Article 8. Bonded Indebtedness Of School Districts of California Education Code >> Division 3. >> Title 2. >> Part 21. >> Chapter 3. >> Article 8.

This article applies only to the reallocation of bonded indebtedness of a school district on general obligation bonds under one of the following conditions:
  (a) The bonded indebtedness was approved by the voters prior to July 1, 1978.
  (b) The bonded indebtedness was incurred for the acquisition or improvement of real property and was approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition.
  (c) The bonded indebtedness was incurred for the acquisition or improvement of real property and was approved on or after July 1, 1978, by 55 percent of the votes cast by the voters voting on the proposition at a regularly scheduled election or a statewide special election.

When a school district is created, annexed, or abolished, or the boundaries thereof changed, the liability to taxation for the outstanding bonded indebtedness of the district or the territory affected thereby is as provided in this article. The authorities whose duty it is to levy taxes for the payment of principal and interest on the outstanding bonds shall levy the taxes upon the districts affected in such proportions as are provided in, or are determined under, the authority of this article.

No territory shall be taken from any school district having any outstanding bonded indebtedness and made a part of another district where the action, if taken, would so reduce the last equalized assessed valuation of a district from which the territory was taken that the outstanding bonded indebtedness of the district would exceed 5 percent of the assessed valuation remaining in the district for each level maintained, on the date the reorganization is effective pursuant to Section 35766.

When any school district is in any manner merged with one or more school districts so as to form a single district by any procedure, the district so formed is liable for all of the outstanding bonded indebtedness of the districts united or merged.

Notwithstanding any other provision of this code, for the purposes of applying the State School Building Aid Law of 1952, Chapter 8 (commencing with Section 16000) of Part 10, the amount of outstanding bonded indebtedness, exclusive of interest, of the divided districts which is equal to the liability incurred by the acquiring district pursuant to Section 35576 shall be considered a liability of the acquiring district for purposes of computing bonding capacity of the district.

When territory is taken from one school district and annexed to another school district and the area transferred contains no public school property or buildings, the territory shall drop any liability for outstanding bonded indebtedness in the district of which it was formerly a part and shall automatically assume its proportionate share of the outstanding bonded indebtedness of the district of which it becomes a part.

(a) If territory is taken from one district and annexed to, or included in, another district or a new district by any procedure and the area transferred contains real property, the district to which the territory is annexed shall take possession of the real property, pursuant to paragraph (1) of subdivision (a) of Section 35560, on the day when the annexation becomes effective for all purposes. The territory transferred shall cease to be liable for the bonded indebtedness of the district of which it was formerly a part and shall automatically assume its proportionate share of the outstanding bonded indebtedness of any district of which it becomes a part.
  (b) The acquiring district shall be liable for the greater of the amounts determined under provisions of paragraph (1) or (2), or the amount determined pursuant to a method prescribed under Section 35738.
  (1) The proportionate share of the outstanding bonded indebtedness of the original district, which proportionate share shall be in the ratio that the total assessed valuation of the transferring territory bears to the total assessed valuation of the original district in the year immediately preceding the date on which the annexation is effective for all purposes. This ratio shall be used each year until the bonded indebtedness for which the acquiring district is liable has been repaid.
  (2) The portion of the outstanding bonded indebtedness of the original district that was incurred for the acquisition or improvement of real property, or fixtures located on the real property, and situated in the territory transferred.
  (c) The county board of supervisors shall compute for the reorganized district an annual tax rate for bond interest and redemption that will include the bond interest and redemption on the outstanding bonded indebtedness specified in paragraph (1) or (2) of subdivision (b), or the amount determined pursuant to a method prescribed under Section 35738. The county board of supervisors shall also compute tax rates for the annual charge and use charge prescribed by former Sections 1822.2 and 1825, as they read on July 1, 1970, when such charges were established before November 23, 1970. All such tax rates shall be levied in excess of any other ad valorem property tax authorized or required by law and shall not be included in the computation of the limitation specified in subdivision (a) of Section 1 of Article XIII A of the California Constitution.

Whenever an existing school district having authorized but unsold bonds is completely divided between two or more districts so that the existing district ceases to exist, pursuant to any provision of this chapter, the board of supervisors shall, prior to the date the action is effective for the purposes of Section 35534, make and enter an order in the minutes of its proceedings that the authorization to issue the unsold bonds be divided between the districts in the ratio which the assessed valuation of the territory transferred to the districts bears to the total assessed valuation of the former district. The bonds, if issued by any new district, shall be considered a liability of the new district for purposes of computing the bonding capacity of the new district when applying the State School Building Aid Law of 1952, Chapter 8 (commencing with Section 16000) of Part 10.

Any unsold bonds of an elementary, high, or unified school district which is included as a whole in a new school district through any kind of reorganization may be issued by the board of supervisors in the name of the new district and the proceeds derived upon the sale thereof shall be the funds of the new district. However, the proceeds derived upon the sale thereof shall be expended only for the purpose, or purposes, for which such bonds were authorized.

Any unsold bonds of an elementary, high, or unified school district which is included as a whole in a new school district through any kind of reorganization, if issued by the board of supervisors in the names of the old districts, shall be considered a liability of the new district for purposes of computing the bonding capacity of the new district when applying the State School Building Aid Law of 1952, Chapter 8 (commencing with Section 16000) of Part 10.