Bill Text: CA SB1029 | 2015-2016 | Regular Session | Introduced

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

---

Bill Title: California Debt and Investment Advisory Commission: accountability reports.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Passed) 2016-09-12 - Chaptered by Secretary of State. Chapter 307, Statutes of 2016. [SB1029 Detail]

Download: California-2015-SB1029-Introduced.html

---

BILL NUMBER: SB 1029	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Hertzberg

                        FEBRUARY 12, 2016

   An act to amend Section 8855 of the Government Code, relating to
state government.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1029, as introduced, Hertzberg. California Debt and Investment
Advisory Commission: accountability reports.
   Existing law establishes the California Debt and Investment
Advisory Commission to, among other things, maintain contact with
state and municipal bond issuers, underwriters, investors, and credit
rating agencies to improve the market for state and local government
debt issues, and assist state and local governments to prepare,
market, and sell its debt issues. Existing law requires the
commission to collect, maintain, and provide comprehensive
information on all state and all local debt authorization and
issuance, and serve as a statistical clearinghouse for all state and
local debt issuance.
   This bill would additionally require the commission to track and
report on all state and local outstanding debt until fully repaid or
redeemed.
   Existing law requires the issuer of debt of state or local
government to submit reports to the commission, within specified time
frames, of the proposed issuance of debt and of final sale, as
provided.
   This bill would require that the report of proposed debt include a
certification by the issuer that it has adopted local debt policies,
which include specified provisions, concerning the use of debt and
that the contemplated debt issuance is consistent with those local
debt policies.
   This bill would also require the issuer of any debt issue of state
or local government that has either outstanding debt or debt that
has been authorized by voter approval or by action of the issuer but
not yet issued as of the end of the prior fiscal year to, no later
than January 1 of each year, provide a debt accountability report to
the commission that includes specified information with respect to
each authorized debt issue as of the end of the prior fiscal year.
   By adding to the duties of local officials with respect to reports
to the commission, this bill would impose a state-mandated local
program.
   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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 8855 of the Government Code is amended to read:

   8855.  (a) There is created the California Debt and Investment
Advisory Commission, consisting of nine members, selected as follows:

   (1) The Treasurer, or his or her designee.
   (2) The Governor or the Director of Finance.
   (3) The Controller, or his or her designee.
   (4) Two local government finance officers appointed by the
Treasurer, one each from among persons employed by a county and by a
city or a city and county of this state, experienced in the issuance
and sale of municipal bonds and nominated by associations affiliated
with these agencies.
   (5) Two Members of the Assembly appointed by the Speaker of the
Assembly.
   (6) Two Members of the Senate appointed by the Senate Committee on
Rules.
   (b) (1) The term of office of an appointed member is four years,
but appointed members serve at the pleasure of the appointing power.
In case of a vacancy for any cause, the appointing power shall make
an appointment to become effective immediately for the unexpired
term.
   (2) Any legislators appointed to the commission shall meet with
and participate in the activities of the commission to the extent
that the participation is not incompatible with their respective
positions as Members of the Legislature. For purposes of this
chapter, the Members of the Legislature shall constitute a joint
interim legislative committee on the subject of this chapter.
   (c) The Treasurer shall serve as chairperson of the commission and
shall preside at meetings of the commission.
   (d) Appointed members of the commission shall not receive a
salary, but shall be entitled to a per diem allowance of fifty
dollars ($50) for each day's attendance at a meeting of the
commission not to exceed three hundred dollars ($300) in any month,
and reimbursement for expenses incurred in the performance of their
duties under this chapter, including travel and other necessary
expenses.
   (e) The commission may adopt bylaws for the regulation of its
affairs and the conduct of its business.
   (f) The commission shall meet on the call of the chairperson, at
the request of a majority of the members, or at the request of the
Governor. A majority of all nonlegislative members of the commission
constitutes a quorum for the transaction of business.
   (g) The office of the Treasurer shall furnish all administrative
assistance required by the commission.
   (h) The commission shall do all of the following:
   (1) Assist all state financing authorities and commissions in
carrying out their responsibilities as prescribed by law, including
assistance with respect to federal legislation pending in Congress.
   (2) Upon request of any state or local government units, to assist
them in the planning, preparation, marketing, and sale of debt
issues to reduce cost and to assist in protecting the issuer's
credit.
   (3) Collect, maintain, and provide comprehensive information on
all state and all local debt authorization and issuance,  
 track and report on all state and local outstanding debt until
fully repaid or redeemed,  and serve as a statistical
clearinghouse for all state and local  debt issues. 
 debt.  This information shall be  readily
 available  upon request by any public official or
any member of   to  the public.
   (4) Maintain contact with state and municipal bond issuers,
underwriters, credit rating agencies, investors, and others to
improve the market for state and local government debt issues.
   (5) Undertake or commission studies on methods to reduce the costs
and improve credit ratings of state and local issues.
   (6) Recommend changes in state laws and local practices to improve
the sale and servicing of state and local debts.
   (7) Establish a continuing education program for local officials
having direct or supervisory responsibility over municipal
investments and debt issuance. The commission shall undertake these
and any other activities necessary to disclose investment and debt
issuance practices and strategies that may be conducive for oversight
purposes.
   (8) Collect, maintain, and provide information on local agency
investments of public funds for local agency investment.
   (9) Publish a monthly newsletter describing and evaluating the
operations of the commission during the preceding month.
   (i) The issuer of any proposed debt issue of state or local
government shall, no later than 30 days prior to the sale of any debt
issue, submit a report of the proposed issuance to the commission by
any method approved by the commission. This subdivision shall also
apply to any nonprofit public benefit corporation incorporated for
the purpose of acquiring student loans. The commission may require
information to be submitted in the report of proposed debt issuance
that it considers appropriate. Failure to submit the report shall not
affect the validity of the sale.  The report of proposed debt
issuance shall include a certification by the issuer that it has
adopted local debt policies concerning the use of debt and that the
contemplated debt issuance is consistent with those local debt
policies. A local debt policy shall include all of the following:
 
   (1) The purposes for which the debt proceeds may be used or are
prohibited.  
   (2) The types of debt that may be issued or prohibited.  

   (3) The relationship of the debt to, and integration with, the
issuer's capital improvement program or budget.  
   (4) Policy goals related to the issuer's planning goals and
objectives.  
   (5) The internal control procedures that the issuer has
implemented, or will implement, to ensure that the proceeds of the
proposed debt issuance will be directed to the intended use upon
completion of the issuance. 
   (j) The issuer of any debt issue of state or local government, not
later than 21 days after the sale of the debt, shall submit a report
of final sale to the commission by any method approved by the
commission. A copy of the final official statement for the issue
shall accompany the report of final sale. If there is no official
statement, the issuer shall provide each of the following documents,
if they exist, along with the report of final sale:
   (1) Other disclosure document.
   (2) Indenture.
   (3) Installment sales agreement.
   (4) Loan agreement.
   (5) Promissory note.
   (6) Bond purchase contract.
   (7) Resolution authorizing the issue.
   (8) Bond specimen.
   The commission may require information to be submitted in the
report of final sale that it considers appropriate. The issuer may
redact confidential information contained in the documents if the
redacted information is not information that is otherwise required to
be reported to the commission. 
   (k) (1) The issuer of any debt issue of state or local government
that has either outstanding debt or debt that has been authorized by
voter approval or by action of the issuer but not yet issued as of
the end of the prior fiscal year shall, no later than January 1 of
each year, provide a debt accountability report to the commission
that includes the following information with respect to each
authorized debt issue as of the end of the prior fiscal year: 

   (A) The principal amount of the issue then outstanding.  

   (B) The amount of proceeds of the issue that remain unspent. 

   (C) The amount of debt authorized by the bond act or other
appropriate authorization relevant to the issue that remains
authorized but not issued.  
   (D) A list of the purposes for which the debt has been issued and
the amounts expended for each purpose in the prior fiscal year from
the proceeds of the issue.  
   (E) Any additional information the commission deems appropriate to
fulfill its statutory duties, to be provided in a format prescribed
by the commission.  
   (2) The requirements of subparagraphs (A) to (C), inclusive, of
paragraph (1) may be satisfied by submitting to the commission a
certified copy of the issuer's annual report of financial
transactions for the immediately preceding fiscal year submitted to
the Controller, as required by Section 12463, in the form and manner
prescribed by the commission. 
  SEC. 2.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.