Local government finance: state-mandated reimbursement receivables.

The California Constitution requires that whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the state provide a subvention of funds to reimburse that local government for the costs of the program or increased level of service, except as specified. Existing law also provides that, with respect to payable claims for costs incurred prior to the 2004–05 fiscal year that have not been paid prior to the 2005–06 fiscal year, those claims may be paid over a term of years, as prescribed. The Marks-Roos Local Bond Pooling Act of 1985 defines the term "authority" and authorizes joint powers authorities to, among other things, purchase, with the proceeds of bonds or its revenue, a local agency's right to receive moneys in repayment of its revenue losses (VLF or Proposition 1A receivables) resulting from this modification of ad valorem property tax revenue allocations. Existing law authorizes a local agency subject to this reduction to sell any of these receivables to the authority. This bill would additionally authorize a joint powers authority to purchase, with the proceeds of its bonds or its revenue and subject to the same criteria, the right of a local agency, as defined, to receive certain subvention moneys for reimbursement for the costs of a new program or higher level of service, which would be known as local mandate claim receivables, and afford a local agency the opportunity to sell these receivables to the authority. The bill would authorize a civil action to determine the validity of any bonds issued to finance bond purchases or the purchase of receivables, as specified. Existing law requires that the total amount due to each city, county, city and county, and special district, for which the state has determined, as of June 30, 2005, that reimbursement is required under the California Constitution, shall be appropriated for payment to these entities over a period of not more than 15 years, commencing with the Budget Act for the 2006–07 fiscal year and concluding with the 2020–21 fiscal year. The bill would require the Controller to prepare a list of reimbursement claims and related interest applied for and approved for specified local entities. The bill would also schedule the amount to be repaid, with interest, and continuously appropriate those amounts to each local entity, as prescribed. The bill would provide for the payment of interest on these claims, as specified. The bill would require the Controller to include specified information regarding reimbursement claims sold by local agencies in the Controller's report submitted to the Joint Legislative Budget Committee. This bill would declare that it is to take effect immediately as an urgency statute.