AB 1198: School facilities: California School Finance Authority: California Credit Enhancement Program.

The California School Finance Authority Act establishes the California School Finance Authority, and authorizes the authority to, among other things, issue revenue bonds to finance or refinance educational facility projects for school districts, charter schools, county offices of education, and community college districts. Existing law establishes the California School Finance Authority Fund, administered by the authority, and continuously appropriates moneys in the fund for purposes of the act.

This bill would create within the authority the California Credit Enhancement Program for the purpose of establishing a fund to insure school facility bonds issued by the authority pursuant to the act, as specified. The bill would create the California Credit Enhancement Account within the California School Finance Authority Fund, would authorize the authority to deposit fees collected pursuant to the program in that account, and would specify that bond insurance, credit enhancement, or other guarantees of the authority shall be payable solely from funds available in that account. By authorizing money in the California School Finance Authority Fund to be used for a new purpose, the bill would make an appropriation. The bill would require the authority to adopt regulations to carry out the program, including, but not limited to, regulations establishing eligibility criteria and a definition of default for purposes of the program.