BILL ANALYSIS
AB 480
Page 1
ASSEMBLY THIRD READING
AB 480 (Tran)
As Amended June 1, 2009
Majority vote
BUSINESS & PROFESSIONS 11-0 APPROPRIATIONS 17-0
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|Ayes:|Hayashi, Emmerson, |Ayes:|De Leon, Nielsen, |
| |Conway, Eng, | |Ammiano, |
| |Hernandez, Nava, Niello, | |Charles Calderon, Davis, |
| | | |Duvall, Fuentes, Hall, |
| |John A. Perez, Price, | |Harkey, Miller, |
| |Ruskin, Smyth | |John A. Perez, Price, |
| | | |Skinner, Solorio, Audra |
| | | |Strickland, Torlakson, |
| | | |Krekorian |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires any state bond measure approved by the voters
on or after January 1, 2010, to include auditing provisions with
respect to the use of any bond money. Specifically, this bill :
1)Authorizes the Bureau of State Audits (BSA) to conduct
periodic or quarterly audits to ensure that bond proceeds are
awarded in a timely manner and that recipients of bond moneys
use the funds in compliance with applicable provisions of law.
2)Requires reimbursement of costs associated with the audit from
bond proceeds.
EXISTING LAW :
1)Contains, in the State General Obligation Bond Law, procedures
for authorizing the issuance and sale, and providing repayment
of, state general obligation bonds.
2)Requires any state general obligation bond measure to be
subject to the making, at least annually, of a specified
report, by the head of the lead state agency administering the
bond proceeds, to the Legislature and the Department of
Finance.
AB 480
Page 2
FISCAL EFFECT : According to the Assembly Appropriations
Committee, assuming three bond measures are approved at each
biennial election cycle commencing in 2010, and the first is
conducted after three years and a second audit two years later,
by 2014 the BSA would be conducting about 2-3 audits annually.
Assuming a cost ranging from $125,000 to $200,000 per audit,
annual costs (from the various bond funds) would be between
$250,000 and $600,000. Presumably, at least some audit findings
would lead to more efficient and effective use of bond funds.
COMMENTS : According to the author's office, "AB 480 is a simple
bill stating that any state bond placed on a ballot must include
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."
The California State Auditor is the state's independent external
auditor that provides independent, nonpartisan, accurate, and
timely assessments of California government's financial and
operational activities in compliance with generally accepted
government auditing standards. The California State Auditor's
Office reports its findings to the legislature and recommends
actions to improve government operations.
In recent elections, voter-approved bond initiatives with
auditing provisions have largely been unfunded mandates. The
BSA receives federal funding for federally mandated audits and
state funding for state-mandated or Joint Legislative Audit
Committee audits, but with limited funding, the BSA performs
audits subject to available funding or by prioritizing high-risk
areas to audit.
Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301
FN: 0001320