Bill Text: CA SB450 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public bodies: bonds: public notice.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2017-10-09 - Chaptered by Secretary of State. Chapter 625, Statutes of 2017. [SB450 Detail]

Download: California-2017-SB450-Amended.html

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Amended  IN  Senate  March 22, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 450

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Introduced by Senator Hertzberg
(Coauthor: Assembly Member Cooley)

February 15, 2017

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An act to add Section 5852.1 to the Government Code, relating to bonds.

LEGISLATIVE COUNSEL'S DIGEST

SB 450, as amended, Hertzberg. Public bodies: bonds: public notice.

Existing law authorizes the governing body of a public body to authorize the issuance of bonds pursuant to a resolution, indenture, agreement, or other instrument providing for the issuance of bonds.

This bill, prior to authorization of the issuance of certain bonds, would require the governing body of a public body to obtain and disclose specified information regarding the bonds in a meeting open to the public. The bill would require the information to be obtained as a good faith estimate from an underwriter, financial advisor, or private lender or from a third party borrower, as specified, if the public body issuing bonds is a conduit financing provided, as defined.

By imposing new duties upon local county officials with respect to the public notice requirement described above, this bill would impose a state-mandated local program.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 5852.1 is added to the Government Code, to read:

5852.1.

 (a) (1) Prior to authorization of the issuance of bonds with a term greater than 13 months pursuant to this chapter, the governing body of a public body shall obtain and disclose all of the following information in a meeting open to the public:

(a)

(A) The annual percentage rate of the bond, which means the cost of interest expressed as a yearly rate.

(b)

(B) The finance charge of the bond, which means the sum of all charges payable by the debtor, including interest and transaction costs, expressed in dollar terms.

(c)

(C) The amount financed by the bond, which means the amount of credit provided by the creditor.

(d)

(D) The total payment amount, which means the sum total of all payments the borrower will have made by the time the full balance has been paid and includes all fees and finance charges. The total payment amount shall be expressed to the final maturity of the borrowing.

(2) The information in paragraph (1) shall be obtained as follows:

(A) As a good faith estimate from an underwriter, financial adviser, or private lender.

(B) From a third-party borrower pursuant to subdivision (b).

(b) (1) If the public body issuing bonds is a conduit financing provider, as defined in subdivision (b) of Section 5870, issuing bonds on behalf of a third-party borrower, the information in paragraph (1) of subdivision (a) shall be presented to the third-party borrower as a good faith estimate by an underwriter, financial adviser, or private lender engaged by the third-party borrower.

(2) If the third-party borrower has a governing board, the information shall be presented to the governing board in the manner required for meetings of the governing board in its bylaws. If the third-party borrower does not have a governing board, the information shall be provided to the official or officials of the third-party borrower who has the authority to obligate the third-party borrower in connection with the financing.

(3) The third-party borrower shall provide the information received pursuant to this subdivision to the public body prior to the disclosure of the information as required pursuant to subdivision (a).

SEC. 2.

 The Legislature finds and declares that Section 1 of this act, which adds Section 5852.1 to the Government Code, furthers, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings:

This act ensures the public’s right of access to information about the conduct of their government agencies relating to the issuance of bonds.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district under this act would result from a legislative mandate that is within the scope of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution.