BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2551 HEARING: 6/11/14
AUTHOR: Wilk FISCAL: No
VERSION: 5/23/14 TAX LEVY: No
CONSULTANT: Ewing
LOCAL GOVERNMENT BOND ISSUES
Requires statement on total cost of debt service to be
included with sample ballot information on local agencies'
bond elections.
Background and Existing Law
State law requires local agencies to provide voters with
information on the cost of proposed bond measures when
submitting those measures to the voters for approval (SB
858 Petris, Chapter 813, 1968). Local agencies are
required to provide information on three specific,
estimated fiscal impacts of a proposed bond measure:
The estimated tax rate that would need to be levied
to fund the bond during the first fiscal year after
the first sale of the bond.
The estimated tax rate that would need to be levied
to fund the bond during the first fiscal year after
the last sale of the bond, if sold in a series, and an
estimate of the year that rate would apply.
The estimated highest tax rate that would need to
be levied to fund that bond issue, and an estimate of
the year that rate would apply.
The ballot information also may include information on
revenue sources that could be used to fund the bond issue,
other than ad valorem taxes, and how those sources of
revenues may offset the need for a new tax rate to fund the
proposed bond issue.
Some taxpayer advocates suggest that additional information
is necessary to help voters fully understand the total cost
of a proposed bond measure.
AB 2551 -- 5/23/14 -- Page 2
Proposed Law
AB 2551 requires local agencies, when submitting bond
measures for voter approval, to include in sample ballot
materials information on the estimated total debt service,
including the principal and interest, which would be
required to be repaid if all the bonds are issued and sold.
That estimate may include information about the
assumptions used to determine the estimate.
State Revenue Impact
No estimate.
Comment
1. Purpose of the bill . AB 2551 extends to local bond
measures a practice that is standard with state bond
measures. For state bonds, the Legislative Analyst's
Office includes in its ballot information guides
information on the total repayment costs of a bond measure
that is on the ballot. AB 2551 includes that requirement
for local agencies' bond measures. Including this
additional information in voter information materials will
provide voters with a clear and concise understanding of
the full fiscal impacts of a proposed bond measure.
Assembly Actions
Assembly Committee on Elections and Redistricting6-0
Assembly Floor 78-0
Support and Opposition (6/5/14)
Support : California Taxpayers Association; Howard Jarvis
Taxpayers Association.
Opposition : Unknown.
AB 2551 -- 5/23/14 -- Page 3