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California State Association of Counties

CSAC Bulletin Article

Government Finance and Operations 09/16/2013

September 16, 2013 Jean Kinney Hurst Geoffrey Neill

Vehicle License Fee

AB 701 (Quirk-Silva) – Request for Signature
As amended September 11, 2013
 
AB 701 by Assembly Member Sharon Quirk-Silva seeks to implement an adjustment to Orange County’s Vehicle License Fee Adjustment Amount (VLFAA), and contains intent language that directs the parties involved in Department of Finance v. Grimes to reach a settlement agreement in that case. CSAC supports the resolution of this ongoing dispute between the County and the state.
 
In 2004, when California cities and counties swapped Vehicle License Fees (VLF) for property taxes, Orange County instead retained a portion its VLF as those revenues were tied to bonded indebtedness associated with the County’s bankruptcy debt. Orange County then was impacted by SB 89 (2011) when those VLF revenues were redirected to fund realigned public safety programs. AB 701 addresses this issue by adjusting the county’s VLFAA for 2013-14 and in the future, as well as setting the path for resolving the litigation in this matter by including intent language directing a settlement that includes a repayment plan over a period of six years.
 
AB 701 was approved by the Legislature and now awaits action by the Governor.
 
SB 56/SB 69 (Roth and Emmerson) – Support 
As amended September 12, 2013
 
Earlier this year, CSAC had taken a support position on SB 56, a measure by Senators Richard Roth and Bill Emmerson that would provide a “Vehicle License Fee Adjustment Amount” for newly incorporated cities, including those that were impacted by SB 89 (2011). CSAC supported this measure, primarily because it would have provided immediate financial assistance to the four newly incorporated cities in Riverside County.
 
Prior to the passage of SB 89 (2011), the four newly incorporated cities in Riverside County relied on current state law in evaluating their fiscal viability through the LAFCO process and relied on a Vehicle License Fee (VLF) revenue special allocation to ensure their future fiscal health. When SB 89 passed and redirected those VLF revenues to 2011 realignment, these fledgling cities were impacted in a significant way. SB 56 provided a mechanism by which the newly incorporated cities resume receipt of revenues anticipated prior to their incorporations/annexations. By establishing a “Vehicle License Fee Adjustment Amount” and replacing the lost VLF revenues with property taxes from the schools’ share (as currently exists for all other cities and counties in the state), SB 56 restored funds to those impacted by SB 89 and ensures their continued viability.
 
SB 56 remains in the Senate Appropriations Committee; however, on the last evening of the legislative session, the contents of SB 56 were amended into a new vehicle, SB 69. SB 69 is in the Assembly Rules Committee, awaiting committee assignment. CSAC has pledged to continue to work through the issues associated with the bill next year.
Utility User Taxes

AB 792 (Mullin) - Request for Veto
As Amended on August 29, 2013
 
AB 792, by Assembly Member Kevin Mullin, would exempt distributed generation energy from utility user taxes (UUTs). Companies that own distributed generation equipment are not currently collecting UUTs from their customers, and they are sponsoring the bill to exempt their products from the tax.
 
Distributed generation is the name given to small electricity generators installed where the energy will be used, like solar panels on roofs, for example. The currently popular business model is for the company that installs the equipment to maintain ownership of it and then sell the energy to the homeowner or business.
 
The property owner benefits from the arrangement because the distributed generation company charges lower rates than the central electric company. The distributed generation company benefits in two ways, first by selling some electricity directly to the property owner, but also by selling the rest of the electricity back to the grid at retail rates (not wholesale).
 
If the state believes it is a matter of statewide importance, then they should use statewide revenue to heap yet another benefit onto these few companies that already are the recipient of so many other incentives.
 
AB 792 is on its way to the Governor.
 
AB 300 (Perea) – Request for Signature
As Amended on September 6, 2013
 
AB 300, by Assembly Member Henry Perea, would create a point-of-sale system for collecting state and local charges—including utility user taxes—on prepaid wireless services.
        
Local agencies that impose a utility user tax on wireless communication are seeing this revenue source slowly fall, despite the ever-increasing number of cell phone subscribers. One reason for this decline in revenue is the increasing popularity of prepaid, non-contract payment plans.
 
Once associated primarily with users who had bad credit, prepaid wireless plans are becoming a more widespread service model. Due to this business model change, and because counties do not currently collect applicable taxes from prepaid wireless consumers, counties support the development of a system that captures the taxes that are owed on this activity.
 
Both houses approved AB 300 and it is now on its way to the Governor.

Broadband

SB 740 (Padilla) – Request for Signature
As Amended on September 6, 2013
 
SB 740, by Senator Alex Padilla, would improve the California Advanced Services Fund (CASF) by broadening eligibility for some funds and increasing the overall funding level.
    
Ideally, the improved program would not single out local governmental agencies for special restrictions, but the increased funding authorization for the program—an additional $90 million—to support last mile projects where they are most needed is critical for the rural counties and overrides concern about those restrictions.
 
The increased program authorization, which will continue to be funded by a fractional percent on the state’s telecommunication services, will help provide the infrastructure that will allow some of the state’s hardest to reach residents to enjoy the economic benefits of broadband services, which the rest of us have taken for granted for years.
 
SB 740 is on its way to the Governor.

Elections

SB 360 (Padilla) – Support
As Amended on August 30, 2013
 
SB 360, by Senator Alex Padilla, would make various changes to the law to allow a county to devise and test a nonproprietary voting system.
 
Among the specific changes the bill would make are those that would allow the Secretary of State to conditionally approve a voting system, allow a county to use public funds to develop such a system, and create a process to set the conditions for a pilot program to test the system.
 
While none of these changes alone represent a revolution in the way elections are run, together they create the opportunity for Los Angeles County to pursue what is frankly a very exciting advance in the administration of elections. Once their system is developed, there is a strong possibility that other counties who are interested could work with LA to implement the system there as well. We urge the Legislature to make these changes so that the effort already underway can continue to move forward.
 
SB 360 is on its way to the Governor for his consideration.

Other Taxes

AB 483 (Ting) – Support
As Amended on September 4, 2013
 
AB 483, by Assembly Member Phil Ting, would clarify certain terms included in Proposition 26.
        
Specifically, the terms ‘specific benefit’ and ‘specific government service’ were used but not defined in the language that voters added to the California Constitution. Resolving the ambiguity about their meanings in a manner consistent with the clear intent of Proposition 26, as AB 483 does, will ensure that local governments may continue to establish and renew tourism marketing districts and business improvement districts, bolstering economic development and job growth throughout the state.
 
AB 483 is on its way to the Governor.
 
AB 781 (Bocanegra) – Support
As Enrolled on September 12, 2013
 
AB 781, by Assembly Member Raul Bocanegra, would make it generally illegal to use, own, install, or sell an automated sales suppression device.
 
The sorts of devices targeted by this bill automatically hide actual sales levels from auditors, cheating both consumers and the public while unjustly enriching tax scofflaws. When unscrupulous Californians skirt their tax responsibilities, the burden of funding public services falls more heavily on those who follow the law.
 
By prohibiting the sale and installation of sales suppression devices, not only their ownership and use, the bill would make it easier for the Board of Equalization to reduce their use.
 
AB 781 awaits the Governor’s action.

Miscellaneous

SB 594 (Hill) – Support
As Amended on September 4, 2013
 
SB 594, by Senator Jerry Hill, as recently amended to reflect an agreement between CSAC and the bill’s proponents, would restrict which money organizations like CSAC can spend on ballot measure activities.
    
As amended, SB 594 will allow CSAC and organizations like ours to continue to advocate for our membership in statewide ballot campaigns. CSAC has consistently taken a measured approach when considering participation in only those measures that have a direct impact on our counties and the people we serve. We believe our voice is an important one on matters of statewide importance and are gratified that we will continue to be able to participate on behalf of California’s 58 counties.
 
Additionally, CSAC supports the amendments that focus on additional transparency and disclosure of our finances as they relate to campaign activity. CSAC has taken great strides to ensure that only non-public funds are used for ballot measure advocacy and pledges to continue to do so in an open and transparent manner.
 
SB 594 is on its way to the Governor.

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September 16, 2013 Jean Kinney Hurst Geoffrey Neill

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jgiadone[remove-this-and-replace-with-at]uhc.com
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Vanir Construction Management, Inc.

February 13, 2014 Bob Fletcher, Vice President of Business Development
4540 Duckhorn Drive, Suite 300
Sacramento, CA 95834
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(916) 997-3195
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Western States Petroleum Association

March 13, 2017 Catherine Reheis-Boyd, President
1415 L St., Suite 600
Sacramento, CA 95816
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(916) 444-7750  
creheis[remove-this-and-replace-with-at]wspa.org
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August 30, 2012

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October 22, 2012
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