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SB-598 Open Financial Statements Act.(2019-2020)

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Date Published: 02/22/2019 09:00 PM
SB598:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 598


Introduced by Senator Moorlach

February 22, 2019


An act to amend Sections 12410.5, 12460, 13291, 27002, 53607, 53646, 53661, 53663, and 53891 of, to add Section 53898 to, and to add Chapter 23.5 (commencing with Section 7540) to Division 7 of Title 1 of, the Government Code, relating to public agency financial reporting, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 598, as introduced, Moorlach. Open Financial Statements Act.
Existing law, the Financial Information System for California (FISCal) Act, establishes the FISCal system, a single integrated financial management system for the state, and requires the Department of FISCal to maintain and operate that system upon its full implementation and final acceptance. Existing law requires various state and local agencies to provide financial reports, as provided.
This bill would enact the Open Financial Statements Act. The bill would establish the Open Financial Statement Commission, consisting of 7 members appointed by the Governor. The bill would require the commission to contract, through an open and competitive request for proposal process, with vendors possessing the necessary software development expertise to build one or more interactive extensible business reporting format (iXBRL) taxonomies suitable for public agency financial filings and create a software tool that enables a public agency to easily create iXBRL documents consistent with these taxonomies. Commencing with an unspecified fiscal year, the bill would require that any financial statement required by other law to be submitted or filed by a public agency be filed in iXBRL and to meet the validation requirements of the relevant taxonomy. The bill would make conforming changes to various other laws requiring state and local agencies to file or submit financial statements or reports. However, if the commission fails to adopt a prototype iXBRL taxonomy software and filing system for implementation by an unspecified date, the bill would dissolve the commission and make the requirement that a public agency file financial statements in iXBRL inoperative. The bill would appropriate an unspecified sum from the General Fund to the commission to be used for purposes of the Open Financial Statements Act, subject to specified restrictions.
By requiring local agencies to submit various financial statements and reports in iXBRL, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 23.5 (commencing with Section 7540) is added to Division 7 of Title 1 of the Government Code, to read:
CHAPTER  23.5. Open Financial Statements

7540.
 This chapter shall be known, and may be cited, as the Open Financial Statements Act.

7540.1.
 The Legislature finds and declares all of the following:
(a) Most local agencies submit two sets of annual financial statements to the Controller: a single audit reporting package in portable document format (PDF) and a financial transactions report. This dual reporting requirement creates an extra burden on local agencies and creates the risk of the Controller receiving inconsistent data.
(b) Other public entities, including the state, separately reporting component units of the state, and public pension systems, also file audited financial statements in PDF, rendering them difficult to analyze.
(c) Transitioning these documents to machine readable formats will ease the identification of fiscally distressed local governments and increase liquidity in the municipal bond market.
(d) It is therefore the intent of the Legislature to transition financial reporting by state and local agencies to a machine readable format.
(e) It is further the intent of the Legislature to replace PDF audited financial statements with filings that utilize interactive extensible business reporting format (iXBRL) and to establish iXBRL audited financial statements as the only annual financial filing required from state and local agencies.

7540.2.
 For purposes of this chapter:
(a) “Commission” means the Open Financial Statement Commission.
(b) “Financial statement” means any financial report or statement that a public agency is required by any state or local law to submit.
(c) “iXBRL” means interactive extensible business reporting format.
(d) “Public agency” means any state agency, department, board, or commission, county, city, special district, or other political subdivision.

7540.3.
 (a) There is hereby established in state government the Open Financial Statement Commission.
(b) The commission shall consist of the following seven members, who shall be appointed by and serve at the pleasure of the Governor:
(1) A representative from the Controller’s office.
(2) A representative from the California State Auditor’s Office.
(3) A representative of a city or a county.
(4) A representative of a special district.
(5) A researcher who has knowledge and experience in government accounting, affiliated with either the University of California or the California State University.
(6) A municipal bond investor.
(7) An information technology professional employed in the private sector.
(c) Meetings of the commission shall be open and public in accordance with the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2).
(d) The commission may employ staff as may be necessary for the performance of its duties under this chapter.
(e) If the commission is dissolved pursuant to subdivision (c) of Section 7540.4, this section shall be inoperative as of the date of the dissolution of the commission.

7540.4.
 (a) (1) The commission shall contract, through an open and competitive request for proposal process and consistent with Section 12100 of the Public Contract Code, with vendors possessing the necessary software development expertise to do both of the following:
(A) Build one or more iXBRL taxonomies suitable for public agency financial filings.
(B) Create an open source software tool that enables a public agency required by other law to file or submit a financial statement to easily create iXBRL documents consistent with the taxonomy or taxonomies developed pursuant to subparagraph (A).
(2) The commission may require the use of an existing iXBRL taxonomy or taxonomies if the commission deems it prudent to do so in order to reduce costs or increase comparability between entries
(b) (1) (A) The commission shall require vendors contracted with pursuant to this section to complete a prototype iXBRL taxonomy software and filing system no later than ___. The commission shall evaluate the protoype software and specify any changes it deems appropriate.
(B) No later than ___, the commission shall submit a report to the Legislature describing the prototype iXBRL taxonomy software and filing system and stating whether or not the commission will implement that prototype iXBRL taxonomy software and filing system.
(2) (A) If the commission disapproves a prototype iXBRL taxonomy software and filing system pursuant to paragraph (1), it shall either instruct the vendor to make necessary changes or contract with a different vendor. No later than ___, the commission shall determine whether or not to implement the revised prototype iXBRL taxonomy software and filing system.
(B) If the commission requires changes to a prototype iXBRL taxonomy software and filing system pursuant to this paragraph, then no later than ___ it shall submit a second report to the Legislature, containing the same information specified in subparagraph (B) of paragraph (1) with respect to the revised prototype iXBRL taxonomy software and filing system.
(3) A report submitted to the Legislature pursuant to this subdivision shall be submitted in compliance with Section 9795.
(c) If the commission fails to adopt a prototype iXBRL taxonomy software and filing system for implementation by ___, the commission shall be dissolved as of that date.

7540.5.
 (a) (1) Subject to subdivision (b), for the ___ fiscal year and each fiscal year thereafter, any financial statement required by other law to be submitted or filed by a public agency shall be filed in iXBRL, using the iXBRL taxonomy developed by the commission pursuant to Section 7540.4, and shall meet the validation requirements of the relevant taxonomy.
(2) Notwithstanding any other law, except as provided in subdivision (c) of Section 12410.5, this section shall supersede any requirement that a public agency submit or file a financial statement in any other electronic format or provide a financial statement in an electronic spreadsheet. If any public agency is unable to utilize iXBRL for its own internal purposes with respect to a particular financial statement, the public agency shall convert a financial statement filed in iXBRL into a usable format for its internal purposes for that financial statement.
(b) If the commission is dissolved pursuant to subdivision (c) of Section 7540.4, this section shall be inoperative as of the date of that dissolution.

7540.6.
 The commission shall identify and recommend to the Controller changes to the budgetary-legal basis annual report required by Section 12460 for the purpose of ensuring that report complies with the requirements of Section 7540.5.

7540.7.
 (a) The sum of ___ dollars ($___) is hereby appropriated without regard to fiscal year from the General Fund to the commission, to be used for purposes of carrying out its duties under this chapter, subject to the following restrictions:
(1) The moneys appropriated by this section shall not be used for compensation of members or staff of the commission.
(2) No more than ___ dollars ($___) of the moneys appropriated by this section may be used for expenses incurred in relation to meetings of the commission.
(b) If the commission is dissolved pursuant to subdivision (c) of Section 7540.4, any unencumbered balance of the moneys appropriated pursuant to this section as of the date of that dissolution shall revert to the General Fund.

SEC. 2.

 Section 12410.5 of the Government Code is amended to read:

12410.5.
 (a) The Controller shall receive every audit report prepared for any local agency, as defined in Section 53890, in compliance with the federal Single Audit Act of 1984 (31 U.S.C. Sec. 7501 et seq.) and required under any law to be submitted to any state agency, and shall, after ascertaining its compliance with that federal act, transmit the report to the designated state agency.
(b) The audit report shall be submitted to the Controller within nine months after the end of the period audited or pursuant to applicable federal or state law.
(c) (1) Subject to paragraph (2), for the ____ fiscal year and each fiscal year thereafter, the Controller shall accept single audit reporting packages in either portable document format or, in accordance with Section 7540.5, interactive ixtensible business reporting format.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

(c)

(d) An audit report for any local agency submitted to the Controller pursuant to this section shall comply with the Government Auditing Standards issued by the Comptroller General of the United States.

(d)

(e) If a local agency does not submit the audit report required by this section to the Controller by the due date established in subdivision (b) of this section, the Controller may appoint a qualified certified public accountant or public accountant to complete the report and to obtain the information required. Any cost incurred by the Controller pursuant to this subdivision, including a contract with, or the employment of, the certified public accountant or public accountant, in completing the audit shall be borne by the local agency and shall be a charge against any unencumbered funds of the local agency.

(e)

(f) Before appointing a certified public accountant or public accountant pursuant to subdivision (d), the Controller shall first notify a local agency of its failure to submit the audit report and give the local agency a reasonable amount of time to submit the report.

(f)

(g) The Controller shall refer any matters of unprofessional conduct, as defined in Section 5100 of the Business and Professions Code, and multiple and repeated failures to disclose noncompliant acts to the California Board of Accountancy.

SEC. 3.

 Section 12460 of the Government Code is amended to read:

12460.
 (a) (1) The Controller shall submit an annual report to the Governor containing a statement of the funds of the state, its revenues, and the public expenditures during the preceding fiscal year. The annual report shall be known as the budgetary-legal basis annual report and prepared in a manner that will account for prior year adjustments, fund balances, encumbrances, deferred payroll, revenues, expenditures, and other components on the same basis as that of the applicable Governor’s Budget and the applicable Budget Act, as determined by the Director of Finance in consultation with the Controller. If the Governor’s Budget or the Budget Act does not provide the applicable information for this purpose, funds shall be accounted for in the budgetary-legal basis annual report in a manner prescribed by Section 13344. The requirements of this section shall apply beginning with the issuance of the budgetary-legal basis annual report for the 2013–14 fiscal year. The Controller shall confer with the Department of Finance to propose and develop methods to facilitate these changes pursuant to Section 13344, including methods to ensure that information related to encumbrances and deferred payroll continue to be listed in the state’s financial statements, as deemed appropriate by the Controller.

The

(2) The Controller shall also issue a comprehensive annual financial report prepared strictly in accordance with “Generally Accepted Accounting Principles.”

The

(3) Subject to subdivision (b), the annual reports referenced in this section shall be compiled and published by the Controller in the time, form, and manner prescribed by him or her.
(b) (1) Subject to paragraph (2), for the ___ fiscal year and each fiscal year thereafter, the Controller shall make the report referenced in this section electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

SEC. 4.

 Section 13291 of the Government Code is amended to read:

13291.
 (a) (1) The department may require financial and statistical reports, duly verified and covering the period of each fiscal year, from all agencies of the state included within the provisions of Section 13300.

Such reports

(2) A report required pursuant to this section shall be made upon blank forms prescribed and furnished by the department, and mailed to each such agency not less than 60 days before the time the reports are required to be filed with the department.
(b) (1) Subject to paragraph (2), for the ___ fiscal year and each fiscal year thereafter, a state agency shall make any report required by the department pursuant to this section electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

SEC. 5.

 Section 27002 of the Government Code is amended to read:

27002.
 (a) The treasurer shall keep an account of the receipt and expenditure of all money received or paid out by him or her in books provided for the purpose. He or she shall enter in the books the amount, the time, from whom, and on what account all money was received by him or her, and the warrant number, the amount, time, and on what account all disbursements were made by him or her.
(b) (1) Subject to paragraph (2), for the ___ fiscal year and each fiscal year thereafter, the treasurer shall make the account required by this section electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

SEC. 6.

 Section 53607 of the Government Code is amended to read:

53607.
 (a) The authority of the legislative body to invest or to reinvest funds of a local agency, or to sell or exchange securities so purchased, may be delegated for a one-year period by the legislative body to the treasurer of the local agency, who shall thereafter assume full responsibility for those transactions until the delegation of authority is revoked or expires, and shall make a monthly report of those transactions to the legislative body. Subject to review, the legislative body may renew the delegation of authority pursuant to this section each year.
(b) (1) Subject to paragraph (2), for the ___ fiscal year and each fiscal year thereafter, the treasurer shall make the monthly report of transactions required pursuant to subdivision (a) electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

SEC. 7.

 Section 53646 of the Government Code is amended to read:

53646.
 (a) (1) In the case of county government, the treasurer may annually render to the board of supervisors and any oversight committee a statement of investment policy, which the board shall review and approve at a public meeting. Any change in the policy shall also be reviewed and approved by the board at a public meeting.
(2) In the case of any other local agency, the treasurer or chief fiscal officer of the local agency may annually render to the legislative body of that local agency and any oversight committee of that local agency a statement of investment policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting.
(b) (1) The treasurer or chief fiscal officer may render a quarterly report to the chief executive officer, the internal auditor, and the legislative body of the local agency. The quarterly report shall be so submitted within 30 days following the end of the quarter covered by the report. Except as provided in subdivisions (e) and (f), this report shall include the type of investment, issuer, date of maturity, par and dollar amount invested on all securities, investments and moneys held by the local agency, and shall additionally include a description of any of the local agency’s funds, investments, or programs, that are under the management of contracted parties, including lending programs. With respect to all securities held by the local agency, and under management of any outside party that is not also a local agency or the State of California Local Agency Investment Fund, the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation.
(2) The quarterly report shall state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance.
(3) The quarterly report shall include a statement denoting the ability of the local agency to meet its pool’s expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available.
(4) In the quarterly report, a subsidiary ledger of investments may be used in accordance with accepted accounting practices.
(c) Pursuant to subdivision (b), the treasurer or chief fiscal officer shall report whatever additional information or data may be required by the legislative body of the local agency.
(d) The legislative body of a local agency may elect to require the report specified in subdivision (b) to be made on a monthly basis instead of quarterly.
(e) For local agency investments that have been placed in the Local Agency Investment Fund, created by Section 16429.1, in National Credit Union Share Insurance Fund-insured accounts in a credit union, in accounts insured or guaranteed pursuant to Section 14858 of the Financial Code, or in Federal Deposit Insurance Corporation-insured accounts in a bank or savings and loan association, in a county investment pool, or any combination of these, the treasurer or chief fiscal officer may supply to the governing body, chief executive officer, and the auditor of the local agency the most recent statement or statements received by the local agency from these institutions in lieu of the information required by paragraph (1) of subdivision (b) regarding investments in these institutions.
(f) The treasurer or chief fiscal officer shall not be required to render a quarterly report, as required by subdivision (b), to a legislative body or any oversight committee of a school district or county office of education for securities, investments, or moneys held by the school district or county office of education in individual accounts that are less than twenty-five thousand dollars ($25,000).
(g) In recognition of the state and local interests served by the actions made optional in subdivisions (a) and (b), the Legislature encourages the local agency officials to continue taking the actions formerly mandated by this section. However, nothing in this subdivision may be construed to impose any liability on a local agency that does not continue to take the formerly mandated action.
(h) (1) Subject to paragraph (2), for the ___ fiscal year and each fiscal year thereafter, a local agency shall make any quarterly report required by subdivision (b) and any financial statement required by subdivision (e) electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(2) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this subdivision shall be inoperative as of the date of that dissolution.

SEC. 8.

 Section 53661 of the Government Code is amended to read:

53661.
 (a) The Commissioner of Business Oversight shall act as Administrator of Local Agency Security and shall be responsible for the administration of Sections 53638, 53651, 53651.2, 53651.4, 53651.6, 53652, 53654, 53655, 53656, 53657, 53658, 53659, 53660, 53661, 53663, 53664, 53665, 53666, and 53667.
(b) The administrator shall have the powers necessary or convenient to administer and enforce the sections specified in subdivision (a).
(c) (1) The administrator shall issue regulations consistent with law as the administrator may deem necessary or advisable in executing the powers, duties, and responsibilities assigned by this article. The regulations may include regulations prescribing standards for the valuation, marketability, and liquidity of the eligible securities of the class described in subdivision (m) of Section 53651, regulations prescribing procedures and documentation for adding, withdrawing, substituting, and holding pooled securities, and regulations prescribing the form, content, and execution of any application, report, or other document called for in any of the sections specified in subdivision (a) or in any regulation or order issued under any of those sections.
(2) The administrator, for good cause, may waive any provision of any regulation adopted pursuant to paragraph (1) or any order issued under this article, where the provision is not necessary in the public interest.
(d) The administrator may enter into any contracts or agreements as may be necessary, including joint underwriting agreements, to sell or liquidate eligible securities securing local agency deposits in the event of the failure of the depository or if the depository fails to pay all or part of the deposits of a local agency.
(e) (1) The administrator shall require from every depository a report certified by the agent of depository listing all securities, and the market value thereof, which are securing local agency deposits together with the total deposits then secured by the pool, to determine whether there is compliance with Section 53652. These reports may be required whenever deemed necessary by the administrator, but shall be required at least four times each year at the times designated by the Comptroller of the Currency for reports from national banking associations. These reports shall be filed in the office of the administrator by the depository within 20 business days of the date the administrator calls for the report.
(2) (A) Subject to subparagraph (B), for the ___ fiscal year and each fiscal year thereafter, a depository shall make the report required by this subdivision electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(B) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this paragraph shall be inoperative as of the date of that dissolution.
(f) The administrator may have access to reports of examination made by the Comptroller of the Currency insofar as the reports relate to national banking association trust department activities which are subject to this article.
(g) (1) The administrator shall require the immediate substitution of an eligible security, where the substitution is necessary for compliance with Section 53652, if (i) the administrator determines that a security listed in Section 53651 is not qualified to secure public deposits, or (ii) a treasurer, who has deposits secured by the securities pool, provides written notice to the administrator and the administrator confirms that a security in the pool is not qualified to secure public deposits.
(2) The failure of a depository to substitute securities, where the administrator has required the substitution, shall be reported by the administrator promptly to those treasurers having money on deposit in that depository and, in addition, shall be reported as follows:
(A) When that depository is a national bank, to the Comptroller of the Currency of the United States.
(B) When that depository is a state bank, to the Commissioner of Business Oversight.
(C) When that depository is a federal association, to the Office of the Comptroller of the Currency.
(D) When that depository is a savings association, to the Commissioner of Business Oversight.
(E) When that depository is a federal credit union, to the National Credit Union Administration.
(F) When that depository is a state credit union or a federally insured industrial loan company, to the Commissioner of Business Oversight.
(h) (1) The administrator may require from each treasurer a registration report and at appropriate times a report stating the amount and location of each deposit together with other information deemed necessary by the administrator for effective operation of this article. The facts recited in any report from a treasurer to the administrator are conclusively presumed to be true for the single purpose of the administrator fulfilling responsibilities assigned to him or her by this article and for no other purpose.
(2) (A) Subject to subparagraph (B), for the ___ fiscal year and each fiscal year thereafter, a treasurer shall make the registration report required by this subdivision electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(B) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this paragraph shall be inoperative as of the date of that dissolution.
(i) (1) If, after notice and opportunity for hearing, the administrator finds that any depository or agent of depository has violated or is violating, or that there is reasonable cause to believe that any depository or agent of depository is about to violate, any of the sections specified in subdivision (a) or any regulation or order issued under any of those sections, the administrator may order the depository or agent of depository to cease and desist from the violation or may by order suspend or revoke the authorization of the agent of depository. The order may require the depository or agent of depository to take affirmative action to correct any condition resulting from the violation.
(2) (A) If the administrator makes any of the findings set forth in paragraph (1) with respect to any depository or agent of depository and, in addition, finds that the violation or the continuation of the violation is likely to seriously prejudice the interests of treasurers, the administrator may order the depository or agent of depository to cease and desist from the violation or may suspend or revoke the authorization of the agent of depository. The order may require the depository or agent of depository to take affirmative action to correct any condition resulting from the violation.
(B) Within five business days after an order is issued under subparagraph (A), the depository or agent of depository may file with the administrator an application for a hearing on the order. The administrator shall schedule a hearing at least 30 days, but not more than 40 days, after receipt of an application for a hearing or within a shorter or longer period of time agreed to by a depository or an agent of depository. If the administrator fails to schedule the hearing within the specified or agreed to time period, the order shall be deemed rescinded. Within 30 days after the hearing, the administrator shall affirm, modify, or rescind the order; otherwise, the order shall be deemed rescinded. The right of a depository or agent of depository to which an order is issued under subparagraph (A) to petition for judicial review of the order shall not be affected by the failure of the depository or agent of depository to apply to the administrator for a hearing on the order pursuant to this subparagraph.
(3) Whenever the administrator issues a cease and desist order under paragraph (1) or (2), the administrator may in the order restrict the right of the depository to withdraw securities from a security pool; and, in that event, both the depository to which the order is directed and the agent of depository which holds the security pool shall comply with the restriction.
(4) In case the administrator issues an order under paragraph (1) or (2) suspending or revoking the authorization of an agent of depository, the administrator may order the agent of depository at its own expense to transfer all pooled securities held by it to such agent of depository as the administrator may designate in the order. The agent of depository designated in the order shall accept and hold the pooled securities in accordance with this article and regulations and orders issued under this article.
(j) In the discretion of the administrator, whenever it appears to the administrator that any person has violated or is violating, or that there is reasonable cause to believe that any person is about to violate, any of the sections specified in subdivision (a) or any regulation or order issued thereunder, the administrator may bring an action in the name of the people of the State of California in the superior court to enjoin the violation or to enforce compliance with those sections or any regulation or order issued thereunder. Upon a proper showing a permanent or preliminary injunction, restraining order, or writ of mandate shall be granted, and the court may not require the administrator to post a bond.
(k) In addition to other remedies, the administrator shall have the power and authority to impose the following sanctions for noncompliance with the sections specified in subdivision (a) after a hearing if requested by the party deemed in noncompliance. Any fine assessed pursuant to this subdivision shall be paid within 30 days after receipt of the assessment.
(1) Assess against and collect from a depository a fine not to exceed two hundred fifty dollars ($250) for each day the depository fails to maintain with the agent of depository securities as required by Section 53652.
(2) Assess against and collect from a depository a fine not to exceed one hundred dollars ($100) for each day beyond the time period specified in subdivision (b) of Section 53663 the depository negligently or willfully fails to file in the office of the administrator a written report required by that section.
(3) Assess against and collect from a depository a fine not to exceed one hundred dollars ($100) for each day beyond the time period specified in subdivision (e) that a depository negligently or willfully fails to file in the office of the administrator a written report required by that subdivision.
(4) Assess and collect from an agent of depository a fine not to exceed one hundred dollars ($100) for each day the agent of depository fails to comply with any of the applicable sections specified in subdivision (a) or any applicable regulation or order issued thereunder.
(l) (1) In the event that a depository or agent of depository fails to pay a fine assessed by the administrator pursuant to subdivision (k) within 30 days of receipt of the assessment, the administrator may assess and collect an additional penalty of 5 percent of the fine for each month or part thereof that the payment is delinquent.
(2) If a depository fails to pay the fines or penalties assessed by the administrator, the administrator may notify local agency treasurers with deposits in the depository.
(3) If an agent of depository fails to pay the fines or penalties assessed by the administrator, the administrator may notify local agency treasurers who have authorized the agent of depository as provided in Sections 53649 and 53656, and may by order revoke the authorization of the agent of depository as provided in subdivision (i).
(m) The amendments to this section enacted by the Legislature during the 1999–2000 Regular Session shall become operative on January 1, 2001.

SEC. 9.

 Section 53663 of the Government Code is amended to read:

53663.
 (a) Each agent of depository shall report in writing to the administrator within two business days after any withdrawal, substitution, or addition of pooled securities and shall state the name and market value of the securities withdrawn, substituted, or added together with the total deposits then secured by the pool. This information shall be available from the administrator to the treasurer upon request.
(b) (1) Each depository shall report in writing to the administrator weekly, giving the total amount of all deposits held by the depository pursuant to this article. The report shall be as of close of business on Wednesday of each week and shall be delivered to the office of the administrator, deposited in the United States mail, postage prepaid, or delivered electronically via email, or other electronic means approved by the administrator, addressed to the office of the administrator, within five business days. Where there has occurred no change in the deposits required to be held by the depository pursuant to this article, the report required by this subdivision need only state that fact.
(2) (A) Subject to subparagraph (B), for the ___ fiscal year and each fiscal year thereafter, a depository shall make the report required by this subdivision electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(B) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this paragraph shall be inoperative as of the date of that dissolution.

SEC. 10.

 Section 53891 of the Government Code is amended to read:

53891.
 (a) (1) The officer of each local agency who has charge of the financial records shall furnish to the Controller a report of all the financial transactions of the local agency during the preceding fiscal year. The report shall contain underlying data from audited financial statements prepared in accordance with generally accepted accounting principles, if this data is available. The report shall be furnished within seven months after the close of each fiscal year and and, subject to paragraph (2), shall be in the form required by the Controller. A local agency shall submit to the Controller information on annual compensation, as described in subdivision (l) of Section 53892, for the previous calendar year no later than April 30th.
(2) (A) Subject to subparagraph (B), for the ____fiscal year and each fiscal year thereafter, the Controller shall accept audited financial statements prepared in interactive extensible business reporting format, in accordance with Section 7540.5, in lieu of a report provided in the form required by the Controller, as described in paragraph (1).
(B) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this paragraph shall be inoperative as of the date of that dissolution.
(b) The Controller shall prescribe uniform accounting and reporting procedures that shall be applicable to all local agencies except cities, counties, and school districts, and except for local agencies that substantially follow a system of accounting prescribed by the Public Utilities Commission of the State of California or the Federal Energy Regulatory Commission. The procedures shall be adopted under Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2. The Controller shall prescribe the procedures only after consultation with and approval of a local governmental advisory committee established pursuant to Section 12463.1. Approval of the procedures shall be by majority vote of the members present at a meeting of the committee called by the chairperson thereof.

SEC. 11.

 Section 53898 is added to the Government Code, to read:

53898.
 (a) Subject to subdivision (b), for the ___ fiscal year and each fiscal year thereafter, any report filed or made publicly available pursuant to this article shall be electronically available in interactive extensible business reporting format, in accordance with Section 7540.5.
(b) If the Open Financial Statement Commission is dissolved pursuant to subdivision (c) of Section 7540.4, this section shall be inoperative as of the date of that dissolution.

SEC. 12.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.