitted shall be consistent with normal public 8 construction costs in the geographic area of the applicant. 9 (b) An applicant wishing to construct a project having costs that 10 exceed normal public construction costs in the area may apply for 11 a grant in an amount not to exceed 65 percent of the normal costs 12 up to a maximum of twenty million dollars ($20,000,000) per 13 project if the applicant certifies that it is capable of financing the 14 remainder of the project costs from other sources. 15 20035. After an application has been approved by the board 16 and included in the State Librarian's request to the committee,the 17 amount of the funding to be provided to the applicant may not be 18 increased. Any actual changes in project costs are the 19 responsibility of the applicant. If the amount of funding that is 20 provided is greater than the cost of the project,the applicant shall 21 return that amount of funding that exceeds the cost of the project 22 to the fund. If an applicant has been awarded funding by the board, 23 but decides not to proceed with the project, the applicant shall 24 return all of the funding to the fund. 25 20036. (a) In reviewing applications, as part of establishing 26 the priorities set forth in Section 20032,the board shall consider 27 all of the following factors. 28 (1) The needs of urban, suburban,and rural areas. 29 (2) The age and condition of existing library facilities within an 30 area. 31 (3) The degree to which existing library facilities are 32 inadequate in meeting the needs of the residents in the library 33 service area and the degree to which the proposed project responds 34 to those needs. 35 (4) The degree to which the library integrates appropriate 36 electronic technologies into the proposed project. 37 (5) The degree to which the proposed site is appropriate for the 38 proposed project and its intended use. 99 AB 222 —8- 1 -8- 1 (6) The financial commitment of the local agency submitting 2 the application to open,operate,and maintain the proposed library 3 project upon its completion. 4 (b) If, after an application has been submitted,material changes 5 occur that would alter the evaluation of an application, the State 6 Librarian may accept an additional written statement from the 7 applicant for consideration by the board. 8 20037. (a) A facility, or any part thereof, acquired, 9 constructed, remodeled, or rehabilitated with grants received 10 pursuant to this chapter shall be dedicated to public library direct 11 service use for a period of at least 20 years following completion 12 of the project. 13 (b) Any financial interest that the state may have in the land or 14 facility,or both,resulting from the funding of a project under this 15 chapter.,as described in subdivision(a),may be transferred by the 16 State Librarian through an exchange for a replacement site and 17 facility acquired or constructed for the purpose of providing public 18 library direct service. 19 (c) 1f the facility, or any part thereof, acquired, constructed, 20 remodeled, or habilitated with grants received pursuant to this 21 chapter ceases to be used for public library direct service prior to 22 the expiration of the period specified in subdivision(a),the board 23 shall be entitled to recover from the grant recipient, or the 24 successor of the recipient, an amount that bears the same ratio to 25 the value of the facility, or appropriate part thereof, at the time it 26 ceased to be used for public library direct service, as the amount 27 of the original grant bore to the original cost of the facility, or 28 appropriate part thereof. For purposes of this subdivision, the 29 value of the facility, or appropriate part thereof, shall be 30 determined by the mutual agreement of the board and the grant 31 recipient or successor, or through an action brought for that 32 purpose in the superior court. 33 (d) Notwithstanding subdivision (f) of Section 16724 of the 34 Government Code, any money recovered pursuant to subdivision 35 (c) shall be deposited in the fund, and shall be available for the 36 purpose of awarding grants for other projects. 37 99 -9— AB 222 1 Article 3. Fiscal Provisions 2 3 20038. Bonds in the total amount not to exceed a total of — 4 dollars ( ), exclusive of refunding bonds issued in 5 accordance with Section 20045,or so much thereof as is necessary, 6 may be issued and sold for deposit in the fund to be used in 7 accordance with, and for carrying out the purposes expressed in, 8 this chapter, including all acts amendatory thereof and 9 supplementary thereto, and to be used to reimburse the General 10 Obligation Bond Expense Revolving Fund pursuant to Section 11 16724.5 of the Government Code.The bonds,when sold, shall be 12 and constitute a valid and binding obligation of the State of 13 California, and the full faith and credit of the State of California 14 is hereby pledged for the punctual payment of both principal of and 15 interest on bonds as the principal and interest become due and 16 payable. 17 20039. The bonds authorized by this chapter shall be 1.8 prepared, executed, issued,sold,paid, and redeemed as provided 19 in the State General Obligation Bond Law (Chapter 4 20 (commencing with Section 16720)of Part 3 of Division 4 of Title 21 2 of the Government Code), and all of the provisions of that law 22 apply to the bonds and to this chapter and are hereby incorporated 23 in this chapter as though set forth in full in this chapter, except 24 Section 16727 of the Government Code to the extent that it may 25 be inconsistent with this chapter. 26 20040. (a) For purposes of this chapter, the California 27 Library Construction and Renovation Finance Committee 28 established pursuant to Section 19972 is continued in existence 29 and is the "committee" as that term is used in the State General 30 Obligation Bond Law for the purpose of this chapter. 31 (b) For purposes of the State General-Obligation Bond Law,the 32 California Public Library Construction and Renovation Board of 33 2004 established pursuant to Section 20023 is designated the 34 board. 35 20041. The committee shall determine whether or not it is 36 necessary or desirable to issue bonds authorized pursuant to this 37 chapter in order to carry out the actions specified in this chapter, 38 including all acts amendatory thereof and supplementary thereto, 39 and, if so,the amount of bonds to be issued and sold. Successive 40 issues of bonds may be authorized and sold to carry out those 99 AB 222 —10— I actions progressively, and it is not necessary that all of the bonds 2 authorized to be issued be sold at any one time. 3 20042. There shall be collected each year and in the same 4 manner and at the same time as other state revenue is collected,in 5 addition to the ordinary revenues of the state,a sum in an amount 6 required to pay the principal of, and interest on, the bonds each 7 year. It is the duty of all officers charged by law with any duty in 8 regard to the collection of the revenue to do and perform each and 9 every act that is necessary to collect that additional sum. 10 20043. Notwithstanding Section 13340 of the Government I 1 Code, there is hereby appropriated from the General Fund in the 12 State Treasury, for the purposes of this chapter,an amount that will 13 equal the total of the following: 14 (a) The sum annually necessary to pay the principal of, and 15 interest on, bonds issued and sold pursuant to this chapter, as the 16 principal and interest become due and payable. 17 (b) The sum necessary to carry out Section 20044,appropriated 18 without regard to fiscal years. 19 20044. For the purposes of carrying out this chapter, the 20 Director of Finance may authorize the withdrawal from the 21 General Fund of an amount or amounts not to exceed the amount 22 of the unsold bonds that have been authorized to be sold for the 23 purpose of carrying out this chapter. Any amounts withdrawn shall 24 be deposited in the fund. Any money made available under this 25 section shall be returned to the General Fund, with interest at the 26 rate earned by the money in the Pooled Money Investment 27 Account during the time the money was withdrawn from the 28 General Fund pursuant to this section, from money received from 29 the sale of bonds for the purpose of carrying out this chapter. 30 20045. The board may request the Pooled Money Investment 31 Board to make a loan from the Pooled Money Investment Account 32 or any other approved form of interium financing, in accordance 33 with Section 16312 of the Government Code, for the purposes of 34 carrying out this chapter. The amount of the request may not 35 exceed the amount of the unsold bonds that the committee has,by 36 resolution, authorized to be sold for the purpose of carrying out 37 this chapter. The board shall execute any documents required by 38 the Pooled Money Investment Board to obtain and repay the loan. 39 Any amounts loaned shall be deposited in the fund to be allocated 40 by the board in accordance with this chapter. 99 - 11 — AB 222 1 24046. Any bonds issued and sold pursuant to this chapter 2 may be refunded by the issuance of refunding bonds in accordance 3 with Article 6(commencing with Section 16780)of Chapter 4 of 4 fart 3 of Division 2 of Title 2 of the Government Code. Approval 5 of the electors of the state for the issuance of bonds under this 6 chapter shall include the approval of the issuance of any bonds 7 issued to refund any bonds originally issued or any previously 8 issued refunding bonds. 9 20047. Notwithstanding any other provision of this chapter, 10 or of the State General Obligation Bond Law,if the Treasurer sells 11 bonds pursuant to this chapter that include a bond counsel opinion 12 to the effect that the interest on the bonds is excluded from gross 13 income for federal tax purposes, subject to designated conditions, 14 the Treasurer may maintain separate accounts for the investment 15 of bond proceeds and for the investment earnings on those 16 proceeds. The Treasurer may use or direct the use of those 17 proceeds or earnings to pay any rebate,penalty,or other payment 18 required under federal law or tape any other action with respect to 19 the investment and use of those bond proceeds required or 20 desirable under federal law to maintain the tax-exempt status of 21 those bonds and to obtain any other advantage under federal law 22 on behalf of the funds of this state. 23 20048. All money deposited in the fund that is derived from 24 premium and accrued interest on bonds sold pursuant to this 25 chapter shall be reserved in the fund and shall be available for 26 transfer to the General Fund as a credit to expenditures for bond 27 interest. 28 20049. The Legislature hereby finds and declares that, 29 inasmuch as the proceeds from the sale of bonds authorized by this 30 chapter are not "proceeds of taxes" as that term is used in Article 31 XIII B of the California Constitution, the disbursement of these 32 proceeds is not subject to the limitations imposed by that article. 33 20049.5. Amounts deposited in the fund pursuant to this 34 chapter may be appropriated in the annual Budget Act to the State 35 Librarian for the actual amount of office, personnel, and other 36 customary and usual expenses incurred in the direct administration 37 of grant projects pursuant to this chapter,including,but not limited 38 to, expenses incurred by the State Librarian in providing technical. 39 assistance to an applicant for a grant under this chapter. 99 AB 222 — 12- 1 SEC. 2. (a) Section I of this act shall take effect upon the 2 adoption by the voters of the California Reading and Literacy 3 Improvement and Public Library Construction and Renovation 4 Bond Act of 2004, as set forth in Section I of this act. 5 (b) Section I of this act shall be submitted to the voters at the 6 2004 direct primary election in accordance with provisions of the 7 Elections Code and the Government Code governing submission 8 of statewide measures to voters. 9 SEC. 3. (a) Notwithstanding any other provisions of law, all 1.0 ballots of the election shall have printed thereon and in a square II thereof, the words: "California Reading and Literacy 12 Improvement and Public Library Construction and Renovation 13 Bond Act of 2004" and in the same square under those words,the 14 following in 8-point type: "This act provides for a bond issue in 15 an amount not to exceed a total of.__–dollars($_____._)to provide 16 funds for the construction and renovation of public library 17 facilities in order to expand access to reading and literacy 18 programs in California's public education system and to expand 19 access to public library services for all residents of California." 20 Opposite the square,there shall be left spaces in which the voters 21 may place a cross in the manner required by law to indicate 22 whether they vote for or against the act. 23 (b) If the voting in the election is done by a means of voting 24 machines used pursuant to law in the manner that carries out the 25 intent of this section, the use of the voting machines and the 26 expression of the voters' choice by means thereof are in 27 compliance with this section. 28 SEC. 4. This act is an urgency statute necessary for the 29 immediate preservation of the public peace, health, or safety 30 within the meaning of Article IV of the Constitution and shall go 31 into immediate effect. The facts constituting the necessity are: 32 In order for this act to appear on the 2004 direct primary election 33 so as to,at the earliest possible time,expand access to reading and 34 literacy programs in California's public education system and 35 expand access to public library services for all residents of 36 California,it is necessary for this act to go into immediate effect. 0 99 TO: BOARD OF SUPERVISORS . '"� ,• Contra FROM: Anne Cain, County Librarian ,+ Costa DATE: February 25,2003r• 10 u nth f �i SUBJECT: Senate Bill 40 SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION SUPPORT SB 40(Senator Alpert, Assembly Member Walk),that would enact the California Reading and Literacy Improvement and Public Library Construction and Renovation Band Act of 2004,as recommended by the County Librarian. FINANCIAL IMPACT None BACKGROUND Existing law authorizes the issuance of bonds in the amount of$75,000,000 in the 1988 act and in the amount of $350,000,000 in the 2000 act,for the purpose of financing library construction and renovation. The City of Clayton was awarded funding for a new library from the 1188 act. The City of Hercules was awarded funding for a new library in the first cycle of the 2000 act. The cities of Walnut Creek and Antioch plan to submit applications in the second cycle,due in March 2003. The cities of Pleasant Hill,Lafayette,and San Ramon are preparing applications for the third cycle,due in January 2004. Due to the overwhelming need for public library construction and renovation statewide,the California Public Library Construction and Renovation Board anticipates having to deny 75%of qualified applications due to additional bond funding. If passed, Senate Bill 40 would be submitted to the voters at the 2004 primary election and would authorize the issuance of$2,000,000,000 for the purpose of financing library construction and renovation. CONTINUED ON ATTACHMENT: ❑ YES SIGNATURE: f � n "RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE 2-APPROVE ❑OTHER t SIGNATURE(S):/ ACTION OF ONFeb2 t ry 2�5 003 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF X UNANIMOUS(AssENT Now } AN ACTION TAKEN AND ENTERER ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. AYES: NOES: ABSENT: ABSTAIN: Contact: ATTESTED Iiebnmy 25, 2003 JOHN SWEETEN,CLEW OF THE 130ARD OF cc: County Library SUPERVISORS AND COUNTY ADMINISTRATOR County Administrator \\nt-fitesvrradmin\BOS\I'EMPLATE\REGULAR\Board order SB40_doc County Auditor BYr ,Deputy \\nt-fiEesvr\admm\BOS\TEMPLAT,E\REGULAR\Board order SB40.doe SENATE BILL No. 40 Introduced by Senator Alpert (Principal coauthor: Assembly Member Wolk) (Coauthor: Assembly Member Maldonado) January 6, 2003 An act to add Chapter 13 (commencing with Section 20020)to Part Il of the Education Code, relating to financing a public library construction and renovation program, making an appropriation therefor, and by providing the funds necessary therefor through an election for, and the issuance and sale of, bonds of the State of California, and by providing for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 40, as introduced, Alpert. California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2004. Existing law establishes the California Library Construction and Renovation Bond Act of 1988 and the California Reading and Literacy Improvement Construction and Renovation Bond Act of 2000. Existing law authorizes the issuance of bonds, pursuant to the State General Bond Law, in the amount of$75,000,000 in the 1988 act and in the amount of$350,000,000 in the 2000 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 2004, for submission to the voters at the 2004 direct primary election. If approved by the voters, this bill would authorize the issuance, pursuant to the State General Bond Law, of bonds in the amount not to exceed a total of $2,000,000,000 for the purpose of 99 SB 40 —2— financing library construction and renovation pursuant to a program administered by the State Librarian. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/_1. Appropriation: no. fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows: 1 SECTION 1. Chapter 13 (commencing with Section 20020) 2 is added to Part 11 of the Education Code, to read: 3 4 CHAPTER 13. CALIFORNIA READING AND LITERACY 5 IMPROVEMENT AND PUBLIC LIBRARY CONSTRUCTION AND 6 RENOVATION BOND ACT OF 2004 7 8 9 Article 1. General Provisions 10 11 20020. This chapter shall be known and may be cited as the 12 California Reading and Literacy Improvement and Public Library 13 Construction and Renovation Bond Act of 2004. 14 20021. The Legislature finds and declares the following: 15 (a) Reading and literacy skills are fundamental to success in our 16 economy and our society. 17 (b) Public libraries are a vital part of the educational system. 18 They provide resources and services for all residents of California, 19 including preschoolers, out-of-school adults, senior citizens, and 20 those attending schools at all levels. 21 (c) In many cases,libraries serve as a community's only public 22 point of access to resources for learning and by extension, 23 self-sufficiency. 24 (d) The construction and renovation of public library facilities 25 is necessary to expand access to reading and literacy programs in 26 California's public education system and to expand access to 27 public library services for all residents of California. 28 (e) The need for library facilities continues to grow. A 2003 29 Needs Assessment compiled by the State Library found that there 30 is a need for over two billion dollars ($2,000,000,000) in public 31 library funding. 99 -3— SB 40 1 (f) In March 2000,California voters approved a bond measure 2 of three hundred fifty million dollars (5350,040,000) for library 3 construction and renovation. 4 (g) Due to the overwhelming response by applicants, the 5 California Public Library Construction and Renovation Board will 6 ultimately be forced to deny approximately 75 percent of all 7 applications due to lack of additional bond funding. 8 20022. As used in this chapter, the following terms have the 9 following meanings: 10 (a) "Committee" means the California Library Construction II and Renovation Finance Committee established pursuant to 12 Section 19972 and continued in existence pursuant to Section 13 20040 for the purposes of this chapter. 14 (b) "Fund" means the California Public Library Construction 15 and Renovation Fund of 2044 established pursuant to Section 16 20024. 17 (c) `Board" means the California Public Library Construction 18 and Renovation Board of 2004 established pursuant to Section 19 20023, 20 20023. (a) The California Public Library Construction and 21 Renovation Board of 2004 is hereby established. 22 (b) The board is comprised of the State Librarian, the 23 Treasurer, the Director of Finance, an Assembly Member 24 appointed by the Speaker of the Assembly,a Senator appointed by 25 the Senate Committee on Rules, and two members appointed by 26 the Governor. 27 (c) Legislative members of the board shall meet with, and 28 participate in, the work of the board to the extent that their 29 participation is not incompatible with their duties as Members of 30 the Legislature. For the purpose of this chapter, Members of the 31 Legislature who are members of the board constitute a joint 32 legislative committee on the subject matter of this chapter. 33 34 Article 2. Program Provisions 35 36 20024. The proceeds of bonds issued and sold pursuant to this 37 chapter shall be deposited in the California Public Library 38 Construction and Renovation Fund of 2004, which is hereby 39 established. 99 SB 40 —4- 1 4-1 20025. All moneys deposited in the fund,except as provided 2 in Section 20050, are continuously appropriated to the State 3 Librarian, notwithstanding Section 13340 of the Government 4 Code,and are available for grants to any city and county,or library 5 district that is authorized at the time of the project application to 6 own and maintain a public library facility for the purposes set forth 7 in Section 20026. 8 20026. The grant funds authorized pursuant to Section 20)0)25, 9 and the matching funds provided pursuant to Section.20033,shall 10 be used by the recipient for any of the following purposes: I I (a) Acquisition or construction of new facilities or additions to 12 existing public library facilities. 13 (b) Acquisition of land necessary for the purposes of 14 subdivision(a). 1.5 (c) Remodeling or rehabilitation of existing public library 16 facilities or of other facilities for the purpose of their conversion 17 to public library facilities. All remodeling and rehabilitation 18 projects funded with grants authorized pursuant to this chapter 19 shall include any necessary upgrading of electrical and 20 telecommunications systems to accommodate Internet and similar 21 computer technology. 22 (d) :Procurement or installation, or both, of furnishings and 23 equipment required to make a facility fully operable, if the 24 procurement or installation is part of a construction or remodeling 25 project funded pursuant to this section. 26 (e) Payment of fees charged by architects,engineers, and other 27 professionals, whose services are required to plan or execute a 28 project authorized pursuant to this chapter. 29 (f) Service charges where the services in question are required 30 by the applicant jurisdiction to be provided by a public works or 31 similar department, or by other departments providing 32 professional services where the costs are directly billed to the 33 project pursuant to this chapter. 34 200327. (a) An applicant for a grant for the acquisition, 35 construction, remodeling, or rehabilitation of public library 36 facilities under this chapter on land not currently possessed by that 37 applicant, for a project that does not include an application for a 38 grant to acquire that land pursuant to subdivision (b) of Section 39 20026, shall be deemed to comply with any administrative 40 condition adopted pursuant to this chapter that the applicant own 99 —5 -- SB 40 1 the land if the application is accompanied by a copy of a court order 2 issued in an eminent domain action pursuant to Section 1255.410 3 of the Code of Civil Procedure that entitles the applicant to 4 possession of the land. 5 (b) the terms "purchase of land" and "acquisition of land" as 6 used in this chapter,or in any rule,regulation or policy adopted by 7 the board pursuant to Section 20431, include,but are not limited 8 to,the acquisition of land by eminent domain.For that purpose,the 9 eligible cost of acquisition shall be the fair market value of the 10 property as defined by Article 4 (commencing with Section 11 1263.310) of Chapter 9 of Title 7 of Part 3 of the Code of Civil 1.2 Procedure, except that, if title to the land will not be transferred 13 until after the application is submitted for a grant for the 14 acquisition of the land, the eligible cost of acquisition may not 15 exceed the appraised value of the land. 16 20028. Any grant funds authorized pursuant to Section 17 20025, or matching funds provided pursuant to Section 20033, 18 may not be used by a recipient for any of the following purposes: 19 (a) Books and other library materials. 20 (b) Administrative costs of the project, including, but not 21 limited to,the costs of any of the following: 22 (1) Preparation of the grant application. 23 (2) Procurement of matching funds. 24 (3) Conduct of an election for obtaining voter approval of the 25 project. 26 (c) Except as set forth in this chapter, including,but not limited 27 to, Section 20048, interest or other carrying charges for financing 28 the project, including, but not limited to, costs of loans or 29 lease-purchase agreements in excess of the direct costs of any of 30 the authorized purposes specified in Section 20026. 31 (d) Any ongoing operating expenses for the facility, its 32 personnel, supplies or any other library operations. 33 24029. All construction contracts for projects funded in part 34 through grants awarded pursuant to this chapter shall be awarded 35 through competitive bidding pursuant to Part 3 (commencing with 36 Section 20104)of Division 2 of the Public Contract Code. 37 20030. This chapter shall be administered by the State 38 Librarian. The board shall adopt rules,regulations,and policies for 39 the implementation of this chapter. 99 SB 40 —6- 1 --6-1 20031. A city, county,city and county,or library district may 2 apply to the State Librarian for a grant pursuant to this chapter as 3 follows: 4 (a) Each application shall be for a project for a purpose 5 authorized by Section 20025. 6 (b) An application may not be submitted for a project for which 7 construction bids already have been advertised. 8 (c) The applicant shall request not less than five hundred 9 thousand dollars ($500,000) per project. 10 20032. In making the awards, the board shall consider I I applications for construction or rehabilitation of public library 12 facilities submitted pursuant to Section 20031 and the funding 13 shall be allocated in the following manner: 14 (a) First priority shall be given to applications deemed eligible 15 by the State Librarian, that were submitted but not funded in the 16 third application cycle of the California Reading and Literacy 17 Improvement and Public Library Construction and Renovation 18 Bond Act of 2000. Amounts awarded by the board for these 19 applications may not exceed 50 percent of the total amount 20 authorized pursuant to Section 20038. 21 (b) Grant awards shall be made within 60 days after the awards 22 are made for the third cycle of the California Reading and Literacy 23 Improvement and Public Library Construction and Renovation 24 Bond Act of 2000. 25 (c) Until regulations are adopted pursuant to Section 20030, 26 regulations adopted pursuant to the California Reading and 27 Literacy Improvement and Public Library Construction and 28 Renovation Bond Act of 2000 (Chapter 12 (commencing with 29 Section 19985)) govern the administration of this chapter. 30 (d) Funds not awarded for the third application cycle pursuant 31 to the California Reading and Literacy Improvement and Public 32 Library Construction and Renovation Bond Act of 2000, shall be 33 awarded on a competitive basis pursuant to this chapter. 34 (e) (1) Up to twenty-five million dollars ($25,000,000) shall 35 be made available for joint-use projects that meet all of the 36 fallowing requirements: 37 (A) The joint-use project is with one or more school districts 38 that serves K-12 pupils. 39 (B) The school district or districts participating as a joint-use 40 partner or partners provide at least 50 percent of the 35 percent -7— SB 40 1 local matching funds required pursuant to subdivision (a) of 2 Section 20033. 3 (2) 1f grant awards for the amount allocated for joint-use 4 projects have not been made by March 2, 2008, any remaining 5 funds shall be made available for grants awarded on a competitive 6 basis in the same manner as set forth in subdivision (d). 7 20033. (a) Each grant recipient shall provide matching funds 8 from any available source in an amount equal to 35 percent of the 9 costs of the project. The.remaining 65 percent of the costs of the 10 project, up to a maximum of twenty million dollars ($20,000,000) 11 per project shall be provided through allocations from the fund. 12 (b) Qualifying matching funds shall be cash expenditures in the 13 categories specified in Section 2002E which are made not earlier 14 than five years prior to the submission of the application to the 15 State Librarian. Except as otherwise provided in subdivision(c), 16 in-kind expenditures do not qualify as matching funds. 17 (c) Land donated or otherwise acquired for use as a site for the 18 facility,including but not limited to,land purchased more than five 19 years prior to the submission of the application to the State 20 Librarian, may count towards the 35 percent matching funds 21 requirement at its appraised value as of the date of the application. 22 This subdivision does not apply to land acquired with funds 23 authorized pursuant to Part 68 (commencing with Section 24 100400), Part 68.1 (commencing with Section 100600), or Part 25 68.2 (commencing with Section 100800) if approved by the 26 voters. 27 (d) Architect fees for plans and drawings for library renovation 28 and new construction, including, but not limited to, plans and 29 drawings purchased more than five years prior to the submission 30 of the application to the State Librarian,may count towards the 35 31 percent matching funds requirement. 32 20034. (a) The estimated costs of a project for which an 33 application is submitted shall be consistent with normal public 34 construction costs in the geographic area of the applicant. 35 (b) An applicant wishing to construct a project.having costs that 36 exceed normal public construction costs in the area may apply for 37 a grant in an amount not to exceed 65 percent of the normal costs 38 up to a maximum of twenty million dollars ($20,000,000) per 39 project if the applicant certifies that it is capable of financing the 40 remainder of the project costs from other sources. 99 SB 46 —8- 1 S- 1 20035. After an application has been approved by the board 2 and included in the State Librarian's request to the committee,the 3 amount of the funding to be provided to the applicant may not be 4 increased. Any actual changes in project costs are the 5 responsibility of the applicant. If the amount of funding that is 6 provided is greater than the cost of the project,the applicant shall 7 return that amount of funding that exceeds the cost of the project 8 to the fund. If an applicant has been awarded funding by the board, 9 but decides not to proceed with the project, the applicant shall 10 return all of the funding to the fund. 11 20036. (a) In reviewing applications, as part of establishing 1.2 the priorities set forth in Section 20032, the board shall consider 13 all of the following factors. 14 (1) The needs of urban, suburban, and rural areas. 15 (2) The age and condition of existing library facilities within an 16 area. 17 (3) The degree to which existing library facilities are 18 inadequate in meeting the needs of the residents in the library 19 service area and the degree to which the proposed project responds 20 to those needs. 21 (4) The degree to which the library integrates appropriate 22 electronic technologies into the proposed project. 23 (5) The degree to which the proposed site is appropriate for the 24 proposed project and its intended use. 25 (6) The financial commitment of the local agency submitting 26 the application to open,operate,and maintain the proposed library 27 project upon its completion. 28 (b) If, after an application has been submitted,material changes 29 occur that would alter the evaluation of an application, the State 30 Librarian may accept an additional written statement from the 31 applicant for consideration by the board. 32 20037. (a) A facility, or any part thereof, acquired, 33 constructed, remodeled, or rehabilitated with grants received 34 pursuant to this chapter shall be dedicated to public library direct 35 service use for a period of at least 20 years following completion 36 of the project. 37 (b) Any financial interest that the state may have in the land or 38 facility,or both, resulting from the funding of a project under this 39 chapter, as described in subdivision(a),may be transferred by the 40 State Librarian through an exchange for a replacement site and 99 -9— SB 40 1 facility acquired or constructed for the purpose of providing public 2 library direct service. 3 (c) If the facility, or any part thereof, acquired, constructed, 4 remodeled, or habilitated with grants received pursuant to this 5 chapter ceases to be used for public library direct service prior to 6 the expiration of the period specified in subdivision(a), the board 7 shall be entitled to recover from the grant recipient, or the 8 successor of the recipient, an amount that bears the same ratio to 9 the value of the facility, or appropriate part thereof, at the time it 10 ceased to be used for public library direct service, as the amount 11 of the original grant bore to the original cost of the facility, or 12 appropriate part thereof. For purposes of this subdivision, the 13 value of the facility, or appropriate part thereof, shall be 14 determined by the mutual agreement of the board and the grant 15 recipient or successor, or through an action brought for that 16 purpose in the superior court. 17 (d) Notwithstanding subdivision (f) of Section 16724 of the 18 Government Code,any money recovered pursuant to subdivision 19 (c) shall be deposited in the fund, and shall be available for the 20 purpose of awarding grants for other projects. 21 22 Article 3. Fiscal Provisions 23 24 20038. Bonds in the total amount not to exceed a total of two 25 billion dollars ($2,000,000,000), exclusive of refunding bonds 26 issued in accordance with Section 20045, or so much thereof as is 27 necessary,may be issued and sold for deposit in the fund to be used 28 in accordance with,and for carrying out the purposes expressed in, 29 this chapter, including all acts amendatory thereof and 30 supplementary thereto, and to be used to reimburse the General 31 Obligation Bond Expense Revolving Fund pursuant to Section 32 16724.5 of the Government Code. The bonds,when sold,shall be 33 and constitute a valid and binding obligation of the State of 34 California, and the full faith and credit of the State of California 35 is hereby pledged for the punctual payment of both principal of and 36 interest on bonds as the principal and interest become due and 37 payable. 38 20039. The bonds authorized by this chapter shall be 39 prepared, executed, issued,sold,paid, and redeemed as provided 40 in the State General Obligation Bond Law (Chapter 4 99 SB 46 —10— I -10-1 (commencing with Section 16720)of Part 3 of Division 4 of Title 2 2 of the Government Code), and all of the provisions of that law 3 apply to the bonds and to this chapter and are hereby incorporated 4 in this chapter as though set forth in full in this chapter, except 5 Section 16727 of the Government Code to the extent that it may 6 be inconsistent with this chapter. 7 20040. (a) For purposes of this chapter, the California 8 Library Construction and Renovation Finance Committee 9 established pursuant to Section 19972 is continued in. existence 10 and is the "committee" as that term is used in the State General 11 Obligation Bond Law for the purpose of this chapter. 12 (b) For purposes of the State General Obligation Bond Law,the 13 California Public Library Construction and Renovation Board of 14 2004 established pursuant to Section 20023 is designated the 15 board. 16 20041. The committee shall determine whether or not it is 17 necessary or desirable to issue bonds authorized pursuant to this 18 chapter in order to carry out the actions specified in this chapter, 19 including all acts amendatory thereof and supplementary thereto, 20 and, if so, the amount of bonds to be issued and sold. Successive 21 issues of bonds may be authorized and sold to carry out those 22 actions progressively, and it is not necessary that all of the bonds 23 authorized to be issued be sold at any one time. 24 20042. There shall be collected each year and in the same 25 manner and at the same time as other state revenue is collected, in 26 addition to the ordinary revenues of the state, a sum in an amount 27 required to pay the principal of, and interest on, the bonds each 28 year. It is the duty of all officers charged by law with any duty in 29 regard to the collection of the revenue to do and perform each and 30 every act that is necessary to collect that additional sum. 31 20043. Notwithstanding Section 13340 of the Government 32 Code,there is hereby appropriated from the General Fund in the 33 State Treasury,for the purposes of this chapter,an amount that will 34 equal the total of the following: 35 (a) The sum annually necessary to pay the principal of, and 36 interest on,bonds issued and sold pursuant to this chapter, as the 37 principal and interest become due and payable. 38 (b) The sum necessary to carry out Section 20044,appropriated 39 without regard to fiscal years. 99 - 11 — SB 40 1 20044. For the purposes of carrying out this chapter, the 2 Director of Finance may authorize the withdrawal from the 3 General Fund of an amount or amounts not to exceed the amount 4 of the unsold bonds that have been authorized to be sold for the 5 purpose of carrying out this chapter.Any amounts withdrawn shall 6 be deposited in the fund. Any money made available under this 7 section shall be returned to the General Fund,with interest at the 8 rate earned by the money in the Pooled Money Investment 9 Account during the time the money was withdrawn from the 10 General Fund pursuant to this section, from money received from I 1 the sale of bonds for the purpose of carrying out this chapter. 12 20045. The board may request the Pooled Money Investment 13 Board to make a loanfrom the Pooled Money Investment Account 14 or any other approved form of interium financing, in accordance 15 with Section 16312 of the Government Code, for the purposes of 16 carrying out this chapter. The amount of the request may not 17 exceed the amount of the unsold bonds that the committee has,by 18 resolution, authorized to be sold for the purpose of carrying out 19 this chapter. The board shall execute any documents required by 20 the Pooled Money Investment Board to obtain and repay the loan. 21 Any amounts loaned shall be deposited in the fund to be allocated 22 by the board in accordance with this chapter. 23 20046. Any bonds issued and sold pursuant to this chapter 24 may be refunded by the issuance of refunding bonds in accordance 25 with Article 6(commencing with Section 16780)of Chapter 4 of 26 Part 3 of Division 2 of Title 2 of the Government Code.Approval 27 of the electors of the state for the issuance of bonds under this 28 chapter shall include the approval of the issuance of any bonds 29 issued to refund any bonds originally issued or any previously 30 issued refunding bonds. 31 20047. Notwithstanding any other provision of this chapter, 32 or of the State General Obligation Bond Law,if the Treasurer sells 33 bonds pursuant to this chapter that include a band counsel opinion 34 to the effect that the interest on the bonds is excluded from gross 35 income for federal tax purposes, subject to designated conditions, 36 the Treasurer may maintain separate accounts for the investment 37 of bond proceeds and for the investment earnings on those 38 proceeds. The Treasurer may use or direct the use of those 39 proceeds or earnings to pay any rebate,penalty,or other payment 40 required under federal law or take any other action with respect to SB 46 -- 12- 1 the investment and use of those bond proceeds required or 2 desirable under federal law to maintain the tax-exempt status of 3 those bonds and to obtain any other advantage under federal law 4 on behalf of the funds of this state. 5 20048. All money deposited in the fund that is derived from 6 premium and accrued interest on bonds sold pursuant to this 7 chapter shall be reserved in the find and shall be available for 8 transfer to the General Fund as a credit to expenditures for bond 9 interest. 10 20049. The Legislature hereby finds and declares that, 1 I inasmuch as the proceeds from the sale of bonds authorized by this 12 chapter are not "proceeds of taxes" as that term is used in Article 13 XIII B of the California Constitution, the disbursement of these 14 proceeds is not subject to the limitations imposed by that article. 15 20050. Amounts deposited in the fund pursuant to this chapter 16 may be appropriated in the annual Budget Act to the State 17 Librarian for the actual amount of office, personnel, and other 18 customary and usual expenses incurred in the direct administration 19 of grant projects pursuant to this chapter,including,but not limited 20 to, expenses incurred by the State Librarian in providing technical 21 assistance to an applicant for a grant under this chapter. 22 SEC_ 2. (a) Section 1 of this act shall take effect upon the 23 adoption by the voters of the California Reading and Literacy 24 Improvement and Public Library Construction and Renovation 25 Bond Act of 2004, as set forth in Section 1 of this act. 26 (b) Section 1 of this act shall be submitted to the voters at the 27 2004 direct primary election in accordance with provisions of the 28 Elections Code and the Government Code governing submission 29 of statewide measures to voters. 30 SEC. 3. (a) Notwithstanding any other provisions of law,all 31 ballots of the election shall have printed thereon and in a square 32 thereof, the words: "California Reading and Literacy 33 improvement and Public Library Construction and Renovation 34 Bond Act of 2004" and in the same square under those words,the 35 following in 8-point type: "This act provides for a bond issue in 36 an amount not to exceed a total of two billion dollars 37 ($2,000,000,000) to provide funds for the construction and 38 renovation of public library facilities in order to expand access to 39 reading; and literacy programs in. California's public education 40 system and to expand access to public library services for all 99 I SB 40 1 residents of California." {apposite the square, there shall be left 2 spaces in which the voters may place a cross in the manner required 3 by law to indicate whether they vote for or against the act. 4 (b) If the voting in the election is done by a means of voting 5 machines used pursuant to law in the manner that carries out the 6 intent of this section, the use of the voting machines and the 7 expression of the voters' choice by means thereof are in 8 compliance with this section. 9 SEC. 4. This act is an urgency statute necessary for the 10 immediate preservation of the public peace, health, or safety I I within the meaning of Article IV of the Constitution and shall go 12 into immediate effect. The facts constituting the necessity are. 13 In order for this act to appear on the 2004 direct primary election 14 so as to,at the earliest possible time,expand access to reading and 15 literacy programs in California's public education system and 16 expand access to public library services for all residents of 17 California, it is necessary for this act to go into immediate effect. 0 99