BILL ANALYSIS Ó
AB 882
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ASSEMBLY THIRD READING
AB
882 (Wilk)
As Amended May 20, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Education |7-0 |O'Donnell, Chávez, | |
| | |Kim, McCarty, | |
| | |Santiago, Thurmond, | |
| | |Weber | |
| | | | |
| | | | |
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SUMMARY: Specifies that the term of a bond used for the purposes
of furnishing and equipping of classroom, including, but not
limited to, electronic equipment, shall not exceed 120% of the
average reasonably expected economic life of the furnishings and
equipment.
EXISTING LAW:
1)Authorizes, under California Constitution Article XVI, Section
18, a school district, community college district or county
office of education to incur indebtedness in the form of General
Obligation (GO) bonds for the construction, reconstruction,
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rehabilitation, or replacement of school facilities, including
the furnishing and equipping of school facilities, or the
acquisition or lease of real property for school facilities upon
approval of 55% of the voters.
2)Specifies, under the Education Code, that the number of years
the whole or any part of the bonds are to run shall not exceed
25 years, from the date of the bonds or the date of any series
thereof.
3)Specifies, under the Government Code, that a school district or
community college district may issue bonds that do not allow for
the compounding of interest and that have a maturity greater
than 30 years, but not greater than 40 years, if the school
district or community college district does both of the
following:
a) Complies with the requirements of Education Code Section
15146 (b) and (c).
b) Makes a finding that the useful life of the facility
financed with the bonds that do not allow for the compounding
of interest and that have a maturity greater than 30 years,
but not greater than 40 years, equals or exceeds the maturity
date of those bonds.
FISCAL EFFECT: None
COMMENTS: Proposition 39. In November, 2000, voters passed
Proposition 39, a Constitutional Amendment which, among others,
give school districts and community college districts the
opportunity to seek approval of a local GO bond based on a 55%
vote rather than a two-thirds vote, provided that the local bond
initiative meets specified accountability measures, including
identifying the list of specific school facilities projects that
will be funded by bond proceeds and the requirement to conduct an
annual independent performance audit and an independent financial
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audit.
Term of bonds. Under the Education Code, the term of local bonds
cannot exceed 25 years, while bonds issued under the Government
Code is no more than 40 years. Proposition 39 authorizes the
proceeds from the sale of GO bonds to be used for the
construction, reconstruction, rehabilitation, or replacement of
school facilities, including the furnishing and equipping of
school facilities. Existing law, however, does not differentiate
between bonds for buildings versus bonds for furnishing and
equipping of facilities, which may include electronic equipment.
This bill specifies that the issuance of local bonds used to
furnish and equip classrooms cannot exceed 120% of the life
expectancy of the items being purchased, whether the bond is
issued under the Education Code or the Government Code. This bill
is consistent with federal tax rules to ensure that taxpayers are
not paying long term bonds for items that have shorter lifespan,
and will reduce costs for these purchases.
The author states, "This bill is consistent with the provisions in
Proposition 39 and does not prohibit the use of Prop 39 bond
proceeds to purchase technology. I am a huge proponent of
equipping students with technology in the classroom, especially
given our new common core standards. If we don't empower our
students with modern technology, we are putting our students at a
disadvantage to provide them the opportunity to develop 21st
century skills. AB 882 will protect taxpayer dollars by ensuring
Prop 39 bond funds are paid off based on the life expectancy of
the items being purchased."
Analysis Prepared by:
Sophia Kwong Kim / ED. / (916) 319-2087 FN:
0000484
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