The State of California is allowed to issue and sell up to ten billion dollars in bonds to fund educational projects, as specified in the related chapter. These bonds aim to support state educational facilities and reimburse a government fund associated with bond expenses.
The bonds represent a solid financial commitment backed by the state to ensure timely payout of the principal and interest. The State Treasurer has the authority to sell these bonds at different times as needed to meet the financial requirements for educational building projects.
(a)CA Education Code § 100825(a) Of the total amount of bonds authorized to be issued and sold pursuant to Chapter 1 (commencing with Section 100800), bonds in the total amount of ten billion dollars ($10,000,000,000), not including the amount of any refunding bonds issued in accordance with Section 100844, or so much thereof as is necessary, may be issued and sold to provide a fund to be used for carrying out the purposes expressed in this chapter and to reimburse the General Obligation Bond Expense Revolving Fund pursuant to Section 16724.5 of the Government Code. The bonds, when sold, shall be and constitute a valid and binding obligation of the State of California, and the full faith and credit of the State of California is hereby pledged for the punctual payment of the principal of, and interest on, the bonds as the principal and interest become due and payable.
(b)CA Education Code § 100825(b) Pursuant to this section, the Treasurer shall sell the bonds authorized by the State School Building Finance Committee established pursuant to Section 15909 at any different times necessary to service expenditures required by the apportionments.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This section describes the makeup and function of the State School Building Finance Committee, which includes several high-ranking state officials who serve without pay to oversee school building finances. The committee is led by the Treasurer, and additional legislative members attend to offer advice as long as it doesn't conflict with their roles. These legislative members form an interim investigation committee with certain powers and responsibilities. The Director of Finance supports the committee, and the Attorney General provides legal guidance.
The State School Building Finance Committee, established by Section 15909 and composed of the Governor, the Controller, the Treasurer, the Director of Finance, and the Superintendent of Public Instruction, or their designated representatives, all of whom shall serve thereon without compensation, and a majority of whom shall constitute a quorum, is continued in existence for the purpose of this chapter. The Treasurer shall serve as chairperson of the committee. Two Members of the Senate appointed by the Senate Committee on Rules, and two Members of the Assembly appointed by the Speaker of the Assembly, shall meet with and provide advice to the committee to the extent that the advisory participation is not incompatible with their respective positions as Members of the Legislature. For the purposes of this chapter, the Members of the Legislature shall constitute an interim investigating committee on the subject of this chapter and, as that committee, shall have the powers granted to, and duties imposed upon, those committees by the Joint Rules of the Senate and the Assembly. The Director of Finance shall provide assistance to the committee as it may require. The Attorney General of the state is the legal adviser of the committee.
State School Building Finance Committee Governor Controller Treasurer Director of Finance Superintendent of Public Instruction committee chairperson legislative advisory members interim investigating committee Joint Rules legal adviser Attorney General
(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This section outlines how the bonds approved under this chapter must be managed. They should be handled—meaning created, sold, paid back, etc.—following the rules set out in the State General Obligation Bond Law. However, one specific part of that law, Section 16727, doesn't apply here. Also, the State Allocation Board is put in charge of overseeing the 2004 State School Facilities Fund as part of these bond management duties.
(a)CA Education Code § 100830(a) The bonds authorized by this chapter shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), and all of the provisions of that law, except Section 16727 of the Government Code, apply to the bonds and to this chapter and are hereby incorporated into this chapter as though set forth in full within this chapter.
(b)CA Education Code § 100830(b) For purposes of the State General Obligation Bond Law, the State Allocation Board is designated the “board” for purposes of administering the 2004 State School Facilities Fund.
State General Obligation Bond Law State Allocation Board 2004 State School Facilities Fund bonds management bonds issuance bonds redemption bonds payment California bonds education funding school facilities bond administration government code exclusion Section 16727 exemption
(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
The State Allocation Board can request the State School Building Finance Committee to decide if it's necessary to issue bonds to fund school building projects. These bonds, used to finance approved projects, can be issued and sold in portions over time as needed, instead of all at once.
Upon request of the State Allocation Board from time to time, supported by a statement of the apportionments made and to be made for the purposes described in Sections 100815 and 100820, the State School Building Finance Committee shall determine whether or not it is necessary or desirable to issue bonds authorized pursuant to this chapter in order to fund the apportionments and, if so, the amount of bonds to be issued and sold. Successive issues of bonds may be authorized and sold to fund those apportionments progressively, and it is not necessary that all of the bonds authorized to be issued be sold at any one time.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law requires the state to collect extra money every year, alongside regular state taxes, to cover the payments for bond debts. Officials responsible for revenue collection must ensure this additional amount is obtained to pay both the bonds' principal and interest annually.
There shall be collected each year and in the same manner and at the same time as other state revenue is collected, in addition to the ordinary revenues of the state, a sum in an amount required to pay the principal of, and interest on, the bonds each year. It is the duty of all officers charged by law with any duty in regard to the collection of the revenue to do and perform each and every act that is necessary to collect that additional sum.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law section sets aside money from California's main budget to cover two main expenses. First, it ensures enough funds are available each year to pay back the principal and interest on bonds that were issued according to this chapter requirements. Second, it provides necessary funds to implement the requirements of another related section, 100840, without worrying about the timing of fiscal years.
Notwithstanding Section 13340 of the Government Code, there is hereby appropriated from the General Fund in the State Treasury, for the purposes of this chapter, an amount that will equal the total of the following:
(a)CA Education Code § 100835(a) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to this chapter, as the principal and interest become due and payable.
(b)CA Education Code § 100835(b) The sum necessary to carry out Section 100840, appropriated without regard to fiscal years.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law allows the State Allocation Board to ask for a short-term loan from the Pooled Money Investment Board to fund projects under this chapter. The loan amount can't be more than the value of unsold bonds previously approved for sale. The board must fill out any necessary paperwork to get and pay back the loan. Once received, the loan money will be added to a fund for the board to use according to this chapter's guidelines.
The State Allocation Board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account or any other approved form of interim financing, in accordance with Section 16312 of the Government Code, for the purpose of carrying out this chapter. The amount of the request shall not exceed the amount of the unsold bonds that the committee, by resolution, has authorized to be sold for the purpose of carrying out this chapter. The board shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated by the board in accordance with this chapter.
State Allocation Board Pooled Money Investment Board interim financing unsold bonds loan request fund allocation Government Code Section 16312 financial documents repayment Pooled Money Investment Account loan approval resolution authorization project funding short-term loan financial management
(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This section allows the California Treasurer to handle bond proceeds and earnings in a specific way to ensure the bonds remain tax-exempt at the federal level. If bonds are sold with a legal opinion confirming that their interest is tax-exempt, the Treasurer can create separate accounts for investing the bond money and its earnings. The Treasurer can also use these funds to pay any penalties or make payments required by federal law to maintain the bonds' tax-exempt status and to benefit the state's finances.
Notwithstanding any other provision of this chapter, or of the State General Obligation Bond Law, if the Treasurer sells bonds pursuant to this chapter that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes, subject to designated conditions, the Treasurer may maintain separate accounts for the investment of bond proceeds and for the investment earnings on those proceeds. The Treasurer may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law or take any other action with respect to the investment and use of those bond proceeds required or desirable under federal law to maintain the tax-exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law allows the Director of Finance to withdraw money from California's General Fund up to the amount of authorized but unsold bonds specifically for school building projects. The withdrawn funds are put into the 2004 State School Facilities Fund to finance these projects.
Once the bonds are sold, the money taken from the General Fund must be paid back. Additionally, an amount equal to the interest that could have been earned on that money, as if it had been in the state's investment account, also needs to be returned.
For the purposes of carrying out this chapter, the Director of Finance may authorize the withdrawal from the General Fund of an amount not to exceed the amount of the unsold bonds that have been authorized by the State School Building Finance Committee to be sold for the purpose of carrying out this chapter. Any amounts withdrawn shall be deposited in the 2004 State School Facilities Fund consistent with this chapter. Any money made available under this section shall be returned to the General Fund, plus an amount equal to the interest that the money would have earned in the Pooled Money Investment Account, from proceeds received from the sale of bonds for the purpose of carrying out this chapter.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law states that any money put in the 2004 State School Facilities Fund, which comes from the extra amount and accumulated interest on sold bonds, should be kept in this fund. It can then be used to reduce the state's expenses by moving it to the General Fund to offset the costs of bond interest.
All money deposited in the 2004 State School Facilities Fund, that is derived from premium and accrued interest on bonds sold shall be reserved in the fund and shall be available for transfer to the General Fund as a credit to expenditures for bond interest.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This section states that bonds can be refinanced, or refunded, according to specific procedures outlined in another part of the law. When voters approve the initial bonds, they are also approving any future bonds needed to refinance those already issued, including any bonds issued as part of a refinancing.
The bonds may be refunded in accordance with Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of Division 4 of Title 2 of the Government Code, which is a part of the State General Obligation Bond Law. Approval by the voters of the state for the issuance of the bonds described in this chapter includes the approval of the issuance of any bonds issued to refund any bonds originally issued under this chapter or any previously issued refunding bonds.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
This law states that money from selling certain bonds isn't considered 'tax revenue' according to the California Constitution. Because of this, limits on spending tax revenue don't apply to using this bond money.
The Legislature hereby finds and declares that, inasmuch as the proceeds from the sale of bonds authorized by this chapter are not “proceeds of taxes” as that term is used in Article XIII B of the California Constitution, the disbursement of these proceeds is not subject to the limitations imposed by that article.
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(Added by Stats. 2002, Ch. 33, Sec. 31. Approved in Proposition 55 at the March 2, 2004, election.)
