BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2274
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     AB 2274 (Gordon) - As Amended:  May 1, 2014

          Policy Committee:                              Banking &  
          FinanceVote: 11-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill modifies the reporting a state or municipal issuer of  
          debt is required to make to the California Debt and Investment  
          Advisory Commission (CDIAC) before a proposed issuance or  
          incurrence of debt.  Specifically, this bill:

          1)Decreases the number of days, from 45 to 21 after the issuance  
            or incurrence of debt, in which the issuer must submit a  
            report of final sale.

          2)Expands the CDIAC's authority to charge fees relating to the  
            principal amount of a debt issuance or incurrence to include  
            lenders as well as underwriters and initial purchasers.

          3)Clarifies certain terminology to better capture debt issuance  
            or incurrence information, and deletes reference to submission  
            of information by postal mail.

           FISCAL EFFECT  

          Minor and absorbable costs to CDIAC.

           COMMENTS  

          1)  Purpose.   According to the sponsor, California State Treasurer  
            Bill Lockyer, AB 2274 will better align CDIAC's debt  
            information collection process with current municipal  
            financing practices while also improving the timelines of  
            reports of debt issuance by public agencies.

          2)  CDIAC  was created to provide information, education, and  








                                                                  AB 2274
                                                                  Page  2

            technical assistance on debt issuance and public fund  
            investments to local public agencies and other public finance  
            professionals.  Its responsibilities include collecting  
            information on all state and local debt issuances in  
            California and serving as a statistical clearinghouse.

          3)  Evolving Public Finance Instruments.   The municipal finance  
            industry has experienced an increasing trend of issuers using  
            non-traditional financing for capital projects, particularly  
            in the form of direct loans from banks.  CDIAC's statute is  
            currently bond focused, leading some issuers to conclude that  
            only bonds should be reported to CDIAC.  This bill amends the  
            debt issuance language to allow CDIAC to capture and report  
            upon all municipal debt finance information.

           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081