Bankruptcy

AB 1692 (Wieckowski) – Oppose

AB 1692, by Assembly Member Bob Wieckowski, would renege on last year’s negotiated agreement on the municipal bankruptcy process.

Last year’s AB 506 implemented a voluntary process whereby local agencies could enter into a neutral evaluation with their creditors and other stakeholders. This process is available to precede or avert bankruptcy. The final result of the bill was the product of many hours of negotiation between the author, Governor Brown, Senator Wolk, and local agencies.

AB 1692 is an attempt to change that deal before it has even had a chance to work. Two cities are currently in the AB 506 process. Due to the confidential nature of that process, it is impossible to know what might be done to improve upon it, making the bill premature at best.

Furthermore, AB 1692 specifically reneges on the deal reached so carefully late last year. First, it would make the neutral evaluation process an open-ended one, so a local agency using it could not plan for how long it might last. Second, it would no longer be a neutral process, since the mediator would have the power to make binding decisions and order investigations. These were both key elements of last year’s deal and were among the reason that CSAC and other local government organizations moved to a ‘neutral’ position on AB 506.

The Assembly passed AB 1692 by a vote of 48-24. It now moves to the Senate.

Redevelopment

SB 1151 (Steinberg) – Support in Concept
SB 1156 (Steinberg) – Support in Concept

These two bills, SB 1151 and SB 1156, by Senate President Pro Tem Darrell Steinberg, would create a structure for continuing redevelopment activities in the future.

The foundation of CSAC’s support is that counties would have an option whether to financially participate in this new version of redevelopment. While previous versions of the bills encouraged a collaborative partnership between local governments to jointly govern and utilize various financing tools to provide economic development, the bills as amended substantially diminish that collaboration. We will consider our positions on the bills as we continue to analyze the amendments, which might renew city control over county and other taxing entities property taxes.

While CSAC supports economic development consistent with the SB 375 goals, as allowed by the two bills, we would support both an expansion of the project area definition and the list of eligible uses currently outlined in the bills in order to support the myriad of public safety, and health and human services that counties provide on behalf of the state.

The Senate passed SB 1151 (22-15) and SB 1156 (21-15). They now move to the Assembly.

Elections

AB 1436 (Feuer) – Pending
As Amended on May 25, 2012

AB 1436, by Assembly Member Mike Feuer, would create a process for potential voters to register to vote and vote in the final two weeks before an election. Currently, citizens must register at least fifteen days before an election to vote in that election. AB 1436 was amended in the Assembly Appropriations Committee to only become operative when the Secretary of State has successfully begun operating a statewide voter registration database.

Those amendments would help relieve some of counties’ concerns with the bill, but CSAC is working with county registrars to determine the extent of that relief. 

The Assembly passed AB 1436 by a vote of 47-26. It now moves to the Senate.

Sales and Use Tax

AB 2618 (Ma) – Support
As Amended on April 18, 2012

AB 2618, by Assembly Member Fiona Ma, would ensure that purchasers of cars at auction pay the appropriate amount of sales or use tax on those transactions.

All too frequently, unscrupulous Californians are avoiding paying taxes on cars purchased at auction, especially salvaged auto auctions, by telling the auctioneer that they will be reselling the vehicles later, then never doing so. Many of these vehicles are either never subsequently registered with DMV, or if they are they report a value lower than the actual sale price.

AB 2618 would curb this fraud by requiring those buyers claiming intent to resell to be licensed dealers, dismantlers, repair dealers, or scrap metal processors.

The sales and use tax supports not only the state’s General Fund, but also counties and cities. The sales and use tax is also an important funding component for 2011 Realignment.

The Assembly passed AB 2618 by a vote of 77-0. It now moves to the Senate.