BILL ANALYSIS �
SB 194
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Date of Hearing: June 29, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 194 (Governance and Finance Committee) - As Amended: June
13, 2011
SENATE VOTE : 40-0
SUBJECT : Local government: omnibus bill.
SUMMARY : Enacts the "Local Government Omnibus Act of 2011" and
makes 22 changes to the state laws affecting local agencies'
powers and duties. Specifically, this bill makes changes in the
following subject areas:
1)County donations and credit cards. County governments can
accept gifts and bequests for public purposes. Counties,
cities, and other public agencies can accept credit cards,
debit cards, or electronic fund transfers for seven specific
purposes, including bail, fines, court fees, family support,
and taxes. SB 194 adds county donations to the list of
purposes for which counties can accept credit cards, debit
cards, or electronic fund transfers.
2)Clean-up state mandate procedures. The California
Constitution requires the state to pay for the costs of new
state-mandated local programs. State law spells out the
procedures for filing, reviewing, paying, and reporting about
local officials' reimbursement claims. Until 2008, local
officials could file estimated claims for future
reimbursement, but a Budget trailer bill deleted those
provisions �AB 8xxx (Assembly Budget Committee), Chapter 6,
Statutes of 2008, Third Extraordinary Session]. The State
Controller must file an annual report with legislative
committees regarding the reimbursement payments for state
mandates, including a comparison of the estimated annual costs
to the actual amounts, even though the Legislature repealed
the ability of local officials to file estimated claims. SB
194 deletes the obsolete reference to local officials'
estimated claims for reimbursement from the statute that
requires the State Controller file annual reports with
legislative committees.
3)Repeal an obsolete library tax. In response to library
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funding cuts and multiple library closures in the late 1980s,
the Legislature passed the Shasta County Regional Library
Facilities and Services Act �AB 4083 (Statham), Chapter 406,
Statutes of 1990]. Shasta County officials could create a new
countywide commission to fund and administer libraries. This
law became inoperative on January 1, 1995. Subsequently,
Shasta County received funding for a new library through the
California Reading and Literacy Improvement and Public Library
Construction and Renovation Bond Act of 2000. In 2006, Shasta
County and the City of Redding designated the City of Redding
as the operator of the Shasta Public Library System. SB 194
repeals the Shasta County Regional Library Facilities and
Services Act.
4)County recorders and veterans' documents. To receive
veterans' benefits, an applicant must present the original or
a certified copy of his or her discharge papers, called a
DD214 form. To protect their documents, many veterans record
DD214 forms with county recorders. County recorders must
accept lawful documents for official recording and index them
for future retrieval. State law prohibits county recorders
from charging fees to record or copy these documents. County
recorders can provide certified copies only to the veterans,
their families, legal representatives, and veterans'
officials. Veterans who record their DD214 forms must declare
they are aware the information is open to public inspection.
Concerned about identity theft, the Legislature limited the
use of Social Security numbers in public records. County
recorders must truncate Social Security numbers from documents
recorded after July 1, 2008, by redacting the first five
digits. A county recorder can publicly disclose an official
record only with a court order. County recorders say veterans
want complete copies of their DD214 forms with full Social
Security numbers so they can claim veterans' benefits. SB 194
allows a county recorder to provide a copy of a DD214 official
record if the requester certifies a full Social Security
number is needed to receive benefits and he or she is
authorized to receive a copy.
5)Revisions to the County Budget Act. The County Budget Act
spells out the procedures county officials must follow when
adopting their annual budgets. A subcommittee of the State
Controller's Advisory Committee on County Accounting
Procedures has been reviewing the statutes and recommending
changes. Based on the subcommittee's recommendations, the
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Legislature amended more than 55 code sections of the County
Budget Act �SB 113 (Senate Local Government Committee),
Chapter 332, Statutes of 2009]. The Governmental Accounting
Standards Board (GASB) has adopted Statement No. 51
(Accounting and Financial Reporting for Intangible Assets) and
Statement No. 54 (Fund Balance Reporting and Governmental Fund
Type Definitions). Those new GASB standards are effective
beginning with the 2010-11 budgets. SB 194 amends nine
sections of the County Budget Act to conform state law to the
new standards promulgated by the Governmental Accounting
Standards Board.
6)Delegation for unclaimed funds. Cities and counties collect
money for various services, programs, and penalties.
Sometimes payments are inadvertently more than the amount due,
requiring local treasurers to keep track of the unclaimed
funds. After three years, a local treasurer can publish a
notice of the unclaimed funds and, if no one claims the money,
it becomes the local agency's property. For amounts of less
than $15, the legislative body can transfer the money to its
general fund after a year, without publishing notice. A
county board of supervisors may authorize its county treasurer
to act on its behalf regarding unclaimed items worth $1,000 or
less, provided the treasurer informs the county auditor. SB
194 raises the statutory ceiling on the amount of unclaimed
funds that county supervisors may delegate to county
treasurers from $1,000 to $5,000.
7)Investment of public funds. Since 1913, state law has
authorized local officials to invest a portion of their
temporarily idle funds in a variety of financial instruments.
Among those eligible investments are certificates of deposit
issued by a nationally or state-chartered bank, savings
associations, credit unions, or a state-licensed branch of a
foreign bank. Changes in banking regulations have resulted in
the establishment of federally chartered branches of foreign
banks ("Yankee banks"), but state law does not recognize those
institutions' certificates of deposit. SB 194 adds the
federally chartered branches of foreign banks to the list of
financial institutions whose certificates of deposit are
eligible for local agencies' investments.
8)Community services districts' governing boards. Community
services districts (CSDs) can provide a wide range of public
services and facilities within their boundaries. When the
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Legislature revised the CSD Law, it learned that most of the
325 CSDs' governing boards had five members, but a few
districts still relied on three-member boards of directors.
The revised CSD Law required all of the districts to have
five-member boards and provided a transition rule for CSDs to
expand their boards by adding two more directors at the next
election after January 1, 2006. SB 194 repeals the obsolete
section of the Community Services District Law that requires
the districts to expand the membership of their boards of
directors.
9)Before a city or county planning commission holds its public
hearing on the adoption or amendment of a general plan, local
officials must give public notice to the affected property
owners. The statute refers to specific procedural
requirements. In 2006, the Legislature expanded the notice
requirements for certain types of subdivisions that
consequently changed the format of Government Code Section
65091, the section to which this public notice requirement
refers. SB 194 corrects the erroneous statutory
cross-references in the law that requires planning commissions
to give notice of their public hearings on general plan
adoptions and amendments.
10)Subdivision clarification. The Subdivision Map Act controls
how counties and cities approve requests to convert large
properties into marketable parcels. When a major subdivision
creates five or more parcels, state law requires a two-stage
process involving both a tentative map and a final map. A
minor subdivision with fewer parcels needs only a parcel map,
but local officials can require a tentative parcel map and a
final parcel map. Counting the number of parcels determines
if a proposed subdivision is a major subdivision or a minor
subdivision. The Subdivision Map Act excludes certain types
of divisions when counting parcels. For example, land
conveyed to (or from) a government agency, public entity,
public utility, or land conveyed to a subsidiary of a public
utility for conveyance to the public utility does not count as
a parcel. Similar, but not identical, language appears in the
section relating to parcel maps. SB 194 amends the exclusion
of parcels for major subdivisions to match the language that
excludes parcels for minor subdivisions.
11)Subdivision improvements. Tentative subdivision maps are
usually good for 24 months. However, if local officials
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require a subdivider to spend $178,000 or more on off-site
public works, state law extends the life of the tentative map
by another 36 months. The Legislature set the original
$125,000 threshold in 1989 and allowed the limit to increase
each year by a designated inflation rate. Each January, the
State Allocation Board computes the annual inflationary
adjustment for the statewide cost index for Class B
construction. In 2004, the Legislature reset the statutory
amount to reflect the State Allocation Board's actions. After
more annual changes, the threshold is now $236,790. SB 194
changes the dollar limit that triggers a longer life for
tentative maps from $178,000 to $236,790, conforming the
statutory threshold to amount set by the State Allocation
Board in January 2011.
12)Subdivision Map Act cross-reference. The Subdivision Map Act
controls how counties and cities convert large properties into
marketable parcels. The Subdivision Map Act allows Orange
County and its cities to charge special subdivision fees to
pay for bridges and major thoroughfares. That language refers
to another statute governing subdivision fees that the
Legislature renumbered in 1986. SB 194 corrects the erroneous
statutory cross-reference in the Subdivision Map Act provision
relating to special subdivision fees for bridges and
thoroughfares.
13)Sanitation districts' employees' cross-reference. The County
Sanitation District Act governs the powers and duties of more
than 70 special districts. The state laws that prohibit state
employees from engaging in inconsistent or conflicting
activities also apply to county sanitation districts'
employees. When the Legislature codified the Governor's
Reorganization Plan No. 1 of 1981, the bill renumbered the
Government Code section that prohibits those activities, but
failed to correct the cross-reference in the County Sanitation
District Act. SB 194 corrects the cross-reference in the
County Sanitation District Act.
14)Obsolete redevelopment blight definition. The Community
Redevelopment Law governs how local officials can use
redevelopment powers to eradicate physical and economic
blight. Because the statutory blight definition is crucial,
the Legislature defined and amended that term in 1993 and
2006. However, a section adopted in 1963 still refers to
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blight in temporary government-owned wartime housing projects,
presumably referring to World War II, which ended in 1945. SB
194 repeals the redevelopment law's reference to blight in
wartime housing.
15)Military base redevelopment cross-reference. The earliest
special legislation for closed military bases benefited Norton
AFB and George AFB in San Bernardino County. Later bills
placed the military base redevelopment provisions in a
separate chapter. In 1997, the Legislature moved most of the
provisions for Norton AFB and George AFB to a new article
within that separate chapter, but left one provision behind.
SB 194 renumbers and amends a cross-reference in a provision
relating to the redevelopment of the Norton AFB and George
AFB.
16)County highway contracts' change orders. State law spells
out the procedures local officials must follow when
contracting for public works projects. For county highway
projects, a board of supervisors may authorize county
employees to make contract changes, provided they do not
exceed specified dollar amounts. For contracts over $250,000,
change orders cannot exceed $25,000 plus 5% of the amount over
$250,000. The amount of the change cannot exceed $150,000.
To buy something that cost $150,000 in 1998 (the effective
date of the last statutory change) costs $202,000 in 2010. SB
194 raises the dollar limit on county highway contracts'
change orders from $150,000 to $210,000. SB 194 also
clarifies that these change orders may include additions to
the work.
17)Avigation easements and recording fees. To reduce the
potential for conflicts between airports and noise-sensitive
land uses, some cities require property owners to grant
avigation easements as a condition for development approvals.
Avigation easements must be granted before local officials
issue building permits. However, if a project is not built,
airport officials must record a notice of termination for the
avigation easement. There has been confusion over who should
pay the fees for recording the required notices of
termination.
SB 194 requires the airport owner or operator to pay for
recording a notice of termination
of an avigation easement.
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18)Cities' fiscal years and state reports. State law requires
counties, cities, special districts, and school districts to
file various annual reports regarding their financial
practices. For example, local transit operators must file
annual reports regarding their operations with transportation
planning agencies and the State Controller within 90 days
after the end of their fiscal year. Counties and cities must
annually report to the State Controller about their spending
on streets and roads for the fiscal year that ended on the
previous June 30. Although the state government follows a
fiscal year that starts on July 1, state law does not specify
a date on which a city must begin its fiscal year. Five
cities use the federal fiscal year that begins on October 1:
El Segundo, Huntington Beach, Inglewood, Long Beach, and South
Lake Tahoe. State law recognizes Huntington Beach and South
Lake Tahoe's practices, allowing those cities to file their
annual financial reports based on the federal fiscal year.
SB 194 adds the Cities of El Segundo, Inglewood, and Long Beach
to the list of cities that may use the federal fiscal year
when filing annual reports regarding transit and street
spending with the State Controller. SB 194 also explains why a
special statute is needed.
19)Repeal obsolete transit planning taxes. In 1966, responding
to Los Angeles County supervisors' reluctance to seek voter
approval of taxes to fund planning for a rapid transit system,
the Legislature provided a one-time authority to impose a
combination of parking taxes, vehicle license fees, and
property taxes to raise $3.9 million to fund the Southern
California Rapid Transit District's planning efforts. Later
that same year, the Legislature directly appropriated $3.9
million for rapid transit planning in Los Angeles County,
making it unnecessary for the County to use the taxing
authority granted earlier. Proposition 13 (1978) subsequently
eliminated the County's ability to levy a property tax to
raise revenues to contribute to a rapid transit district's
planning efforts. Further, under Proposition 218 (1996) and
Proposition 26 (2010), a parking lot license tax or a vehicle
license fee to fund transit planning needs two-thirds voter
approval. SB 194 repeals the statutes authorizing the Los
Angeles County Board of Supervisors to raise money, for one
year only, from parking taxes, vehicle license fees, and
property taxes, and to appropriate those funds to a rapid
transit district to pay for transit planning.
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20)Benefit assessments for maintenance. Proposition 218 (1996)
set limits on how local officials can use benefit assessments
to finance public works and maintenance activities. Benefit
assessments must reflect the special (not general) benefits
that properties receive from facilities and services. New and
increased benefit assessments on property need the weighted
ballot approval of the affected property owners. The
Legislature amended the benefit assessment statutes to conform
to the new constitutional limits. Among the revised statutes
was the Landscaping and Lighting Act of 1972. Local officials
can use the 1972 Act to finance a specific list of
improvements as well as their maintenance and servicing. The
2000 revisions to the 1972 Act also repealed an obsolete
procedural requirement for voter approval for acquiring and
constructing community centers, auditoriums, halls, and
similar facilities, shifting the authorization for those
facilities to the list of improvements. SB 194 allows local
officials to use benefit assessments levied under the
Landscaping and Lighting Act of 1972 to pay for maintaining
community centers as well as for financing their construction.
21)Assessment area clarification. Cities use the Parking and
Business Improvement Area Law of 1989 to levy benefit
assessments, when approved by the affected property owners or
business owners. The formation of a parking and business
improvement area begins when a city council adopts a formal
resolution that contains eight types of information about the
proposal and a subsequent protest hearing. SB 194 clarifies
the wording in the statute that spells out the contents of a
city's resolution initiating the formation of a parking and
business improvement area.
22)Property and business improvement assessments. Proposition
218 (1996) set limits on how local officials can use benefit
assessments to finance public works and maintenance
activities. Benefit assessments must reflect the special (not
general) benefits that properties receive from facilities and
services. New and increased benefit assessments on property
need the weighted ballot approval of the affected property
owners. The Property and Business Improvement District Act of
1994 allows local officials to set up property and business
improvement districts (PBIDs) that can levy benefit
assessments on real property or businesses or both. SB 194
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amends the procedural requirements for levying property and
business improvement assessments to distinguish between
property assessments and business assessments. SB 194 also
clarifies that a joint powers agency that forms a PBID may
include the State.
23)Legislative intent. SB 194 expresses the Legislature's
intent to cut costs by combining several noncontroversial
items relating to local government into a single bill.
FISCAL EFFECT : Unknown
COMMENTS :
1)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. The Senate Governance and Finance
Committee believes 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.
2)The Senate Governance and Finance Committee responds by
combining several of these minor topics into an annual
"omnibus bill." For example, SB 894, Chapter 699, Statutes of
2010, was the Committee's annual omnibus bill, which contained
24 noncontroversial statutory changes, avoiding about $400,000
in legislative costs. Although this practice may violate a
strict interpretation of the single-subject rule expressed in
Harbor v. Deukmejian (1987) 43 Cal. 3d 1078, and Californians
for an Open Primary v. McPherson (2006) 38 Cal.4th 735, the
Senate Governance and Finance Committee believes it is an
expeditious and relatively inexpensive way to respond to
multiple requests.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Planning Association, California Chapter
Association of California Water Agencies
California Airports Council
California Association of Clerks and Election Officials
California Association of County Treasurers and Tax Collectors
California Building Industry Association
California Business Properties Association
California Special Districts Association
City of Walnut Creek
County of Los Angeles
County Recorders' Association of California
Honorable John Chang, California State Controller
Howard Jarvis Taxpayers Association
Individual letter (1)
Analysis Prepared by : Jennifer Klein Baldwin / L. GOV. /
(916) 319-3958