California 2009-2010 Regular Session Status: To Executive

SB 826 — General obligation bonds.

Last action — Chaptered by Secretary of State. Chapter 205, Statutes of 2009.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed Assembly
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2009-2010 Regular Session. It reached “To Executive” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

(1) The State General Obligation Bond Law generally provides for a procedure that may be adopted by other acts, with any necessary modifications, in authorizing the issuance and sale of state general obligation bonds and providing for the repayment of those bonds, including the determination of interest rates the bonds shall bear. Existing law requires, with regard to a resolution specifying that the bonds may pay a variable interest rate, that the aggregate principal amount of all state general obligation bonds bearing variable interest rates does not exceed 20 percent of the aggregate principal amount of all outstanding general obligation bonds. Existing law exempts, from this calculation, variable rate bonds that have an effective fixed interest rate through a hedging contract. This bill would require the Treasurer to determine, with regard to those bonds that have an effective fixed interest rate through a hedging contract, that the hedging contract either significantly reduces variable rate risk or qualifies for integration with the bonds in calculating the yield on the bonds under certain federal rules. (2) Existing law provides that certain amounts payable or contractual obligations regarding bonds that bear a variable interest rate under a bond act that was approved by the voters before July 1, 2002, are not backed by the full faith and credit of the state. Existing law specifies that this contractual obligation is under a standby bond purchase agreement or other liquidity facility. This bill would instead provide that this contractual obligation is to repay advances and pay interest thereon under a credit enhancement or liquidity agreement. The bill would also provide that those amounts payable or those contractual obligations are backed by the full faith and credit of the state, if the bond act was approved on or after January 1, 2002. (3) Existing law requires, for bonds approved by the voters after January 1, 2006, that the payment of interest include the payment of any amounts owed by a counterparty after any offset for payments owed to the state on a hedging contract, and prohibits the total payments of stated interest on the bonds and payments owed by the state from exceeding a specified maximum rate after a specified offset. This bill would instead provide that the payment of any amounts owed by the state, after any offset, shall be deemed to be included within the appropriation for interest on the bonds. The bill would allow the payments of interest on a bond and the payments on a hedging contract that exceed the maximum rate in a fiscal year to be paid in subsequent fiscal years, under specified conditions. (4) Existing law requires, when the finance committee created by the bond act determines to issue commercial paper notes, for purposes of determining the principal amount of outstanding bonds, that the principal amount deemed outstanding be the maximum amount authorized in the resolution. This bill would delete that condition. (5) Existing law authorizes the Treasurer, when the finance committee created by the bond act deems it in the best interests of the state, to issue notes, on a negotiated or a competitive-bid basis, maturing within a period not to exceed 2 years, in anticipation of the sale of bonds. This bill would increase the maturation date of those notes to 5 years and make related changes. (6) Existing law specifies the manner in which the Treasurer may sell bonds. This bill would revise these provisions regarding the competitive sale of bonds and the conditions for bidding in a competitive sale or purchasing in a negotiated sale. The bill would make other conforming and nonsubstantive changes to the bond law. (7) Existing law allows a finance committee to also provide for the issuance and sale or exchange of refunding bonds for the purpose of redeeming, retiring, or purchasing for retirement, outstanding bonds at or before their maturity, if the committee determines, among other things, that refunding is necessary or advisable to effect a saving in debt service cost to the state. This bill would require the committee, when making this determination, to include, as interest on a refunded bond, the interest, if any, that will result from a related hedging contract and would authorize the committee, when determining debt service savings, to base the interest of a refunding bond upon the effective fixed interest rate under a hedging contract.

Bill Text

Action History

  1. Chaptered by Secretary of State. Chapter 205, Statutes of 2009.

  2. Approved by Governor.

  3. Enrolled. To Governor at 9 p.m.

  4. In Senate. To enrollment.

  5. Read third time. Passed. (Ayes 76. Noes 2. Page 2852.) To Senate.

  6. From Consent Calendar to third reading.

  7. Read second time. To Consent Calendar.

  8. (Heard in committee on July 8.)

  9. From committee: Do pass. To Consent Calendar. (Ayes 15. Noes 0.)

  10. (Heard in committee on June 29.)

  11. From committee: Do pass, but first be re-referred to Com. on APPR. (Ayes 11. Noes 0.) Re-referred to Com. on APPR.

  12. To Com. on B. & F.

  13. In Assembly. Read first time. Held at Desk.

  14. Read third time. Passed. (Ayes 39. Noes 0. Page 1148.) To Assembly.

  15. To Special Consent Calendar.

  16. Read second time. To third reading.

  17. From committee: Do pass. (Ayes 12. Noes 0. Page 1027.)

  18. (For vote only.)

  19. Set for hearing May 26.

  20. Set, first hearing. Testimony taken. Further hearing to be set.

  21. From committee with author's amendments. Read second time. Amended. Re-referred to Com. on APPR.

  22. Set for hearing May 18.

  23. From committee: Do pass, but first be re-referred to Com. on APPR with recommendation: To Consent Calendar. (Ayes 12. Noes 0. Page 682.) Re-referred to Com. on APPR.

  24. Set for hearing April 28.

  25. To Com. on G.O.

  26. From print. May be acted upon on or after April 19.

  27. Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

  • Committee on Governmental Organization · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 121 not signed on

Sponsors (1)

  • Committee on Governmental Organization

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

Show all 121 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

SB 826 G.O. Senate Third Reading By EVANS

Passed 88 Yea · 2 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 82201
Democratic 3000
Republican 3000
Total 88201
% of votes cast 97%2%0%1%
How each member voted (91)
Member Party Vote
Hagman — Yea
Carter — Yea
Chesbro — Yea
Conway — Yea
Cook — Yea
Bill — Yea
Tom — Yea
Charles — Yea
De — Yea
La — Yea
Torre — Yea
De — Yea
Leon — Yea
Ammiano — Yea
Anderson — Yea
Beall — Yea
Blakeslee — Yea
Fletcher — Yea
Fong — Yea
Bonnie — Yea
Lowenthal — Yea
V. — Yea
Manuel — Yea
Perez — Yea
John — Yea
A. — Yea
Perez — Yea
Portantino — Yea
Salas — Yea
Saldana — Yea
Audra — Yea
DeVore — Nay
Eng — Yea
Evans — Yea
Duvall — Yea
Fuentes — Yea
Fuller — Yea
Galgiani — Yea
Garrick — Yea
Gilmore — Yea
Hall — Yea
Bass — Yea
Harkey — Nay
Hernandez — Yea
Hill — Yea
Huffman — Yea
Jeffries — Yea
Krekorian — Yea
Lieu — Yea
Mendoza — Yea
Miller — Yea
Monning — Yea
Nava — Yea
Ruskin — Yea
Silva — Yea
Skinner — Yea
Solorio — Yea
Swanson — Yea
Torres — Yea
Torrico — Yea
Villines — Yea
Adams — Yea
Block — Yea
Blumenfield — Yea
Brownley — Yea
Buchanan — Not Voting
Hayashi — Yea
Huber — Yea
Knight — Yea
Logue — Yea
Ma — Yea
Nestande — Yea
Nielsen — Yea
Smyth — Yea
Torlakson — Yea
Tran — Yea
Emmerson — Yea
Coto — Yea
Feuer — Yea
Davis — Yea
Yamada — Yea
Furutani — Yea
Beth Gaines — Yea
Bill Berryhill — Yea
Bill Berryhill — Yea
Arambula, Joaquin Democratic Yea
Caballero, Anna M. Democratic Yea
Calderon, Lisa Democratic Yea
Jones, Brian W. Republican Yea
Niello, Roger W. Republican Yea
Strickland, Tony Republican Yea

Official roll call →

Do pass, to Consent Calendar.

Passed 20 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 18001
Democratic 1000
Republican 1000
Total 20001
% of votes cast 95%0%0%5%
How each member voted (21)
Member Party Vote
Charles — Yea
De — Yea
Leon — Yea
John — Yea
A. — Yea
Perez — Yea
Audra — Yea
Duvall — Yea
Hall — Yea
Harkey — Yea
Miller — Yea
Ammiano — Yea
Nielsen — Yea
Skinner — Yea
Solorio — Not Voting
Torlakson — Yea
Coto — Yea
Davis — Yea
Fuentes — Yea
Calderon, Lisa Democratic Yea
Strickland, Tony Republican Yea

Official roll call →

Special Consent #7 SB826 Committee on G.O. (Florez)

Passed 40 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 37000
Democratic 2000
Republican 1000
Total 40000
% of votes cast 100%0%0%0%
How each member voted (40)
Member Party Vote
Yee — Yea
Hancock — Yea
Florez — Yea
Cedillo — Yea
Cogdill — Yea
Corbett — Yea
Ducheny — Yea
Harman — Yea
Kehoe — Yea
Leno — Yea
Liu — Yea
McLeod — Yea
Lowenthal — Yea
Negrete — Yea
Runner — Yea
Alquist — Yea
Benoit — Yea
Dutton — Yea
Oropeza — Yea
Pavley — Yea
Simitian — Yea
Steinberg — Yea
Wiggins — Yea
Wolk — Yea
Wright — Yea
Aanestad — Yea
Ashburn — Yea
Hollingsworth — Yea
Huff — Yea
Maldonado — Yea
Romero — Yea
Walters — Yea
Wyland — Yea
Correa — Yea
Cox — Yea
DeSaulnier — Yea
Denham — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea
Strickland, Tony Republican Yea

Official roll call →

Do pass.

Passed 12 Yea · 0 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 12001
Total 12001
% of votes cast 92%0%0%8%
How each member voted (13)
Member Party Vote
Yee — Yea
Hancock — Yea
Kehoe — Yea
Runner — Yea
Corbett — Yea
Oropeza — Not Voting
Walters — Yea
Wolk — Yea
Leno — Yea
Wyland — Yea
Cox — Yea
DeSaulnier — Yea
Denham — Yea

Official roll call →

Do pass, but re-refer to the Committee on Appropriations Recommend Consent.

Passed 13 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 11000
Democratic 2000
Total 13000
% of votes cast 100%0%0%0%
How each member voted (13)
Member Party Vote
Yee — Yea
Florez — Yea
Negrete — Yea
Benoit — Yea
Oropeza — Yea
Wiggins — Yea
Harman — Yea
McLeod — Yea
Wright — Yea
Wyland — Yea
Denham — Yea
Calderon, Lisa Democratic Yea
Padilla, Stephen C. Democratic Yea

Official roll call →

Subjects

finance
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Frequently asked questions

What does SB 826 do?
(1) The State General Obligation Bond Law generally provides for a procedure that may be adopted by other acts, with any necessary modifications, in authorizing the issuance and sale of state general obligation bonds and providing for the repayment of those bonds, including the determination of interest rates the bonds shall bear. Existing law requires, with regard to a resolution specifying that the bonds may pay a variable interest rate, that the aggregate principal amount of all state general obligation bonds bearing variable interest rates does not exceed 20 percent of the aggregate principal amount of all outstanding general obligation bonds. Existing law exempts, from this calculation, variable rate bonds that have an effective fixed interest rate through a hedging contract. This bill would require the Treasurer to determine, with regard to those bonds that have an effective fixed interest rate through a hedging contract, that the hedging contract either significantly reduces variable rate risk or qualifies for integration with the bonds in calculating the yield on the bonds under certain federal rules. (2) Existing law provides that certain amounts payable or contractual obligations regarding bonds that bear a variable interest rate under a bond act that was approved by the voters before July 1, 2002, are not backed by the full faith and credit of the state. Existing law specifies that this contractual obligation is under a standby bond purchase agreement or other liquidity facility. This bill would instead provide that this contractual obligation is to repay advances and pay interest thereon under a credit enhancement or liquidity agreement. The bill would also provide that those amounts payable or those contractual obligations are backed by the full faith and credit of the state, if the bond act was approved on or after January 1, 2002. (3) Existing law requires, for bonds approved by the voters after January 1, 2006, that the payment of interest include the payment of any amounts owed by a counterparty after any offset for payments owed to the state on a hedging contract, and prohibits the total payments of stated interest on the bonds and payments owed by the state from exceeding a specified maximum rate after a specified offset. This bill would instead provide that the payment of any amounts owed by the state, after any offset, shall be deemed to be included within the appropriation for interest on the bonds. The bill would allow the payments of interest on a bond and the payments on a hedging contract that exceed the maximum rate in a fiscal year to be paid in subsequent fiscal years, under specified conditions. (4) Existing law requires, when the finance committee created by the bond act determines to issue commercial paper notes, for purposes of determining the principal amount of outstanding bonds, that the principal amount deemed outstanding be the maximum amount authorized in the resolution. This bill would delete that condition. (5) Existing law authorizes the Treasurer, when the finance committee created by the bond act deems it in the best interests of the state, to issue notes, on a negotiated or a competitive-bid basis, maturing within a period not to exceed 2 years, in anticipation of the sale of bonds. This bill would increase the maturation date of those notes to 5 years and make related changes. (6) Existing law specifies the manner in which the Treasurer may sell bonds. This bill would revise these provisions regarding the competitive sale of bonds and the conditions for bidding in a competitive sale or purchasing in a negotiated sale. The bill would make other conforming and nonsubstantive changes to the bond law. (7) Existing law allows a finance committee to also provide for the issuance and sale or exchange of refunding bonds for the purpose of redeeming, retiring, or purchasing for retirement, outstanding bonds at or before their maturity, if the committee determines, among other things, that refunding is necessary or advisable to effect a saving in debt service cost to the state. This bill would require the committee, when making this determination, to include, as interest on a refunded bond, the interest, if any, that will result from a related hedging contract and would authorize the committee, when determining debt service savings, to base the interest of a refunding bond upon the effective fixed interest rate under a hedging contract.
Who sponsors SB 826?
SB 826 is sponsored by Committee on Governmental Organization.
What is the current status of SB 826?
This bill died with 2009-2010 Regular Session. It reached “To Executive” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track SB 826?
Track SB 826 free on One Click Politics — get push/email alerts when it moves.

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