BILL ANALYSIS Ó
SB 1462
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Date of Hearing: June 18, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
SB 1462 (Committee on Governance and Finance) - As Amended:
June 10, 2014
SENATE VOTE : 35-0
SUBJECT : Local government: omnibus bill.
SUMMARY : Enacts the Local Government Omnibus Act of 2014, which
proposes a number
of minor, noncontroversial changes to state laws affecting local
agencies' powers and duties. Specifically, this bill :
1)Allows real property acquired by a law library's Board of
Trustees to be leased, rented or licensed, with the proceeds
to be deposited in the Law Library Fund.
2)Allows the Sacramento County Board of Supervisors to
designate, by resolution, another county officer to perform
the duties of the Clerk of Sacramento County regarding the
filing of fictitious business name statements.
3)Allows a legislative body, as defined, to include the maturity
or maturities of bonds in the ordinance, resolution,
indenture, agreement, or other instrument providing for
issuance of the bonds, if the legislative body determines
prior to issuing bonds that the interest payable on the bonds
will be subject to federal income taxation, as specified.
4)Corrects an erroneous cross-reference in a requirement that
the State Controller (Controller) regularly audit, in
accordance with a specified schedule, the annual apportionment
and allocation by counties of property tax revenue.
5)Specifies that the description of the boundaries of a proposed
infrastructure financing district (IFD) may be accomplished by
reference to a map on file in the Office of the Clerk of
either the city or county that is proposing to establish the
IFD.
6)Extends an existing authorization for special districts to
issue securitized limited obligation notes (SLONs), as
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specified, until December 31, 2019.
7)Eliminates a requirement that the noise element of a city or
county general plan recognize the guidelines established by
the Office of Noise Control.
8)Corrects an erroneous cross-reference in statute that defines
"port or harbor infrastructure."
9)Updates obsolete references to the State Association of County
Assessors in specified provisions of law regarding the Board
of Equalization's (BOE) oversight of appraisers, by
substituting the Association's existing name, the California
Assessors' Association.
10)Makes the following changes to the Property and Business
Improvement District (PBID) Law of 1994:
a) Revises the definition of "assessment" to mean a levy
for the purpose of providing activities that will benefit
the properties or businesses located within the district;
b) Allows the description of the exterior boundaries of the
PBID in the resolution of intention to form a PBID, the
management PBID plan, and the resolution of formation of
the PBID to be made by reference to any plan or map which
is on file with the City Clerk;
c) Corrects an erroneous cross-reference in the listing of
the information that must be contained in the resolution
establishing a PBID;
d) Allows a PBID to be renewed upon or before expiration,
as specified;
e) Allows, rather than requires, interest and penalties to
be charged on delinquent payments for assessments;
f) Eliminates the reference to all other "public meetings"
in the notice requirement for the modification of a
management district plan, and refers to "public hearings"
instead; and,
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g) Requires the report prepared by the owners' association
under contract with a local governmental entity to
administer or implement activities and improvements
specified in the management district plan to include the
estimated amount of any surplus or deficit revenues to be
carried over from a previous fiscal year, and the estimated
amount of any contributions to be made from sources other
than assessments.
11)Makes findings and declarations.
12)Makes other technical and clarifying changes.
EXISTING LAW :
1)Establishes a system of county law libraries, provides for a
Board of Trustees in each county to govern the law library,
and allows real property acquired by the board to be sold,
with the proceeds to be deposited in the Law Library Fund.
2)Requires a fictitious business name statement to be filed with
the clerk of the county in which a registrant has his or her
principal place of business in this state or, if a registrant
has no place of business in this state, with the Clerk of
Sacramento County.
3)Authorizes a legislative body, as defined, that determines
prior to issuing bonds that the interest payable on the bonds
will be subject to federal income taxation under the law in
effect on the date of issuance, to require in the ordinance,
resolution, indenture, agreement, or other instrument
providing for the issuance of the bonds, that the bonds be
denominated, payable, and redeemable in accordance with
certain standards.
4)Requires the Controller to regularly audit, in accordance with
a specified schedule, the annual apportionment and allocation
by counties of property tax revenue.
5)Authorizes the legislative body of a city or county to
establish an IFD, and requires proceedings for the
establishment of an IFD to be instituted by the adoption of a
resolution
of intention to establish the proposed IFD that, among other
things, describes the boundaries of the proposed IFD as
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referenced in a map on file in the Office of the Clerk of the
city.
6)Authorizes special districts to issue SLONs, as specified,
until December 31, 2014.
7)Requires, pursuant to the Planning and Zoning Law, the
legislative body of a city or county to adopt a general plan
that consists of various elements, including a noise element
that identifies and appraises noise problems in the community.
Among other things, the noise element must recognize the
guidelines established by the Office of Noise Control.
8)Authorizes any two or more harbor agencies to establish an
authority, as specified, for the purposes of establishing an
infrastructure fund and financing port or harbor
infrastructure, and defines "port or harbor infrastructure"
for purposes of that law.
9)Requires the BOE to hold appraiser examinations, prepared by
the BOE with the assistance of five assessors selected by the
State Association of County Assessors, and prescribe a course
of study, prepare an examination, and approve the professional
designation for advanced appraisers, with the advice and
assistance of five assessors selected by the State Association
of County Assessors.
10)Pursuant to the PBID Law of 1994:
a) Defines "assessment" for purposes of that law to mean a
levy for the purpose of, among other things, promoting
activities that will benefit the properties or businesses
located within the PBID;
b) Requires the resolution of intention to form a PBID, the
management PBID plan, and the resolution of formation of
the PBID to include a description of the exterior
boundaries of the district;
c) Requires the resolution establishing a PBID to contain
specified information;
d) Allows, upon the expiration of a PBID, a new PBID to be
established, and allows any PBID previously established
whose term has expired to be renewed, as specified;
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e) Requires all delinquent payments for assessments to be
charged interest and penalties;
f) Allows the city council to modify a PBID's management
district plan after conducting a public hearing on the
proposed modifications. Notice of all other public
meetings and public hearings with respect to the
modification of a management district plan must comply with
either a particular statute or specified requirements; and,
g) Requires the owners' association under contract with the
local governmental entity to administer or implement
activities and improvements specified in the management
district plan to prepare a report for each fiscal year for
which assessments are to be levied and collected to pay the
costs of the improvements and activities described in the
report. The report must include, among other things, the
amount of any surplus or deficit revenues to be carried
over from a previous fiscal year and the amount of any
contributions to be made from sources other than
assessments.
FISCAL EFFECT : None
COMMENTS :
1)Purpose of this bill . This bill enacts the Local Government
Omnibus Act of 2014, which proposes a number of minor,
noncontroversial changes to state laws affecting local
agencies' powers and duties. This bill is authored by the
Senate Governance and Finance Committee.
2)Author's statement . According to the author, "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.
"The Senate Governance & Finance Committee responds by
combining several of these minor topics into an annual
'omnibus bill'?Although this practice may violate a strict
interpretation of the single-subject and germaneness rules as
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presented in Californians for an Open Primary v. McPherson
(2006) 38 Cal.4th 735, nevertheless it is an expeditious and
relatively inexpensive way to respond to multiple requests."
3)Background . The Local Government Omnibus Act of 2014 compiles
a number of noncontroversial changes to state laws affecting
local agencies and land use into a single bill. This bill
proposes the following changes to current law affecting local
agencies:
a) County law libraries' real property management . The
Legislature established a system
of county law libraries more than 120 years ago. 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.
The Council of California County Law Librarians wants the
Legislature to give law library trustees more flexibility
in managing libraries' real property. This bill allows a
board of trustees to lease, rent, or license real property,
with proceeds going to the law library fund.
b) Sacramento County fictitious business names . Current
law requires a fictitious business name statement to be
filed with the clerk of the county in which a registrant
has his or her principal place of business in this state
or, if a registrant has no place of business in this state,
with the Clerk of Sacramento County. As a result of
various reorganizations of Sacramento County's departments,
the County's fictitious business name functions are now
administered by the County's Department of Finance,
pursuant to a memorandum
of understanding (MOU) with the County Clerk/Recorder's
Office. Sacramento County officials want to eliminate this
confusing and unnecessary MOU process and establish the
County's statutory authority to administer fictitious
business name functions through its
Finance Department. This bill allows the Sacramento County
Board of Supervisors to designate, by resolution, another
County officer to perform the duties of the County Clerk
pursuant to specified state laws governing fictitious
business names.
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c) 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. 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 principal and/or interest of the
bonds is to be paid (annually, semiannually, monthly,
etc.). This bill clarifies that local bond issuers may
also determine the final maturity date or dates of the
bonds.
d) Controller's property tax audits cross-reference . State
law requires the State Controller to perform periodic
audits of counties' allocation of property tax revenue
among local jurisdictions. The statutory language
requiring these audits was originally placed in the Revenue
and Taxation Code, but was later moved into the Government
Code. The State Controller's Office notes that when the
language was moved out of the Revenue and Taxation Code, a
cross-reference to the chapter of the Revenue and Taxation
Code governing property tax allocation was not updated. To
clarify the current statute, this bill corrects the
cross-reference to the Revenue and Taxation Code sections
that govern property tax allocation.
e) Infrastructure Financing Districts . Cities and counties
can create IFDs and issue bonds to pay for community scale
public works such as 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. 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 does not apply to
counties, the Local Government Omnibus Act of 2013 [SB 184
(Governance & Finance Committee), Chapter 210, Statutes of
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2013] removed counties from the definition of a city and
inserted the term "county" throughout the statutes that
govern IFDs. The California State Association of Counties
notes that last year's bill omitted a reference to a county
clerk in one IFD statute. This bill corrects this omission
by adding a reference to a clerk of a county.
f) Special districts and securitized limited obligation
notes . Special districts can issue SLONs and borrow up to
$2 million to be paid back from designated revenues, over
10 years. Unlike riskier promissory notes, SLONs are more
secure because the special district pledges a dedicated
stream of revenues. SLONs are like promissory notes in
that they don't require voter approval. It takes a 4/5
vote of a special district's governing board to issue
SLONs. The statutory authority to issue SLONs sunsets on
December 31, 2014. To keep this financing tool available
to special districts, the California Special Districts
Association wants legislators to extend the sunset date in
the statutes authorizing SLONs. This bill extends the
authority for special districts to issue SLONs from
December 31, 2014, to December 31, 2019.
g) Office of Noise Control . State law directs local
agencies to adopt a general plan with seven specified
elements, including a noise element. The noise element
must recognize guidelines established by the California
Office of Noise Control. The Governor's Office of Planning
and Research (OPR) must adopt and periodically revise
guidelines for the preparation and content of local general
plans. OPR staff notes that the Office of Noise Control,
which last issued noise control guidelines in 1976, was
eliminated sometime in the 1980s. This bill deletes the
requirement that a general plan's noise element must
recognize guidelines issued by the Office of Noise Control,
thereby clarifying OPR's authority to develop guidelines
for the noise element.
h) Port or harbor infrastructure definition
cross-reference . State law allows any two or more harbor
agencies to use the joint powers law to establish a port
infrastructure financing authority to establish an
infrastructure fund and finance port or harbor
infrastructure. State law defining "port of harbor
infrastructure" contains an erroneous cross-reference.
This bill corrects that error.
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i) 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. The Association notes that two statutes still
refer to the Association's outdated name. This bill
replaces the outdated name, "State Association of County
Assessors," with the correct name, "California Assessors'
Association."
j) Property and Business Improvement Districts . The PBID
Law of 1994 allows property owners to petition a city (or
county) to set up a PBID and levy assessments on property
owners, business owners, or both, to pay for promotional
activities as well as for physical improvements.
Practitioners who work with PBIDs have identified errors
and ambiguities in the PBID Law. They want the Legislature
to amend the PBID Law to make the following corrections and
clarifications:
i) Assessment definition . The PBID Law of 1994 defines
the term "assessment" as a levy for the purpose of
acquiring, constructing, installing, or maintaining
improvements and promoting activities which will benefit
the properties or businesses located within a property
and business improvement district. This bill replaces
the reference to "promoting" activities with the phrase
"providing" activities;
ii) District boundaries . Current law requires that a
PBID's management district plan and the resolution
establishing a PBID must include a description of the
district's boundaries. This bill allows this boundary
description to be made by reference to a map that is on
file with the City Clerk;
iii) Cross-reference correction . Current law requires
that the resolution establishing a PBID must contain
specified information. This bill corrects an inaccurate
cross-reference to the statute specifying the information
the resolution establishing a PBID must contain;
iv) District renewal . Current law specifies that if a
PBID expires due to statutory time limits, a new
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management district plan may be created and a new
district established pursuant to specified procedures.
This bill clarifies that a district is "renewed," and not
"established," by the specified process. The bill also
clarifies that a district may be renewed before its
statutory time limit expires;
v) Interest and penalties . Current law requires that
all delinquent payments for PBIDs' assessments must be
charged interest and penalties. This bill allows, rather
than requires, delinquent assessment payments to be
charged interest and penalties;
vi) Public hearing . Current law requires PBID officials
to hold a "public hearing" on proposed modifications to a
management district plan. This bill replaces related
references to a "public meeting" with the phrase "public
hearing;" and,
vii) Use of estimates in the annual report . Current law
requires PBID officials to produce an annual report on
the PBID's activities. The report must include specified
information, including the amount of any surplus or
deficit revenues to be carried over from a previous
fiscal year, and the amount of any contributions to be
made from sources other than assessments. This bill
allows the annual report to include the "estimated"
amount of surplus or deficit revenues carried over from a
previous year, and the "estimated" amount of
contributions from sources other than PBID assessments.
4)Arguments in support . Supporters note that this bill provides
clarity and makes noncontroversial changes for local agencies.
5)Arguments in opposition . None on file.
6)Chaptering conflicts . Because provisions of this bill
conflict with provisions in SB 33 (Wolk), the author may wish
to amend the bill to avoid any chaptering out issues that
could occur because of the conflict.
REGISTERED SUPPORT / OPPOSITION :
Support
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California Assessors' Association
California Public Securities Association
California Special Districts Association
Council of California County Law Librarians
Sacramento County Board of Supervisors
Opposition
None on file
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958