BILL NUMBER: AB 182 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 12, 2013
INTRODUCED BY Assembly Members Buchanan and Hueso
( Principal coauthor: Assembly Member
Alejo )
(Principal coauthors: Senators Block and Wyland)
( Coauthors: Assembly Members
Ian Calderon, Roger Hernandez, and
Williams )
JANUARY 24, 2013
An act to amend Section 15146 of, and to add Sections 15144.1 and
15144.2 to, the Education Code, and to amend Sections 53506, 53507,
53508.7, and 53530 of the Government Code, relating to bonds.
LEGISLATIVE COUNSEL'S DIGEST
AB 182, as amended, Buchanan. Bonds: school districts and
community college districts.
(1) 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 district the question whether the bonds
of the district should be issued and sold for the purposes
of raising to raise money for specified
purposes. Existing law requires the interest rate on
the bonds to bear a rate of interest that does not exceed
8% per annum and requires the number of years the whole or any part
of the bonds are to run to not exceed 25 years.
This bill would require the ratio of total debt service to
principal for each bond series to not exceed 4 to one. The bill would
require each capital appreciation bond maturing more than 10 years
after its date of issuance to be subject to mandatory tender for
purchase or redemption before its fixed maturity date, as specified,
beginning no later than the 10th anniversary of the date the capital
appreciation bond was issued.
(2) Existing law requires the governing board of the school
district or community college district, before the sale of bonds, to
adopt a resolution as an agenda item at a public meeting that
includes specified information.
This bill would require, if the sale includes capital appreciation
bonds, the agenda item to identify that capital appreciation bonds
are proposed and require the governing board of the school district
or community college district to be presented with an analysis
containing the overall cost of the capital appreciation bonds, a
comparison to the overall cost of current interest bonds, the reason
capital appreciation bonds are being recommended, and a copy of a
certain disclosure made by the underwriter.
(3) Additionally and alternatively to the authority described
above, existing law authorizes the legislative body of an issuer, by
resolution, to provide for the issuance of bonds or refunding bonds
and defines "issuer" to include, among other public entities, a
school district and a community college district. Existing law also
authorizes these bonds to bear an interest rate at a
coupon rate or rates as determined by the legislative body of a local
agency in its discretion but not to exceed 12% per year payable and
defines "local agency" to include, among other public entities, a
public district.
This bill would instead specify that issuer and local agency, as
defined for purposes of this source of bonding authority, do not
include a school district or a community college district.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 15144.1 is added to the Education Code, to
read:
15144.1. The ratio of total debt service to principal for each
bond series shall not exceed four to one.
SEC. 2. Section 15144.2 is added to the Education Code, to read:
15144.2. A capital appreciation bond maturing more than 10 years
after its date of issuance shall be subject to mandatory tender for
purchase or redemption before its fixed maturity date, with or
without a premium, at any time at the option of the issuer
, or from time to time, beginning no later than the 10th anniversary
of the date the capital appreciation bond was issued.
SEC. 3. 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 district.
The governing board may sell the bonds at a negotiated sale or by
competitive bidding.
(b) Before the sale, the governing board shall adopt a resolution,
as an agenda item at a public meeting, that includes all of the
following:
(1) Express approval of the method of sale.
(2) Statement of the reasons for the method of sale selected.
(3) Disclosure of the identity of the bond counsel, and the
identities of the bond underwriter and the financial adviser if
either or both are utilized used for
the sale, unless these individuals have not been selected at the time
the resolution is adopted, in which case the governing board shall
disclose their identities at the public meeting occurring after they
have been selected.
(4) Estimates of the costs associated with the bond issuance.
(c) If the sale includes capital appreciation bonds, the agenda
item shall identify that capital appreciation bonds are proposed and
the governing board shall be presented with all of the following:
(1) An analysis containing the total overall cost of the capital
appreciation bonds.
(2) A comparison to the overall cost of current interest bonds.
(3) The reason capital appreciation bonds 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 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 shall ensure that all necessary
information and reports regarding the sale or planned sale of bonds
by the school 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 shall
comply with Sections 15147 and 15148. The bonds shall be sold by the
governing board no later than the date designated by the governing
board 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 other purposes
other than those for which the bonds were issued. Any premium
or accrued interest received from the sale of the bonds shall be
deposited in the interest and sinking fund of the district.
(h) The governing board 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 district for this purpose, separate from the
building fund and the interest and sinking fund of the district. The
proceeds deposited shall be drawn out on the order of the governing
board or an officer of the district duly authorized by the governing
board to make the order, only to pay authorized costs of issuance of
the bonds. Upon the order of the governing board or duly authorized
officer, 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 district.
(i) The governing board may cause to be deposited proceeds of sale
of any series of the bonds in the interest and sinking fund of the
district in the amount of the annual reserve permitted by Section
15250 or in any lesser amount, as the governing board 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
district.
(j) The governing board may cause to be deposited proceeds of sale
of any series of the bonds in the interest and sinking fund of the
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 district.
SEC. 4. Section 53506 of the Government Code is amended to read:
53506. (a) This article is full authority for the issuance of
bonds or refunding bonds by any city, county, city and county, or
special district, secured by the levy of ad valorem taxes, authorized
in accordance with the Constitution and, in the case of a chartered
city, county, or city and county, with the charter thereof, or in the
case of a special district, with the district's principal act. This
article shall not apply to a school district or a community college
district.
(b) This article is intended to provide a complete additional and
alternative method for doing the things authorized by this article.
The powers conferred by this article are supplemental and additional
to the powers conferred by any other laws, and the limitations
imposed by this article do not affect the powers conferred by any
other law.
SEC. 5. Section 53507 of the Government Code is amended to read:
53507. As used in this article, the following terms shall have
the meanings assigned to them in this section.
(a) "Bonds" means bonds, notes, warrants, or other evidence of
indebtedness payable, both principal and interest, from the proceeds
of ad valorem taxes that may be levied without limitation as to rate
or amount upon property subject to taxation by the legislative body.
(b) "Issuer" means a city, county, city and county, or special
district, secured by the levy of ad valorem taxes, authorized to
issue bonds pursuant to this article. "Issuer" shall not include a
school district or community college district.
(c) "Legislative body" means the governing body of the issuer.
SEC. 6. 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 Bonds sold at a
discount below the par value of the bonds shall be sold in compliance
with the provisions of Section 53532.
SEC. 7. Section 53530 of the Government Code is amended to read:
53530. As used in this article:
(a) "Local agency" means county, city, city and county, public
district, public entity or authority, or other public or municipal
corporation, including redevelopment agencies, housing authorities,
and industrial development authorities. "Local agency" shall not
include a school district or community college district.
(b) "Bonds" means bonds, warrants, notes , or other
evidences of indebtedness of a local agency or zone or improvement
district thereof.