California Tightens Rules on Community College Bonds

California Governor Jerry Brown, a Democrat, signed legislation Wednesday that will tighten the rules on the kinds of bonds that community colleges and school districts can use, The Los Angeles Times reported. The legislation will bar the use of bonds that allow entities issuing them to delay repayment by decades, providing a short-term gain for districts, but creating long-term debt obligations and much more debt than would be the case with shorter term bonds. The new rules limit repayment periods to 25 years (down from 40) and require that interest payments total no more than $4 for every dollar borrowed.