BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 2551
          Author:   Wilk (R), et al.
          Amended:  5/23/14 in Senate
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  7-0, 6/11/14
          AYES:  Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Walters

           SENATE ELECTIONS & CONSTITUTIONAL AMEND. COMM.  :  5-0, 6/24/14
          AYES:  Padilla, Anderson, Hancock, Jackson, Pavley

           ASSEMBLY FLOOR  :  78-0, 5/15/14 - See last page for vote


           SUBJECT  :    Local ballot measures:  bond issues

           SOURCE  :     California League of Bond Oversight Committees
                      Howard Jarvis Taxpayers Association


           DIGEST :    This bill 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 will be required to  
          be repaid if all the bonds are issued and sold.  

           ANALYSIS  :    Existing 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.   
          Local agencies are required to provide information on three  
          specific, estimated fiscal impacts of a proposed bond measure:

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           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.  

          This bill 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 will 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. 

           Comments
           
          This bill extends to local bond measures a practice that is  
          standard with state bond measures.  For state bonds, the  
          Legislative Analyst's Office (LAO) includes in its ballot  
          information guides information on the total repayment costs of a  
          bond measure that is on the ballot.  This bill 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.   

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  6/26/14)

          California League of Bond Oversight Committees (co-source) 

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          Howard Jarvis Taxpayers Association (co-source) 
          California Taxpayers Association

           ARGUMENTS IN SUPPORT  :    According to the author, "AB 2551 will  
          establish a minimum standard of transparency for the fiscal  
          analysis of local bond measures that is very similar to what the  
          LAO already does for state General Obligation bond measures.   
          This standard would be equally applied, and because we are  
          simply educating voters as to how the tax rate estimate is  
          achieved, there should be no struggle in complying with these  
          provisions.  

          "In order to estimate tax rates, there needs to be a clearer  
          fiscal effect/impact statement similar to what the LAO does.   
          However, it needs to be open-ended enough to not place excessive  
          burdens on county counsel."

           ASSEMBLY FLOOR  :  78-0, 5/15/14
          AYES:  Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,  
            Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,  
            Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,  
            Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,  
            Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V.  
            Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,  
            Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,  
            Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
          NO VOTE RECORDED:  Mansoor, Vacancy


          AB:nl  6/26/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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