BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 THIRD READING


          Bill No:  AB 189
          Author:   Assembly Budget Committee 
          Amended:  9/8/09 in Senate 
          Vote:     27 - Urgency

           
           PRIOR VOTES NOT RELEVANT 
           

           SUBJECT  :     Letters of credit

           SOURCE  :     Author


           DIGEST  :     Senate Floor Amendments  of 9/8/09 delete the  
          prior version of the bill expressing the intent of the  
          Legislature to enact statutory changes relating to the 2009  
          Budget Act.  This bill now increases, the cap from two to  
          three percent, on the annual amount of fees, costs, and  
          other similar expenses to be incurred by the state in  
          connection with letters of credit.  The amendments increase  
          this cap to three percent until June 30, 2013.  It is  
          estimated this will create a cost avoidance of $150 million  
          in 2009-10; with actual costs of less than $20 million.

           ANALYSIS  :    Section 5924 of the Government Code limits the  
          annual amount of fees, costs, and other similar expenses to  
          be incurred by the state in connection with letters of  
          credit to two percent of the amount of bonds to which the  
          letters of credit pertains.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No






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          DLW:mw  9/10/09   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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