BILL ANALYSIS �
AB 1754
Page 1
Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
AB 1754 (Hagman) - As Amended: April 24, 2014
SUBJECT : School bonds: portable electronic devices and
instructional materials
SUMMARY : Prohibits the proceeds from the sale of bonds
authorized through Proposition 39 of 2000, which amended Article
XIII A, Section 1(b) and Article XVI, Section 18(b) of the
California Constitution, to be used to purchase either of the
following:
1)Portable electronic devices, including, but not limited to,
laptop computers and tablet computers, that are any of the
following:
a) Not closely connected to classroom instruction.
b) Assigned to individual pupils.
c) Permitted to leave the schoolsite for more than one
schoolday.
2)Basic or supplemental instructional material.
EXISTING LAW :
1)Authorizes, under Section 1 of Article XIII A of the
California Constitution, school districts, community college
districts, or county offices of education to pass a general
obligation (GO) bond by a 55% vote, provided that the local
initiative includes the following accountability measures:
a) A requirement that the proceeds from the sale of the
bonds be used only for the construction, reconstruction,
rehabilitation, or replacement of school facilities,
including the furnishing and equipping of school
facilities, or the acquisition or lease of real property
for school facilities, and not for any other purpose.
b) Provide a list of the specific school facilities
projects to be funded and certification that the school
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district board, community college board, or county office
of education (COE) has evaluated safety, class size
reduction, and information technology needs in developing
that list.
c) A requirement that the school district board, community
college board, or COE conduct an annual, independent
performance audit to ensure that the funds have been
expended only on the specific projects listed.
d) A requirement that the school district board, community
college board, or COE conduct an annual, independent
financial audit of the proceeds from the sale of the bonds
until all of those proceeds have been expended for the
school facilities projects.
2)Authorizes, under Article XVI, Section 18 of the California
Constitution, a school district, community college district or
COE to incur indebtedness in the form of GO bonds for the
construction, reconstruction, rehabilitation, or replacement
of school facilities, including the furnishing and equipping
of school facilities, or the acquisition or lease of real
property for school facilities upon approval of 55% of the
voters.
3)Specifies that the total amount of bonds issued from bonds
approved by voters with a 55% vote shall not exceed specified
percentages of taxable property or specified rates per
$100,000 of taxable property. (Education Code Section 15268)
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS : Proposition 39 . In November, 2000, voters passed
Proposition 39, a Constitutional Amendment which, among others,
give school districts and community colleges the opportunity to
seek approval of a local GO bond based on a 55% vote rather than
a 2/3 vote, provided that the local bond initiative meets
specified accountability measures, including identifying the
list of specific school facilities projects that will be funded
by bond proceeds and the requirement to conduct an annual
independent performance audit and an independent financial
audit.
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This bill establishes parameters on the use of bond proceeds for
portable electronic devices, including laptop computers and
tablet computers, and prohibits the use of bond proceeds for the
purchase of basic or supplemental instructional materials. The
bill specifies that portable electronic devices may not be
purchased with bond proceeds unless the devices are closely
connected to classroom instruction, are not assigned to
individual pupils and are not allowed to leave the schoolsite
for more than one schoolday. According to the author's office,
the reason for allowing the devices to leave the schoolsite for
one schoolday is to accommodate the use of portable devices for
projects off the schoolsite.
The author states that local educational agencies (LEAs) have
recently been using Proposition 39 bond funds to purchase
non-facility related items that have short usable life, while
still taking decades to pay the bond debt. The author cites, as
an example, the purchase of thousands of iPads by the Los
Angeles Unified School District (LAUSD) in 2013.
Many school districts have embarked on new technology programs,
partly in response to the new Common Core State Standards and
the accompanying Smarter Balanced assessments. The new
assessments are computer-based and are expected to begin in the
2014-15 school year. Students in grades 3 through 8 and 11th
grade are taking the tests in 2013-14 as a field test only.
Last fall, LAUSD launched the first phase of the Common Core
Technology Project, which provided iPads to 31,000 students and
1,500 teachers at 47 schools. The iPads are installed with
English and math curriculum and are assigned to pupils, who are
allowed to take the devices home. LAUSD plans to purchase
keyboards to enable students to take the new assessments using
the iPads.
San Diego Unified School District implemented a technology
program several years ago through the passage of two local
bonds. The district upgraded technology in the classrooms and
purchased portable electronic devices. The devices are used in
the classrooms, but the district also allows pupils to take the
devices home and provides internet coverage to families that do
not have access.
Other school districts have purchased other types of portable
electronic devices, such as the Chromebooks or MacBook Air
laptops. Many districts are not assigning devices to each
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student, and instead are rolling them into classrooms on carts.
Furnishing and equipping school facilities . LEAs use bond funds
to furnish and equip school facilities, including furniture,
such as desks, and equipment, such as desktop computers.
According to the Legislative Counsel, portable electronic
equipment is a type of equipment that is allowable under
Proposition 39. While portable electronic devices such as the
iPads were not in existence when Proposition 39 was passed, they
are evolved from desktop computers and as such, a court would
construe Proposition 39 to authorize portable electronic
devices. However, the equipment must be a part of equipping
classrooms and school facilities and be used in connection with
instruction in the classroom.
Opposition states that this bill will prevent a school district
from complying with Proposition 39's requirement to consider
technology. Opposition also expresses concerns that even though
the Legislature has authorized the movement towards digital
textbooks, districts will not be able to provide the textbooks
without the portable electronic devices.
The relevant parts of Proposition 39 state the following:
1)Section (1)(b)(3) of Article XIII A of the California
Constitution allows "Bonded indebtedness incurred by a school
district, community college district or county office of
education for the construction, reconstruction,
rehabilitation, or replacement of school facilities, including
the furnishing and equipping of school facilities (emphasis
added), or the acquisition or lease of real property for
school facilities?."
2)Section (1)(b)(3)(A) provides that the bond must include "A
requirement that the proceeds from the sale of the bonds be
used only for the purposes specified in Article XIII A,
Section 1(b)(3), and not for any other purpose, including
teacher and administrator salaries and other school operating
expenses."
3)Section (1)(b)(3)(B) provides that the bond must include "A
list of the specific school facilities projects to be funded
and certification that the school district board, community
college board, or county office of education has evaluated
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safety, class size reduction, and information technology needs
in developing that list."
4)The findings and declarations section of Proposition 39
include the following:
a) "Investing in education is crucial if we are to prepare
our children for the 21st Century."
b) "We need to make sure our children have access to the
learning tools of the 21st Century like computers and the
internet, but most California classrooms (emphasis added)
do not have access to these technologies."
This bill is consistent with the provisions in Proposition 39.
The bill does not prohibit the use of Proposition 39 bond
proceeds to purchase technology. Proposition 39 and this bill
allow the proceeds of Proposition 39 bonds to be used for
portable electronic devices as along as the technology is part
of equipping a school facility and used for instruction in
classrooms.
Committee amendments :
1)Staff recommends striking the contents of the bill and
rewriting the language that is clearer.
2)Staff also recommends adding language expressing the intent of
the Legislature to ensure that the proceeds from Proposition
39 bonds are used consistently with the intent and
requirements of Proposition 39.
3)Staff recommends adding an amendment to apply the provisions
of this bill to any bond passed by voters after January 1,
2015.
Arguments in support . The author states, "This bill in no way
inhibits the ability of schools to purchase needed instructional
materials. Schools can and should use the budget dollars they
get from the state to purchase these types of materials. This
measure will protect taxpayer dollars by ensuring that Prop 39
bond funds are used for the appropriate purposes and are
directed toward projects that have a longer usable life and are
justified in being paid off over a long period of time."
Arguments in opposition . The Coalition for Adequate School
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Housing (C.A.S.H.) has an oppose unless amended position and
suggests an alternative solution to address concerns regarding
the use of long-term bond funds for items with a relatively
short useful life. C.A.S.H. states, "We recognize the author's
concern regarding the use of long-term bonds for the purchase of
items with a much shorter useful life. Under Federal tax code
housed in the Code of Federal Regulations, school districts and
others issuing tax-exempt bonds must strive to match the
maturity of the bond with the life of the item being purchased
with bond proceeds. Governmental entities must ensure that the
"weighted average maturity [?] does not exceed 120 percent of
the average reasonably expected economic life of the financed
capital projects" [Treasury Regulation 1.148-1(c)(4)(i)B)(2)].
Failure to do so may subject them to penalties for the creation
of "replacement proceeds." As such, we recommend that AB 1754 be
amended to enact California statute to achieve conformity with
these Federal tax code requirements."
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of REALTORS
Opposition
California Association of School Business Officials
Coalition for Adequate School Housing (oppose unless amended)
Riverside County Superintendent of Schools
San Diego Unified School District
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087