BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 732| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 732 Author: Buchanan (D) Amended: 8/31/11 in Senate Vote: 21 SENATE ELECTIONS & CONSTIT. AMEND. COMM. : 5-0, 06/21/11 AYES: Correa, La Malfa, De León, Gaines, Lieu SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 75-0, 05/26/11 - See last page for vote SUBJECT : Elections SOURCE : Author DIGEST : This bill requires the Attorney General's (AG's) summary prepared in the state voter pamphlet for each state bond measure to include an explanatory table summarizing the Legislative Analyst's Office (LAO's) estimated fiscal impact of the bond measure. Senate Floor Amendments of 8/31/11 prevent a chaptering out problem with SB 334 (DeSaulnier), and AB 1021 (Gordon). ANALYSIS : Existing law: 1.Establishes a process for the AG to prepare a title and summary for each measure submitted to the voters of the whole state. Requires the ballot title and summary to CONTINUED AB 732 Page 2 include a summary of the Legislative Analyst's estimate of the net state and local government fiscal impact. 2.Requires the Legislative Analyst to prepare an impartial analysis of each proposed measure describing the measure and including a fiscal analysis of the measure showing the amount of any increase or decrease in revenue or cost to state or local government. Provides that if a proposed measure is estimated to result in increased costs to the state, the estimate of those costs shall be set out in boldface print in the ballot pamphlet. 3.Requires the statewide ballot pamphlet to include information, in a specific order, for each state measure to be voted upon including, but not limited to: A. Upon the top portion of the first page, and not exceeding one-third of the page, shall appear: Identification of the measure by number and title; and, The official summary prepared by the AG. A. Beginning at the top of the right page, the analysis prepared by the Legislative Analyst. B. Arguments for and against the measure. Related Legislation AB 1021 (Gordon) requires additional fiscal information to be included in the circulating title and summary prepared by the AG and the summary statements prepared by the Legislative Analyst for a proposed initiative measure. Previous Legislation AB 1278 (Harkey) of 2009, would have required the Legislative Analyst to include additional information in the ballot pamphlet for an election for each state initiative measure that proposed the issuance of a state bond. The bill also would have required that the ballot labels for state bond measures include additional information relating to the proposed bond. AB 732 Page 3 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/1/11) California State Controller John Chiang California Taxpayers Association Little Hoover Commission ARGUMENTS IN SUPPORT : According to the author's office: AB 732 attempts to decrease California's future debt obligations by improving voter clarity on bond measures and their future fiscal implications. The bill would require the Legislative Analyst's Office to prepare a simple and easy to understand graph, chart, or report card for each statewide bond measure, illustrating the information discussed in the Overview of State Bond Debt section of the Voter Information Guide. AB 732 stems from a recommendation from the Little Hoover Commission's 2009 report, Bond Spending: Expanding and Enhancing Oversight. Nearly two-thirds of California voters know very little or nothing about how the state pays for bond measures. This makes it very difficult for a majority of voters to know exactly what they are authorizing at the ballot box and how it contributes to the state's General Fund obligations. In addition to voters' limited knowledge on bond financing, many organizations mislead voters to think that enormous projects won't cost taxpayers. As more general obligation bond measures are enacted, the debt service on bonds consumes a larger portion of the General Fund. General obligation bond measures typically do not have a dedicated revenue source outside the General Fund. Ads promoting the bonds often tout that a measure can be implemented without new taxes. While these bond measures may not specifically require new taxes, they are not without cost. In the current budget climate, money to pay for a bond measure may displace money for another program that derives its funds from the General Fund. As our AB 732 Page 4 state's deficit continues to grow and the Legislature is being forced to cut funding to school districts and public safety organizations, Californians must do something to control future debt obligations. In 2007, the Legislative Analyst's Office reported that General Fund debt payments for already authorized general obligation and lease-revenue bonds for infrastructure-related purposes will total about $4.7 billion in 2007-08, rising to a peak of $7.5 billion in 2014-15. Unless the state does more to educate voters on the impacts of ballot-box budgeting, California's debt obligations could take up an even greater portion of the General Fund and fiscally impact the state for years to come. ASSEMBLY FLOOR : AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Carter, Chesbro, Conway, Cook, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Campos, Cedillo, Davis, Gorell, Jones DLW:nl 9/1/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****