BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: SB 1462 HEARING: 4/24/14 AUTHOR: Governance & Finance CommitteeFISCAL: No VERSION: 4/9/14 TAX LEVY: No CONSULTANT: Weinberger LOCAL GOVERNMENT OMNIBUS ACT OF 2014 Proposes several changes to state laws governing local governments' powers and duties. Background and Existing Law 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 2013, for example, the local government omnibus bill was SB 184 (Senate Governance & Finance Committee) which contained 12 noncontroversial statutory changes, avoiding about $200,000 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 1462, the "Local Government Omnibus Act of 2014," proposes the following changes to the state laws affecting local agencies' powers and duties: County law libraries' real property management . More than 120 years ago, the Legislature set up a system of county law libraries (Business & Professions Code §6300, et seq., SB 1462 -- 4/9/14 -- Page 2 enacted by AB 691, Mathews, 1891, and recodified by SB 364, Kenny, 1941). Each county law library has an appointed board of trustees which supervises its operations and finances. Current law allows a county law library's board of trustees to sell real property, with the proceeds going to the law library fund (Business & Professions Code §6348.4, as amended by SB 113, Senate Local Government Committee, 2009). The Council of California County Law Librarians wants the Legislature to give law library trustees more flexibility in managing libraries' real property. Senate Bill 1462 allows a board of trustees to lease, rent, or license real property, with proceeds going to the law library fund. [See §2 of the bill.] Local Bond Issuers Determination of Taxable Bond Maturity . Most municipal bonds are tax-exempt, but the Legislature has allowed state and local governments to issue taxable revenue bonds. To provide state and local governments with the flexibility to access the market for taxable bonds, state law allows government bond issuers to determine the denominations, forms, redemption terms, and interest rates of taxable bonds (Government Code § 5903, as enacted by AB 939, Johnston, 1986). Current law allows a legislative body to determine the "time or times" at which taxable bonds are payable. Bond finance practitioners believe that this language could be interpreted narrowly to refer only to how the bonds' principal and/or interest must be paid (annually, semiannually, monthly, etc.). Senate Bill 1462 clarifies that local bond issuers may also determine the final maturity date or dates of the bonds. [See §3 of the bill.] County Clerks and Infrastructure Financing Districts . Cities and counties can create Infrastructure Financing Districts (IFDs) and issue bonds to pay for community scale public works: highways, transit, water systems, sewer projects, flood control, child care facilities, libraries, parks, and solid waste facilities. To repay the bonds, IFDs divert property tax increment revenues from the city or county that created the district and any other consenting local governments -- but not schools -- for 30 years (SB 308, Seymour, 1990). When they were enacted, the statutes governing IFDs only used the term "city" because the IFD statutes defined "city" as including a county and a city and county. To avoid any misperceptions that IFD law doesn't apply to counties, the Local Government Omnibus Act SB 1462 -- 4/9/14 -- Page 3 of 2013 (SB 184, Governance & Finance Committee, 2013) removed counties from the definition of a city and inserted the term "county" throughout the statutes that govern IFDs. Last year's bill omitted a reference to a county clerk in one IFD statute. Senate Bill 1462 corrects this omission by inserting a reference to a clerk of a county. [See §4 of the bill.] California Assessors' Association . The California Assessors' Association, the statewide non-profit professional association for County Assessors, was previously known as the State Association of County Assessors. Two statutes still refer to the Association's antiquated name (Revenue & Taxation Code §670 and §671, as amended by AB 3701, Kapiloff, 1974). Senate Bill 1462 replaces the antiquated name, "State Association of County Assessors," with the correct association name, "California Assessors' Association." [See §5 and §6 of the bill.] State Revenue Impact No estimate. Comment Purpose of the bill . SB 1462 compiles four 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 3 other bills, the Committee's measure avoids more than $50,000 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 1462 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 (4/21/14) SB 1462 -- 4/9/14 -- Page 4 Support : California Assessors' Association; California Public Securities Association; Council of California County Law Librarians. Opposition : Unknown.