Kathleen Brown, treasurer of California, on Friday said a special hearing on tax-exempt Mello-Ross bonds will be held in January.

The California Debt Advisory Commission, of which Ms. Brown is the chairwoman, has scheduled the hearing of Jan. 15 and tentatively selected Santa Ana as the state.

A spokesman for Ms. Brown said the hearings will focus on two aspects of the bonds. The hearing will focus on "what should be done in terms of legislation, if there should be an oversight function, or otherwise," the spokesman said. "And it will be educational: What role can [Mello-Ross] bonds continue to play in the current economy, given a slumping real estate market?"

Real estate values and real estate taxes are at the heart of the Mello-Roos revenue streams. A slowdown in homes sales in districts with outstanding bonds could endanger the issues. Ms. Brown's office estimated about $3.5 billion of California Mello-Roos bonds are outstanding.

In September, Ms. Brown said she would be "more aggressive" in monitoring the Mello-Ross issues. "Ultimately, it's the taxpayer who ends up paying the price -- so it's the taxpayer we must protect," she said Friday.

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