BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 222|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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UNFINISHED BUSINESS
Bill No: SB 222
Author: Block (D)
Amended: 5/19/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/8/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley
NO VOTE RECORDED: Bates
SENATE FLOOR: 38-0, 4/23/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block, De León,
Fuller, Gaines, Galgiani, Hall, Hancock, Hernandez, Hertzberg,
Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen,
Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak, Wieckowski,
Wolk
NO VOTE RECORDED: Cannella
ASSEMBLY FLOOR: 79-0, 6/25/15 - See last page for vote
SUBJECT: Local agencies: school bonds: general obligation
bonds: statutory lien
SOURCE: Author
DIGEST: This bill specifies that general obligation bonds
issued and sold by local governments, including school
districts, are secured by a statutory lien.
Assembly Amendments specify that school bonds issued and sold to
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be secured by a statutory lien on all revenues received pursuant
to the levy and collection of the tax, as provided.
ANALYSIS:
Existing law authorizes cities, counties, school districts,
community college districts, and some special districts to issue
general obligation (GO) bonds, secured by ad valorem property
tax revenues, with voter approval.
This bill:
1)Requires all GO bonds issued and sold by or on behalf of a
local agency, including a school district, to be secured by a
statutory lien on all revenues received, pursuant to the levy
and collection of the tax.
2)Requires the lien to automatically arise without any further
action or authorization by the local agency or its governing
board
3)Requires the lien to be valid and binding from the time the
bonds are executed and delivered.
4)Requires the revenue received, pursuant to the levy and
collection of the tax, to be immediately subject to the lien
and requires the lien to immediately attach to the revenues
and be effective, binding, and enforceable against the local
agency, its successors, transfers, and creditors, irrespective
of whether those parties have notice of the lien and without
the need for any physical delivery, recordation, filing or
further act.
5)Specifies that this section is not intended to supplement or
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limit a local agency's power to issue GO bonds conferred by
any other law.
6)Defines local agency to mean any city, county, city and
county, school district, community college district,
authority, or special district.
7)Defines GO bonds to mean bonds, warrants, notes, or other
evidence of indebtedness of a local agency payable from the
proceeds of ad valorem taxes that may be lived, pursuant to
the California Constitution Article XIII A ,Section
1(b)(2)(3).
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified6/26/15)
California Association of School Business Officials
California Public Securities Association
Coalition for Adequate School Housing
Lemon Grove School District
Riverside County School District Superintendents
Riverside County Superintendent of Schools
San Diego Unified School District
OPPOSITION: (Verified6/26/15)
None received
ARGUMENTS IN SUPPORT: According to supporters, bond rating
agencies perceive that some school districts' distressed
financial conditions could pose a threat to those districts' GO
bond payments. As a result, districts in financial difficulty
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receive lower GO bond ratings than do districts in more stable
financial condition. Fiscally distressed school districts are
often among those districts that most need the kinds of
facilities renovation or rehabilitation that can be financed
through GO debt. Lower bond ratings increase those districts'
borrowing costs, creating an additional obstacle to financing
their facilities projects. By enacting language that
unambiguously attaches statutory liens to GO bonds issued by all
local governments, including school districts, SB 222 will
improve some local governments' bond ratings. Higher ratings
will reduce the bonds' interest rates, allowing taxpayers to
finance more public improvements at lower costs.
ASSEMBLY FLOOR: 79-0, 6/25/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson,
Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Melendez
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
6/26/15 15:24:32
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