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Friday, August 11, 2006
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VOLUME 106
Issue 24
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Revenue and Taxation
For more information, contact Jean Hurst at 916/327-7500, ext. 515, or e-mail jhurst@counties.org, or Geoffrey Neill at 916/327-7500, ext. 567, or e-mail gneill@counties.org.
Telecommunications
AB 2987 (Nuñez/Levine) – Oppose Unless Amended
Counties have a great deal to continue to be concerned about in AB 2987, by Assembly Speaker Fabian Nuñez and Assembly Member Lloyd Levine. This bill provides a new process for the granting of video franchises in California and will be heard in the Senate Appropriations Committee on August 14.
County advocates have spent countless hours working on the provisions of this bill, suggesting changes, and talking with legislators and their staffs. Needless to say, our efforts have been met with little success. YOU need to make contact with your Senate and Assembly delegation TODAY! If you are worried about adequate technology services in your community, you owe it to your constituents to let members of the Legislature know that AB 2987 misses the mark. Here’s why:
AB 2987 places existing local government franchise fee revenue at risk. There has been considerable debate as to the constitutional integrity of a franchise fee structure where the franchise is authorized by one governmental entity and the fee is imposed and/or received by another governmental entity. We would prefer that a uniform franchise fee be imposed at the local level. The state levy of the fee as provided for in the bill exposes the receipt of local governments’ fee revenues to an unacceptable level of risk. We propose that this issue be resolved by including a “back-up” remedy in the bill that would preserve the flow of funds to local governments – a remedy that would only be triggered by a court’s determination that a state franchise fee is invalid or should be enjoined.
Gross revenues are the basis on which the maximum five percent franchise fee will be calculated. Therefore, it is critical that the definition include all funds upon which the fee should be based and that this information is readily accessible. Counties believe that the definition of gross revenues in the bill still falls short of providing appropriate revenues to local governments. Specifically, we have suggested language that clarifies that revenues for bundled services shall be allocated between each type of service in proportion to the price of each service if provided separately.
AB 2987 abrogates existing cable contracts, rendering local governments’ contracting authority virtually meaningless. We oppose language that allows existing cable providers to abrogate existing contracts. Cable providers entered into franchise agreements with the understanding that competition could be forthcoming. Such an amendment would set a dangerous precedent, as counties contract with many types of private and non-profit entities in public service provision on behalf of the state. We are concerned that allowing contract abrogation in this instance will open the door to similar requests for abrogation in other areas, such as waste management or ambulance services.
The buildout and anti-discrimination provisions contained in AB 2987 fail to provide equitable access to video services in all California communities. Counties want to ensure that buildout provisions already obligated to by existing providers are met and that county residents will eventually receive competitive services.
Emergency notification requirements in AB 2987 will not meet the public safety needs of Californians. We continue to advocate for broad authorization for local emergency notification systems. Local emergency notification systems have been in existence for quite some time around the country and offer county emergency services administrators an important tool for providing broad distribution of information to citizens. When Californians experience natural disasters, terrorist attacks, or some other local emergency, such as the recent heat emergency, public safety officials should have more access to emergency alerts, not less. Language proposed to be amended into the bill would only require current emergency alert authority in existing franchises to continue through the length of those franchises. Telephone companies and cable companies with expired franchises would have no obligation to provide such alerts.
AB 2987 requires cities and counties to provide customer service enforcement without adequate enforcement tools. Counties believe that the disconnect between franchising authority and customer service enforcement in AB 2987 is problematic, especially when local governments do not have meaningful enforcement tools. The monetary penalties seem relatively small, and, in certain instances, it may be the sound fiscal choice for the video provider to have penalties assessed for a longer period and delay resolution of the material breach. Further, the most meaningful penalty, termination of a franchise, is only available to the court. Local governments, of course, continue to request the ability to require locally imposed customer service standards to meet the unique needs of local communities.
We continue to advocate for increased penalties, the ability to terminate a franchise upon repeated breach of standards, a definition of breach of standards, a mechanism to report such breaches to the CPUC, and the ability to require a letter of credit from video operators to ensure compliance with customer service standards and penalties.
We also endorse the ability of the CPUC to revoke a franchise or deny franchise renewal in cases of serious noncompliance with customer service standards.
Need more information? Visit the CSAC website for our most recent letter or contact Jean Hurst at jhurst@counties.org.
Property Tax Administration
AB 1717 (Lieber) – Oppose
Regrettably, CSAC has taken an “oppose” position on AB 1717, a measure by Assembly Member Sally Lieber, that seeks to provide funding to county property tax administration systems. While we strongly support additional funding for property tax administration, CSAC is very concerned about provisions of AB 1717 that run counter to long-standing policies of California counties.
First, we continue to have concerns about the required maintenance of effort (MOE) set out in Section 95.36(e). The previous program had an MOE set at 1994-95 expenditures and staffing. The existing language changes that MOE the 2004-05 levels (a 10-year increase). (We have previously suggested that language be added to ensure that this level is not artificially high and is calculated less funds received under Section 95.35, the previous program.) Also, by including staffing levels in the MOE requirement, the MOE then includes the wages and benefits associated with those staff, according to a county counsel opinion. Thus, the MOE grows on an annual basis. Finally, we remain concerned that even this required level of funding will render many counties unable to access property tax administration funding.
Our most significant concern, however, is the language that gives the assessor equal standing with the Board of Supervisors in approving changes to the contract, plans for expenditure of grant funds in other departments, and utilization of grant funds by other departments when the assessor has chosen to forgo the grant. CSAC has suggested deleting “and the assessor” from Section 95.36 (d)(1) and (2), (e)(2), and “subject to the approval of the county assessor” in Section 95.36 (f). This authority is clearly above what was included in the previous program and we believe is above what is required for participation in other similar types of state grants.
AB 1717 de facto provides county assessors priority for local spending, providing budget protection for that department over all others in the county. CSAC cannot support a measure that further ties the hands of boards of supervisors and unduly limits their budget discretion.
The state clearly has much to gain from an appropriate level of investment in the property tax administration system, as the success of the previous program proves. Counties’ preference, of course, is to have the authority to charge all taxing entities their share of the administrative costs associated with collecting the property tax, fully funding the property tax administration system, as the state’s sales and income tax systems are funded. While we recognize the difficulty of achieving that policy goal, counties cannot participate in a program that virtually locks up a budget for one department at the potential expense of all others.
AB 1717 is currently on the Senate Appropriations Committee Suspense File.
Redevelopment
SB 1206 (Kehoe) – Support
SB 1206, by Senator Kehoe, underwent substantial amendment early this week to remove several controversial provisions. Among those dropped were limits on new debt for old project areas and the "clear and convincing evidence" standard for judicial review of ordinances that implement redevelopment plans. The bill as it is now written would still reform redevelopment law in three primary ways.
First, the bill would change the definition of blight and what constitutes a blighted area. The bill's descriptions of physical and economic conditions that cause blight are substantially more specific than those in current law and an “antiquated subdivision” finding as the sole symptom of blight would no longer sufficient. Non-blighted parcels could not be included in a project area for the purpose of receiving tax allocation without substantial justification for inclusion.
Second, SB 1206 would grant more time for citizens to file referendums and lawsuits challenging redevelopment agencies' decisions. The referendum petition period would be increased to 90 days from 30, and the deadline for filing key lawsuits increased to 90 days from 60. The bill would list the attorney general as an interested party who can file lawsuits and require redevelopment agencies to tell the attorney general about lawsuits.
Third, Senator Kehoe's bill would increase the state's oversight of redevelopment activities. It would require county officials to prepare and deliver a report to the Department of Finance containing information about affected tax revenues, with the incurred cost to be reimbursed by the redevelopment agency. The new law would also require redevelopment agencies to send various documents to the Departments of Finance and Housing and Community Development, which could then submit formal comments.
Language removed by earlier amendments would have set specific numerical standards for finding blight and required renewed blight findings before new bond issuances.
SB 1206 is set for hearing in the Assembly Appropriations Committee on August 16. CSAC recognizes that these changes must be made to improve California's redevelopment process and supports SB 1206. For a more detailed analysis of the bill, search for SB 1206 online using CSAC's "Legislative Tracking" tool and look under "Attachments/Links."
Off-Highway Vehicle License Fees
During this year's budget process, Legislative Counsel inadvertently removed language deleting the provision for an as-yet-unfinished report that is supposed to be the basis for the state controller to allocate off-highway fees. The Department of Parks and Recreation has committed to finishing the report by April 10, 2007, and possibly as early as the end of this year, as ordered in the Legislative Analyst's Supplemental Budget Report. The Controller's Office originally requested that the deleted language be reinserted into the Public Resources Code. However, after further discussions between the Controller's Office and the Department of Finance, they have agree that when the study is finished, the controller can disburse the funds without a legislative fix. CSAC will continue to monitor this situation, but absent any more surprises counties should look forward to seeing this money in mid- to late-2007.
PRINTER-FRIENDLY VERSION
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Published by
The LEGISLATIVE BULLETIN is published weekly during the State Legislative Session by the California State Association of Counties, 1100 K Street, Suite 101, Sacramento, CA 95814.
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