April 24, 1991
To All Bond Counsel:
RE: Issuance of School Bonds - S.B. 351
Our position with respect to the issuance of school bonds subsequent to the enactment of S.B. 351 is as follows.
1. Refunding Bonds. We will continue to approve unlimited tax refunding bonds where the bonds to be refunded were authorized by an election held on or before April 1, 1991 (and issued before September 1, 1992).
2. New Money Bonds Authorized on or before April 1, 1991. We will approve, until September 1, 1992, unlimited tax new money bonds which were authorized by an election held on or before April 1, 1991.
3. New Money Bonds Authorized after April 1, 1991. We will accept for review new money bonds authorized by an election held after April 1, 1991. However, to be approved, the bond ordinance must provide that the bonds will be subject to the tax limitations set out in Section 20.09 of the Education Code, as added by S.B. 351. Elections held between April 1, 1991 and the effective date of S.B. 351 take place under existing law, but the bond ordinance must take into account the known effect of S.B. 351 on the ability of a district to levy taxes in the future. Elections held after the effective date of S.B. 351 will have to recognize the effect of the new Section 20.09 on existing Section 20.04.
There may be additional requirements relating to the issuance of bonds after the effective date of S.B. 351 (approximately August 26, by my calculation). Also, the possibility of a legal challenge to S.B. 351 does complicate the above bond issuance scenarios. However, in all three cases our ability to approve bonds until September 1, 1991 would not appear to be affected by a challenge to S.B. 351. Additional legislation could also affect the issuance of bonds by school districts. We will communicate any change in our position to bond counsel should a change be required after the effective date of S.B. 351, or by new legislation or litigation.