BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Alex Padilla, Chair
BILL NO: AB 2551 HEARING DATE: 6/24/14
AUTHOR: WILK ANALYSIS BY: Frances Tibon
Estoista
AMENDED: 5/23/14
FISCAL: NO
SUBJECT
Local ballot measures: bond issues
DESCRIPTION
Existing law requires all bond issues proposed by a county, city
and county, city, district, or other political subdivision, or
by any agency, department, or board thereof, to be submitted to
the voters for approval.
Existing law requires a statement for each bond issue to be
mailed to the voters with the sample ballot for the bond
election and further requires the statement to be filed with the
elections official conducting the election not later than the
88th day prior to the election.
Existing law requires the statement to include the following:
a) The best estimate from official sources of the tax rate that
would be required to be levied to fund that bond issue during
the first fiscal year after the first sale of the bonds based
on assessed valuations available at the time on the election
or a projection based on experience within the same
jurisdiction of other demonstrable factors;
b) The best estimate from official sources of the tax rate that
would be required to be levied to fund that bond issue during
the first fiscal year after the last sale of the bonds if the
bonds are proposed to be sold in series, and an estimate of
the year in which that rate will apply, based on assessed
valuations available at the time of the election of a
projection based on experience within the same jurisdiction
or other demonstrable factors; and,
c) The best estimate from official sources of the highest tax
rate that would be required to be levied to fund that bond
issue, and an estimate of the year in which that rate will
apply, based on assessed valuations available at the time of
the election or a projection based on experience within the
same jurisdiction or other demonstrable factors.
Existing law permits the statement to contain any declaration of
policy of the legislative or governing body of the applicable
jurisdiction, proposing to utilize revenues other than ad
valorem taxes for purposes of funding the bond issue, and the
best estimate from official sources of these revenues and the
reduction in the tax rate levied to fund the bond issue
resulting from the substitution of revenue.
Existing law defines "tax rate" to mean a tax rate per one
hundred dollars ($100) of assessed valuation on all property to
be taxed to fund any bond issue described above.
Existing law requires the Legislative Analyst to prepare an
impartial analysis of each proposed measure describing the
measure and include a fiscal analysis of the measure showing the
amount of any increase or decrease in revenue or cost to state
or local government. Existing law further provides that if a
proposed measure is estimated to result in increased costs to
the state, the estimate of those costs shall be set out in
boldface print in the ballot pamphlet.
This bill requires local agencies (as noted above), when
submitting bond measures for voter approval to include in sample
ballot materials the best estimate from official sources of the
total debt service including the principal and interest, which
would be required to be repaid if all the bonds are issued and
sold. The estimate may include information about the
assumptions used to determine the estimate.
This bill makes other minor grammatical changes.
BACKGROUND
Existing 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. Local
agencies are required to provide information on three specific,
AB 2551 (WILK)
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estimated fiscal impacts of a proposed bond measure as noted
above under existing law.
The ballot information may also 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 long term fiscal
implications of a proposed bond measure.
COMMENTS
1. According to the Author : Since 1997, the non-partisan
Legislative Analyst's Office (LAO) has been required to
include the "fiscal effect" of any costs related to the
approval of a statewide General Obligation Bond in the ballot
pamphlet presented to voters. Per existing law (Elections
Code 9087) the LAO is required to follow a list of criteria
which includes: the amount of the cost to state or local
government, and utilizing a uniform method in each analysis
to describe the estimated increase or decrease in revenue or
cost of a measure.
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AB 2551 updates the tax rate statement to ensure that voters
understand how the estimate of the tax rate was reached and
what the costs will be throughout the 30-40 year length of
the bond.
The purpose is to establish a minimum standard of
transparency for the fiscal analysis of local bond measures
that is very similar to what the LAO already does for state
General Obligation bond measures.
PRIOR ACTION
Assembly Elections and Redistricting Committee: 6-0
Assembly Floor: 78-0
Senate Governance and Finance Committee: 7-0
POSITIONS
Sponsor: California League of Bond Oversight Committees
(co-sponsor)
Howard Jarvis Taxpayers Association (co-sponsor)
Support: California Taxpayers Association (CalTax)
Oppose: None received
AB 2551 (WILK)
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