BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        AB 114|
          |Office of Senate Floor Analyses   |                              |
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                                   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  








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            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.









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                                                                    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


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