BILL ANALYSIS
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THIRD READING
Bill No: SB 866
Author: Senate Budget and Fiscal Review Committee
Amended: 10/7/10
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SUBJECT : Local government finance: state-mandated
reimbursement
receivables
SOURCE : Author
DIGEST : Assembly Amendments delete the Senate version,
expressing the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2010.
This bill now enacts statutory changes relating to local
government finances and state-mandated reimbursement
receivables.
ANALYSIS : The California Constitution requires that
whenever the Legislature or any state agency mandates a new
program or higher level of service on any local government,
the state provide a subvention of funds to reimburse that
local government for the costs of the program or increased
level of service, except as specified. Existing law also
provides that, with respect to payable claims for costs
incurred prior to the 2004-05 fiscal year that have not
been paid prior to the 2005-06 fiscal year, those claims
CONTINUED
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may be paid over a term of years, as prescribed.
The Marks-Roos Local Bond Pooling Act of 1985 defines the
term "authority" and authorizes joint powers authorities
to, among other things, purchase, with the proceeds of
bonds or its revenue, a local agency's right to receive
moneys in repayment of its revenue losses (VLF or
Proposition 1A receivables) resulting from this
modification of ad valorem property tax revenue
allocations. Existing law authorizes a local agency
subject to this reduction to sell any of these receivables
to the authority.
This bill additionally authorizes a joint powers authority
to purchase, with the proceeds of its bonds or its revenue
and subject to the same criteria, the right of a local
agency, as defined, to receive certain subvention moneys
for reimbursement for the costs of a new program or higher
level of service, which would be known as local mandate
claim receivables, and afford a local agency the
opportunity to sell these receivables to the authority.
The bill authorizes a civil action to determine the
validity of any bonds issued to finance bond purchases or
the purchase of receivables, as specified.
Existing law requires that the total amount due to each
city, county, city and county, and special district, for
which the state has determined, as of June 30, 2005, that
reimbursement is required under the California
Constitution, shall be appropriated for payment to these
entities over a period of not more than 15 years,
commencing with the Budget Act for the 2006-07 fiscal year
and concluding with the 2020-21 fiscal year.
The bill requires the Controller to prepare a list of
reimbursement claims and related interest applied for and
approved for specified local entities. The bill would also
schedule the amount to be repaid, with interest, and
continuously appropriate those amounts to each local
entity, as prescribed. The bill provides for the payment
of interest on these claims, as specified.
The bill requires the Controller to include specified
information regarding reimbursement claims sold by local
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agencies in the Controller's report submitted to the Joint
Legislative Budget Committee.
This bill declares that it is to take effect immediately as
an urgency statute.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
DLW:do 10/7/10 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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