SAN FRANCISCO - Several bills that would have an impact on the municipal bond world remain active in the California Legislature, following Friday's deadline to move legislation out of its house of origin.
Bills clearing the Assembly include one designed to make negotiated bond deals available to more issuers.
AB 1388, which passed on a unanimous vote, would give cities and other local agencies authority to use negotiated bond sales at, above, or below par value, under the same terms that became available to school districts and community college districts 10 years ago.
"This authority is currently provided to schools and community colleges," Daniel Carrigg, legislative director of the League of California Cities, wrote in a letter of support. "Expanding this authority to apply to cities and other public agencies will provide them with additional options to craft financing mechanisms that best fit the available market."
Assemblyman Ed Hernandez, D-West Covina, sponsored the bill at the behest of the California Public Securities Association, a municipal underwriting trade group.
If adopted, its impact would be magnified if a proposed constitutional amendment to reduce the threshold required for voter approval of most municipal bonds succeeds.
Assembly Constitutional Amendment 9, which would lower the threshold for cities and other local agencies to 55% from two-thirds, is one of at least five similar amendments that have been introduced this year, according to an Assembly staff analysis.
School general obligation bond issuance exploded after a 2000 constitutional amendment allowed most school bond measures to pass at 55%.
A constitutional amendment would require two-thirds votes in each chamber, plus voter approval in a statewide election. That means some Republican votes would be needed, something that seems unlikely unless the issue gets drawn into part of a larger compromise to solve the state's unbalanced budget.
Senate president pro tempore Darrell Steinberg, D-Sacramento, recently said he is interested in giving local governments more control over their own revenues as the state prepares deep cuts in its own programs.
Other bills to move forward include SB 99, which would apply more regulations to conduit bond issuers in California. A similar bill passed last year only to be vetoed by Gov. Arnold Schwarzenegger.
The Assembly approved a measure, backed by state Treasurer Bill Lockyer, which would create a new California Transportation Financing Authority out of his office.
AB 798 would permit - though not require - state, local, and regional transportation agencies to sponsor projects using the new authority to approve financing and tolls, according to an Assembly staff report.
The Assembly also sent the Senate a bill authorizing the Department of Water Resources to refund bonds without counting such a refund against its bond authorization limit.
Bills clearing the Senate include a measure that would allow community facilities district bond financing to be used to fund solar and other renewable energy installations.
