BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2551
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2551 (Wilk)
          As Amended  May 23, 2014
          Majority vote
           
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          |ASSEMBLY:  |78-0 |(May 15, 2014)  |SENATE: |36-0 |(August 18,    |
          |           |     |                |        |     |2014)          |
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           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 


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