BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 477|
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UNFINISHED BUSINESS
Bill No: SB 477
Author: Wright (D)
Amended: 7/3/12
Vote: 21
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : 77-0, 8/22/12 - See last page for vote
SUBJECT : School district reorganization: bonded
indebtedness:
Wiseburn Unified School District: Centinela
Valley Union
High School District
SOURCE : Wiseburn School District
DIGEST : This bill addresses issues of bonded
indebtedness, debt capacity, and the establishment of a
revenue limit related to the creation of the Wiseburn
Unified School District.
Assembly Amendments delete the Senate version of the bill
and insert the current language.
ANALYSIS : 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.
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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.
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 that was formerly part of the territory of
Centinela.
1.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.
2.Requires Wiseburn Unified to expend the $4 million for
purposes consistent with the original voter authorization
for the bonds.
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3.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.
4.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.
5.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.
6.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.
A. Establishes a formula for calculating a revenue
limit for the new Wiseburn Unified district as
follows:
B. Multiply the Wiseburn Elementary revenue limit
per ADA in 2012-13 by nine (for the nine grade
levels in the K-8 district).
C. Multiply the Centinela revenue limit per ADA in
2012-13 by four (for the four grade levels in the
9-12 district).
D. Add the amount in #a and #b above.
1. Divide the amount in #C above, by 13.
2. 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.
3. Provides that the election to approve the unification
of Wiseburn Unified shall be conducted within the
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territory of the Wiseburn Elementary.
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 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.
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee,
unknown, potential increased General Fund/Proposition 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. 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 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 General Fund/Prop. 98 costs per ADA due to the
district reorganization
SUPPORT : (Verified 8/22/12)
Wiseburn School District (source)
ARGUMENTS IN SUPPORT : The Wiseburn School District
writes in support, "SB 477 contains the statutory changes
needed to implement the unification proposal for the
Wiseburn School District. The District started the process
eleven years ago in 2001. Since then the District and
three other elementary school districts (Hawthorne,
Lawndale and Lennox) and the Centinela Valley Union High
School District have been working on an agreement that
would be acceptable to all of the districts."
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ASSEMBLY FLOOR : 77-0, 8/22/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Bonilla, Bradford, Brownley, Buchanan, Butler,
Charles Calderon, Campos, Carter, Cedillo, Chesbro,
Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman,
Hall, Harkey, Hayashi, Hill, Huber, Hueso, Huffman,
Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel
P�rez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Bill Berryhill, Blumenfield, Roger
Hern�ndez
PQ:n 8/22/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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