Bill Text: CA AB2738 | 2015-2016 | Regular Session | Chaptered
Bill Title: School bonds: local school bonds: investment.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2016-09-22 - Chaptered by Secretary of State - Chapter 472, Statutes of 2016. [AB2738 Detail]
Download: California-2015-AB2738-Chaptered.html
BILL NUMBER: AB 2738 CHAPTERED
BILL TEXT
CHAPTER 472
FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2016
APPROVED BY GOVERNOR SEPTEMBER 22, 2016
PASSED THE SENATE AUGUST 15, 2016
PASSED THE ASSEMBLY APRIL 21, 2016
AMENDED IN ASSEMBLY APRIL 13, 2016
AMENDED IN ASSEMBLY MARCH 28, 2016
INTRODUCED BY Assembly Member Olsen
(Coauthors: Senators Bates, Huff, and Moorlach)
FEBRUARY 19, 2016
An act to amend Section 15146 of the Education Code, relating to
school bonds.
LEGISLATIVE COUNSEL'S DIGEST
AB 2738, Olsen. School bonds: local school bonds: investment.
The California Constitution limits the maximum amount of any ad
valorem tax on real property to 1% of the full cash value of the
property. The California Constitution states that the 1% limitation
for ad valorem taxes does not apply to ad valorem taxes or special
assessments to pay the interest and redemption charges on bonded
indebtedness incurred by a school district, community college
district, or county office of education for the construction,
reconstruction, rehabilitation, or replacement of school facilities
approved by 55% of the voters if the proposition includes specified
accountability requirements. Existing law requires the proceeds of
the sale of the bonds, exclusive of any premium received, to be
deposited in the county treasury to the credit of the building fund
of the school district, or community college district as designated
by the California Community Colleges Budget and Accounting Manual.
This bill would prohibit the proceeds from the sale of bonds from
being withdrawn by the school district or community college district
for investment outside the county treasury.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15146 of the Education Code is amended to read:
15146. (a) The bonds shall be issued and sold pursuant to Section
15140, payable out of the interest and sinking fund of the school
district or community college district. The governing board of the
school district or community college district may sell the bonds at a
negotiated sale or by competitive bidding.
(b) (1) Before the sale, the governing board of the school
district or community college district shall adopt a resolution, as
an agenda item at a public meeting, that includes all of the
following:
(A) Express approval of the method of sale.
(B) Statement of the reasons for the method of sale selected.
(C) Disclosure of the identity of the bond counsel, and the
identities of the bond underwriter and the financial adviser if
either or both are used for the sale, unless these individuals have
not been selected at the time the resolution is adopted, in which
case the governing board of the school district or community college
district shall disclose their identities at the public meeting
occurring after they have been selected.
(D) Estimates of the costs associated with the bond issuance.
(E) If the sale includes bonds that allow for the compounding of
interest, including, but not limited to, capital appreciation bonds,
disclosure of the financing term and time of maturity, repayment
ratio, and the estimated change in the assessed value of taxable
property within the school district or community college district
over the term of the bonds.
(2) If the sale includes bonds that allow for the compounding of
interest, including, but not limited to, capital appreciation bonds,
the resolution shall be publicly noticed on at least two consecutive
meeting agendas, first as an information item and second as an action
item.
(c) If the sale includes bonds that allow for the compounding of
interest, including, but not limited to, capital appreciation bonds,
the agenda item shall identify that bonds that allow for the
compounding of interest are proposed and the governing board of the
school district or community college district shall be presented with
all of the following:
(1) An analysis containing the total overall cost of the bonds
that allow for the compounding of interest.
(2) A comparison to the overall cost of current interest bonds.
(3) The reason bonds that allow for the compounding of interest
are being recommended.
(4) A copy of the disclosure made by the underwriter in compliance
with Rule G-17 adopted by the federal Municipal Securities
Rulemaking Board.
(d) After the sale, the governing board of the school district or
community college district shall do both of the following:
(1) Present the actual cost information for the sale at its next
scheduled public meeting.
(2) Submit an itemized summary of the costs of the bond sale to
the California Debt and Investment Advisory Commission.
(e) The governing board of the school district or community
college district shall ensure that all necessary information and
reports regarding the sale or planned sale of bonds by the school
district or community college district it governs are submitted to
the California Debt and Investment Advisory Commission in compliance
with Section 8855 of the Government Code.
(f) The bonds may be sold at a discount not to exceed 5 percent
and at an interest rate not to exceed the maximum rate permitted by
law. If the sale is by competitive bid, the governing board of the
school district or community college district shall comply with
Sections 15147 and 15148. The bonds shall be sold by the governing
board of the school district or community college district no later
than the date designated by the governing board of the school
district or community college district as the final date for the sale
of the bonds.
(g) The proceeds of the sale of the bonds, exclusive of any
premium received, shall be deposited in the county treasury to the
credit of the building fund of the school district, or community
college district as designated by the California Community Colleges
Budget and Accounting Manual. The proceeds deposited shall be drawn
out as other school moneys are drawn out. The bond proceeds withdrawn
shall not be applied to any purposes other than those for which the
bonds were issued. At no time shall the proceeds be withdrawn by the
school district or community college district for investment outside
the county treasury. Any premium or accrued interest received from
the sale of the bonds shall be deposited in the interest and sinking
fund of the school district or community college district.
(h) The governing board of the school district or community
college district may cause to be deposited proceeds of sale of any
series of the bonds in an amount not exceeding 2 percent of the
principal amount of the bonds in a costs of issuance account, which
may be created in the county treasury or held by a fiscal agent
appointed by the school district or community college district for
this purpose, separate from the building fund and the interest and
sinking fund of the school district or community college district.
The proceeds deposited shall be drawn out on the order of the
governing board of the school district or community college district
or an officer of the school district or community college district
duly authorized by the governing board of the school district or
community college district to make the order, only to pay authorized
costs of issuance of the bonds. Upon the order of the governing board
of the school district or community college district or duly
authorized officer of the school district or community college
district, the remaining balance shall be transferred to the county
treasury to the credit of the building fund of the school district or
community college district. The deposit of bond proceeds pursuant to
this subdivision shall be a proper charge against the building fund
of the school district or community college district.
(i) The governing board of the school district or community
college district may cause to be deposited proceeds of sale of any
series of the bonds in the interest and sinking fund of the school
district or community college district in the amount of the annual
reserve permitted by Section 15250 or in any lesser amount, as the
governing board of the school district or community college district
shall determine from time to time. The deposit of bond proceeds
pursuant to this subdivision shall be a proper charge against the
building fund of the school district or community college district.
(j) The governing board of the school district or community
college district may cause to be deposited proceeds of sale of any
series of the bonds in the interest and sinking fund of the school
district or community college district in the amount not exceeding
the interest scheduled to become due on that series of bonds for a
period of two years from the date of issuance of that series of
bonds. The deposit of bonds proceeds pursuant to this subdivision
shall be a proper charge against the building fund of the school
district or community college district.
