September 3, 2013
Significant amendments are in print today (August 30, 2013) for AB 182 (Buchanan) – click here to view. The bill now maintains the existing Government Code authority to issue Current Interest Bonds (CIBs) with a 40-year maximum term. Previously, the bill would have sunset this authority on January 1, 2019, at which time CIBs would be limited to a maximum term of 30 years. AB 182 still includes restrictions on Capital Appreciation Bonds (CABs), including but not limited to a maximum term of 25 years and a debt service ratio limit of 4:1 for each series. It also stipulates additional transparency requirements for CIBs with maturities between 30 and 40 years.
These amendments are the result of negotiations between the Governor’s Office and Assembly Member Buchanan, which were heavily influenced by the concerns voiced by C.A.S.H. and other education advocacy organizations. Over the past two weeks, C.A.S.H. staff have met with members of the Administration and Department of Finance to express our opposition to limiting Government Code authority for CIBs.
The bill now must be heard by the full Senate and, if passed, it will go back to the Assembly for concurrence before heading to the Governor. The Legislature has until Sept. 13 to pass all bills.