BILL ANALYSIS Ó
SB 1029
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1029
(Hertzberg) - As Amended June 15, 2016
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|Policy |Local Government |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires state and local agencies to submit an annual
report to the California Debt and Investment Advisory Committee
(CDIAC) that includes debt issuances, outstanding debt, and use
of proceeds over the reporting period, as specified. The bill
would also require CDIAC to track and report on all state and
local outstanding debt until it is fully repaid or redeemed.
FISCAL EFFECT:
1)CDIAC administrative costs of approximately $132,000 in the
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first two years (1 PY), $261,000 in years three and four (2
PY), and $393,000 annually thereafter (3 PY) for new
positions to receive, review, process, and include reported
data on new debt issuances in its database. (California Debt
and Investment Advisory Commission Fund)
2)CDIAC indicates that any one-time costs for systems upgrades
would be minor and absorbable. Staff notes that there could
be future cost pressures to the extent the bill authorizes
CDIAC to develop alternative reporting methods for data
collection. CDIAC indicates it would absorb any future costs
for these upgrades. (California Debt and Investment Advisory
Commission Fund)
COMMENTS:
1)Purpose. According to the author, "This bill imposes
additional reporting requirements on debt issuers that will
benefit taxpayers, investors, and public agencies. Taxpayers
deserve to have enough information to determine, with
confidence, that public officials are being good stewards of
public funds. Investors will benefit from having more
knowledge about the types of internal controls that
governments have in place to ensure that debt proceeds are
used as promised."
This bill is sponsored by California State Treasurer, John
Chiang.
2)Background. Existing law establishes CDIAC within the State
Treasurer's Office to support and improve public finance
practices by providing public officials with information,
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analysis, and training. CDIAC collects, maintains, and
provides comprehensive information on all state and local debt
authorization and issuance, and serves as a statistical
clearinghouse for all state and local debt issues. Existing
law requires CDIAC to make this information readily available
upon request by any public official or any member of the
public. Any state or local agency that issues debt must
submit both a "report of proposed debt issuance" at least 30
days prior to issuing debt, and a "report of final sale"
within 21 days of the date of sale of the debt, as specified.
Existing law authorizes CDIAC to require information it
considers appropriate to be included in those reports.
Existing law also requires local agencies to annually submit
information on their financial transactions to the State
Controller's Office (SCO). These financial transactions
reports include specified information regarding local agency
debt, including the principal amount of debt issues
outstanding at the time of the report, the amount of debt
authorized by a bond act or other appropriate authorization
relevant to the issue that remains authorized but unissued,
and a list of purposes and amounts expended for each purpose
in the prior fiscal year from the proceeds of the issue.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
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