Bankruptcy

AB 506 (Wieckowski) – Oppose
As Amended August 15, 2011

This week, AB 506 emerged from the Senate Rules Committee in substantially the same form it was when it arrived in the Senate Governance and Finance Committee prior to the Legislature’s summer recess. Over the objections of Senate Republicans, the Rules Committee moved the bill to Senate Appropriations where it was sent to the Suspense File in the morning and voted out of the committee in the afternoon. Now, AB 506 awaits a vote on the Senate Floor.

As counties will recall, AB 506 requires that local agencies wishing to seek federal bankruptcy protection first participate in a “neutral evaluation”. New amendments to the bill also authorize a local agency to submit a petition to a Local Agency Bankruptcy Committee consisting of the State Treasurer, State Controller, and Director of Finance. The Local Agency Bankruptcy Committee would be tasked with reviewing the petition and approve or deny the petition within seven days or the petition is deemed approved. There are additional public noticing requirements for the Local Agency Bankruptcy Committee.

The Senate Appropriations Committee analysis points out the many flaws with the bill; however, the bill was moved to the Suspense File in the morning hours and by the afternoon voted off of the Suspense File to the Senate Floor. The Committee amended the bill to remove the provisions allowing for the State Auditor to provide an audit of the local agency at its request, thus reducing the state cost of the bill.

In the meantime, CSAC and its local government partners had developed an alternative approach to pre-bankruptcy mediation that offered a mandatory mediation process. The process outlined in the alternative approach would be a truly neutral process with a 60-day time limit that could be extended as the local agency desired. In the case of a severe fiscal emergency, a local agency would have been able to access the federal courts directly with the passage of a resolution by a 2/3 vote. This reasonable alternative, however, was rejected.

AB 506 will arrive on the Senate Floor for a vote as early as next week. We continue to lobby Senators and Assembly Members, urging them to consider the potential fallout from the process outlined in the bill. In the unfortunate instance that a county finds itself in dire fiscal straits, we cannot imagine that the provisions of AB 506 will do anything other than exacerbate that terrible circumstance and jeopardize public services in that community.

Elections

SB 641 (Calderon) – Oppose
As Amended on May 31, 2011

Senate Bill 641, by Senator Ronald Calderon, would have allowed voters to conditionally register and provisionally vote during the fourteen days prior to an election. Currently, citizens must register before this time in order to vote in an election.

CSAC sincerely appreciates Senator Calderon’s attention to the people’s access to elections, but objected to the grave difficulties many counties would have faced complying with this bill in particular, especially given the Legislature’s suspension of funding for voter access mandates in this year’s budget.

The Assembly Appropriations Committee held SB 641 and it is dead for the year.

Validations

SBs 192 and 193 (Committee on Governance and Finance) – Support
As Amended on May 16, 2011

SBs 192 and 193, by the Senate Governance and Finance Committee, would retroactively cure the minor errors and omissions that public officials make throughout the year. In turn, this will give investors confidence in public agencies’ securities and therefore lead to lower interest rates for state and local bonds. They do not correct fraud, corruption, or unconstitutional acts. These “validating acts” are traditionally noncontroversial and receive “aye” votes from all legislators, since with their passage everyone wins.

However, when Senator Wolk presented the validating acts earlier this year in the Assembly Local Government Committee, Vice Chair Alejo asked for amendments to all three bills. Mr. Alejo said that he was concerned about the actions taken by some redevelopment agencies in reaction to the Governor’s proposal to end redevelopment agencies. He worried that the validating acts might be used inappropriately to attempt to protect questionable asset transfers and interagency borrowing. Mr. Alejo’s amendments removed redevelopment agencies from the bills’ protections. The Assembly Local Government Committee adopted Mr. Alejo’s amendments on a 7-0 vote. In reaction, the California Redevelopment Agency and the League of California Cities withdrew its earlier support for the three bills. Because of all of this, the first validating act, SB 191, failed passage on the Assembly Floor earlier this summer.

SB 192 and SB 193 have been removed from the Assembly’s Inactive File and are now awaiting action. In the absence of these blanket validations, each agency issuing debt will need to have a court individually validate its bonds.

Property Taxes

SB 507 (DeSaulnier) – Support
As Amended on July 1, 2011

SB 507, by Assembly Member Mark DeSaulnier, would double the time property owners have to file change in ownership statements with county assessors, and would increase the fines for filing them late.

When a property changes hands in California, the Constitution requires the county assessor to reassess the property. To that end, the new property owner must file a change in ownership statement within a certain period after the change in ownership. SB 507 would double that period from 45 days to 90. Changes of possession resulting from a death retain their longer 150-day period for filing these statements.

SB 507 also raises the cap on penalties for failing to respond to a specific request from the county assessor to file a change in ownership statement. The current cap is too often insufficient to urge compliance with the law, especially for large commercial properties.

The Assembly Appropriations Committee passed SB 507 and it is now on the Assembly Floor.

AB 820 (Gordon) – Support
As Introduced February 17, 2011

AB 820, by Assembly Member Rich Gordon, would require county officials to charge a sufficient fee for certificates of payment showing taxes paid.

Most requests for these certificate requests are for the current year, and easily provided. However, those that are for probate court, for subdivision maps, or from long ago can require significant research. The establishment of new fees must go through the review procedures proscribed by Government Code Section 54986 and must comply with the provisions of Proposition 26. Charging actual costs will reduce pressure on county finances.

The Senate passed AB 820 and it now awaits the Governor’s consideration.

AB 902 (Alejo) – Support
As Introduced on February 17, 2011

AB 902, by Assembly Member Luis Alejo, would require county tax collectors to recover their reasonable and actual costs related to making personal contact with the owner-occupants of the proposed sale of their tax-defaulted property. It does the same for the costs of notifying parties of interest in tax-defaulted property sales.

The Senate passed AB 902 and it now awaits the Governor’s consideration.

Property Tax Administration

AB 946 (Butler) – Support
As Amended August 16, 2011

AB 946, by Assembly Member Betsy Butler, was amended last week to restart the successful State-Local Property Tax Administration Loan Program. However, some technical issues were raised with the bill, and the committee hearing scheduled for this week was canceled.