BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2116


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          2116 (Gallagher)


          As Amended  June 15, 2016


          Majority vote


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          |ASSEMBLY:  |79-0  |(April 21,     |SENATE: |37-0  |(June 30, 2016)  |
          |           |      |2016)          |        |      |                 |
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          Original Committee Reference:  ED.


          SUMMARY:  Specifies that before the governing board of a school  
          district or the governing board of a community college district  
          orders an election to place a general obligation bond on the  
          ballot, it shall obtain reasonable and informed projections of  
          assessed property valuations that take into consideration  
          projections of assessed property valuations made by the county  
          assessor.    


          The Senate amendments clarify that references to the governing  
          board include the governing board of a community college  
          district in addition to the governing board of a school  
          district.  


          EXISTING LAW:  Authorizes, under California Constitution Article  
          XIII A, Section 1, school districts, community college  
          districts, or county offices of education to pass a general  








                                                                    AB 2116


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          obligation bond by 55% vote, provided that the local initiative  
          includes the following accountability measures:


          1)A requirement that the proceeds from the sale of the bonds be  
            used only for the construction, reconstruction,  
            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,  
            and not for any other purpose;
          2)Provide a list of the specific school facilities projects to  
            be funded and certification that the school district board,  
            community college board, or county office of education has  
            evaluated safety, class size reduction, and information  
            technology needs in developing that list;


          3)A requirement that the school district board, community  
            college board, or county office of education conduct an  
            annual, independent performance audit to ensure that the funds  
            have been expended only on the specified projects; and,


          4)A requirement that the school district board, community  
            college board, or county office of education conduct an  
            annual, independent financial audit of the proceeds from the  
            sale of the bonds until all of those proceeds have been  
            expended for the school facilities projects.


          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  In 2000, voters passed Proposition 39, a  
          Constitutional Amendment which, among others, gave school and  
          community college districts the opportunity to seek approval of  
          a local school facilities bond based on 55% vote rather than 2/3  
          vote, provided that the local bond initiative meets specified  
          accountability measures, including identifying the projects to  
          be funded by the bond measure and conducting annual independent  
          financial and performance audits.  








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          Local bonds are paid by an ad valorem tax (up to $60 per  
          $100,000 for a unified school district) based on property  
          values.  Higher assessed valuations would yield higher revenues  
          to pay for a bond.  According to the author, bond advisors may  
          present overly positive revenue projections when presenting a  
          proposed bond measure to a governing board.  The author states  
          that this bill would improve school bond oversight,  
          accountability, and fiscal responsibility by requiring the  
          school district governing board to consider the county  
          assessor's projections prior to ordering an election to  
          authorize school facilities construction bonds. 


          Analysis Prepared by:                                             
                          Sophia Kwong Kim / ED. / (916) 319-2087  FN:  
          0003597