The California Assembly is slated this week to discuss a bill designed to strengthen the state's special district bonds.
SB 1464, introduced by Sen. Henry Mello, D-Monterey, cleared the full Senate in May and last month was approved by the Assembly Local Government Committee. If passed by the entire Assembly, the measure will go to governor for signing.
"We expect it to be a slam dunk," said Ray Miller, a consultant on the bill.
The legislation would reform the Mello-Roos Community Facilities Act of 1982 to ease concerns regarding Mello-Roos bonds. Questions over the safety of such land-backed debt erupted last year after the state's prolonged real estate slump. In California, more than $3.6 billion of Mello-Roos bonds have financed infrastructure needs associated with development.
SB 1464 includes several recommendations from the California Debt Advisory Commission, such s increasing disclosure and requiring certain lien-to-value ratios. In April, lawmakers removed a controversial provision reducing the capitalized interest period.