§ 101428 School Bond Fund Withdrawal

This law lets the Director of Finance take money out of the General Fund to help pay for school building projects, but only up to the amount of bonds that haven’t been sold yet, minus any loans that haven’t been paid back.

Key Takeaways

•The Director can only take out money that matches the amount of bonds still unsold, after removing special refunding bonds.
•Any outstanding loans must be subtracted from that amount before deciding how much to withdraw.
•When the money is paid back, the state must also add the interest it would have earned if the cash had stayed in the investment account.

Example

A school district needs $5 million to start building a new classroom wing, but the state only has $4 million left in unsold bonds after some were already sold.

The Director can pull out up to $4 million (the unsold bond amount) minus any outstanding loans. If the district still owes $500,000 on a previous loan, the most that can be taken out is $3.5 million.

How to Calculate

Withdrawal Amount ≤ (Unsold Bond Amount – Refunding Bond Amount) – (Loaned Amount Not Repaid)

Find the total amount of bonds that have not been sold yet.
Subtract any refunding bonds (these are special bonds that don’t count).
Subtract any money that was loaned out and hasn’t been paid back yet.
The result is the most money the Director can withdraw.

State has $10 million in unsold bonds. $2 million of those are refunding bonds. There is $1 million still owed on a loan.

Result: Withdrawal Amount ≤ (10,000,000 – 2,000,000) – 1,000,000 = 7,000,000. So up to $7 million can be taken out.

For 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, excluding any refunding bonds authorized pursuant to Section 101430, less any amount loaned and not yet repaid pursuant to Section 101426 and withdrawn from the General Fund pursuant to this section and not yet returned, that have been authorized by the State School Building Finance Committee to be sold for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 Any amounts withdrawn shall be deposited in the 2024 State School Facilities Fund and allocated by the State Allocation Board in accordance with this chapter.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 purposes of carrying out this chapter. (Added by Stats. 2024, Ch. 81, Sec. 28. (AB 247) Approved in Proposition 2 at the November 5, 2024, election. Effective November 6, 2024.)

Key Takeaways

•The Director can only take out money that matches the amount of bonds still unsold, after removing special refunding bonds.
•Any outstanding loans must be subtracted from that amount before deciding how much to withdraw.
•When the money is paid back, the state must also add the interest it would have earned if the cash had stayed in the investment account.

Example

A school district needs $5 million to start building a new classroom wing, but the state only has $4 million left in unsold bonds after some were already sold.

How to Calculate

Withdrawal Amount ≤ (Unsold Bond Amount – Refunding Bond Amount) – (Loaned Amount Not Repaid)

Find the total amount of bonds that have not been sold yet.
Subtract any refunding bonds (these are special bonds that don’t count).
Subtract any money that was loaned out and hasn’t been paid back yet.
The result is the most money the Director can withdraw.

State has $10 million in unsold bonds. $2 million of those are refunding bonds. There is $1 million still owed on a loan.

Result: Withdrawal Amount ≤ (10,000,000 – 2,000,000) – 1,000,000 = 7,000,000. So up to $7 million can be taken out.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 101428 School Bond Fund Withdrawal

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References