BILL ANALYSIS �
AB 276
Page 1
Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 276 (Alejo) - As Amended: April 4, 2011
Policy Committee: Local
GovernmentVote:8-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill increases penalties for local agencies, including
specified joint powers agencies, that fail to file their annual
financial transaction reports with the State Controller's
Officer in a timely manner, and makes other specified changes to
local agency financial reporting requirements. Specifically,
this bill:
1)Requires the State Controller to compile and publish reports
of the financial transactions of each joint powers agency
(JPA) that issues conduit revenue bonds and is formed pursuant
to the Joint Exercise of Powers Act.
2)Increases fines for an officer of a local agency, including a
community redevelopment agencies and a JPA, who fails or
refuses to make and file his or her report within 20 days
after receipt of a written notice of the failure from the
Controller. The fines depend on the size of the jurisdiction.
For example, the bill increases penalties from $1,000 to
$2,500, in the case of a local agency with total revenue, in
the prior year, of less than $100,000, as reported in the
Controller's annual financial reports, with steeper fines for
larger jurisdictions. The bill also increases fines for
jurisdictions that miss deadlines for two and three
consecutive years.
3)Prohibits a community redevelopment agency from using any of
the funds in the Low and Moderate Income Housing Fund to fund
any forfeiture or fine assessed because of the provision of
the bill.
AB 276
Page 2
4)Makes other conforming changes by repealing outdated sections
of law related to financial reporting of schools, and deletes
findings and declarations language related to JPAs that issue
conduit revenue bonds.
FISCAL EFFECT
The State Controller's office estimates that there will
administrative costs of approximately $30,000 to implement this
bill.
COMMENTS
1)Purpose. The State Controller's office asserts that currently
there is very limited oversight of the activities of JPAs,
which provide conduit financing that annually provides
billions of dollars of tax-exempt financing to the private
sector. By requiring JPAs to file these financial reports,
the Controller's Office will be better able to determine that
conduit financing providers are complying with audit, annual
financial reporting and other public accountability
requirements.
2)Fines. According to the sponsor, the State Controller's
Office, in some cases local agencies have been content to pay
the fines rather than file the required reports. This bill
aims to stop that sort of behavior by increasing penalties to
a more meaningful level. In addition to increasing the amount
of fines in existing law, this bill also doubles these fines
if the agency fails to submit the report to the SCO for two
consecutive years, and triples the fines if the agency fails
to report after three consecutive years. After the third
violation, this bill gives the Controller the authority to
conduct an independent financial audit report of that agency.
The increased penalties apply to cities, counties, special
districts, JPAs and community redevelopment agencies.
3)Background. Existing law requires the officer of each local
agency, who has charge of the financial records of the agency,
to furnish to the Controller a report of all the financial
transactions of the local agency during the next preceding
fiscal year, within 90 days of the close of each fiscal year.
"Local agency," for purposes of these financial reports
includes any city, county, district, and specified community
redevelopment agencies.
AB 276
Page 3
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081