California Assembly Bill AB1388 Amended / Bill

 BILL NUMBER: AB 1388AMENDED BILL TEXT AMENDED IN SENATE JUNE 10, 2009 AMENDED IN ASSEMBLY MAY 11, 2009 INTRODUCED BY Assembly Member Hernandez FEBRUARY 27, 2009 An act to add Section 53508.9 to  , and to repeal Section 53508.5 of,  the Government Code, relating to bonds. LEGISLATIVE COUNSEL'S DIGEST AB 1388, as amended, Hernandez. Local agencies: general obligation bonds.  Existing   (1) Existing law requires, subject to a specific exception, the annual payments of principal and interest on bonds issued by a local agency, as defined, to be structured to amortize so that the maximum annual debt service payment on the bonds does not exceed the minimum annual debt service payment by more than 10%.   This bill would repeal this provision.   (2)     Existing  law authorizes cities, counties, school districts, community college districts, and special districts to issue and refund general obligation bonds secured by a general tax levy and prescribes the procedures for this purpose. Existing law requires that the bonds be sold at a public or private sale. This bill would authorize a local agency, as defined, to issue bonds, without further approval, at a negotiated sale for a price  at  above  ,  or below par value if the legislative body of the local agency adopts a specified resolution that includes certain disclosures before the negotiated sale. This bill would also impose duties on the legislative body after the negotiated sale. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 53508.5 of the   Government Code   is repealed.   53508.5. (a) Annual payments of the principal and interest on an issue of bonds shall be structured to amortize the bonds in a manner whereby the maximum annual debt service payment on the bonds does not exceed the minimum annual debt service payment on the bonds by more than 10 percent. Notwithstanding the provisions of this subdivision, a deviation in annual debt service in excess of 10 percent is allowable if the excess deviation is the result of an accelerated repayment of principal on the bonds. (b) The restrictions set forth in subdivision (a) shall not apply if, as a result of the issuance of the particular bond issue, the overall outstanding general obligation bond debt of the issuer will be amortized in a more level manner.   SECTION 1.   SEC. 2.  Section 53508.9 is added to the Government Code, to read: 53508.9. (a) Notwithstanding Section 53508.7  or any other law  , a local agency may sell bonds at a negotiated sale for a price  above  at, above,  or below par value, as authorized by the legislative body, without further approval, if the legislative body adopts a resolution before the negotiated sale, as an agenda item at a public meeting, that includes all of the following: (1) Express approval of the negotiated method of sale. (2) Statement of the reasons for selecting the negotiated method of sale. (3) Disclosure of the identity of the bond counsel. (4) Disclosure of the identity of the bond underwriter and the financial adviser, if used for the negotiated bond sale. If a bond underwriter or financial adviser has not been selected at the time the legislative body adopts the resolution, the legislative body shall disclose the identity at the public meeting first occurring after the bond underwriter or financial adviser has been selected. (5) Estimate of the costs associated with the bond issuance. (b) After the negotiated sale, the legislative body shall do both of the following: (1) Present actual cost information for the negotiated sale at its next scheduled public meeting. (2) Submit an itemized summary of the costs of the negotiated bond sale to the California Debt and Investment Advisory Commission. (c) For purposes of this section, the following definitions shall apply: (1) "Legislative body" means the governing body of a local agency. (2) "Local agency" means a city, county, city and county, and special district.  "Special district" means an agency of the state formed for the performance of governmental or proprietary functions within limited geographic boundaries, and shall not   include a school district or commu   nity college district.