BILL ANALYSIS Ó
SB 193
Page 1
Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 193 (Governance and Finance Committee) - As Amended: May 2,
2011
SENATE VOTE : 36-0
SUBJECT : Validations.
SUMMARY : Enacts the Third Validating Act of 2011, which would
validate the organization, boundaries, acts, proceedings, and
bonds of the state government, counties, cities, special
districts, school districts, and other public bodies, excluding
redevelopment agencies.
EXISTING LAW allows local agencies to make changes to the
organization, boundaries, acts, proceedings, and bonds of the
state, cities, counties, special districts, school districts,
redevelopment agencies, and other local agencies.
FISCAL EFFECT : None
COMMENTS :
1)According to the Senate Governance and Finance Committee, the
Legislature has adopted annual Validating Acts for over 70
years that retroactively fix public officials' inadvertent
procedural errors or omissions. The annual bills affect the
state government, as well as counties, cities, special
districts, school districts, and redevelopment agencies.
2)Beginning 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 comprehensive
validating acts.
In Miller v. McKenna 23 Cal.2d 774 (1944), the California
Supreme Court explained that the "Legislature may cure
irregularities or omissions to comply with provisions of a
statute which could have been omitted in the first instance."
3)The Validating Acts save taxpayers money. The bills allow bond
SB 193
Page 2
counsels to issue strong legal opinions. Strong legal opinions
result in higher credit ratings. Higher credit ratings result
in lower interest rates. Lower interest rates mean lower
borrowing costs. Lower borrowing costs save money for state
and local taxpayers. The Validating Acts cannot forgive fraud,
corruption, or unconstitutional actions.
4)It was customary practice for members of the former Senate
Local Government Committee to jointly author these annual
Validating Acts. Following this established tradition, the
Senate Governance and Finance Committee is authoring this
year's Validating Acts. As an urgency measure, SB 191, the
First Validating Act, will take effect this spring, when the
Governor signs the bill into law. SB 192, the Second
Validating Act, also an urgency bill, will take effect late
summer, validating mistakes that occur after the chaptering of
the First Validating Act. SB 193, the Third Validating Act,
will take effect on January 1, 2012, covering the period
between the chaptering of SB 192 and the end of 2011.
5)The May 2nd amendments exclude redevelopment agencies (RDAs),
Community Development Commissions, and Joint Powers
Authorities acting as redevelopment agencies, from the
provisions of the bill. These amendments were requested by the
Department of Finance in order to avoid conflict at this time
with the Governor's Budget and budget legislation (SB 77) that
remains pending on the Assembly Floor. The amendments do not
invalidate any actions of RDAs. They avoid putting the
Legislature in the position of appearing to validate the
numerous actions that RDAs have taken purporting to commit
current and future funds in agreement with their host
communities and others. Pre-January 2011 actions already have
been validated by legislation last session. Depending on the
final budget action on redevelopment, these measures can be
revised as appropriate in the second and third validating
acts, and these validations would reach back to January 1,
2011. The amendments are intended to allow these bills to move
forward now and provide the extra security of validation to
local government entities and the state while the
redevelopment budget action remains pending. Nothing in the
provisions of this measure prohibit an RDA from individually
requesting a superior court to determine validity of a matter
pursuant to Section 860 of the Civil Code of Procedure.
6)Support arguments: Supporters argue that the annual Validating
SB 193
Page 3
Acts are a cost effective way of correcting inadvertent
procedural errors or omissions of the state and local
governments without having to have thousands of entities go to
the superior court to get their actions validated.
Opposition arguments: Opposition argues that singling out one
type of local government entity for exclusion from the
Validating Acts is unprecedented. It will cast an unwarranted
shadow of uncertainty over redevelopment transactions to the
detriment of both agencies and the private investors in those
transactions.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County & Municipal Employees
Association of CA Water Agencies
CA Association of Local Agency Formation Commissions
CA Association of Recreation and Park Districts
CA Association of Sanitation Agencies
CA Municipal Utilities Association
CA Special Districts Association
CA State Association of Counties
SB 193
Page 4
County of Sacramento
East Bay Municipal Utility District
Fire Districts Association of CA
Midpeninsula Regional Open Space District
Mosquito and Vector Control Association of CA
Regional Council of Rural Counties
State Association of County Auditors
State Controller John Chiang
State Treasurer Bill Lockyer
Urban Counties Caucus
Opposition
CA Redevelopment Association
City of San Jose (unless amended)
San Jose Redevelopment Agency (unless amended)
League of CA Cities
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958