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SB 192
Bill No:
SB 192
Senate Governance and Finance Committee
27 - Urgency
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez, La Malfa, Liu
SENATE FLOOR: 36-0, 3/24/11 (Consent)
AYES: Alquist, Anderson, Berryhill, Blakeslee, Cannella, De León,
DeSaulnier, Dutton, Emmerson, Evans, Fuller, Gaines, Hancock,
Harman, Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu, Lowenthal,
Negrete McLeod, Padilla, Pavley, Price, Rubio, Runner, Simitian,
Steinberg, Vargas, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Calderon, Corbett, Correa, Strickland
ASSEMBLY FLOOR: 76-0, 8/25/11 - See last page for vote
Second Validating Act of 2011
DIGEST: This bill enacts the Second Validating Act which validates the
organization, boundaries, acts, proceedings, and bonds of the state
government, counties, cities, special districts, school districts, and
redevelopment agencies, among other public bodies.
Assembly Amendments (1) exclude redevelopment agencies, Community
Development Commissions, and Joint Powers Authorities acting as
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redevelopment agencies, from the provisions of this bill, (2) make clarifying
changes, and (3) remove three coauthors.
ANALYSIS: For over 70 years, the Legislature’s annual Validating Acts
(Acts) have boosted the stability and credit ratings of state and local bonds.
The Acts cure public officials’ mistakes that might otherwise invalidate
boundary changes or bond issues. They also correct errors or omissions by
local agencies and state departments. The Acts do not protect against fraud,
corruption, or unconstitutional actions.
This bill enacts the Second Validating Act which validates the organization,
boundaries, acts, proceedings, and bonds of the state government, counties,
cities, special districts, school districts, and redevelopment agencies, among
other public bodies.
The annual Validating Acts protect investors from the chance that a minor
error might undermine the legal integrity of a public agency’s bond. Banks,
pension funds, and other investors will not buy public agencies’ securities
unless they are sound investments. Investors rely on legal opinions from
bond counsels to assure the bonds’ credit worthiness. Without legislative
action to cure technical errors, bond counsels are reluctant to certify bonds
as good credit risks. This bill gives legislative protection to public agencies
and private investors.
The three Validating Acts cure typographical, grammatical, and procedural
errors. They do not forgive fraud, corruption, or unconstitutional acts. A
local official who makes a technical error will find reassurance in the Acts,
while a corrupt official faces prosecution regardless of the Acts.
By insulating state and local bonds against harmless errors, the Acts save
taxpayers’ money. Strong legal opinions from bond counsels result in
higher credit ratings for state and local bonds. Higher credit ratings allow
state and local officials to pay lower interest rates to private investors.
Lower borrowing costs save money for taxpayers.
Starting in the mid-1920s, the Legislature passed separate validating acts for
different types of bonds, several classes of special districts, and various local
boundary changes. By the late 1930s, the practice was to pass annual
validating acts (AB 2842 [Bennett], of 1939). The current custom and
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practice is to pass three Validating Acts that retroactively cure public
officials’ mistakes. The first two bills are urgency bills that go into effect
when they are chaptered. SB 191 (First Validating Act) will probably reach
Governor Brown’s desk this spring, validating errors made before the date
on which the bill is chaptered. This bill (Second Validating Act) will reach
Governor Brown in August, validating mistakes made after SB 191. The
Third Validating Act (SB 193) will take effect on January 1, 2012, covering
the period between the chaptering of this bill and the end of 2011.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 8/25/11)
State Controller John Chiang
State Treasurer Bill Lockyer
American Federation of State, County & Municipal Employees
Association of California Water Agencies
California Association of Local Agency Formation Commissions
California Association of Recreation and Park Districts
California Association of Sanitation Agencies
California Municipal Utilities Association
California Redevelopment Association
California Special Districts Association
California State Association of Counties
County of Sacramento
East Bay Municipal Utility District
Fire Districts Association of California
Midpeninsula Regional Open Space District
Mosquito and Vector Control Association of California
Regional Council of Rural Counties
State Association of County Auditors
Urban Counties Caucus
OPPOSITION: (Verified 8/25/11)
California Redevelopment Association
City of Hesperia
City of Highland
City of San Jose
League of California cities
San Jose Redevelopment Agency
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Town of Apple Valley
ASSEMBLY FLOOR: 76-0, 8/25/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill,
Block, Blumenfield, Bradford, Brownley, Buchanan, Butler, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly,
Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Hall, Harkey,
Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio,
Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Bonilla, Charles Calderon, Gorell, Knight
AGB:do 8/26/11 Senate Floor Analyses
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