Bill Text: CA AB1550 | 2017-2018 | Regular Session | Amended

California Assembly Bill 1550 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: School finance: school bonds: small school district.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2017-10-03 - Chaptered by Secretary of State - Chapter 451, Statutes of 2017. [AB1550 Detail]

Download: California-2017-AB1550-Amended.html

Amended IN Assembly April 18, 2017

Amended IN Assembly March 16, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 1550

Introduced by Assembly Member Limón

February 17, 2017

An act to add Section ~~15151~~ 15100.3 to the Education Code, relating to school finance.

LEGISLATIVE COUNSEL'S DIGEST

AB 1550, as amended, Limón. School finance: ~~school bonds: credit enhancement.~~ school bonds: small school district.

Existing law authorizes the governing board of any school district or community college district to order an election and submit to the electors of the school district or community college district, as applicable, the question whether the bonds of the district should be issued and sold for the purpose of raising money for specified purposes, including, among other things, the supplying of school buildings and grounds with furniture, equipment, or necessary apparatus of a permanent nature.

This bill would authorize a school district, whenever the school district issues and sells bonds pursuant to the provisions above, to enter into an agreement for credit enhancement with bond purchasers, as specified. If a school district enters into an agreement for credit enhancement, the bill would require, among other things, that the terms of the bond sale agreement specify that the Controller is required to make an apportionment from moneys in Section A of the State School Fund and the Education Protection Account designated for apportionment to the school district for the purpose of satisfying the debt service requirements of the bond sale agreement.
Existing law, the Joint Exercise of Powers Act, generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power.
This bill would authorize 2 or more small school districts, as defined, to form a joint powers authority pursuant to the Joint Exercise of Powers Act for the purpose of authorizing, issuing, and selling bonds to raise money for specified purposes for the small school districts. The bill would authorize a joint powers authority formed pursuant to these provisions to exercise the authority granted to a school district under a specified law for the authorizing, issuing, and selling of bonds.

Vote: MAJORITY Appropriation: NO Fiscal Committee: ~~YES~~NO Local Program: NO

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

SECTION 1.

Section 15100.3 is added to the Education Code, to read:

15100.3.
(a) Two or more small school districts may form a joint powers authority in accordance with the provisions of Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code for the purpose of authorizing, issuing, and selling bonds for raising money for the purposes specified in subdivision (a) of Section 15100 for the small school districts.
(b) A joint powers authority described in subdivision (a) shall be deemed a school district for purposes of this chapter and may exercise all authority granted to a school district under this chapter under the conditions imposed by this chapter, including that the bonds shall be authorized, issued, and sold in the same manner as provided in this chapter.
(c) For purposes of this section, “small school district” means a school district with fewer than 2,501 units of average daily attendance.

SECTION 1.Section 15151 is added to the Education Code, to read:
15151.
~~Whenever, under this chapter, a school district issues and sells any bond, the school district may enter into an agreement for credit enhancement with bond purchasers as follows:~~
(a)The terms of the bond sale agreement shall specify that the Controller shall make an apportionment from moneys in Section A of the State School Fund and the Education Protection Account designated for apportionment to the school district for the purpose of satisfying the debt service requirements of the bond sale agreement.
(b)Any apportionment authorized pursuant to this section shall constitute a lien senior to any other apportionment or payment of State School Fund and Education Protection Account moneys to or for that school district not made pursuant to this section, with the exception of emergency apportionments made pursuant to Article 2.7 (commencing with Section 41329.50) of Chapter 3 of Part 24 of Division 3 of Title 2.
~~(c)The school district shall provide a schedule of payments to the Office of the State Controller.~~
~~(d)Any payment by the Controller to the bond purchaser shall satisfy that portion of the school district’s debt obligation to that creditor.~~
(e)The amount apportioned for a school district pursuant to this section is an allocation to the school district for purposes of subdivision (b) of Section 8 of Article XVI of the California Constitution. For purposes of computing the local control funding formula allocation pursuant to Section 42238.02, as implemented by Section 42238.03, for any school district, the local control funding formula allocation for any fiscal year in which funds are apportioned for the school district pursuant to this section shall include any amounts apportioned by the Controller pursuant to this section.
(f)If the amount of debt payments vary from the schedule as a result of variable interest rates on the bonds, early redemptions, or changes in expenses, the school district shall amend or supplement the schedule accordingly and provide notice to the Controller.
~~(g)No party, including the school district or any of its creditors, shall have any claim to the money apportioned or to be apportioned to the bond purchaser by the Controller pursuant to this section.~~