BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2551| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: CONTINUED AB 2551 Page 2 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) CONTINUED AB 2551 Page 3 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 **** END **** CONTINUED