BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 67
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          SENATE THIRD READING
          SB 67 (Ducheny)
          As Amended  September 4, 2009
          2/3 vote.  Urgency 

           SENATE VOTE  :Vote not relevant  
           
           SUMMARY  :  Makes clean up revisions to the Proposition 1A (2004)  
          suspension and securitizing provisions of the July 2009-10  
          Budget Act enacted through AB 15 X4 (Chapter 14, Statutes of  
          2009-10 Fourth Extraordinary Session).  Specifically,  this bill  :

          1)Increases the minimum size of the Joint Powers Authority (JPA)  
            from 100 local agencies to 250 local agencies.  Ensures the  
            bonds are sold by a single JPA instead of multiple JPAs,  
            thereby minimizing costs to the state.

          2)Clarifies and revises various dates and timelines to  
            streamline the process and eliminate potential ambiguity for  
            bond investors.

          3)Allows bond proceeds to be used to reimburse the State  
            Treasurer (Treasurer) for his work in reviewing the bonds, and  
            provide a streamlined contracting process so the Treasurer can  
            quickly procure fiscal advisory services.  Under the existing  
            language, the Treasurer and the Director of Finance have  
            certain oversight responsibilities to protect the interests of  
            the State.

          4)Removes the requirement for at least two early call dates, and  
            instead allow periodic interest payments, as approved by the  
            Director of Finance and State Treasurer.  Removing the early  
            call date requirement will provide more flexibility to  
            negotiate terms that minimize interest and other costs.

          5)Revises the extreme hardship exemption process such that the  
            determination is made after the anticipated sales of bonds,  
            but no later than December 1, 2009.  If bonds are successfully  
            sold and allocated, locals will see no revenue loss or delay  
            associated with the Proposition 1A suspension, and no hardship  
            exemptions will be granted.

          6)Adds "city" and "a city and county" to the existing authority  
            for a county to borrow funds from a Redevelopment Agency.  An  








                                                                  SB 67
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            RDA would have the option, but not be required, to loan funds  
            to a city, county, or city and county to fully or partially  
            replace their Proposition 1A reduction.  No such loan could be  
            made if the Redevelopment Agency has itself borrowed from its  
            Low- and Moderate-Income Housing Fund.

          7)Makes other technical and clarifying changes requested by  
            local governments, bond counsel, and the Treasurer's Office to  
            facilitate the securitization of Proposition 1A receivables.

          8)Urgency Clause:  Declares this bill take effect immediately as  
            an urgency statute.


           Analysis Prepared by  :    Adam Dondro / BUDGET / (916) 319-2099 


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