§ 100170 Bond Interest Transfer Rules

This law says that any extra money earned from bond premiums and interest that goes into certain education funds must stay in those funds, but can be moved to the state’s main budget to help pay the interest on those bonds.

Key Takeaways

•Extra money from bond premiums and interest stays in the specific education funds.
•That money can be moved to the General Fund to help cover bond‑interest costs.
•The amount that can be moved is simply the sum of the premium plus the accrued interest.

Example

A school district sells a bond and gets $10,000 extra because investors paid a premium and the bond has earned $2,000 in interest so far.

The $12,000 (premium + interest) must stay in the education fund, but the state can later move that $12,000 into the General Fund to count as money that helps pay the bond’s interest costs.

How to Calculate

Transferable amount = Premium on bonds sold + Accrued interest on bonds sold

Find the premium amount earned when the bond was sold.
Find the accrued interest amount that has built up on the bond.
Add the premium and the accrued interest together.
That total can be transferred to the General Fund as a credit for bond‑interest spending.

A bond issue brings in a $5,000 premium and has $1,500 of interest that has accrued.

Result: Transferable amount = 5000 + 1500 = $6,500

All money deposited in the State School Building Lease-Purchase Fund, the Education Technology Fund, and the 1996 Higher Education Capital Outlay Bond Fund that is derived from premium and accrued interest on bonds sold shall be reserved in the fund and shall be available for transfer to the General Fund as a credit to expenditures for bond interest. (Added by Stats. 1996, Ch. 1, Sec. 1. Approved in Proposition 203 at the March 26, 1996, election.)

Key Takeaways

•Extra money from bond premiums and interest stays in the specific education funds.
•That money can be moved to the General Fund to help cover bond‑interest costs.
•The amount that can be moved is simply the sum of the premium plus the accrued interest.

Example

A school district sells a bond and gets $10,000 extra because investors paid a premium and the bond has earned $2,000 in interest so far.

The $12,000 (premium + interest) must stay in the education fund, but the state can later move that $12,000 into the General Fund to count as money that helps pay the bond’s interest costs.

How to Calculate

Transferable amount = Premium on bonds sold + Accrued interest on bonds sold

Find the premium amount earned when the bond was sold.
Find the accrued interest amount that has built up on the bond.
Add the premium and the accrued interest together.
That total can be transferred to the General Fund as a credit for bond‑interest spending.

A bond issue brings in a $5,000 premium and has $1,500 of interest that has accrued.

Result: Transferable amount = 5000 + 1500 = $6,500

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 100170 Bond Interest Transfer Rules

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