BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 118
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     SB 118 (Yee) - As Amended:  August 6, 2012 

          Policy Committee:                              Business and 
          Professions  Vote:                            9 - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows state agencies to reimburse the State 
          Controller's Office (SCO) directly for costs associated with 
          mandated revenue bond activities. 

           FISCAL EFFECT  

          There are no new costs associated with this legislation.  In 
          2010-11 the SCO was reimbursed approximately $175,000 for 
          revenue bond accounting work. Reimbursement was made through an 
          interagency agreement with the State Treasurer's Office (STO). 
          Under this legislation, the SCO would be able to bill 
          departments directly for their costs. 

           COMMENTS  

           Rationale  . This bill, supported by both the State Controller and 
          the State Treasurer, is intended to streamline the reimbursement 
          process for work conducted by the SCO as it pertains to the 
          state's general obligation (GO) bonds. Historically, SCO has had 
          an interagency agreement with the STO that allowed the SCO to 
          bill the STO for actual expenses incurred related to bond work.  
          The STO would reimburse the SCO and then seek reimbursement from 
          the respective state agency.  According to the author, at the 
          end of Fiscal Year (FY) 2010-11, the STO informed the SCO that 
          they no longer wanted to engage in the interagency agreement.  

          The SCO has the authority to be reimbursed for actual expenses 
          incurred for accounting work related to GO bonds, per Government 
          Code Section 16724.6.  The SCO performs accounting tasks related 
          to GO bonds, as well as for revenue bonds, but has no authority 








                                                                  SB 118
                                                                  Page  2

          in law to be directly reimbursed for the expenses incurred while 
          performing accounting work related to revenue bonds.  

          This bill requires the Controller to invoice a state agency for 
          the costs associated with the accounting of expenditures related 
          to revenue bonds, and requires the state agency to pay the 
          invoice.

           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081