BILL ANALYSIS �
SB 477
Page 1
SENATE THIRD READING
SB 477 (Wright)
As Amended July 3, 2012
Majority vote
SENATE VOTE :Vote not relevant
EDUCATION 11-0 APPROPRIATIONS 17-0
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|Ayes:|Brownley, Norby, Ammiano, |Ayes:|Gatto, Harkey, |
| |Buchanan, Butler, Carter, | |Blumenfield, Bradford, |
| |Eng, Grove, Halderman, | |Charles Calderon, Campos, |
| |Wagner, Williams | |Davis, Donnelly, Fuentes, |
| | | |Hall, Hill, Cedillo, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Addresses issues of bonded indebtedness, debt
capacity, and the establishment of a revenue limit related to
the creation of the Wiseburn Unified School District.
Specifically, this bill :
1)Provides that any tax for repayment of bonds of the current
Wiseburn School District (Wiseburn Elementary) shall be levied
on all taxable property of the new Wiseburn Unified School
District (Wiseburn Unified).
2)Provides that any tax for repayment of bonds issued by
Wiseburn Unified, including bonds authorized by Wiseburn
Elementary, shall be levied on all taxable property of
Wiseburn Unified.
3)Provides that, when Wiseburn Unified is formed, any tax for
repayment of voter-approved bonds of the Centinela Valley
Union High School District (Centinela) approved on or before
January 1, 2012, shall be levied on both of the following:
a) All taxable property located within Centinela as the
district exists following the effective date of the
reorganization; and,
b) All taxable property located within Wiseburn Unified
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that was formerly part of the territory of Centinela.
4)Requires Centinela to transfer to Wiseburn Unified $4 million
from the proceeds of the sale of bonds approved by voters on
November 2, 2010, and issued after January 1, 2012, in
recognition of the authority for Centinela to continue levying
property taxes on taxable property located within Wiseburn
Unified.
5)Requires Wiseburn Unified to expend the $4 million for
purposes consistent with the original voter authorization for
the bonds.
6)Provides that, for purposes of establishing the bonding limit,
the limit for Wiseburn Unified and Centinela shall each be
1.25% of the assessed value of all non-residential property
located in Wiseburn Unified.
7)Provides that the bonding limit applicable to bonds payable
from ad valorem property taxes of a joint powers authority
(JPA) created by Wiseburn Unified and Centinela shall be equal
to the limit of the two districts.
8)Authorizes a JPA created by Wiseburn Unified and Centinela to
hold facilities bond elections and provides that debt service
of the JPA shall be allocated to each district in proportion
to its assessed value of taxable property.
9)Provides that this bill does not prohibit either district from
seeking a waiver of bonding limits established by this bill or
any other statutory bonding limit.
10)Establishes a formula for calculating a revenue limit for the
new Wiseburn Unified district as follows:
a) Multiply the Wiseburn Elementary revenue limit per ADA
in 2012-13 by nine (for the nine grade levels in the K-8
district).
b) Multiply the Centinela revenue limit per ADA in 2012-13
by four (for the four grade levels in the 9-12 district).
c) Add the amount in a) and b) above.
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d) Divide the amount in c) above, by 13.
11)Provides that a high school pupil who resides in Wiseburn
Unified may attend a school in Centinela without an
interdistrict attendance agreement if Centinela accepts that
pupil for attendance.
12)Provides that the election to approve the unification of
Wiseburn Unified shall be conducted within the territory of
the Wiseburn Elementary.
EXISTING LAW allows funds from the sale of previously issued
school bonds to be used for the acquisition, construction, or
improvement of school property that was a part of a former
district or to discharge bonded indebtedness in the former
district. However, if the new district accepts and assumes the
former district's bonded indebtedness, the funds may be used
anywhere in the new district for the purposes for which the
bonds were originally voted. Existing law also establishes a
method for calculating a revenue limit for the new district
based on the weighted average revenue limit for the districts
involved in the reorganization.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown, potential increased General Fund/Proposition
98 (GF/98) revenue limit (general purpose) funding costs, likely
between $500,000 and $800,000, to reorganize school districts
pursuant to this measure. The cost is attributed to the
increased revenue limit funding a unified district receives
versus an elementary district (WSD). School districts receive
revenue limit funding based on what type of district they are:
elementary, high school, and unified (elementary and high
schools). The average revenue limit in the 2010-11 fiscal year
(FY) for elementary school districts is slightly less ($6,110
per ADA) than the average unified rate ($6,393 per ADA). As a
result, the state will incur increased GF/98 costs per ADA due
to the district reorganization
COMMENTS : This bill reflects an agreement between the Wiseburn
School District, which is currently a K-8 school district, and
Centinela to reorganize Wiseburn as a unified district, serving
K-12. Currently, the territory of Centinela includes four
elementary school districts, one of which is Wiseburn. The
other districts are Hawthorne School District, Lawndale
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Elementary School District, and Lennox School District. This
bill reflects an agreement among all five districts that
addresses the following issues:
Protecting the tax rates of all five school districts for
approved but unissued bonds by Centinela . This is achieved by
allowing the Wiseburn Unified taxpayers to continue to pay debt
service on authorized but unissued bonds passed for Centinela.
Absent this provision, tax rates in the remaining four districts
would go up. The transfer of $4 million of bond revenue from
Centinela to Wiseburn Unified ensures that Wiseburn Unified
taxpayers receive a benefit for the taxes they are paying for
the bonds.
Ensuring that the unification of Wiseburn Elementary does not
cause tax rates for future bond authorizations for Centinela to
be substantially higher and that Centinela will have a larger
assessed valuation and bond capacity after Wiseburn unification
than it would have under existing law . This is achieved by
allowing Centinela and Wiseburn Unified to share a portion of
Wiseburn's tax base-specifically, an area of non-residential
property-for bonding purposes. Existing law establishes a debt
limit of 2.5% of assessed valuation for unified school
districts. When an elementary school district and a high school
district share the same territory, the debt limit is 1.25% of
assessed valuation for each district. This bill treats an area
of non-residential property in Washburn Unified in the same
manner, with Centinela and Washburn Unified each applying 1.25%
of the assessed valuation toward its debt limit and applying
revenues from that property to debt service on future bonds, if
any. This bill authorizes this arrangement to be administered
by a JPA. Under existing law, a JPA has the powers of each of
its component members. Therefore, through the JPA, Centinela
would be able to use the non-residential property in Washburn
Unified for bonding purposes.
Creating a revenue limit for the new unified district . This
bill establishes a methodology for computing a base revenue
limit for Wiseburn Unified that results in a base revenue limit
of $6,600.26 according to the author's office. By comparison,
the statewide average revenue limit for unified school districts
in 2011-12 is $6,393.
SB 477
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Analysis Prepared by : Rick Pratt / ED. / (916) 319-2087
FN: 0004989