BILL NUMBER: AB 2552	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Nestande

                        FEBRUARY 19, 2010

   An act to add Section 15265 to the Education Code, relating to
education finance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2552, as introduced, Nestande. Education finance: cash out
refinancing.
   Existing law establishes the system of public elementary and
secondary schools and public institutions of higher education in this
state. Under existing law, part of the funding for the public
institutions of elementary, secondary, and postsecondary institutions
in this state is derived from the sale of bonds whose issuance is
approved by voters either statewide or within the jurisdiction of a
local educational agency.
   This bill would prohibit the proceeds of bonds issued by a local
educational agency pursuant to a measure approved by the voters on or
after January 1, 2011, from being used for cash out refinancing
unless authority for that procedure has been explicitly included in
that bond measure. The bill would define "cash out refinancing" to
mean the issuance of refunding general obligation bonds to generate
proceeds beyond the amount that would be needed to retire the bonds
outstanding prior to the refinancing.
   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 15265 is added to the Education Code, to read:
   15265.  (a) This section applies to any bonds issued by a local
educational agency pursuant to a measure approved by the voters on or
after January 1, 2011.
   (b) The proceeds of bonds issued by a local educational agency
shall not be used for cash out refinancing unless authority for that
procedure has been explicitly included in the bond measure approved
by the voters.
   (c) As used in this section, "cash out refinancing" means the
issuance of refunding general obligation bonds to generate proceeds
beyond the amount that would be needed to retire the bonds
outstanding prior to the refinancing.