BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 194| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: SB 194 Author: Senate Governance and Finance Committee Amended: 4/7/11 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 04/27/11 AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez, Kehoe, La Malfa, Liu SUBJECT : Local government: omnibus bill SOURCE : Author DIGEST : This bill, the Local Government Omnibus Act of 2011, proposes 18 changes to the state laws affecting local agencies' powers and duties. ANALYSIS : Each year, local officials discover problems with the state statutes that affect counties, cities, special districts, and redevelopment agencies, as well as the laws on land use planning and development. These minor problems do not warrant separate (and expensive) bills. According to the Legislative Analyst, in 2001-02 the cost of producing a bill was $17,890. Legislators respond by combining several of these minor topics into an annual "omnibus bill." In 2010, for example, the local government omnibus bill was SB 894, Chapter 699 (Senate Local Government Committee) which contained 20 noncontroversial statutory changes, avoiding CONTINUED SB 194 Page 2 about $350,000 in legislative costs. Although this practice may violate a strict interpretation of the single-subject and germaneness rules as presented in Californians for an Open Primary v. McPherson (2006), it is an expeditious and relatively inexpensive way to respond to multiple requests. This bill, the "Local Government Omnibus Act of 2011," proposes 18 changes to the state laws affecting local agencies' powers and duties: 1. Repeal an obsolete library tax . In response to library funding cuts and multiple library closures in the late 1980s, the Legislature passed the Shasta County Regional Library Facilities and Services Act (Government Code Section 26170, et seq., added by AB 4083, Statham, 1990). Shasta County officials could create a new countywide commission to fund and administer libraries. This law became inoperative on January 1, 1995 (Government Code Section 26170.24). Subsequently, Shasta County received funding for a new library through the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2000. In 2006, Shasta County and the City of Redding designated the City as the operator of the Shasta Public Library System. As a result, the Committee's staff notes that the 1990 Statham bill's provisions for library funding and administration are not only inoperative, but unnecessary. This bill repeals the Shasta County Regional Library Facilities and Services Act. ŬSee Section 1.5 of the bill.] 2. Delegation for unclaimed funds . Cities and counties collect money for various services, programs, and penalties. Sometimes payments are inadvertently more than the amount due, requiring local treasurers to keep track of the unclaimed funds. After three years, a local treasurer can publish a notice of the unclaimed funds and, if no one claims the money, it becomes the local agency's property (Government Code Section 50050 & Section 50052). For amounts of less than $15, the legislative body can transfer the money to its general fund after a year, without publishing SB 194 Page 3 notice (Government Code Section 50055). A county board of supervisors may authorize its county treasurer to act on its behalf regarding unclaimed items worth $1,000 or less, provided that the treasurer informs the county auditor (Government Code Section 50057, added by SB 1165, Senate Local Government Committee, Chapter 118, Statutes of 2004). The California Association of County Treasurers and Tax Collectors requested the 2004 statute which allows county supervisors to delegate these duties to county treasurers. However, the Association now believes that the $1,000 ceiling is too low, requiring county supervisors to act on small matters which could be reliably delegated to the county treasurers. The Association wants the Legislature to raise the ceiling. This bill raises the statutory ceiling on the amount of unclaimed funds that county supervisors may delegate to county treasurers from $1,000 to $5,000. ŬSection 2] 3. Investment of public funds . Since 1913, state law has authorized local officials to invest a portion of their temporarily idle funds in a variety of financial instruments (Government Code Section 53601). Among those eligible investments are certificates of deposit issued by a nationally or state-chartered bank, savings associations, credit unions, or a state-licensed branch of a foreign bank (Government Code Section 53601 Ŭi]). The California Association of County Treasurers and Tax Collectors notes that changes in banking regulations have resulted in the establishment of federally chartered branches of foreign banks ("Yankee banks"), but that state law doesn't recognize those institutions' certificates of deposit. The Association wants the Legislature to allow local officials to invest their funds in CDs issued by federally chartered branches of foreign banks. This bill adds the federally chartered branches of foreign banks to the list of financial institutions whose certificates of deposit are eligible for local agencies' investments. ŬSection 3] 4. Community services districts' governing boards . Community services districts (CSDs) can provide a wide SB 194 Page 4 range of public services and facilities within their boundaries (Government Code Section 61000, et seq.). When the Legislature revised the CSD Law (SB 135, Kehoe, Chapter 249, Statutes of 2005), it learned that most of the 325 CSDs' governing boards had five members, but a few districts still relied on three-member boards of directors. The revised CSD Law required all of the districts to have five-member boards and provided a transition rule for CSDs to expand their boards by adding two more directors at the next election after January 1, 2006 (Government Code Section 61041). Because that transition period has expired, the Committee's staff wants the Legislature to repeal the obsolete transition language. This bill repeals the obsolete section of the Community Services District Law that requires the districts to expand the membership of their boards of directors. ŬSection 4] 5. Planning law cross-reference . Before a city or county planning commission holds its public hearing on the adoption or amendment of a general plan, local officials must give public notice to the affected property owners. The statute refers to specific procedural requirements (Government Code Section 65353). In 2006, the Legislature expanded the notice requirements for certain types of subdivisions which consequently changed the format of Government Code Section 65091, the section to which this public notice requirement refers (AB 2867, Torrico, Chapter 363, Statutes of 2006). Planners note that these statutory cross-references are no longer valid and they want the Legislature to correct those errors. This bill corrects the erroneous statutory cross-references in the law that requires planning commissions to give notice of their public hearings on general plan adoptions and amendments. ŬSection 5] 6. Subdivision clarification . The Subdivision Map Act (Government Code Section 66410, et seq.) controls how counties and cities approve requests to convert large properties into marketable parcels. When a major subdivision creates five or more parcels, state law requires a two-stage process involving both a SB 194 Page 5 tentative map and a final map (Government Code Section 66426). A minor subdivision with fewer parcels needs only a parcel map, but local officials can require a tentative parcel map and a final parcel map (Government Code Section 66428). Counting the number of parcels determines if a proposed subdivision is a major subdivision or a minor subdivision. The Map Act excludes certain types of divisions when counting parcels. For example, land conveyed to (or from) a government agency, public entity, public utility, or land conveyed to a subsidiary of a public utility for conveyance to the public utility doesn't count as a parcel (Government Code Section 66428 Ŭa]Ŭ2]). Similar, but not identical, language appears in the section relating to parcel maps. This lack of precision might result in confusion, according to an assistant city attorney who specializes in land use law. He wants the Legislature to conform the language in the parcel map section to the language in the tentative map section. This bill amends the exclusion of parcels for major subdivisions to match the language that excludes parcels for minor subdivisions. ŬSection 6 & Section 7] 7. Subdivision improvements . Tentative subdivision maps are usually good for 24 months. However, if local officials require a subdivider to spend $178,000 or more on off-site public works, state law extends the life of the tentative map by another 36 months. The Legislature set the original $125,000 threshold in 1989 and allowed the limit to increase each year by a designated inflation rate (AB 1963, Cortese, 1989). Each January, the State Allocation Board computes the annual inflationary adjustment for the statewide cost index for Class B construction (Government Code Section 66452.6 Ŭa]). In 2004, the Legislature reset the statutory amount to reflect the State Allocation Board's actions (SB 1165, Senate Local Government Committee, Chapter 118, Statutes of 2004). After more annual changes, the threshold is now $236,790. Some builders say that it's hard to figure out the current threshold because it requires knowing years of inflation rates. They want the Legislature to once again recalibrate the statute. This bill changes the SB 194 Page 6 dollar limit that triggers a longer life for tentative maps from $178,000 to $236,790, conforming the statutory threshold to amount set by the State Allocation Board in January 2011. ŬSection 7.5] 8. Map Act cross-reference . The Subdivision Map Act (Government Code Section 66410, et seq.) controls how counties and cities convert large properties into marketable parcels. The Map Act allows Orange County and its cities to charge special subdivision fees to pay for bridges and major thoroughfares (Government Code Section 66484.3, added by AB 2431, Young, 1984). That language refers to another statute governing subdivision fees which the Legislature renumbered in 1986 (Government Code Section 53077.5 renumbered to Section 66007 by AB 3314, Leonard, 1986). The Committee's staff wants the Legislature to correct this erroneous statutory cross-reference. This bill corrects the erroneous statutory cross-reference in the Map Act provision relating to special subdivision fees for bridges and thoroughfares. ŬSection 8] 9. Sanitation districts' employees' cross-reference . The County Sanitation District Act governs the powers and duties of more than 70 special districts (Health & Safety Code Section 4700, et seq.). The state laws that prohibit state employees from engaging in inconsistent or conflicting activities also apply to county sanitation districts' employees (Health & Safety Code Section 4768). When the Legislature codified the Governor's Reorganization Plan No. 1 of 1981, the bill renumbered the Government Code section that prohibits those activities, but failed to correct the cross-reference in the County Sanitation District Act (former Government Code Section 19251 renumbered to Section 19990 by SB 668, Dills, 1981). A Los Angeles County official wants the Legislature to correct the cross-reference. This bill corrects the cross-reference in the County Sanitation District Act. ŬSection 8.5] 10. Obsolete redevelopment "blight" definition . The Community Redevelopment Law governs how local officials can use redevelopment powers to eradicate SB 194 Page 7 physical and economic blight (Health & Safety Code Section 33000, et seq.). Because the statutory "blight" definition is crucial, the Legislature defined and amended that term in 1993 and 2006 (Health & Safety Code Section 33030 & Section 33031, amended by AB 1290, Isenberg, 1993 and SB 1206, Kehoe, 2006). However, a section adopted in 1963 still refers to blight in temporary government-owned wartime housing projects, presumably referring to World War II which ended in 1945. The Committee's staff wants the Legislature to repeal this obsolete reference. This bill repeals the redevelopment law's reference to blight in wartime housing. ŬSection 9] 11. Military base redevelopment cross-reference . The earliest special legislation for closed military bases benefited Norton AFB and George AFB in San Bernardino County (Health & Safety Code Section 33320.5 & Section 33320.51, added by AB 419, Eaves, 1989). Later bills placed the military base redevelopment provisions in a separate chapter (Health and Safety Code Section 33492 et seq., added by SB 915, Johnston, 1993). In 1997, the Legislature moved most of the provisions for Norton AFB and George AFB to a new article within that separate chapter (Health & Safety Code Section 33492.40, et seq., added by SB 320, Senate Housing & Land Use Committee, 1997), but left one provision behind (Health & Safety Code Section 33320.51). The Committee's staff wants the Legislature to renumber this section, moving it to the article with the rest of the provisions. This bill renumbers and amends a cross-reference in a provision relating to the redevelopment of the Norton AFB and George AFB. ŬSection 10] 12. County highway contracts' change orders . State law spells out the procedures that local officials must follow when contracting for public works projects (Public Contract Code Section 20100, et seq.). For county highway projects, a board of supervisors may authorize county employees to make contract changes, provided that they don't exceed specified dollar amounts. For contracts over $250,000, change orders can't exceed $25,000 plus 5% of the amount over SB 194 Page 8 $250,000. The amount of the change can't exceed $150,000 (Public Contract Code Section 20395 Ŭd], amended by AB 683, Morrow, 1997). Los Angeles County officials note that since 1997, inflation has eroded their purchasing power. To buy something that cost $150,000 in 1998 (the effective date of the last statutory change) costs $202,000 in 2010. County officials want the Legislature to raise the dollar limit on county highway contracts' change orders. This bill raises the dollar limit on county highway contracts' change orders from $150,000 to $210,000. This bill also clarifies that these change orders may include additions to the work. ŬSection 11] 13. Avigation easements and recording fees . To reduce the potential for conflicts between airports and noise-sensitive land uses, some cities require property owners to grant avigation easements as a condition for development approvals. Avigation easements must be granted before local officials issue building permits. However, if a project isn't built, airport officials must record a notice of termination for the avigation easement (Public Utilities Code Section 21669.5, added by SB 1333, Yee, 2010). Since the passage of last year's bill, there has been confusion over who should pay the fees for recording the required notices of termination. After discussions with the County Recorders' Association of California, airport officials agreed that they should pay the fees. The California Airports Council wants the Legislature to clarify that the airports must pay the county recorders' fees. This bill requires the airport owner or operator to pay for recording a notice of termination of an avigation easement. ŬSection 11.5] 14. Cities' fiscal years and state reports . State law requires counties, cities, special districts, and school districts to file various annual reports regarding their financial practices. For example, local transit operators must file annual reports regarding their operations with transportation planning agencies and the State Controller within 90 days after the end of their fiscal year (Public SB 194 Page 9 Utilities Code Section 95243). Counties and cities must annually report to the State Controller about their spending on streets and roads for the fiscal year that ended on the previous June 30 (Streets & Highways Code Section 2151). Although the state government follows a fiscal year that starts on July 1, state law doesn't specify a date on which a city must begin its fiscal year. Five cities use the federal fiscal year which begins on October 1: El Segundo, Huntington Beach, Inglewood, Long Beach, and South Lake Tahoe. State law recognizes Huntington Beach and South Lake Tahoe's practices, allowing those cities to file their annual financial reports based on the federal fiscal year. The Committee's staff wants the Legislature to recognize the other three cities that use the federal fiscal year. This bill adds the Cities of El Segundo, Inglewood, and Long Beach to the list of cities that may use the federal fiscal year when filing annual reports regarding transit and street spending with the State Controller. ŬSection 12 & Section 13] This bill also explains why a special statute is needed. ŬSection 23] 15. Repeal obsolete transit planning taxes . In 1966, responding to Los Angeles County supervisors' reluctance to seek voter approval of taxes to fund planning for a rapid transit system, the Legislature provided a one-time authority to impose a combination of parking taxes, vehicle license fees, and property taxes to raise $3.9 million to fund the Southern California Rapid Transit District's planning efforts (Revenue & Taxation Code Section 36000, et seq., added by SB 80x, Rattigan, 1966). Later that same year, the Legislature directly appropriated $3.9 million for rapid transit planning in Los Angeles County (SB 2x, Miller, 1966), making it unnecessary for the County to use the taxing authority granted by the Rattigan bill. Proposition 13 (1978) subsequently eliminated the County's ability to levy a property tax to raise revenues to contribute to a rapid transit district's planning efforts. Further, under Proposition 218 (1996) and Proposition 26 (2010), a parking lot license tax or a vehicle license fee to fund transit planning needs 2/3-voter approval. The Committee's SB 194 Page 10 staff believes that the 1966 statutory provisions are outdated. This bill repeals the statutes authorizing the Los Angeles County Board of Supervisors to raise money, for one year only, from parking taxes, vehicle license fees, and property taxes, and to appropriate those funds to a rapid transit district to pay for transit planning. ŬSection 12.5] 16. Benefit assessments for maintenance . Proposition 218 (1996) set limits on how local officials can use benefit assessments to finance public works and maintenance activities. Benefit assessments must reflect the special (not general) benefits that properties receive from facilities and services. New and increased benefit assessments on property need the weighted ballot approval of the affected property owners (California Constitution Article XIID and Government Code Section 53750, et seq.). The Legislature amended the benefit assessment statutes to conform to the new constitutional limits (SB 1334, Senate Local Government Committee, 2000). Among the revised statutes was the Landscaping and Lighting Act of 1972 (Streets & Highways Code Section 22500, et seq.). Local officials can use the 1972 Act to finance a specific list of "improvements" as well as their "maintenance and servicing" (Streets & Highways Code Section 22525). The 2000 revisions to the 1972 Act also repealed an obsolete procedural requirement for voter approval for acquiring and constructing community centers, auditoriums, halls, and similar facilities, shifting the authorization for those facilities to the list of "improvements" (former Streets & Highways Code Section 22525.5, repealed by SB 1334, Senate Local Government Committee, 2000). By placing community centers at the bottom of that statutory list, the 2000 bill could be read to preclude the use of benefit assessments to pay for their maintenance, even though the pre-2000 law allowed local officials to use benefit assessments for maintaining community centers. An attorney who advises on local fiscal affairs wants the Legislature to amend the 1972 Act so that local officials can use benefit assessments for maintaining community centers, in addition to financing their construction. This SB 194 Page 11 bill allows local officials to use benefit assessments levied under the Landscaping and Lighting Act of 1972 to pay for maintaining community centers as well as for financing their construction. ŬSection 13.5] 17. Assessment area clarification . Cities use the Parking and Business Improvement Area Law of 1989 (Streets & Highways Code Section 36500, et seq.) to levy benefit assessments, when approved by the affected property owners or business owners. The formation of a parking and business improvement area begins when a city council adopts a formal resolution that contains eight types of information about the proposal and a subsequent protest hearing (Streets & Highways Code Section 36522). An assistant city attorney notes that the statute incorrectly calls this resolution a "notice" and wants the Legislature to clarify that the resolution must describe the protest provisions. This bill clarifies the wording in the statute that spells out the contents of a city's resolution initiating the formation of a parking and business improvement area. ŬSection 14] 18. Property and business improvement assessments . Proposition 218 (1996) set limits on how local officials can use benefit assessments to finance public works and maintenance activities. Benefit assessments must reflect the special (not general) benefits that properties receive from facilities and services. New and increased benefit assessments on property need the weighted ballot approval of the affected property owners (California Constitution Article XIID and Government Code Section 53750, et seq.). The Property and Business Improvement District Act of 1994 allows local officials to set up property and business improvement districts (PBIDs) that can levy benefit assessments on real property or businesses or both (Streets & Highways Code Section 36600, et seq.). The California Business Properties Association notes that the procedural requirements for PBIDs don't always distinguish between property owners and business owners. To avoid confusion, the Association wants the Legislature to adopt clarifying amendments. This bill amends the procedural SB 194 Page 12 requirements for levying property and business improvement assessments to distinguish between property assessments and business assessments. This bill also clarifies that a joint powers agency that forms a PBID may include the State. ŬSection 3.5 and Sections 15-21] Legislative intent . This bill expresses the Legislature's intent to cut costs by combining several noncontroversial items relating to local government into a single bill. ŬSection 1] Comments This bill collects 18 noncontroversial changes to the state laws affecting local agencies and land use into a single bill. Sending a bill through the legislative process costs over $18,000. By avoiding 17 other bills, the Committee's measure avoids over $300,000 in legislative costs. Although the practice may violate a strict interpretation of the single-subject and germaneness rules, the Committee insists on a very public review of each item. More than 150 public officials, trade groups, lobbyists, and legislative staffers see each proposal before it goes into the Committee's bill. Should any item in this bill attract opposition, the Committee will delete it. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 4/28/11) American Planning Association - California Chapter Association of California Water Agencies California Airports Council California Association of Clerks and Election Officials California Association of County Treasurers and Tax Collectors California Building Industry Association California Business Properties Association California Special Districts Association City of Walnut Creek County of Los Angeles Mandell Municipal Counseling SB 194 Page 13 AGB:nl 4/28/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****