| FOR IMMEDIATE RELEASE: September 10, 2007 |
CONTACT: Sophia Kwong Kim
(916) 319-2087 |
|
Sacramento – The Legislature passed AB 1368, authored by Assemblymember Gene Mullin (D-South San Francisco), and initiated by the Hillsborough City School District. The bill, if signed into law by the Governor, will save school districts administrative costs in the process of securing funds for the construction and modernization of school facilities. Specifically, the bill eliminates the requirement that Bond Anticipation Notes (BANs) be renewed annually. BANs are short-term debt instruments secured by the proceeds from the future sale of a local general obligation bond.
Each time a BAN is renewed, districts must pay legal fees, underwriting fees and other associated administrative costs. Since local bond funds are used to pay back the BAN, this has the effect of reducing the amount of bond funds for school facilities.
"This bill allows K-12 and community college districts to issue the original BAN for up to five years and eliminates the annual renewal requirement. This will ensure that bond funds are used for school facilities and not administrative fees. K-12 and community college districts throughout the state will save millions of dollars if this bill is signed into law. The Hillsborough City School District alone has estimated savings of almost $2 million," said Assemblymember Mullin.
The bill now goes to the Governor's Desk. The deadline for the Governor to sign or veto all bills is October 14, 2007.