State and local agencies that issue debt must now file new specified information in the annual reports they are required to submit to the California Debt and Investment Advisory Commission. Under Senate Bill 1029, which Gov. Jerry Brown signed into law on Monday, the new required information includes certification that the issuer has adopted local debt policies and information regarding the use of proceeds from the debt. Both public agencies proposing to issue debt for the first time, and those that have previously issued debt, should adopt new policies and procedures for complying with these annual reporting requirements.
Existing law requires CDIAC to collect, maintain and provide comprehensive information on all state and local agency debt authorizations and issuances and to serve as a statistical clearinghouse for such debt issuances. Existing law also requires the state and local agencies to submit reports to the Commission, within specified timeframes, of the proposed issuance and final sale of debt.
Pursuant to SB 1029, state and local public agencies are required to submit an annual report for any issuance of debt for which it has submitted a report of final sale on or after Jan. 21, 2017. The annual report must cover a reporting period of July 1 to June 30, inclusive, and include the following specified information regarding authorized and outstanding debt, and the expenditure of proceeds from issued debt:
The bill requires that the report be submitted within seven months after the end of the reporting period by any method approved by CDIAC. It also requires that the report of any proposed debt include a certification by the issuer that it has adopted local debt policies, which policies must include specified provisions concerning the use of debt and that the contemplated debt issuance is consistent with those local debt policies.
CDIAC also has additional oversight requirements, including a requirement to track and report on all state and local agency outstanding debt until fully repaid or redeemed, and a requirement to consult with appropriate state and local debt issuers and organizations representing debt issuers prior to approving any annual method of reporting pursuant to the new law.
If you have any questions about this legislation or how it may impact your agency, please contact the attorney author of this Legal Alert listed to the right in the firm’s Public Finance practice group, or your BB&K attorney.
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