BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 480
                                                                  Page  1

          Date of Hearing:   May 6, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                     AB 480 (Tran) - As Amended:  April 14, 2009

          Policy Committee:                              Business and  
          Profession   Vote:                            11-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill:

          1.Requires any state bond measure approved by the voters after  
            January 1, 2010 to include provisions requiring audits of bond  
            expenditures.

          2.Authorizes the Bureau of State Audits (BSA) to conduct  
            periodic audits to ensure that bond proceeds are awarded in a  
            timely manner and that recipients use bond moneys in  
            compliance with applicable provisions of law.

          3.Requires audit-related costs to be reimbursed by bond  
            proceeds.

           FISCAL EFFECT  

          Assuming three bond measures are approved at each biennial  
          election cycle commencing in 2010, and that annual audits  
          commence about 24 months after approval and continue for three  
          years, by 2014 the BSA would be conducting about six audits  
          annually.  Assuming a cost ranging from $125,000 to $200,000 per  
          audit, annual costs (from the various bond funds) would be  
          between $750,000 to $1.2 million.  Presumably, at least some  
          audit findings would lead to more efficient and effective use of  
          bond funds.

           COMMENTS  

           Purpose  .  According to the author's office, "AB 480 is a simple  
          bill stating that any state bond placed on a ballot must include  








                                                                  AB 480
                                                                  Page  2

          auditing provisions. This bill seeks to ensure that California  
          voters can remain confident that the bonds they are authorizing  
          the state to sell to generate revenue for a specific project,  
          are utilized for that project. This is a common sense measure  
          that will ensure the use of bond monies is transparent and as  
          intended."

          In support, the California Taxpayers Association believes the  
          bill would provide greater accountability and give citizens more  
          confidence that authorized bonds are going to their intended  
          use.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081