League Holds Legislative Briefings, Forecasts Key Issues in Year Ahead

The 2011 legislative year was marked by extensive defensive positioning on the part of cities and the League due to the attacks on Prop 22, redevelopment and local control.  City-state relations were far from harmonious this legislative session, starting with the radical proposal to eliminate RDAs. The governor’s most aggressive and extreme proposals concerned local government and little in the way of compromise or reforms were sought on the part of the Administration. The bills that the governor signed ultimately demonstrated that he held no defined or consistent philosophy toward local control. The Governor's sign-veto actions were consistent with the League's requests just 56 percent of the time, so the impact of many bills on cities was overall a mixed record. Disappointments include passage of SB 244 (planning and annexation mandates), AB 438 (limiting contracting for library staffing), and AB 646 (compulsory fact-finding). Based on the results of 2011, it may be fair to conclude that the governor will continue to exhibit little hesitation over bills that erode local control.

That being said, there were bright spots to commend; namely, issues with the municipal bankruptcy bill were resolved, and over 30 bills in response to the Bell scandal were introduced and efforts by the League and local officials helped to rule out redundancies and problem areas. In addition, HUTA revenues were protected, technical issues with the state’s “Gas Tax Swap” have been addressed, and AB 710 was defeated, which was important because it would have imposed a mandatory cap on local parking standards in transit intensive areas. Also, SB 469 (Land use/Walmart) and AB 1220 (Litigation over housing elements) were vetoed. City officials played an instrumental role in ensuring the interests of local control were protected by writing letters, making phone calls, visiting with the Legislators, and building coalitions.

Looking ahead to 2012:

The League concludes that next year is likely to be another difficult year due to an unstable state budget, high unemployment, a large number of ballot measures, and most importantly the Supreme Court’s decision on redevelopment. The overall conclusion and recommendation is that the Governor and legislators should not underestimate the importance of cities to California’s economy and quality of life and that it would be in the interest of all Californians if the state were to reestablish a more collaborative tone working with its cities.

An Overview of Notable Bills by Category & Issues for 2012:

I. Revenue and Taxation

• AB 155: Improves state collection of use tax. Contains several trigger dates in 2012, depending on whether Congress enacts a nationwide law
• Local governments will also benefit from improved tax collection due to the following bills: AB 563 (documentary transfer tax); AB 1307 (enhances BOE’s authority so that the License Board can refuse an applicant’s request if they have outstanding liabilities); and AB 1424 (Collection of Delinquent Tax Debt).
• AB 686 (Huffman) Authorizes minimum local transactions and use tax increases of 1/8 cent rather than ¼
• AB 1350 (Lara) City of Bell related bill requires county auditors to verify property taxes increased by a jurisdiction do not exceed maximum statutory rate

Issues for 2012:

• Unstable state budget, including redevelopment, trigger cuts, funding for realignment
• Job creation: return of Gov’s tax-Swap proposal
• Return of regional gas tax (fee) idea (Former Version of SB 791)
• State Water Resources Control Board –Fees Transient occupancy tax collection
• PLAs

II. Housing, Community, and Economic Development

• AB 208: extends the expiration date of any tentative map or vesting tentative map that would have otherwise expired between the dates of July 15, 2011, and January 1, 2014, by 24 months
• SB 244: each city will have to update the land use element of its General Plan to address disadvantaged unincorporated communities; impacts future annexations
• SB 688: cities and counties, until January 1, 2016, can recoup forgone property tax revenues from nonprofit land-trust organizations, nonprofit entities, or public agencies under a Williamson Act contract if the state fails to make subvention payments or provides a reduced subvention.
• AB 307: Authorizes Indian tribes to enter into joint powers agreements
• AB 1069: film industry tax credits; extends authorization for tax credits to July 2015
• AB 936: Debt forgiveness, RDAs: Loans to or from redevelopment agencies require a resolution by roll-call vote; Loans forgiven between January 1, 2010 and December 31, 2011 require a resolution and report

Issues for 2012:

• Revision of Enterprise Zones
• The Return of AB 710
• Housing Element Post Budget Cuts
• SB 375 Implementation (Sustainable Communities Strategies)

III. Administrative Services and Employee Relations

These two categories combined show there was a plethora of bills impacting such varied issues as the Bell scandal, election reforms, elected officials, local agency meetings, pensions, labor relations, workers’ comp, and personnel.

Bell Bills:

• AB 1344: requires that specific abuse-of-office provisions are added to manager contracts; prohibits automatic renewals if linked to a salary increase above a cost-of-living adjustment and cash settlements that exceed existing statutory limits
• AB 23: clerk or a member of the legislative body must announce the compensation that members of the legislative body will receive for attending the serial or simultaneous meeting
• AB 782: CalPERS must notify a contracting agency if an audit is to be initiated and the length of time it will require
• AB 187: authorizes the State Auditor to establish a high risk local government agency audit program
• AB 1350: requires county auditors to verify that property tax rates increased or extended by a jurisdiction do not exceed the maximum statutory rate

Elections and Elected Officials:

• AB 413: pilot program for Yolo County to conduct all-mail elections
• SB 202: moves ballot measures to November general election
• SB 327: text of a proposed municipal initiative is not required to be published or posted when the proponents of the initiative post or publish the notice of intention to circulate the petition and the title and summary of the initiative
• AB 309: provides that a public office becomes vacant when an incumbent is listed in the Excluded Parties List System

Employee Relations:

• SB 322: a member’s service under multiple employers may not be considered separately for the purposes of calculating the Internal Revenue Code limit
• AB 378: reduces the costs in the workers’ compensation system by closing a loophole in the pharmacy reimbursement fee schedule
• AB 506: local public entities required to participate in a mandatory mediation to for a minimum of 60 days prior to filing a Chapter 9 petition with a federal court  

Issues for 2012:

• Pension reforms will continue to be a notable issue to watch for in light of the governor’s 12-point pension plan that was recently released and Republican calls for changes
• Workers’ comp
• an eye on how the Bell bills move forward and the impact of such reforms

IV. Community Services

The impact of the state budget played a big role in affecting community service programs due to a lack of funding, cuts to the state parks program, and reductions in county health and human services programs. The closure of state parks is a sore reminder of the state’s budget woes. Contracting for libraries was also a major issue this legislative session.

• AB 438: limits contracting for library services; a loss for local control
• SB 264: Indefinitely extends qualified local immunity for public agencies that operate skateboarding parks
• AB 42: allows Parks and Recreation to enter into contracts with non-profit organizations to operate and maintain state park units; 70 slated for closure

Issues for 2012:

• Spending reductions for community service programs
• state park closures; impacts and solutions
• Potential additional cuts to social services programs
• Focus on protection of existing programs

V. Environmental Quality

Hot button issues this year concerned the California Environmental Quality Act, energy efficiency funding, solid waste, and water quality.

• SB 226; CEQA Streamlining: Establishes CEQA exemptions for solar projects; establishes new abbreviated CEQA review for some infill projects
• SB 292: Provides expedited judicial review for Los Angeles Stadium project
• AB 900: Provides expedited judicial review for large residential, commercial, sports, cultural, entertainment, recreational and clean energy projects
• SB 679: Transfers $25 million to support local PACE programs
• AB 341: State policy goal of 75% solid waste diversion and mandates commercial recycling by 2012

Issues for 2012:

• 2012 water bond
• water quality fees and permits
• mandatory commercial recycling
• CEQA streamlining
• AB 1178 and landfills

VI. Transportation, Communication and Public Work

Major bills under this category concerned funding for transportation, public contracting, preserving local authority, electric vehicles, gas pipelines, and volunteers.

• AB 587: Allows Volunteers to Continue to Work on Public Works
• AB 56: utilities must meet w/ locals
• SB 216: remote block valves/auto shutoff
• AB 475: charging stations for plug-in hybrids
• AB 529: speed limits; downward speed zoning; AB 1298: mobile billboards
• SB 922: PLA agreements; cities can’t ban
• AB 105: changes to transportation-related budget items in the 2010-11 Budget and makes adjustments to conform to the requirements of Propositions 22 and 26

Issues for 2012:

• Regional Gas Tax/Fee
• Electric Vehicles
• Transportation Reauthorization
• Collecting UUTs for Prepaid Wireless
• Public Works Contracts (Lease‐Leasebacks, PLAs)

VII. Public Safety

Realignment has been chief among the most pressing and transformative issues during this legislative session for local public safety, and long-term funding remains a sticking point for locals burdened with additional responsibilities under the shift. Counties now have responsibility for a former state parole segment; in response, Community Corrections Partnerships have adopted plans and implementation at the local level has entailed budgeting, low-level felony incarceration, post-release supervision, and parole revocation. Other notable bills:

AB 1300: Validates local authority to adopt and enforce ordinances that regulate the location, operation, and establishment of a medical marijuana cooperative

AB 619: Massage therapy; Cities may not charge extra for massage businesses compared to other businesses and Cities may conduct background check for owner of business

AB 1417: Indian Gaming Grants; grants for law enforcement, fire response, streets and roads, public works infrastructure

AB 353: Sobriety checkpoints; Cities cannot impound on grounds of invalid driver’s license

Issues for 2012:

• Medical marijuana regulation; ballot initiative?
• Automated traffic enforcement systems
• Fire response and land use/development rules
• EMS transport rights for cities
• Constitutional protection for realignment funding