BILL ANALYSIS Ó SB 118 Page 1 Date of Hearing: August 8, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 118 (Yee) - As Amended: August 6, 2012 Policy Committee: Business and Professions Vote: 9 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill allows state agencies to reimburse the State Controller's Office (SCO) directly for costs associated with mandated revenue bond activities. FISCAL EFFECT There are no new costs associated with this legislation. In 2010-11 the SCO was reimbursed approximately $175,000 for revenue bond accounting work. Reimbursement was made through an interagency agreement with the State Treasurer's Office (STO). Under this legislation, the SCO would be able to bill departments directly for their costs. COMMENTS Rationale . This bill, supported by both the State Controller and the State Treasurer, is intended to streamline the reimbursement process for work conducted by the SCO as it pertains to the state's general obligation (GO) bonds. Historically, SCO has had an interagency agreement with the STO that allowed the SCO to bill the STO for actual expenses incurred related to bond work. The STO would reimburse the SCO and then seek reimbursement from the respective state agency. According to the author, at the end of Fiscal Year (FY) 2010-11, the STO informed the SCO that they no longer wanted to engage in the interagency agreement. The SCO has the authority to be reimbursed for actual expenses incurred for accounting work related to GO bonds, per Government Code Section 16724.6. The SCO performs accounting tasks related to GO bonds, as well as for revenue bonds, but has no authority SB 118 Page 2 in law to be directly reimbursed for the expenses incurred while performing accounting work related to revenue bonds. This bill requires the Controller to invoice a state agency for the costs associated with the accounting of expenditures related to revenue bonds, and requires the state agency to pay the invoice. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081