BILL ANALYSIS Ó AB 2551 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2551 (Wilk) As Amended May 23, 2014 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |78-0 |(May 15, 2014) |SENATE: |36-0 |(August 18, | | | | | | |2014) | ----------------------------------------------------------------- Original Committee Reference: E. & R. SUMMARY : Requires each bond issue proposed by a county, city and county, district, or other political subdivision, or any agency, department, or board thereof, to include the best estimate from official sources of the total debt service, including the principal and interest that would be required to be repaid if all the bonds are issued and sold, and permits the estimate to include information about the assumptions used to determine the estimate. The Senate amendments add coauthors and make a non-substantive change. FISCAL EFFECT : None. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS : According to the author, "Since 1997, the non-partisan Legislative Analyst's Office (LAO) has been required to include the 'fiscal effect' of any costs related to the approval of a statewide General Obligation Bond in the ballot pamphlet presented to voters. Per existing law (Elections Code [Section] 9087) the LAO is required to follow a list of criteria which includes: the amount of the cost to state or local government, and utilizing a uniform method in each analysis to describe the estimated increase or decrease in revenue or cost of a measure. "AB 2551 updates the tax rate statement (over 100 years old) to ensure that voters understand how the estimate of the tax rate was reached and what the costs will be throughout the 30-40 year length of the bond. "The purpose is to establish minimum standard of transparency for the fiscal analysis of local bond measures that is very AB 2551 Page 2 similar to what the LAO already does for state General Obligation bond measures." In 1968, the Legislature passed and the Governor signed SB 838 (Petris), Chapter 813, which required the elections official to mail to voters with the sample ballot a tax rate statement for local bond measures. Aside from a few technical changes that have been made, the information included in this statement has mostly been unchanged since it was signed into law in 1968. This bill requires each bond issue proposed by a county, city and county, district, or other political subdivision, or any agency, department of board thereof, to also include the best estimate from official sources of the total debt service, including the principal and interest that would be required to be repaid if all the bonds are issued and sold. According to the author, the tax rate statement needs to be updated to ensure voters understand how the estimate of the tax rate was reached and what the costs will be throughout the 30-40 year period of the bond. In addition the author argues that the LAO already includes the "fiscal effect" of any costs related to the approval of a statewide General Obligation Bond in the statewide ballot pamphlet sent to voters. According to the author, this bill adds similar language into the "tax rate" statement required to be sent with the sample ballot for all local bond measures. The Senate amendments were entirely non-substantive. This bill, as amended in the Senate, is consistent with the Assembly actions. Analysis Prepared by : Nichole Becker and Ethan Jones / E. & R. / (916) 319-2094 FN: 0004113