BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  AB 2551                     HEARING:  6/11/14
          AUTHOR:  Wilk                         FISCAL:  No
          VERSION:  5/23/14                     TAX LEVY:  No
          CONSULTANT:  Ewing                    

                          LOCAL GOVERNMENT BOND ISSUES
          

          Requires statement on total cost of debt service to be  
          included with sample ballot information on local agencies'  
          bond elections.


                           Background and Existing Law  

          State law requires local agencies to provide voters with  
          information on the cost of proposed bond measures when  
          submitting those measures to the voters for approval (SB  
          858 Petris, Chapter 813, 1968).  Local agencies are  
          required to provide information on three specific,  
          estimated fiscal impacts of a proposed bond measure:

                 The estimated tax rate that would need to be levied  
               to fund the bond during the first fiscal year after  
               the first sale of the bond.

                 The estimated tax rate that would need to be levied  
               to fund the bond during the first fiscal year after  
               the last sale of the bond, if sold in a series, and an  
               estimate of the year that rate would apply.

                 The estimated highest tax rate that would need to  
               be levied to fund that bond issue, and an estimate of  
               the year that rate would apply.  

          The ballot information also may include information on  
          revenue sources that could be used to fund the bond issue,  
          other than ad valorem taxes, and how those sources of  
          revenues may offset the need for a new tax rate to fund the  
          proposed bond issue.  

          Some taxpayer advocates suggest that additional information  
          is necessary to help voters fully understand the total cost  
          of a proposed bond measure.  




          AB 2551 -- 5/23/14 -- Page 2




                                   Proposed Law  

          AB 2551 requires local agencies, when submitting bond  
          measures for voter approval, to include in sample ballot  
          materials information on the estimated total debt service,  
          including the principal and interest, which would be  
          required to be repaid if all the bonds are issued and sold.  
           That estimate may include information about the  
          assumptions used to determine the estimate. 


                               State Revenue Impact
           
          No estimate.


                                     Comment  

          1.   Purpose of the bill  .  AB 2551 extends to local bond  
          measures a practice that is standard with state bond  
          measures.  For state bonds, the Legislative Analyst's  
          Office includes in its ballot information guides  
          information on the total repayment costs of a bond measure  
          that is on the ballot.  AB 2551 includes that requirement  
          for local agencies' bond measures.  Including this  
          additional information in voter information materials will  
          provide voters with a clear and concise understanding of  
          the full fiscal impacts of a proposed bond measure.   


                                 Assembly Actions  

          Assembly Committee on Elections and Redistricting6-0
          Assembly Floor                       78-0


                         Support and Opposition  (6/5/14)

           Support  :  California Taxpayers Association; Howard Jarvis  
          Taxpayers Association.

           Opposition  :  Unknown.   








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