BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 1090                     HEARING:  4/18/12
          AUTHOR:  Governance & Finance CommitteeFISCAL:  Yes
          VERSION:  4/11/12                     TAX LEVY:  No
          CONSULTANT:  Weinberger               

                      LOCAL GOVERNMENT OMNIBUS ACT OF 2012
          

          Proposes nine changes to state laws affecting local 
          agencies' powers and duties.


                                    Background  

          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 2011, for 
          example, the local government omnibus bill was 
          SB 194 (Senate Governance & Finance Committee) which 
          contained 22 noncontroversial statutory changes, avoiding 
          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.


                                   Proposed Law  

          Senate Bill 1090, the "Local Government Omnibus Act of 
          2012," proposes the following changes to the state laws 
          affecting local agencies' powers and duties:

           Archaic voter approval requirements for special taxes  .  
          Proposition 13 (1978), Proposition 62 (1986), and 
          Proposition 218 all require voter approval for new and 




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          increased local taxes.  Proposition 218 specifically 
          requires special taxes to be approved by a 2/3 vote 
          (California Constitution, Article XIIIC, §2(d)).  Some 
          older statutes which were enacted before the constitutional 
          voter-approval requirements took effect appear to allow 
          local governments to impose special taxes with only 
          majority voter approval.  The Committee's staff wants the 
          Legislature to update these archaic statutes by 
          cross-referencing the statutory requirements for voter 
          approval of special taxes.  SB 1090 deletes archaic 
          majority voter approval language and inserts 
          cross-references to voter approval requirements for special 
          taxes into a statute authorizing cities to impose charges 
          for sidewalk installation (Government Code §40471, as 
          enacted by SB 1036, Whetmore, 1971).

           Property and Business Improvement Districts .  The Property 
          and Business Improvement District Law of 1994 allows 
          property owners to petition a city (or county) to set up an 
          improvement district (PBID) and levy assessments on 
          property owners, business owners, or both, to pay for 
          promotional activities as well as for physical improvements 
          (AB 3754, Caldera, 1994).  Practitioners who work with 
          PBIDs have identified errors and ambiguities in the 1994 
          Act.  They want the Legislature to amend four code sections 
          to make the following corrections and clarifications: 

           Management district plans  .  State law requires each PBID's 
          management district plan to include specified information 
          (Streets & Highways Code §36622, as amended by AB 1208, 
          Silva, 2007).  Among other things, every management plan 
          must contain:
                 The improvements and activities proposed for each 
               year of operation of the district.
                 The total annual amount proposed to be expended for 
               improvements, maintenance and operations, and debt 
               service in each year of operation of the district.
          SB 1090 permits a management plan to contain only a 
          description of the proposed improvements and activities for 
          a PBID's first year of operation if the plan states that 
          the improvements and activities proposed for each year of 
          operation are the same. Similarly, SB 1090 permits a 
          management plan to contain only the amount proposed to be 
          expended for improvements, maintenance and operations, and 
          debt service in the PBID's first year of operation if the 
          plan states that the amount proposed to be expended in each 





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          year of operation is not significantly different.

           District name correction  .  SB 1090 corrects an erroneous 
          reference to a "parking and business improvement area" by 
          replacing that phrase with "property and business 
          improvement district" (Streets & Highways Code §36629, as 
          amended by AB 944, Steinberg, 2003).

           Disposition of revenues after a PBID expires  .  State law 
          requires PBIDs to be established for a limited initial term 
          and specifies the procedures by which PBIDs can be renewed 
          for subsequent terms of up to 10 years (Streets & Highways 
          Code §36660).  State law also specifies procedures by which 
          a city council or board of supervisors can disestablish a 
          PBID and imposes requirements on the disposition of 
          revenues remaining after a disestablishment (Streets & 
          Highways Code §§36670 and 36671).  SB 1090 clarifies that 
          district revenues remaining after a district expires 
          without renewal are subject to the same requirements that 
          apply to revenues remaining after a disestablishment.

           Water and sewer districts' lien priority  . State law 
          authorizes local governments that provide water or sewer 
          service to collect specified charges for services and 
          infrastructure using the same laws that apply to the levy, 
          collection, and enforcement of property taxes.  Statutes 
          authorizing water and sewer service providers to collect 
          charges using property tax billing procedures typically 
          allow a public agency to impose a levy on real property for 
          delinquent taxes and charges.  The levy becomes a lien - or 
          "encumbrance" - on the property when that property is sold. 
           The statutes, however, provide an exception to this 
          encumbrance, when the sale occurs before the charge becomes 
          delinquent (AB 1342, Knox, 1973).

          This exception was intended to cover only sales and new 
          mortgage liens occurring in the "gap period" after the 
          agency submits the charge for placement on the tax bill and 
          before the tax bill becomes due.  However, a 1981 court 
          decision, County of Butte v. North Burbank Public Utility 
          District, interpreted the exception more broadly.  That 
          decision expanded the exception to cover any existing 
          mortgage lien. The court held that, when a lender holding 
          an existing mortgage forecloses and sells the property, 
          later-added unpaid tax liens for delinquent utility charges 
          are wiped out, regardless of when they were added. This 





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          interpretation of the bona fide encumbrance exception 
          raises questions about the priority of liens that water and 
          sewer providers use to collect unpaid taxes and charges.

          In response to the Butte decision, the Legislature amended 
          the public utility district statutes involved in that 
          decision and the Irrigation District Law (SB 1922, Johnson, 
          1982).  Those amendments narrowed the exception to apply 
          only to transfers and encumbrances created during a 
          specified window preceding the tax bill showing the 
          charges.  That bill, however, did not amend any of the 
          other statutes with the bona fide encumbrance exception to 
          include this clarification.
           
          Last year, the Legislature approved AB 741 (Huffman, 2011), 
          which authorizes sewer service providers, at a property 
          owner's request, to construct sewer improvements on private 
          property and charge the property owner for the costs.  
          Irvine Ranch Water District officials are concerned that 
          local governments will face risks in implementing AB 741 
          unless statutes that authorize water and sewer districts to 
          use tax bill collection procedures are conformed to the 
          language enacted by the 1982 Johnson bill.  Senate Bill 
          1090 narrows the bona fide encumbrance exception to protect 
          sewer and other water agencies using the tax bill 
          collection mechanisms from the Butte decision's expansive 
          interpretation of the exception. 

           Fresno and Merced counties' boundaries  .  State statutes 
          recite the official boundary descriptions of all 58 
          counties (Government Code §23101-§23158).  State law also 
          allows counties to adjust their mutual boundaries 
          (Government Code §23200, et seq.).  After counties use this 
          procedure they ask the Legislature to revise their 
          statutory boundary descriptions to match the new realities. 
           In 2007, Fresno and Merced county officials used these 
          procedures to shift 4,175 acres from Fresno County to 
          Merced County near the City of Dos Palos.  After those 
          boundary changes took effect on January 1, 2008, the 
          Legislature then corrected the counties' statutory boundary 
          descriptions (SB 894, Senate Local Government Committee, 
          2010).  County officials recently identified errors in the 
          new boundary descriptions that were enacted in 2010 and 
          want the Legislature to correct these errors.  Senate Bill 
          1090 corrects Fresno and Merced Counties' statutory 
          boundary descriptions. 





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           Williamson Act and Photovoltaic Solar Facilities  .  Statutes 
          enacted by SB 618 (Wolk, 2011) authorize a city or county 
          and a landowner to simultaneously rescind a Williamson Act 
          contract on marginally productive or physically impaired 
          lands and enter into a solar-use easement that restricts 
          the use of land to photovoltaic solar facilities 
          (Government Code §§51190-51192.2).  Some of the statutes 
          enacted by last year's Wolk bill contained drafting errors 
          and inconsistent terminology:
                 One statute incorrectly refers to agricultural 
               "productively" instead of "productivity" (Government 
               Code §51191). 
                 Two statutes incorrectly refer to the time an 
               easement "terminates" instead of the time it "is 
               extinguished" (Government Code §51191.3 and §51192.1).
                 One statute incorrectly refers to an easement's 
               "abandonment" instead of its "termination" (Government 
               Code §51192.2).
          To help local governments and land owners use SB 618's 
          provisions properly, Williamson Act practitioners want the 
          Legislature to correct these errors.  Senate Bill 1090 
          corrects errors in Williamson Act statutes related to solar 
          facilities.

           "Abuse of office" definition  .  State law requires a local 
          agency's employment contracts to contain a provision to 
          reimburse the local agency for specified salary, legal, and 
          settlement costs if an employee is convicted of a crime 
          involving an abuse of his or her office or position (AB 
          1344, Feuer, 2011).  For the purposes of this requirement, 
          Government Code §53243.4 defines "abuse of office" as 
          either:
                 An abuse of public authority, including, but not 
               limited to, waste, fraud, and violation of the law 
               under color of authority.
                 A crime against public justice, including, but not 
               limited to, a crime described in Title 7 (commencing 
               with Section 92) of Part 1 of the Penal Code.

          Some law enforcement officials worry that this definition's 
          cross-reference to the Penal Code excludes important crimes 
          that are defined in Title 5 of Part 1 of the Penal Code. 
          Senate Bill 1090 adds a cross-reference to the Penal Code 
          to more accurately define the phrase abuse of office.






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           Benefit Assessment Act of 1982 validations  .  Numerous 
          statutes authorize a local government to file a validation 
          lawsuit, asking a superior court to determine the validity 
          of actions the local government has taken.  The Benefit 
          Assessment Act of 1982 (Government Code §54703 et seq.) 
          allows local governments to levy assessments on real 
          property to pay for the maintenance and operation costs of 
          drainage, flood control, and street lighting services.  
          Unlike many other benefit assessment acts, the 1982 Act 
          doesn't expressly authorize local governments to use 
          validation lawsuits to validate 1982 Act assessments. The 
          California Central Valley Flood Control Association wants 
          the Legislature to allow local governments that levy 
          benefits assessments under the 1982 Act to use validation 
          suits to confirm their actions.  Senate Bill 1090 adds 
          language to the 1982 Act that mirrors the validation 
          language that was added to the North Delta Water Agency's 
          governing statutes by the Local Government Omnibus Act of 
          2009 (SB 113, Senate Local Government Committee, 2009).

           Engineers' and surveyors' seals on subdivision maps .  The 
          Subdivision Map Act governs how cities and counties approve 
          applications to convert large properties into smaller 
          parcels for sale, lease, or financing.  A major subdivision 
          creates five or more parcels and requires both a tentative 
          map and a final map.  A minor subdivision (lot split) 
          creates four or fewer parcels and usually needs only a 
          parcel map.  Final maps and parcel maps must be certified 
          by a licensed engineer or land surveyor, who must "indicate 
          his or her registration or license number with expiration 
          date and the stamp of his or her seal" on a certified map 
          (Government Code §66442 and §66450).  The Legislature 
          recently repealed the requirement that an expiration date 
          appear on the seal that licensed engineers and surveyors 
          stamp on specified engineering and land surveying documents 
          (AB 645, Niello, 2009).  The California Land Surveyors 
          Association wants the Legislature to conform the 
          Subdivision Map Act to these changes.  Senate Bill 1090 
          deletes the requirement that final maps and parcel maps 
          must be stamped with a seal that indicates the expiration 
          date of an engineer's or surveyor's license.  

           Kings River Conservation District's elections  .  The Kings 
          River Conservation District (Fresno County) is a special 
          act special district that provides flood control, water 
          resource management, and power generation services to 





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          communities within its 1.2 million acre jurisdiction.  The 
          District is governed by a seven-member elected board of 
          directors.  Six of the directors represent six electoral 
          divisions within the District and the seventh director 
          represents the entire District.  Because the boundaries of 
          these electoral divisions are defined in the District's 
          special act, using metes and bounds descriptions, the 
          boundaries can only be adjusted by the Legislature, not by 
          the District's board of directors.  The Legislature last 
          amended the statute describing the District's electoral 
          boundaries in 1955.  

          District officials worry that the antiquated statutes 
          governing their board of directors' electoral divisions 
          prevent the District from complying with federal Voting 
          Rights Act requirements.  They want the Legislature to 
          repeal and amend outdated provisions of the Kings River 
          Conservation District Act governing the district's 
          electoral divisions.  Specifically, Senate Bill 1090:
                 Repeals the statutory descriptions of the 
               District's electoral boundaries. 
                 Repeals other antiquated statutory provisions 
               governing district elections.
                 Requires district directors to establish seven 
               electoral divisions that must be, as far as 
               practicable, equal in population, using the most 
               recent federal census data as a basis.
                 Allows directors, when establishing division 
               boundaries, to consider the topography, geography, 
               cohesiveness, contiguity, integrity, compactness of 
               territory, and the community of interests of the 
               electoral divisions.
                 Requires directors to review and, if necessary, 
               adjust the District's electoral division boundaries 
               following each decennial census.
                 Requires a candidate for the board of directors to 
               reside in the electoral division for which he or she 
               is a candidate.
                 Requires a director to continue to reside within 
               the electoral division during his or her term of 
               office.
                 Prohibits a change in boundaries of an electoral 
               division from affecting an incumbent director's term 
               of office.
                 Establishes a schedule for conducting elections for 
               each division.





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                 Defines directors' terms of office.
                 Requires the District to conduct elections in 
               accordance with the Uniform District Election Law.


                               State Revenue Impact
           
          No estimate.


                                     Comment  

           Purpose of the bill  .  SB 1090 compiles nine 
          noncontroversial changes to state laws affecting local 
          agencies and land use into a single bill.  Sending a bill 
          through the legislative process costs around $18,000.  By 
          avoiding 8 other bills, the Committee's measure avoids over 
          $140,000 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 100 public officials, trade 
          groups, lobbyists, and legislative staffers see each 
          proposal before it goes into the Committee's bill.  Should 
          any item in SB 1090 attract opposition, the Committee will 
          delete it.  In this transparent process, there is no hidden 
          agenda.  If it's not consensus, it's not omnibus.


                         Support and Opposition  (4/12/12)

           Support  :  California Central Valley Flood Control 
          Association, Irvine Ranch Water District, Kings River 
          Conservation District.

           Opposition  :  Unknown.