BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1462| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 1462 Author: Senate Governance and Finance Committee Amended: 6/10/14 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 4/24/14 AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Walters SENATE FLOOR : 35-0, 5/1/14 (Consent) AYES: Anderson, Berryhill, Block, Cannella, Corbett, Correa, De León, DeSaulnier, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Knight, Lara, Leno, Lieu, Liu, Mitchell, Monning, Morrell, Nielsen, Padilla, Pavley, Roth, Steinberg, Torres, Vidak, Walters, Wolk, Wyland NO VOTE RECORDED: Beall, Calderon, Jackson, Wright, Yee ASSEMBLY FLOOR : 76-0, 6/26/14 (Consent) - See last page for vote SUBJECT : Local government: omnibus bill SOURCE : Author DIGEST : This bill, the Local Government Omnibus Act of 2014, proposes a number of minor, noncontroversial changes to state laws governing local governments' powers and duties. Assembly Amendments add 12 more noncontroversial changes. ANALYSIS : Each year, local officials discover problems with CONTINUED SB 1462 Page 2 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 and Finance Committee, Chapter 210) 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. This bill, the Local Government Omnibus Act of 2014, proposes the following changes to the state laws affecting local agencies' powers and duties: 1.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. Existing 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. 2.Sacramento County fictitious business names . Existing law requires a fictitious business name statement to be filed with the clerk of the county in which a registrant has his/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. CONTINUED SB 1462 Page 3 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. 3.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. Existing 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. 4.State Controller's property tax audits cross-reference . Existing 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. 5.Infrastructure Financing Districts (IFDs) . 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 CONTINUED SB 1462 Page 4 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 (Senate Governance and Finance Committee, Chapter 210, Statutes of 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. 6.Special districts and securitized limited obligation notes (SLONs) . 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. 7.Office of Noise Control . Existing 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. CONTINUED SB 1462 Page 5 8.Port or harbor infrastructure definition cross-reference . Existing 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. Existing law defining "port of harbor infrastructure" contains an erroneous cross-reference. This bill corrects that error. 9.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." 10.Property and Business Improvement Districts (PBID) . 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: A. 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; B. District boundaries . Existing 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; C. Cross-reference correction . Existing law requires that CONTINUED SB 1462 Page 6 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; D. District renewal . Existing law specifies that if a PBID expires due to statutory time limits, a new 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; E. Interest and penalties . Existing 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; F. Public hearing . Existing 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 G. Use of estimates in the annual report . Existing 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. Comments This bill compiles 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 separate bills, this bill avoids more than $160,000 in legislative costs. Although the practice may CONTINUED SB 1462 Page 7 violate a strict interpretation of the single-subject and germaneness rules, the Senate Governance and Finance Committee (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 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. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 6/27/14) California Assessors' Association California Public Securities Association California Special Districts Association Council of California County Law Librarians County of Sacramento ASSEMBLY FLOOR : 76-0, 6/26/14 AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins NO VOTE RECORDED: Gorell, Logue, Rendon, Vacancy AB:e 6/27/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED SB 1462 Page 8 CONTINUED