BILL NUMBER: AB 189	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 8, 2009

INTRODUCED BY   Committee on Budget (Evans (Chair), Arambula, Beall,
Blumenfield, Brownley, Caballero, Carter, De La Torre, Feuer, Hill,
Huffman, Monning, Ruskin, and Swanson)

                        FEBRUARY 2, 2009

    An act relating to the Budget Act of 2009.  
An act to amend, repeal,   and add Section 5924 of the
Government Code, relating to state finances, making an appropriation
therefor, and declaring the urgency thereof, to take effect
immediately. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 189, as amended, Committee on Budget. Budget Act of 2009. 
   Existing law sets forth the duties and authority of the Treasurer
generally in the sale of state bonds. Moneys are continuously
appropriated from the General Fund in an annual amount necessary to
pay all obligations, including principal, interest, fees, costs,
indemnities, and all other amounts incurred by the state under or in
connection with any credit enhancement or liquidity agreement entered
into by the state, as specified, for bonds payable pursuant to an
appropriation from the General Fund. Existing law prohibits the
amount appropriated for these fees, costs, and other similar expenses
from exceeding a percentage of the original principal amount of the
bonds that is specified in the federal Internal Revenue Code. 

   This bill would, until June 30, 2013, instead increase that
percentage by which those expenses are calculated to 3%, thereby
making an appropriation.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2009. 
   Vote:  majority   2/3  . Appropriation:
 no   yes  . Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 5924 of the  
Government Code   is amended to read: 
   5924.  (a)  (1)    Notwithstanding Section
13340, there is hereby continuously appropriated without regard to
fiscal years, from the General Fund in the State Treasury for the
purpose of this chapter, an amount that will equal the sum annually
as will be necessary to pay all obligations, including principal,
interest, fees, costs, indemnities, and all other amounts incurred by
the state under or in connection with any credit enhancement or
liquidity agreement (including in the form of a letter of
credit, standby purchase agreement, reimbursement agreement,
liquidity facility, or other similar arrangement)   ,
  as specified in paragraph (2), that is  entered into
by the state pursuant to this chapter for bonds payable pursuant to
an appropriation from the General Fund. 
   (2) A credit enhancement or liquidity agreement subject to this
section includes a credit enhancement or liquidity agreement that is
in the form of a letter of credit, standby purchase agreement,
reimbursement agreement, liquidity facility, or other similar
arrangement. 
   (b)  Fees,   (1)     If the
agent for sale determines that the credit enhancement or liquidity
agreement is expected to result in a lower cost of the borrowing for
the bonds to which the credit enhancement or liquidity  
agreement pertains, the state may incur fees,  costs, and other
similar expenses  may be incurred by the state 
under or in connection with any credit enhancement or liquidity
agreement entered into by the state pursuant to this chapter 
if the agent for sale determines that the credit enhancement or
liquidity agreement is expected to result in a lower cost of the
borrowing for the bonds to which the credit enhancement or liquidity
agreement pertains  .  The 
    (2)     The  amount appropriated
pursuant to subdivision (a) for fees, costs, and other similar
expenses incurred in connection with any credit enhancement or
liquidity agreement, when expressed as a percentage of the original
principal amount of the bonds to which the credit enhancement or
liquidity agreement pertains, may not exceed  the percentage
set forth in paragraph (1) of subsection (g) of Section 147 of Title
26 of the United States Code enacted as of January 1, 2003. The
  3 percent. 
    (3)     The  amount appropriated
pursuant to subdivision (a) for interest incurred in connection with
any credit enhancement or liquidity agreement, when expressed as a
percentage of the outstanding principal amount of the bonds to which
the credit enhancement or liquidity agreement pertains, may not
exceed the interest rate percentage set forth in subdivision (d) of
Section 16731. 
   (c) This section shall become inoperative on June 30, 2013, and,
as of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.

   SEC. 2.    Section 5924 is added to the  
Government Code   , to read:  
   5924.  (a) (1) Notwithstanding Section 13340, there is hereby
continuously appropriated without regard to fiscal years, from the
General Fund in the State Treasury for the purpose of this chapter,
an amount that will equal the sum annually as will be necessary to
pay all obligations, including principal, interest, fees, costs,
indemnities, and all other amounts incurred by the state under or in
connection with any credit enhancement or liquidity agreement, as
specified in paragraph (2), that is entered into by the state
pursuant to this chapter for bonds payable pursuant to an
appropriation from the General Fund.
   (2) A credit enhancement or liquidity agreement subject to this
section includes a credit enhancement or liquidity agreement that is
in the form of a letter of credit, standby purchase agreement,
reimbursement agreement, liquidity facility, or other similar
arrangement.
   (b) (1) If the agent for sale determines that the credit
enhancement or liquidity agreement is expected to result in a lower
cost of the borrowing for the bonds to which the credit enhancement
or liquidity agreement pertains, the state may incur fees, costs, and
other similar expenses under or in connection with any credit
enhancement or liquidity agreement entered into by the state pursuant
to this chapter.
   (2) The amount appropriated pursuant to subdivision (a) for fees,
costs, and other similar expenses incurred in connection with any
credit enhancement or liquidity agreement, when expressed as a
percentage of the original principal amount of the bonds to which the
credit enhancement or liquidity agreement pertains, may not exceed
the percentage set forth in paragraph (1) of subdivision (g) of
Section 147 of Title 26 of the United States Code enacted as of
January 1, 2003.
   (3) The amount appropriated pursuant to subdivision (a) for
interest incurred in connection with any credit enhancement or
liquidity agreement, when expressed as a percentage of the
outstanding principal amount of the bonds to which the credit
enhancement or liquidity agreement pertains, may not exceed the
interest rate percentage set forth in subdivision (d) of Section
16731.
   (c) This section shall become operative June 30, 2013. 
   SEC. 3.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to ensure that the state may meet its financial
obligations and to enable the state to market debt issuances, thereby
improving the state's fiscal status, it is necessary that this act
take effect immediately.  
  SECTION 1.    It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2009.