BILL ANALYSIS �
SB 191
Page 1
SENATE THIRD READING
SB 191 (Governance and Finance Committee)
As Amended May 16, 2011
2/3 vote. Urgency
SENATE VOTE :36-0
LOCAL GOVERNMENT 8-1
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|Ayes:|Smyth, Alejo, Bradford, | | |
| |Campos, Davis, Gordon, | | |
| |Hueso, Norby | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight | | |
| | | | |
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SUMMARY : Enacts the First Validating Act of 2011, which would
validate the organization, boundaries, acts, proceedings, and
bonds of the state government, counties, cities, special
districts, school districts, and other public bodies, excluding
redevelopment agencies.
EXISTING LAW allows local agencies to make changes to the
organization, boundaries, acts, proceedings, and bonds of the
state, cities, counties, special districts, school districts,
redevelopment agencies, and other local agencies.
FISCAL EFFECT : None
COMMENTS : According to the Senate Governance and Finance
Committee, the Legislature has adopted annual Validating Acts
for over 70 years that retroactively fix public officials'
inadvertent procedural errors or omissions. The annual bills
affect the state government, as well as counties, cities,
special districts, school districts, and redevelopment agencies.
Beginning in the mid-1920s, the Legislature passed separate
validating acts for different types of bonds, several classes of
special districts, and various local boundary changes. By the
late 1930s, the practice was to pass annual comprehensive
validating acts.
SB 191
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In Miller v. McKenna (1944), 23 Cal.2d 774 the California
Supreme Court explained that the "Legislature may cure
irregularities or omissions to comply with provisions of a
statute which could have been omitted in the first instance."
The Validating Acts save taxpayers money. The bills allow bond
counsels to issue strong legal opinions. Strong legal opinions
result in higher credit ratings. Higher credit ratings result
in lower interest rates. Lower interest rates mean lower
borrowing costs. Lower borrowing costs save money for state and
local taxpayers. The Validating Acts cannot forgive fraud,
corruption, or unconstitutional actions.
It was customary practice for members of the former Senate Local
Government Committee to jointly author these annual Validating
Acts. Following this established tradition, the Senate
Governance and Finance Committee is authoring this year's
Validating Acts. As an urgency measure, SB 191, the First
Validating Act, will take effect this spring, when the Governor
signs the bill into law. SB 192, the Second Validating Act,
also an urgency bill, will take effect late summer, validating
mistakes that occur after the chaptering of the First Validating
Act. SB 193, the Third Validating Act, will take effect on
January 1, 2012, covering the period between the chaptering of
SB 192 and the end of 2011.
The May 2 amendments exclude redevelopment agencies (RDAs),
Community Development Commissions, and Joint Powers Authorities
acting as redevelopment agencies, from the provisions of the
bill. These amendments were requested by the Department of
Finance in order to avoid conflict at this time with the
Governor's Budget and budget legislation �SB 77 (Budget and
Fiscal Review Committee)] that remains pending on the Assembly
Floor. The amendments do not invalidate any actions of RDAs.
They avoid putting the Legislature in the position of appearing
to validate the numerous actions that RDAs have taken purporting
to commit current and future funds in agreement with their host
communities and others. Pre-January 2011 actions already have
been validated by legislation last session. Depending on the
final budget action on redevelopment, these measures can be
revised as appropriate in the second and third validating acts,
and these validations would reach back to January 1, 2011. The
amendments are intended to allow these bills to move forward now
SB 191
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and provide the extra security of validation to local government
entities and the state while the redevelopment budget action
remains pending. Nothing in the provisions of this measure
prohibit an RDA from individually requesting a superior court to
determine validity of a matter pursuant to the Code of Civil
Procedure Section 860.
Support arguments: Supporters argue that the annual Validating
Acts are a cost effective way of correcting inadvertent
procedural errors or omissions of the state and local
governments without having to have thousands of entities go to
the superior court to get their actions validated.
Opposition arguments: Opposition argues that singling out one
type of local government entity for exclusion from the
Validating Acts is unprecedented. It will cast an unwarranted
shadow of uncertainty over redevelopment transactions to the
detriment of both agencies and the private investors in those
transactions.
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916) 319-3
FN: 0000650