BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 1948 HEARING: 6/11/14
AUTHOR: Mullin FISCAL: Yes
VERSION: 4/7/14 TAX LEVY: No
CONSULTANT: Urquiza
COUNTIES: OFFICERS: QUALIFICATION FOR OFFICE
Establishes mandatory qualifications for the office of
county treasurer, tax collector, treasurer-tax collector,
consolidated director of finance, and director of finance.
Background and Existing Law
State law establishes numerous county offices, including
county treasurer, tax collector, and director of finance.
Many counties have combined the offices of treasurer and
tax collector. Counties also can combine the offices of
auditor, controller, treasurer, and tax collector into one
elected or appointed office of the director of finance.
In response to Orange County's bankruptcy in 1994, Senate
Bill 866 (Craven, 1995) increased oversight of county
investment practices. SB 866 required a person, in order
to be eligible for election or appointment to the office of
county treasurer, county tax collector, or county
treasurer-tax collector, to meet at least one of the
following five criteria:
Serve in a senior financial management position in
a public agency for three years, including, but not
limited to treasurer, collector, auditor
auditor-collector, or the chief deputy or an assistant
in those offices;
Possess a baccalaureate, masters, or doctoral
degree from an accredited college or university in a
finance-related field;
Possess a certificate issued by the California
Board of Accounting;
Possess a charter issued by the Institute of
Chartered Financial Analysts; or
Possess a certificate from the Treasury Management
Association.
AB 1948 -- 4/7/14 -- Page 2
However, these qualifications become effective only if a
county's board of supervisors enacts an ordinance to adopt
the requirements. Forty-seven of California's 57 counties
(excluding San Francisco) have voluntarily adopted the
qualifications. Two additional counties, Sacramento and
Santa Clara, have established director of finance offices
under their charter authority.
For general law counties, the office of director of finance
must meet the minimum qualifications of either auditor or
treasurer, if the qualifications are adopted by the board
of supervisors. Some county officials want the Legislature
to make the county treasurer-tax collector qualifications
mandatory for all counties and want to extend the
qualifications to the office of director of finance.
Proposed Law
Senate Bill 1948 deletes the provision in current law that
states that requirements for qualification for the office
of county treasurer, county tax collector, or
county-treasurer-tax collected shall become effective only
in those counties in which the board of supervisors enacts
an ordinance adopting such requirements.
AB 1948 prohibits any person from being eligible for
election or appointment to any office of county treasurer,
tax collector, treasurer-tax collector, director of
finance, consolidated director of finance, or any office
consolidated with the office of treasurer or tax collector,
unless they meet one of the following criteria:
Has served in a senior financial management
position in a public agency for three years,
including, but not limited to treasurer, collector,
auditor auditor-collector, or the chief deputy or an
assistant in those offices;
Possess a baccalaureate, masters, or doctoral
degree from an accredited college or university in a
finance-related field;
Possess a certificate issued by the California
Board of Accounting;
Possess a charter issued by the Institute of
Chartered Financial Analysts; or
Possess a certificate from the Association for
AB 1948 -- 4/7/14 -- Page 3
Financial Analysts.
The bill applies the qualifications to any person elected
or appointed to the aforementioned offices on or after
January 1, 2015.
The bill makes technical and updating changes.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . County treasurer-tax collectors
and directors of finance are responsible for a range of
complex financial duties, including the collection of tax
revenue, the safekeeping of taxpayer dollars in the
treasury, and the oversight of investment funds for
counties, school districts, and special districts. They
manage investment portfolios that can range from several
million to billions of dollars. Qualifications for county
treasurer-tax collectors currently are optional, at the
discretion of the board of county supervisors. In
contrast, county assessors, district attorneys, sheriffs,
and superintendents of schools all must meet certain
qualifications to be eligible for those offices. SB 1948
requires all counties to adopt minimum qualifications for
officers who perform the function of treasurers and tax
collectors to ensure that those charged with handling
county financial resources are well trained and fully
qualified.
2. Home rule . Each of California's 58 counties have
unique financial circumstances. Alpine County's investment
pool in 2011 was approximately $30.5 million, whereas Los
Angeles' was $25.5 billion. Each county is authorized
AB 1948 -- 4/7/14 -- Page 4
under law to establish mechanisms to ensure appropriate use
of its investment pool. Many counties have established
county treasurer oversight committees to provide formal
oversight of the treasurers' investment policies. Counties
with larger investment pools often hire a professional
chief investment officer to manage the county's investment
portfolio, making the treasurer's job more focused on
administration than finance. Some county representatives
are concerned that establishing mandatory qualification for
their treasurer-tax collector would limit a county's
ability to recruit and retain qualified candidates,
particularly in rural or low-population counties. Given
the unique circumstances of each county and the board of
supervisors' various tools to ensure that the county's
investment policies are sound, the committee may wish to
consider whether it is necessary to mandate all counties to
adopt the minimum qualification for the offices that
perform the function of treasurers and tax collectors.
3. Qualifications and responsibilities . AB 1948 requires
a candidate to meet just one of five qualifications for
education or experience. For example, an individual who
has a bachelor's degree in a finance-related field or has
simply served as an assistant in an office such as the
office of county auditor, would qualify for the election or
appointment to the office of county treasurer-tax
collector. It is not clear whether these minimum
qualifications reflect a candidate's fitness to manage
millions or billions of dollars in county investments. The
committee may wish to consider whether mandating the
minimum qualifications established in AB 1948 would result
in better trained and qualified candidates.
4. Mandate . The California Constitution requires the
state to reimburse local governments for the costs of new
or expanded state mandated local programs. Because AB 1948
imposes mandatory qualifications for specific county
offices, Legislative Counsel says that it imposes a new
state mandate. AB 1948 requires the state to reimburse
local agencies if the Commission on State Mandates
determines that the bill imposes a reimbursable mandate.
Assembly Actions
AB 1948 -- 4/7/14 -- Page 5
Assembly Local Government: 9-0
Assembly Appropriations: 17-0
Assembly Floor: 73-0
Support and Opposition (6/5/14)
Support : California Association of County Treasurers and
Tax Collectors; Howard Jarvis Taxpayers Association.
Opposition : Unknown.