BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1492|
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THIRD READING
Bill No: AB 1492
Author: Evans (D), et al
Amended: 8/29/05 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE EDUCATION COMMITTEE : 9-0, 9/6/05
AYES: Scott, Maldonado, Alquist, Dutton, Lowenthal,
Simitian, Soto, Speier, Torlakson
NO VOTE RECORDED: Denham, Morrow, Romero
SUBJECT : Community college districts: property: sale
or lease
SOURCE : Los Angeles Community College District
DIGEST : This bill exempts the sale-sale back or
lease-leaseback of California Community College facilities
from construction and property disposal provisions if the
proceeds are used for capital outlay projects involving
energy efficient buildings. This bill also authorizes
"apportionment intercept" for the payment of debt service
obligations for bonds or short-term loans used to finance
energy efficient buildings. The overall purpose is to
allow the California Community Colleges to utilize a
facilities financing mechanism that is currently only
enjoyed by K-12 school districts.
Senate Floor Amendments of 8/29/05 delete the previous
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version which related to instruction in economics.
ANALYSIS :
Lease-Leaseback . Current law provides that current
requirements relative to the sale or lease of K-12 school
district surplus property do not apply to the sale or lease
of a school district's real property, together with any
personal property located thereon, if all of the following
conditions are met:
1. The property is sold or leased for the purpose of
assisting a local governmental agency in obtaining
financing.
2. In the case of a sale, the school district
simultaneously repurchases the same property (sale-sale
back).
3. In the case of a lease, the school district
simultaneously leases back the same property
(lease-leaseback).
4. The financing proceeds are used solely for capital
outlay purposes.
Apportionment Intercept . K-12 public schools currently
have the option to ask the State Controller (Controller) to
withhold from apportionments an amount of funds necessary
to satisfy its annual bond payment obligation, as it
relates to School Finance Authority funds. This process,
whereby school funding is diverted to the Controller, who
directly pays the bond holders, can assist districts in
securing better rates on bonds and loans.
This bill provides that current requirements relative to
the sale or lease of surplus property do not apply to the
sale or lease of community college real property, together
with any personal property located thereon, if all of the
following conditions are met:
1. The property is sold or leased for the purpose of
assisting a local governmental agency in obtaining
financing for a qualified community college facility.
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2. In the case of a sale, the community college district
simultaneously repurchases the same property (sale-sale
back).
3. In the case of a lease, the community college district
simultaneously leases back the same property
(lease-leaseback).
4. The financing proceeds are used solely for capital
outlay relating to a qualified community college
facility.
This bill defines "qualified community college facility" as
real and personal property, improvements and related
facilities that are determined by the governing board of
the community college district to satisfy each of the
following:
1. The facilities will assist the district in reducing
energy and resource consumption and to operate as energy
and resource efficient buildings, as specified.
2. The facilities are affordable, as specified.
The bill requires, when a community college district enters
into a sale or lease as described above, the district to
authorize the chancellor and Controller to withhold from
its annual apportionment the amount of funds necessary to
satisfy its annual payment obligation under the sale
contract or lease.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 9/6/05)
Los Angeles Community College District (source)
NC:cm 9/7/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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