BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 882


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          ASSEMBLY THIRD READING


          AB  
          882 (Wilk)


          As Amended  May 20, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Education       |7-0   |O'Donnell, Chávez,  |                      |
          |                |      |Kim, McCarty,       |                      |
          |                |      |Santiago, Thurmond, |                      |
          |                |      |Weber               |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
           ------------------------------------------------------------------- 


          SUMMARY:  Specifies that the term of a bond used for the purposes  
          of furnishing and equipping of classroom, including, but not  
          limited to, electronic equipment, shall not exceed 120% of the  
          average reasonably expected economic life of the furnishings and  
          equipment.
          EXISTING LAW:  


          1)Authorizes, under California Constitution Article XVI, Section  
            18, a school district, community college district or county  
            office of education to incur indebtedness in the form of General  
            Obligation (GO) bonds for the construction, reconstruction,  








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            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.  
          2)Specifies, under the Education Code, that the number of years  
            the whole or any part of the bonds are to run shall not exceed  
            25 years, from the date of the bonds or the date of any series  
            thereof.


          3)Specifies, under the Government Code, that a school district or  
            community college district may issue bonds that do not allow for  
            the compounding of interest and that have a maturity greater  
            than 30 years, but not greater than 40 years, if the school  
            district or community college district does both of the  
            following:


             a)   Complies with the requirements of Education Code Section  
               15146 (b) and (c).
             b)   Makes a finding that the useful life of the facility  
               financed with the bonds that do not allow for the compounding  
               of interest and that have a maturity greater than 30 years,  
               but not greater than 40 years, equals or exceeds the maturity  
               date of those bonds.


          FISCAL EFFECT:  None


          COMMENTS:  Proposition 39.  In November, 2000, voters passed  
          Proposition 39, a Constitutional Amendment which, among others,  
          give school districts and community college districts the  
          opportunity to seek approval of a local GO bond based on a 55%  
          vote rather than a two-thirds 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  








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          audit.  


          Term of bonds.  Under the Education Code, the term of local bonds  
          cannot exceed 25 years, while bonds issued under the Government  
          Code is no more than 40 years.  Proposition 39 authorizes the  
          proceeds from the sale of GO bonds to be used for the  
          construction, reconstruction, rehabilitation, or replacement of  
          school facilities, including the furnishing and equipping of  
          school facilities.  Existing law, however, does not differentiate  
          between bonds for buildings versus bonds for furnishing and  
          equipping of facilities, which may include electronic equipment.   
          This bill specifies that the issuance of local bonds used to  
          furnish and equip classrooms cannot exceed 120% of the life  
          expectancy of the items being purchased, whether the bond is  
          issued under the Education Code or the Government Code.  This bill  
          is consistent with federal tax rules to ensure that taxpayers are  
          not paying long term bonds for items that have shorter lifespan,  
          and will reduce costs for these purchases.     


          The author states, "This bill is consistent with the provisions in  
          Proposition 39 and does not prohibit the use of Prop 39 bond  
          proceeds to purchase technology.  I am a huge proponent of  
          equipping students with technology in the classroom, especially  
          given our new common core standards.  If we don't empower our  
          students with modern technology, we are putting our students at a  
          disadvantage to provide them the opportunity to develop 21st  
          century skills.  AB 882 will protect taxpayer dollars by ensuring  
          Prop 39 bond funds are paid off based on the life expectancy of  
          the items being purchased."




          Analysis Prepared by:                                               
                          Sophia Kwong Kim / ED. / (916) 319-2087  FN:  
          0000484









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