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. AB 2551 -- 5/23/14 -- Page 3