BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 114| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 114 Author: Committee on Budget Amended: 6/11/15 in Senate Vote: 21 SENATE BUDGET & FISCAL REVIEW COMMITTEE: 15-0, 6/15/15 AYES: Leno, Nielsen, Allen, Beall, Block, Hancock, Mitchell, Monning, Moorlach, Nguyen, Pan, Pavley, Roth, Stone, Wolk NO VOTE RECORDED: Anderson ASSEMBLY FLOOR: Not relevant SUBJECT: Public works: building construction SOURCE: Author DIGEST: This bill is necessary for the enactment of the 2015 Budget Act and makes various changes relating to public works and debt. ANALYSIS: This bill makes certain technical and clarifying changes to facilitate the financing of capital projects. Specifically, this bill: 1)Reduces the amount of authorized revenue bonds, notes, or bond anticipation notes that may be issued to finance the acquisition, design or construction of approved certain local jail facilities from $365.8 million to $340.9 million; increases the amount of authorized revenue bonds, notes, or AB 114 Page 2 bond anticipation notes that may be issued to finance the acquisition, design or construction of approved other local jail facilities from $854.2 million to $870.1 million; and increases the amount of authorized revenue bonds, notes, or bond anticipation notes that may be issued to finance the acquisition, design or construction of approved adult local criminal justice facilities from $500.0 million to $509.1 million. 2)Expands the performance criteria for public works projects to include concept drawings, which may include schematic or architectural renderings. 3)Repeals the provisions allowing for the appointment of deputies to the State Public Works Board (SPWB) by the Director of Transportation and the Director of General Services. 4)Adopts new rules for the conveyance of a public building to the state agency that had jurisdiction of the property prior to the SPWB financing, once the facility is no longer required as pledge for payment. 5)Removes the sunset date of July 1, 2015, for the provision that allows the SPWB to enter into an asset transfer and lease for purposes of securing the payment of debt service and facilitate the completion of public works projects. Requires the Department of Finance to report to the fiscal committees of the Legislature, on the use of this asset transfer authority by the SPWB by June 30, 2017. 6)Eliminates dated provisions of law that relate to coupon bonds, adjusts provisions relating to the determination of the net interest costs to the state of bond financing, and increases flexibility with respect to issuance of bonds based on par values and how bids are submitted to the State Treasurer. AB 114 Page 3 7)Specifies that the method for determining the lowest interest cost bid by the State Treasurer shall be limited to either the net interest cost method (determined to be the total amount of interest, less the total amount of the premium, plus the total amount of the discount) or the true interest cost method (determined to be the nominal interest rate when compounded semiannually, used to discount debt service payments to the date of the bonds). 8)Effectuates certain other technical changes regarding administrative processes for public works projects. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: No SUPPORT: (Verified 6/12/15) None received OPPOSITION: (Verified 6/12/15) None received Prepared by:Mark Ibele / B. & F.R. / (916) 651-4103 6/15/15 13:06:11 **** END ****