BILL ANALYSIS
SB 102
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SENATE THIRD READING
SB 102 (Local Government Committee)
As Introduced January 27, 2009
2/3 vote. Urgency
SENATE VOTE :33-0
LOCAL GOVERNMENT 7-0
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|Ayes:|Caballero, Knight, | | |
| |Arambula, Davis, Duvall, | | |
| |Krekorian, Skinner | | |
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SUMMARY : Enacts the Second Validating Act of 2009, which validates
the organization, boundaries, acts, proceedings, and bonds of the
state, counties, cities, special districts, school districts,
redevelopment agencies, and other public agencies.
EXISTING LAW allows local agencies to make changes to the
organization, boundaries, acts, proceedings, and bonds of the state,
cities, counties, special districts, school districts, redevelopment
agencies, and other local agencies.
FISCAL EFFECT : None
COMMENTS : For nearly 70 years, the Legislature has adopted annual
Validating Acts (Acts) that retroactively fix public officials'
inadvertent procedural errors or omissions. Starting in the
mid-1920s, the Legislature passed separate validating acts for
different types of bonds, several classes of special districts, and
various local boundary changes. By the late 1930s, the practice had
been streamlined into annual, comprehensive validating acts.
Following its customary practice, the Senate Local Government
Committee has authored these Acts again this year, the first two
being urgency measures: Senate Bills 101, 102, and 103.
SB 101 was chaptered late spring [SB 101 (Local Government
Committee), Chapter 2, Statutes of 2009]. SB 102 will take effect
late summer, validating mistakes that occurred after the chaptering
of SB 101. SB 103 will take effect on January 1, 2010, covering the
period between the chaptering of SB 102 and the end of 2009.
SB 102
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The Acts protect investors from the chance that a minor error might
undermine the legal integrity of a public agency's bond. Banks,
pension funds, and other investors will not buy public agencies'
securities unless they are sound investments. Investors rely on
legal opinions from bond counsels to assure the bonds' credit
worthiness. Without legislative action to cure technical errors,
bond counsels are reluctant to certify bonds as good credit risks.
This bill gives legislative protection to public lenders and private
investors.
By insulating state and local bonds against harmless errors, the
Acts save taxpayers' money. Strong legal opinions from bond
counsels result in higher credit ratings for state and local bonds.
Higher credit ratings allow state and local officials to pay lower
interest rates to private investors. Lower borrowing costs save
money for taxpayers.
Analysis Prepared by : Dixie Petty / L. GOV. / (916) 319-3958 FN:
0002229