BILL NUMBER: SB 504 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Hernandez
FEBRUARY 17, 2011
An act to amend Section 15150 of the Education Code, and to amend
Sections 53508.7 and 53508.9 of the Government Code, relating to
bonds.
LEGISLATIVE COUNSEL'S DIGEST
SB 504, as introduced, Hernandez. Bonds.
(1) Existing law authorizes the governing board of a school or
community college district to order an election and submit to the
electors of the district the question whether the bonds of the
district shall be issued and sold for the purpose of raising money
for various facilities purposes, for refunding bonds, or for the
purchase of schoolbuses. Existing law limits the total amount of
bonds that a school or community college district may issue to 1.25%
of the taxable property of the school or community college district.
Existing law also authorizes the governing board of a school
district or community college district to issue bond anticipation
notes. Existing law requires a bond anticipation note to be payable
not more than 5 years from the date of the original issuance of the
note. Existing law prohibits the maturity date of a renewed note to
be later than 5 years from the date of the original issuance of the
note. Existing law allows the interest on the notes to be payable
from the proceeds of the sale of bonds or from the tax levied to pay
principal of and interest on the bonds.
This bill would extend the period during which the note is payable
from 5 to 10 years and would delete the prohibition against the
maturity date of a renewed note being later than 5 years from the
date of the original issuance of the note. The bill would authorize
the payment of interest and principal on the bond anticipation notes
from property taxes levied for that purpose if provided for in the
resolution adopted by the governing board in connection with issuance
of the bond anticipation notes. The bill would require the notes to
be issued without reference to the limitation on indebtedness for
bonds noted above if the resolution adopted by the governing board in
connection with the bond anticipation notes does not authorize the
levy of a tax for payment of the principal of and interest on the
notes.
The bill would require the governing board of a school district or
community college district that issued bond anticipation notes
payable from ad valorem taxes to transmit the authorizing resolution
and debt service schedule to the county auditor and county treasurer.
(2) Existing law authorizes the general obligation bonds of a
city, county, city and county, school district, community college
district, or special district to be sold at a public sale and
authorizes the sale of school district and community college district
general obligation bonds at a private sale.
This bill would authorize a city, county, city and county, and a
special district to sell their bonds at a private sale.
(3) Existing law authorizes a city, county, city and county, and
special district to sell bonds at a negotiated sale for a price at,
above, or below par value, as authorized by the legislative body of
the city, county, city and county, or special district, without
further approval, if the legislative body adopts a resolution before
the negotiated sale that includes specified information.
This bill would extend this authorization to a school district and
a community college district.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15150 of the Education Code is amended to read:
15150. (a) When the governing board of a school district or a
community college district deems it in the best interests of the
district, it may by resolution, upon such terms and conditions as it
shall prescribe, issue notes, to be sold on a negotiated
or competitive-bid basis, maturing within a period not to
exceed five years, in anticipation of the sale of bonds
authorized pursuant to Section 15100 or Section 15340 at the time the
notes are issued. The proceeds from the sale of the notes shall be
used only for authorized purposes of the bonds ,
costs of issuance of the notes, or to repay outstanding notes
authorized by this section.
(b) All notes issued and any renewal thereof shall be payable at a
fixed time not more than five 10 years
from the date of the original issuance of the note or earlier,
as the notes may provide . If the sale of the bonds does not
occur prior to the maturity of the notes issued in anticipation of
the sale, the fiscal officer of the school district or community
college district, in order to meet the notes then maturing, shall
issue renewal notes for this purpose. The renewal of a note may not
be issued after the sale of bonds in anticipation of which the
original note was issued and the maturity date of the
renewed note shall not be later than five years from the date of the
original issuance of the note .
(c) Every note and any renewal thereof shall be payable from the
proceeds of the sale of bonds or of any renewal of notes or from
other funds of the school district or community college district
lawfully available for the purpose of repaying the notes, including
state grants. The total amount of the notes or renewals thereof
issued and outstanding may not at any time exceed the total amount of
the unsold bonds.
(d) Interest on the notes shall be payable from proceeds of the
sale of bonds, or from the tax lawfully levied to pay
principal of and interest on the bonds in anticipation
of which the notes are issued, including any premium on the sale of
those bonds .
(e) Interest on the notes and principal thereof may be paid from a
property tax levied for that purpose if the resolution of the
governing board so provides. The tax for payment of the principal of
or interest on the notes is a tax authorized by law for payment of
the bonds in anticipation of which the notes are issued. If the
governing board authorizes the levy of a tax for payment of a portion
of the notes, the governing board shall comply with subdivision (c)
of Section 15140 in giving notice to officers of the county of the
issuance of the notes.
(f) Unless the governing board authorizes the levy of a tax for
payment of the principal of or interest on the notes, notes shall not
be issued without reference to any limitation on indebtedness for
bonds under Section 15102, 15106, 15268, 15270, or 15334.5.
(g) Unless the governing board authorizes the levy of a tax for
payment of the principal of or interest on the notes, notes in
anticipation of bonds authorized pursuant to Chapter 1.5 (commencing
with Section 15264) shall be issued without reference to the tax
limitations of Section 15268 or 15270.
(e)
(h) The original issuance of notes and any renewal
thereof may be in the form of commercial paper notes. Each issuance
of commercial paper notes to repay outstanding notes shall be deemed
to be a renewal of notes subject only to the requirements of this
section.
SEC. 2. Section 53508.7 of the Government Code is amended to read:
53508.7. (a) The bonds shall be sold at a public or private sale
and at a price at, above, or below par, as the legislative body
determines.
(b) Any bonds sold at a discount below the par value of the bonds
shall be sold in compliance with the provisions of Section 53532.
(c) The private sale of bonds is limited to the sale of school
districts' and community college districts' bonds pursuant to
Sections 15140 or 15146 of the Education Code.
SEC. 3. Section 53508.9 of the Government Code is amended to read:
53508.9. (a) Notwithstanding Section 53508.7, a local agency may
sell bonds at a negotiated sale for a price at, above, or below par
value, as authorized by the legislative body, without further
approval, if the legislative body adopts a resolution before the
negotiated sale, as an agenda item at a public meeting, that includes
all of the following:
(1) Express approval of the negotiated method of sale.
(2) Statement of the reasons for selecting the negotiated method
of sale.
(3) Disclosure of the identity of the bond counsel.
(4) Disclosure of the identity of the bond underwriter and the
financial adviser, if used for the negotiated bond sale. If a bond
underwriter or financial adviser has not been selected at the time
the legislative body adopts the resolution, the legislative body
shall disclose the identity at the public meeting first occurring
after the bond underwriter or financial adviser has been selected.
(5) Estimate of the costs associated with the bond issuance.
(b) For purposes of this section, the following definitions shall
apply:
(1) "Legislative body" means the governing body of a local agency.
(2) "Local agency" means a city, county, city and county,
school district, community college district, and special
district. "Special district" means an agency of the state formed for
the performance of governmental or proprietary functions within
limited geographic boundaries , and shall not include a
school district or community college district .