BILL ANALYSIS �
AB 562
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 562 (Williams)
As Amended August 15, 2013
Majority vote
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|ASSEMBLY: |49-19|(May 23, 2013) |SENATE: |23-11|(August 26, |
| | | | | |2013) |
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Original Committee Reference: L. GOV.
SUMMARY : Requires local agencies, beginning January 1, 2014, to
provide specified information to the public before approving any
economic development subsidy of $100,000 or more.
The Senate amendments :
1)Delete a requirement that local agencies provide to the public
the name and address of the entity or individual that is the
beneficiary of an economic development subsidy, if applicable,
except that the address of the beneficiary does not need to be
posted on the local agency's Internet Web site if the
beneficiary is a sole proprietor and instead require local
agencies to provide to the public the name and address of all
corporations or any other business entities, except for sole
proprietorships, that are the beneficiary of an economic
development subsidy, if applicable.
2)Delete a requirement that local agencies prepare a report for
each economic development subsidy by October 1, 2015, and
biennially thereafter, and instead require the report to be
issued within the term of the economic development subsidy but
not later than five years after action granting the economic
development subsidy.
3)Delete a requirement that local agencies hold a public hearing
to consider comments on the information contained in the
report by November 1, 2015, and biennially thereafter, and
instead require the public hearing to be held within the term
of the economic development subsidy but not later than five
years after action granting the economic development subsidy.
4)Delete a requirement that local agencies provide a final
report at the conclusion of each economic development subsidy,
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and instead require local agencies to hold a hearing at the
conclusion of each economic development subsidy with a term of
10 years or more, and make conforming changes.
5)Require each public hearing required by this bill to be
consolidated with a local agency's regularly scheduled
hearing.
6)Remove "tax increment financing" from the definition of
"economic development subsidy."
7)Remove "community redevelopment agency" from the definition of
"local agency."
EXISTING LAW prohibits cities, counties, and redevelopment
agencies from subsidizing the relocation of big box retailers
and auto malls within the same market area, but otherwise
generally allows local governments to make their own decisions
regarding local economic development matters.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required, beginning January 1, 2014, each local agency, before
approving any economic development subsidy (subsidy) within
its jurisdiction, to provide all of the following information
in written form available to the public, and through its
Internet Web site (website), if applicable, for the entire
term of the subsidy:
a) The name and address of the entity or individual that is
the beneficiary of the subsidy,
if applicable, except that the address of the beneficiary
does not need to be posted on the local agency's Internet
Web site if the beneficiary is a sole proprietor;
b) The start and end dates and the schedule for the
subsidy;
c) A description of the subsidy, including the estimated
total amount of the expenditure
of public funds by, or revenue lost to, the local agency as a
result of the subsidy;
d) A statement of the public purposes for the subsidy;
e) Projected tax revenue to the local agency as a result of
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the subsidy; and,
f) Estimated number of jobs created by the subsidy,
categorized by full-time, part-time, and temporary
positions.
2)Required each local agency, before granting a subsidy, to
provide public notice and a hearing regarding the subsidy,
unless a hearing and notice is otherwise required by law.
3)Required, on or before October 1, 2015, and on or before
October 1 in each odd-numbered year thereafter, each local
agency to prepare a report for each subsidy approved after
January 1, 2014, and to make the report available to the
public, and through the agency's website. The report must
include the items listed in 1a) through 1f), above, and the
actual data on those elements as the subsidy is extended. For
any subsidy that will exist for 40 years or more, the report
must be prepared only once every six years after the initial
report.
4)Required the local agency, on or before November 1, 2015, and
on or before November 1 in each odd-numbered year thereafter,
to hold a public hearing to consider any written or oral
comments on the information contained in the report.
5)Required the local agency to provide a final report at the
conclusion of each economic development subsidy, as specified.
6)Provided that subsidies with a term of less than two years are
not subject to the ongoing reporting requirements of this
bill, but the local agency must comply with the final report
requirement within two years of the date the subsidy is
granted and must hold a public hearing to consider any written
or oral comments on the final report.
7)Defined an "economic development subsidy" to mean any
expenditure of public funds or loss of revenue to a local
agency in the amount of $100,000 or more, for the purpose of
stimulating economic development within the jurisdiction of a
local agency, including, but not limited to, bonds, grants,
loans, loan guarantees, enterprise zone or empowerment zone
incentives, tax-increment financing, fee waivers, land price
subsidies, matching funds, tax abatements, tax exemptions and
tax credits.
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8)Specified that an "economic development subsidy" does not
include expenditures of public funds by, or loss of revenue
to, the local agency for the purpose of providing affordable
housing to those of low and moderate income, as defined in
current law.
9)Defined a "local agency" as a city, including a charter city,
county, city and county, and community redevelopment agency.
FISCAL EFFECT : None
COMMENTS : This bill requires cities and counties to provide
specified information to the public before approving a subsidy
of $100,000 or more. This bill is sponsored by the American
Federation of State, County and Municipal Employees.
According to the author's office, "Local governments engage in a
wide variety of economic development activities to build their
tax bases. In that respect, local officials use their
regulatory powers to direct spending and tax policies which, in
turn, influence where, when and how the private sector invests
capital and improves real property. Each year, local
governments give out billions of dollars in tax incentives to
corporations in hopes of increasing economic growth and drawing
jobs for their residents?State requirements for local budgets,
annual financial reports, and regular audits allow constituents
to review most of the direct fiscal decisions made by local
governments. However, local economic subsidies do not receive
the same public scrutiny as budgets and regulatory decisions.
Additionally, local governments rarely track how many jobs are
created and it's impossible to know whether the jobs would have
been created without the aid. AB 562 seeks to remedy this
shortcoming."
Cities and counties engage in a variety of economic development
activities to build their tax bases. Local officials use
regulatory powers, direct spending, and tax policies to
influence where, when, and how the private sector invests
capital and improves real property. Local officials sometimes
use economic development powers to induce business to relocate
to their communities. How local officials use their regulatory
powers is relatively transparent because state law requires
public notice, public hearings, and environmental reviews.
State requirements for local budgets, annual financial reports,
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and regular audits allow constituents to review most of the
direct fiscal decisions. However, some groups worry that local
economic development subsidies do not receive the same public
scrutiny as budgets and regulatory decisions.
Support arguments: Supporters argue that this bill increases
transparency of local government decisions related to economic
development subsidies.
Opposition arguments: Opponents contend that this bill places
additional and unnecessary burdens on local agencies regarding
decisions that are already open to the public.
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
FN: 0001765