BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1090| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: SB 1090 Author: Senate Governance and Finance Committee Amended: 4/11/12 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 4/18/12 AYES: Wolk, Dutton, DeSaulnier, Fuller, Hancock, Hernandez, Kehoe, La Malfa, Liu SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Local government: omnibus bill SOURCE : Author DIGEST : This bill, the Local Government Omnibus Act of 2012, proposes nine changes to 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 2011, for example, the local government omnibus bill was SB 194 CONTINUED SB 1090 Page 2 (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. This bill, 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 increased local taxes. Proposition 218 specifically requires special taxes to be approved by a 2/3 vote (California Constitution, Article XIIIC, Section 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. This bill 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 Section 40471, as enacted by SB 1036, Whetmore, Chapter 350, Statutes of 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, Chapter 897, Statutes of 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: CONTINUED SB 1090 Page 3 1.Management district plans . State law requires each PBID's management district plan to include specified information (Streets & Highways Code Section 36622, as amended by AB 1208, Silva, Chapter 114, Statutes of 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. This bill 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, this bill 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 year of operation is not significantly different. 1.District name correction . This bill corrects an erroneous reference to a "parking and business improvement area" by replacing that phrase with "property and business improvement district" (Streets & Highways Code Section 36629, as amended by AB 944, Steinberg, Chapter 763, Statutes of 2003). 2.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 Section 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 Sections 36670 and 36671). This bill clarifies that district revenues remaining after a district expires without renewal are subject to the same requirements that CONTINUED SB 1090 Page 4 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, Chapter 861, Statutes of 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 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, Chapter 1137, Statutes of 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), Chapter 106, Statutes of 2011, which authorizes sewer service providers, at a property owner's request, to CONTINUED SB 1090 Page 5 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. This bill 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 Section 23101-Section 23158). State law also allows counties to adjust their mutual boundaries (Government Code Section 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, Chapter 699, Statutes of 2010). County officials recently identified errors in the new boundary descriptions that were enacted in 2010 and want the Legislature to correct these errors. This bill corrects Fresno and Merced Counties' statutory boundary descriptions. Williamson Act and Photovoltaic Solar Facilities . Statutes enacted by SB 618 (Wolk), Chapter 596, Statutes of 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 Sections 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 CONTINUED SB 1090 Page 6 Code Section 51191). Two statutes incorrectly refer to the time an easement "terminates" instead of the time it "is extinguished" (Government Code Section 51191.3 and Section 51192.1). One statute incorrectly refers to an easement's "abandonment" instead of its "termination" (Government Code Section 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. This bill 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, Chapter 692, Statutes of 2011). For the purposes of this requirement, Government Code Section 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. This bill adds a cross-reference to the Penal Code to more accurately define the phrase abuse of office. 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 Section 54703 et seq.) allows local governments to levy assessments on real property to pay for the maintenance and operation costs of CONTINUED SB 1090 Page 7 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. This bill 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, Chapter 332, Statutes of 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 Section 66442 and Section 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, Chapter 368, Statutes of 2009). The California Land Surveyors Association wants the Legislature to conform the Subdivision Map Act to these changes. This bill 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 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 CONTINUED SB 1090 Page 8 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, this bill: 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. Defines directors' terms of office. Requires the District to conduct elections in CONTINUED SB 1090 Page 9 accordance with the Uniform District Election Law. Comments This bill 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 eight 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 this bill attract opposition, the Committee will delete it. In this transparent process, there is no hidden agenda. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT : (Verified 4/30/12) Association of California Water Agencies California Central Valley Flood Control Association California Land Surveyors Association Fresno County Board of Supervisors Irvine Ranch Water District Kings River Conservation District Merced County Board of Supervisors AGB:nl 5/1/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED