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11th - Counties_ Cities_ and Special Districts Unite to Protect


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									April 11, 2002                                       &6$& /(*,6/$7,9( %8//(7,1                                    Page 1

April 11, 2002                             California State Association of Counties                       Vol. 102, No. 12

B .ranchise
                                       Counties, Cities, and
    ALJ requests
                                       Special Districts Unite to
    comments on
    collection and                     Protect Local .unding
                                       Leave Our Community Assets Local (LOCAL)
B Juvenile                             Coalition is Underway
     Justice Crime                     B Steven C. Szalay, Executive Director    B State government should balance
     Prevention                          sszalay@counties.org
                                                                                      the budget without taking more
     .unding                           CSAC is pleased to announce the
                                                                                      money     away      from    local
                                       kick-off of the Leave Our
    SB 823 on COPS                     Community Assets Local (LOCAL)            County supervisors and staff will be
    chaptered ........p8               Coalition in partnership with the         contacted to enlist their partici-
                                       League of California Cities and the       pation in this critically important
                                       California      Special    Districts      effort. We are asking supervisors to
                                       Association. The LOCAL Coalition          make direct personal contact with
In This Issue:                         will be actively involved in this         legislators to ensure that those
Legislature Approves                   year’s budget process, speaking           legislators understand how their
$2.1 Billion                                                                     statewide actions will impact their
Housing Bond ............. 2           with a single local government
                                       voice to ensure that funding for          local communities. Regular com-
                                       essential local services is not           munication with your legislative
Revenue and
Taxation....................... 3      compromised. The coalition has            representatives,      phone     calls,
                                       developed four core principles that       breakfasts, and district office visits,
Health and Human                       will guide our efforts:                   will be essential to our success.
Services....................... 6                                                California has not faced a fiscal
                                       B Essential local services should
                                                                                 crisis of today’s magnitude since
Administration of                        not be sacrificed to solve state
                                                                                 the early 1990s and we all
Justice .......................... 8     budget problems.
                                                                                 remember how that crisis was
                                       B Local taxes and fees paid by            resolved. When the state shifted
Housing, Land Use                        local residents should remain in
and Transportation... 13                                                         billions of dollars in property tax
                                         the community to fund local             revenues from local governments,
                                         services.                               counties bore the brunt of that shift.
Agriculture and
Natural Resources.... 15               B Local governments and local             We need to make sure that it
                                         revenues are already part of the        doesn’t happen again. And we can’t
Washington, DC                           state budget solution.                  do it without your help.
Report ........................ 17
Page 2                                          &6$& /(*,6/$7,9( %8//(7,1                                       April 11, 2002

Legislature Approves $2.1 Billion Housing Bond
In response to the current housing crisis in California, the Legislature passed SB 1227, by Senate pro Tem John Burton,
which would provide for $2.1 billion in bonds to be directed toward housing, which would be placed on the November 2002
ballot. This bill passed the Senate on April 8 and is currently pending on the Governor’s desk.

This measure, the Housing and Emergency Shelter Trust .und Act of 2002, would allocate the $2.1 billion bond proceeds
among various housing programs, including the CalHome Program and the California Homebuyer Downpayment
Assistance Program. This bill includes funding that would assist in meeting California’s housing needs. The allocation of the
funds includes the following:

    B    $910 million for multi-family housing through the Multifamily Housing Program. This program provides loans to
         local governments, non-profit and for-profit developers, for rehabilitation and new construction of affordable
         multifamily rental housing. This bill requires the Department of Housing and Community Development to provide
         priority points for in-fill projects, projects built close to public transit and job centers, and adaptive reuse in
         existing developed areas served with public infrastructure.

    B    $195 million for emergency housing and assistance through the Emergency Housing Assistance Program. This
         program provides grants to counties and nonprofit entities to finance emergency shelters for the homeless. .unds
         may be used for rehabilitation, renovation, expansion of existing facilities, site acquisition, equipment purchase
         and operating costs.

    B    $195 million for supportive housing to be used for individuals and households moving from emergency housing
         projects or transitional housing or those at risk of homelessness.

    B    $200 million for farmworker housing through the .armworker Housing Grant Program. This program provides
         grants to local public agencies, nonprofit corporations, and Indian tribes to provide housing for agricultural
         workers. This allocation would include $25 million for projects that serve migratory agricultural workers and $20
         million for projects that also provide health services to the residents.

    B    $5 million to be used for capital expenditures in support of local code enforcement and compliance programs.
         .unds would be provided through grants to cities and counties to expand staff for building code enforcement

    B    $100 million to the Jobs Housing Improvement Account to be expended as capital grants to local governments for
         increasing housing if enabling legislation is passed during the 2001-2002 legislative session.

The housing bond would be the first investment in 12 years and could help to decrease the rising costs of housing.
According to the state Department of Housing and Community Development, housing costs have increased at an average
annual rate of 7.5 percent between 1969 and 1999. These funds could also alleviate the supply-demand imbalance, which
has been a problem in many counties.

CSAC supports SB 1227 because we believe that these funds could help counties to meet their housing needs and provide
increased affordable housing to California residents. SB 1227 is currently pending on the Governor’s desk, and the
Governor has indicated that he is in support of the measure. We urge the Governor to sign this important measure.

The LEGISLATIVE BULLETIN (ISSN 10403752) is published weekly during the State Legislative Session, by the California
State Association of Counties, 1100 K Street, Suite 101, Sacramento, CA 95814. Subscriptions: $10.00 annually for CSAC
members; $30.00 annually for non-members. Periodicals postage paid at Sacramento, CA . POSTMASTER: Send changes
of address to: Legislative Bulletin, 1100 K Street, Suite 101, Sacramento, CA 95814.
April 11, 2002                                     &6$& /(*,6/$7,9( %8//(7,1                                               Page 3

Got E-Mail?
CSAC is now offering the Legislative Bulletin via e-mail.

The electronic version of the Legislative Bulletin offers:

B More timely information since you don't have to wait for news in the U.S. mail.

B Cost efficiency.

B Information direct from CSAC in an easy-to-read and share format.

B No paper to clutter up your desk!
Each week during the Legislative session, you'll receive the Legislative Bulletin in your e-mail in box in both PD. and Word
formats. To sign up, contact Laura Valdez at 916/327-7500 ext. 558 or lvaldez@counties.org. Please allow a few weeks for e-
mail distribution to begin.

Revenue and Taxation
.or more information, contact Pat Leary at 916/327-7500, ext. 514, or e-mail pleary@counties.org, or Jean Hurst at
916/327-7500, ext. 515, or e-mail jhurst@counties.org.

.ranchise .ees
Administrative Law Judge Requests Comments on Collection and Remittance

The California Public Utilities Commission (PUC) has directed the assigned Administrative Law Judge to solicit comments
on legal issues relating to treatment of franchise fees for power sold by the California Department of Water Resources (DWR)
to customers in the service territories of the three major investor-owned utilities (IOUs).

The PUC noted the controversy regarding the rights and obligations of municipalities, IOUs, and DWR regarding the
collection and remittance of franchise fees on sales of electric power by DWR. DWR claims that franchise fees are the
obligation of the IOUs, and that such fees are part of each utility’s cost of service, separate and distinct from net short energy
purchases. DWR asserts that it has no responsibility for franchise fees, and excludes them from its revenue requirement.

The position expressed by various municipalities is that they cannot be lawfully deprived of franchise fees on energy
revenues merely because DWR as a state agency has assumed the role of predominant energy supplier. The municipalities’
primary interest is in ensuring that the PUC enforces the remittance of franchise fees, whether from the IOUs or from DWR.

The position of the IOUs is that they are only obligated to remit franchise fees on their power sales revenues. Since DWR
sales revenues are not part of utility earnings, the IOUs do not believe that franchise fees can properly be assessed on them
for such sales.

The PUC did not reach final resolution of this dispute and, instead, ordered the utilities to maintain the status quo pending
further determinations of an appropriate course of action. Under the status quo, each IOU continues to remit franchise fees to
the local governments for DWR-supplied power and keeps track of such remittances in separate accounts. The purpose of
the separate accounts is to make the IOUs whole for any franchise fees remitted on behalf of DWR that are not already
reflected in retail rates.

Parties have been requested to address a number of issues relating to the role of DWR as a power provider, e.g. who bears
the responsibility for franchise fee payment, the potential need for a legislative remedy to this problem, or how the PUC
should move forward. Counties are encouraged to review the solicitation for comments, available on the PUC’s Web site at
http://www.cpuc.ca.gov/published/rulings/14359.htm and provide comments where appropriate. (The City and County of
Page 4                                          &6$& /(*,6/$7,9( %8//(7,1                                       April 11, 2002

San .rancisco is filing a brief with the Administrative Law Judge.) Opening briefs are due on April 16 and reply briefs are
due on April 26.

.ederal Tax Conformity
AB 1122 – Support
We have previously reported on AB 1122, by Assembly Member Ellen Corbett, which conforms California law to the federal
pension provisions, increase in the child and dependent care credit, and other conformity issues enacted by the federal
Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001. This measure has been characterized as the
Governor’s proposal for federal tax conformity.

AB 1122 is scheduled to be heard before the Senate Appropriations Committee on April 15.

SB 657 – Support
SB 657, by Senator Jack Scott, conforms state income and corporation tax laws to provisions of the federal Economic Growth
and Tax Relief Reconciliation Act (EGTRRA) of 2001 that apply to retirement plans and certain trusts. Among other things,
this measure increases the annual contribution amounts to IRAs and Roth IRAs, as well as increases the limits on annual
elective deferrals to 457, 401 k, and 403 b plans.

This measure will be heard in the Assembly Appropriations Committee on April 17.

Revenue Reallocation
AB 2878 – Oppose Unless Amended
We have previously reported on AB 2878, by Assembly Member Patricia Wiggins, the .air Allocation to Entities (.ARE) Act of
2002, which seeks to remove fiscal hurdles to housing by implementing various revenue swaps among cities and counties.
Specifically, this measure would implement two revenue-neutral changes: (1) the state would replace the vehicle license fee
(VL.) offset to local governments with an equal amount of property tax revenue from Educational Revenue Augmentation
.unds (ERA.); and (2) in the base year, cities would shift 15 percent of their sales and use tax revenues to their respective
counties, while counties would increase the percentage of property tax the cities receive by shifting a commensurate amount
to the cities.

CSAC has taken an “oppose unless amended” on this measure, and has requested amendments to remove the provision that
provides a shift of city sales tax revenues to counties and a commensurate shift of county property tax revenues to cities. We
have also communicated to the author our interest in addressing some technical concerns regarding the actual
implementation of these proposed shifts, should this measure move forward. .urther, CSAC has been informed of some
additional concerns with the measure by some counties that have dedicated their vehicle license fee (VL.) revenues to repay
their bonded indebtedness.

AB 2878 was considered this week in the Assembly Local Government Committee. Committee members embarked upon a
lengthy discussion of the state/local fiscal relationship and how AB 2878 addresses these issues. While many members
indicated their concerns with the measure, the will of the committee was to move the bill forward with the author’s
commitment to continue to work with interested parties. If the measure is substantially amended in the Senate, Assembly
Member Wiggins indicated that she would bring AB 2878 back to the Local Government Committee prior to concurrence on
the Assembly .loor.

AB 2878 is double referred and will next move to the Assembly Revenue and Taxation Committee. Counties are encouraged
to carefully review this measure for its potential fiscal impact and contact CSAC staff with comments or concerns. Please
forward any information to Jean Hurst at jhurst@counties.org or 916/327-7500 ext. 515.
April 11, 2002                                    &6$& /(*,6/$7,9( %8//(7,1                                                Page 5

Vehicle License .ee (VL.)
AB 1906 – Support
AB 1906, by Assembly Member John Longville, is a measure that would limit special vehicle license fees for historical
vehicles solely to those vehicles that have been assigned special identification plates.

Current law requires the Department of Motor Vehicles (DMV) to issue special license plates to the owners of historic
vehicles who operate or move those vehicles over the highway primarily for the purpose of historical exhibition. In order to
qualify for these special plates and a reduced vehicle license fee charges, these vehicles must meet specified criteria.

AB 1906 clarifies the provision in existing law that applies a $2 VL. only to those historical vehicles that meet those specified
criteria. A recent court interpretation found that a vehicle that “qualifies” for the issuance of these plates, whether the plates
are assigned to the vehicle or not, may receive the reduced vehicle license fee. CSAC agrees with the DMV that this
interpretation is in conflict with the original legislative intent that the reduced fee be granted in the acknowledgement of the
limitation on operation of a vehicle displaying historical vehicle plates.

DMV estimates that local governments could face upwards of $40 million loss in VL. revenue if every owner of a vehicle that
is 25 years old or older applies for the $2 VL.. California cities and counties cannot face such a significant revenue loss in
this year of substantial economic uncertainty.

AB 1906 will be heard in the Assembly Appropriations Committee on April 17.

SCA 10 – Support
SCA 10, by Senator Jackie Speier, authorizes a public library to pursue authorization and issuance of general obligation
bonds for library facilities upon approval of 55 percent of voters if certain accountability measures are met.

As a matter of long-standing policy, CSAC believes that the ability of local jurisdictions to raise revenues for specific
purposes should be less burdensome. Public libraries have long suffered from desperate facility needs and a lack of
available funding to address those needs. According to a 1998 survey by the State Librarian, the statewide library
infrastructure deficit stands at an estimated $2 billion. While the funding provided by Proposition 14 (2000) helped by
providing $350 million in matching funds to public libraries, these bond funds simply cannot meet the funding gap. The
ongoing shift of property tax revenues to the state only exacerbates the problem.

Counties assert that California’s voters should have the opportunity to determine if a 55 percent requirement for voter
approval on bonds for library facilities is appropriate.

This measure is set to be heard before the Senate Education Committee on April 17.

CSM.O Legislative Seminar
The California Society of Municipal .inance Officers (CSM.O) will be hosting its 30th Annual Legislative Seminar on Local
Government .inance on May 30 from 10:00 a.m. to 2:00 p.m. at the Sacramento Convention Center.

The seminar is a one-day program designed to provide current and factual insight into local government finance matters
presently considered by the Legislature and the administration. It is timed to follow the Governor’s May Revision to the
budget and at the point in the legislative process when decisions are likely to be made. CSAC is again co-sponsoring this
seminar and encourages county staff and elected officials to attend. Registration materials have been sent to county auditors
and treasurers. Additional registration materials may be found on the CSM.O Web site at www.csmfo.org.
Page 6                                           &6$& /(*,6/$7,9( %8//(7,1                                       April 11, 2002

Digital Clipping Service
Read today's county news online!

The California Institute for County Government (CICG) Digital Clipping Service is a free, on-line resource for busy county
officials or anyone interested in county government. Each day, CICG staff search through hundreds of news stories and
reports and post summaries of the county-relevant news on the Web, together with a link to the original story. Articles from
newspapers published in every region of the state are included.

.ind out about what's going on in county government around the state.

Just visit www.cicg.org and click on County News.

Health and Human Services
.or more information, contact Caitlin O’Halloran at 916/327-7500 ext. 536 or e-mail cohalloran@counties.org or Kelly Brooks at
916/327-7500 ext. 531 or e-mail kbrooks@counties.org.

Budget Subcommittee Actions
Senate Budget and .iscal Review Subcommittee No. 3

Senate Budget and .iscal Review Subcommittee No. 3 met on April 11 to discuss a variety of issues, including child welfare
services and foster care. Among other items, the subcommittee discussed the following:

B    Supportive Transitional Emancipation Program (STEP): The Legislative Analyst’s Office (LAO) estimates that STEP
     program is over-budgeted by $1.1 million General .und (G.) in the current year and by $4.6 million G. in the budget
     year. The STEP program provides cash assistance to eligible former foster youth. The budget proposes $3.7 million
     ($1.5 million G.) for the program in the current year and $33.5 million ($13.4 million G.) in the budget year. The
     subcommittee voted to reduce the STEP budget by the amount recommended by the LAO; this reduction will not
     impact the program.

B    Adoptions Initiative: The Governor’s budget proposes a reduction of $12.8 million ($7.3 million G.) due to a redirection
     of federal adoption incentives to programs currently supported by the General .und. This is a direct reduction in
     adoption services of $5.5 million. Senator Wes Chesbro, chair of Subcommittee No. 3, directed the LAO to estimate the
     costs of the reduction (i.e. increased costs in longer foster care placements). The subcommittee held this item open.

B    .oster .amily Agencies: The LAO has expressed concerns about the role of .oster .amily Agencies (..As) in the out-
     of-home care system, especially around length of placement and costs. The analyst provided three options for reducing
     ..A placements and costs: (1) holding the ..A funding constant at current year levels; (2) decreasing the number of
     ..A treatment placements; and (3) adjusting the ..A treatment rate over time to encourage timely exit of children from
     ..As. A number of stakeholders, including the County Welfare Directors Association, expressed concern about how
     any of these proposals will impact foster care capacity. The subcommittee held this item open.

B    .oster and Kinship Care Education Program: The Governor’s Budget proposes to reduce the .oster Children and
     Parent Training .und by $1 million. This would reduce federal reimbursements by approximately $1.5 million. The total
     reduction is 21.3 percent of the training program’s budget. A number of stakeholders, including the County Welfare
     Directors Association, expressed concern about how reduced funding will impact foster parent recruitment and training
     activities. The subcommittee held this item open.
April 11, 2002                                   &6$& /(*,6/$7,9( %8//(7,1                                               Page 7

Assembly Budget Subcommittee No. 1

Assembly Budget Subcommittee No. 1 met on April 10. Items on the agenda included foster care and child welfare services.
Highlights of some of the Subcommittee’s discussion summarized below:

B    Supportive Transitional Emancipation Program (STEP): The subcommittee voted to reduce the STEP budget by the
     amount recommended by the LAO. This was a consent calendar item. Please note that Senate Budget and .iscal
     Review Subcommittee No. 3 took the same action on April 11.

B    CalWORKs Exemption: The subcommittee had a policy discussion about the impact of exempting CalWORKs with
     children under age there form participating in the CalWORKs program. This item was held open.

B    .oster Care Emergency Assistance .und Shift: The LAO proposed a fund shift for the .oster Care Emergency
     Assistance (EA) program. The LAO suggests replacing Temporary Assistance to Needy .amilies (TAN.) funding used
     for EA with .ederal IV-E funds. The freed-up TAN. funds could be transferred into the Title XX Social Services block
     grant. Once transferred, the funds may be used to offset G. costs in the community-based programs in the Department
     of Developmental Services. The proposal would save $34.5 million G., but cost counties $2.9 million. The LAO
     recommends reimbursing counties the $2.9 million. This item was held open.

AB 2116 – Watch
AB 2116, by Assemblywoman Dion Aroner, would stop or extend the CalWORKs 60-month time clock under certain
circumstances. The specific circumstances include the following:

B    When the state or county unemployment rate exceeds the national average by at least one-fifth or is designated as a
     Labor Surplus Area by the U.S. Department of Labor (DOL), making the state or county unable to provide employment
     for individuals required to participate in welfare-to-work activities.

B    Exempts from the 60-month limit of CalWORKs benefits any month in which the following conditions exist: (1) the
     recipient satisfies his or her 32- or 35-hour weekly work participation requirement entirely through unsubsidized
     employment; (2) the recipient is unable to participate in welfare-to-work activities due to the state's or county's lack of
     resources or funding for these activities or for support services; or (3) the state or county unemployment rate exceeds
     the national average by at least one-fifth or is designated as a Labor Surplus Area by the DOL.

A number of states stop welfare time clocks or provide extensions to working families. The time clock stops entirely for
parents working 30 or more hours per week in Illinois and Rhode Island. In Delaware, the time clock stops if the parent is
working 20 hours per week. Maryland stops the clock for all employed families. Some states, including Michigan, Maine,
Maryland, Vermont, and New York, extend the 5-year time limit without any conditions on recipients.

Additionally, many states provide extensions or stop the welfare time clock under special circumstances, including: when
child care is unavailable (8 states); when services that have been specified in a welfare-to-work plan are unavailable (5
states); when families reside in areas of high unemployment (7 states); or when families need additional time to complete
education or training (7 states).

The Western Center on Law and Poverty is the sponsor of AB 2116.
Page 8                                           &6$& /(*,6/$7,9( %8//(7,1                                         April 11, 2002

Administration of Justice
.or more information, contact Rubin R. Lopez at 916/327-7500, ext. 513, or e-mail rlopez@counties.org or Elizabeth
Howard at 916/327-7500, ext. 537, or e-mail ehoward@counties.org.

Juvenile Justice Crime Prevention .unding
SB 823 – Chapter #21
Governor Davis signed SB 823, by Senator Charles Poochigian and Senate President pro Tempore John Burton, into law.
Because it is an urgency measure, the provisions of this measure are effective immediately.

SB 823 changes the reporting and expenditure requirements relative to the juvenile justice programs established under
AB 1913 (Chapter 353, Statutes of 2000), the Schiff-Cárdenas Crime Prevention Act of 2000.) CSAC strongly supported this
measure, as it clarifies the intent of the original legislation. Counties will recall that AB 1913 joined an established funding
program for law enforcement activities (the Citizens’ Option for Public Safety, or COPS) with a new initiative aimed at
juvenile crime prevention and intervention. Technical amendments to the reporting requirements for those programs were
enacted in SB 736, by Senators Charles Poochigian and John Burton (Chapter 475, Statutes of 2001). Among the changes in
SB 736 was a provision that restored the reporting date for the COPS portion of the funding initiative to October 15 of each
year. (Earlier statutory versions of the COPS program established the expenditure report due date as October 15, but
AB 1913 moved up that date to August 15.)

SB 823 makes the juvenile justice reporting deadline consistent with that of the COPS program by restoring it to October 15.
.urthermore, SB 823 deletes language relating to the reversion of unspent monies to the General .und to be more consistent
with the original intent. It provides that entities failing to submit required expenditure data would be disallowed from
continued expenditure until the report is completed. CSAC is very appreciative of the efforts of Senators Poochigian and
Burton to help make these important clarifications to this program.

Guidelines Available on Juvenile Justice Program Encumbrances

Counties may wish to refer to the Board of Corrections’ (BOC) Web site for recommended guidelines on encumbrances of
Juvenile Justice Crime Prevention Act (JJCPA) funds in the current fiscal year. The BOC sets forth four principal guidelines to
assist counties in making encumbrances of current year juvenile justice funds:

    1.   .unds to pay for fixed assets ordered during the fiscal year, but not delivered and paid until the next fiscal year may
         be encumbered for up to one year. The encumbered amount should be charged against the fiscal year allocation
         during which the fixed asset was ordered.

    2.   A year-end liquidation period of 120 days will be operational beginning June 30, 2002 and annually thereafter to allow
         counties to encumber funds to pay for payroll and contracts for services provided during the current fiscal year but
         not paid until the next fiscal year.

    3.   The aforementioned liquidation period of 120 days will also apply for payroll and contract services incurred during
         the liquidation period for activities specifically and directly associated with the development and delivery of required
         evaluation and reporting documents to the BOC.
    4.   Except for the provisions identified in the above section #3, JJCPA funds from one fiscal year cannot be
         encumbered to cover payroll or contracts for services delivered after the close of that fiscal year.

Refer to www.bdcorr.ca.gov/cppd/cpa_2000/cpa_2000_page.htm for more information on encumbrance guidelines and on
JJCPA reporting requirements and plan modifications. Counties are reminded that updated plans are due to the BOC on
May 1, 2002.
April 11, 2002                                    &6$& /(*,6/$7,9( %8//(7,1                                                 Page 9

Court .acilities
SB 1732 – Co-sponsor
CSAC is pleased to join the Judicial Council in co-sponsorship of SB 1732, Senator Martha Escutia’s measure that would
serve as the vehicle to advance the recommendations of the Task .orce on Court .acilities. The measure is scheduled for
hearing on April 16 in the Senate Judiciary Committee.

As counties are aware, the Task .orce on Court .acilities was one of two bodies created as part of the Trial Court .unding
Act of 1997. Each body was charged with studying and making recommendations on an important and complex issue –
employment and facilities – related to the implementation of the trial court funding redesign. The facilities task force set out
to thoroughly examine issues related to court facilities, including making a determination on which level of government
should be responsible for court facilities in the future. The task force began meeting in July 1998 and concluded its work at a
final meeting held in August 2001. It released its first Interim Report, “Preliminary Determination: Trial Court .acility
Guidelines” on October 1, 1999. It presented its final report and recommendations on October 31, 2001.

By way of summary, the task force recommended that responsibility for court facilities be transferred from the counties to the
state and proposed an approach for accomplishing that objective. The rationale for this conclusion was based on the

B    The judicial branch of state government is wholly responsible for its programs and operations, with the exception of
     facilities. The judiciary should have the authority, responsibility, and financial capacity for all of the functions related to
     its operations and staff, including facilities.

B    Controlling both operations and facilities ensures that all costs are considered when decisions are made, and ensures
     economical, efficient, and effective court operations.

B    The state, being solely responsible for creating new judgeships, drives the need for new court facilities.

B    Equal access to justice is a key underpinning of our society and the rule of law. It is also a paramount goal of the
     Judicial Council, the policy-making body of the judicial branch. The state can best ensure uniformity of access to all
     court facilities in California.

Over the past several months, CSAC and Judicial Council representatives have been working to develop a proposal that
would advance the recommendations of the task force and other possible solutions to court facility issues. We are very
appreciative of Senator Escutia’s efforts in this area and her commitment to assisting counties and courts in achieving a
significant next step in the process of centralizing responsibility for the trial courts with the state. We will continue to work
with the author’s office, courts, and other interested parties as this measure makes its way through the legislative process. In
the meantime, we urge counties to express their support for Senator Escutia’s efforts and leadership in this area.

Costs for Probation Services
AB 2075 – Support
CSAC supports AB 2075, authored by Assembly Member Edward Chavez and sponsored by the Chief Probation Officers of
California. AB 2075 would extend probation departments’ ability to charge for certain services. Existing law permits
probation departments to recover costs of specific services such as preplea or presentence investigations and reports and of
certain reports filed relative to deferred entry of judgment programs. This measure would recast the recovery provisions in
Government Code Section 1203.1b to include additional duties, including pretrial and postsentence investigations and
reports and other pretrial monitoring activities.

CSAC has supported similar legislative efforts in the past. We believe that it is appropriate to grant county probation
departments expanded latitude to charge for services, while retaining the “ability to pay” features that apply to current
charges made by probation departments. AB 2075 will provide a needed source of revenue to carry out the critical services
provided by local probation departments. This measure failed passage out of the Assembly Public Safety Committee on April
2, but will be reconsidered in this committee on April 16.
Page 10                                          &6$& /(*,6/$7,9( %8//(7,1                                         April 11, 2002

Integrated Public Safety Communication System
AB 2018 – Support in Concept
AB 2018, by Assembly Member George Nakano, would seek to establish an integrated public safety communication system
in California. CSAC supports this measure in concept, and we are working with the author’s office to assist in identifying
technical experts in the three specified counties – Los Angeles, Sacramento, and San Diego – that are proposed to serve as
test sites for establishing a system of interoperability. We join the California State Sheriffs’ Association in our commitment to
collaborate with Assembly Member Nakano in examining and defining the full range of issues that must be addressed in
creating an integrated communication system among public safety agencies.

CSAC is aware that system design must take into account the many complexities and challenges we face in establishing a
statewide system of interoperability. Clearly, the vast size and varied geography of our state will affect the feasibility of
connecting the communication systems of the state and local public safety agencies in our 58 counties. However, we are
committed to working collaboratively with the author’s office to advance the concept of interoperability in the state. AB 2018 is
scheduled for hearing in the Assembly Public Safety Committee on April 16. All counties are urged to review the provisions of
AB 2018 and contact CSAC with questions or concerns.

Public Agency Indemnity
AB 1839 – Oppose
CSAC and the League of California Cities jointly oppose AB 1839, by Assembly Member Bill Campbell. Existing indemnity
language allows public agency contracts to be written in a manner that design professionals must agree to indemnify and
defend the public agency from any and all losses arising out of the consultant’s negligent acts, errors, omissions, or willful
misconduct. An indemnity tries to protect the public agency from the accusation of any liability on its part, so as to avoid
being drawn into the lawsuit, and it shifts the liability to the indemnifying party (except for the sole active negligence of the
public entity.) AB 1839 would limit the conditions under which a design professional would be required to indemnify a public
agency to negligence and willful misconduct, which is the normal tort rule, and hence provides for no indemnification.

Additionally, AB 1839 further limits the indemnity of the public agency to causation arising from action “in the performance of
the agreement or contract.” This provision would offer the design professional an additional loophole with which to avoid
indemnifying and defending a public agency, by stating that a particular action was not “in the performance of the contract.”

CSAC and the League are concerned that AB 1839 would threaten the important financial protections that are currently in
place for public agencies, local government ratepayers, and taxpayers. We believe that existing statutory requirements
agreed upon by local government and design professionals in previous legislation on this matter (Chapter 722, Statutes of
1997) provide sufficient protection for the design professional. At its April 9 hearing, the Assembly Public Safety Committee
passed the measure with amendments. It does not appear that the amendments – which have not yet appeared in print – will
fully address public agencies’ concerns. Additional details on this measure will be reported as they become available.

Public Records Act
AB 2937 – Update
CSAC has been advised that Assembly Member Kevin Shelley will not pursue AB 2937, his measure that expressly stated in
the Public Records Act that public agencies may not charge for segregating or deleting portions of records that are
exempted by law. Counties will recall that CSAC negotiated amendments to AB 2799 (Chapter 982, Statutes of 2000),
Assembly Member Shelley’s measure in 2000, to give public agencies the authority to recoup direct costs associated with
providing records in an electronic format. The sponsor of both AB 2799 and AB 2937, the California Newspaper Publishers
Association, allege that its members have encountered instances in which public agencies – citing their ability to recover
direct costs as enacted in AB 2799 – have overcharged for the preparation of an electronic record.

CSAC had recently addressed its concerns to Assembly Member Shelley on this measure, stressing the need to preserve
public agencies’ ability to recover legitimate costs associated with the production of electronic records. In our view, AB 2937
minimized the complex, often time-consuming activities that public agencies must undertake in order to produce a record in
an electronic format. CSAC thanks all county representatives who provided input and feedback on this measure.
April 11, 2002                                   &6$& /(*,6/$7,9( %8//(7,1                                              Page 11

Investigations in Conservatorships
AB 1957 – Support
CSAC is supporting AB 1957, by Assembly Member Robert Pacheco. This measure, which sponsored by Orange County,
would give Public Guardians or other appropriate agencies access to local and state summaries of criminal history
information in order to carry out investigations of a potential conservator. The provisions would apply to both mental health
and probate conservatorships. Granting access to existing criminal information databanks will help keep both operational
and fiscal impacts to a minimum.

We believe AB 1957 makes a great deal of sense. It is in the public’s interest to have appropriate and necessary information
when governmental agencies are making critical decisions regarding the appointment of a conservator. Access to criminal
history information will help public guardians and other appropriate agencies to effectively identify key factors that could
lead to denying the appointment of a conservator. This measure is scheduled for hearing in the Assembly Public Safety
Committee on April 16.

Mediation in Child Custody and Visitation Proceedings
SB 1406 – Request for Comment
SB 1406, by Senator Sheila Kuehl, would prohibit a mediator in a child custody or visitation proceeding from submitting a
recommendation to the court when the parties do not come to an agreement. The measure also would require that the
discussions between the mediator and parties be kept confidential. Currently, by local rule, a court may permit a mediator to
submit a recommendation to the court regarding a custody or visitation arrangement when the parties reach an impasse. We
understand that courts in 33 counties now permit mediators to make recommendations.

Counties should recognize that in addition to advancing a major policy change in a substantial number of counties, SB 1406
also contains a potential cost impact. Some counties are estimating that without the benefit of the mediator’s
recommendation, increases would be required in court staff to provide additional services such as investigation and
evaluation to resolve these issues. Any facility costs associated with growth in staff would be the responsibility of the county.
We urge counties with comments or concerns on this measure to contact CSAC as soon as is practical. SB 1406 awaits
hearing in the Senate Judiciary Committee.

Placement of Wards in Non-Secure .acilities
AB 2496 – Request for Comment
AB 2496, by Assembly Member Darrell Steinberg, would create a new set of requirements for the handling of juveniles,
adjudicated as wards of the court under Welfare and Institutions Code Sections 601 or 602, who have been ordered into a
non-secure out-of-home placement and are detained in juvenile hall while awaiting placement. The purpose of the bill is to
encourage the swift and expeditious placement of these minors that will help reduce lengthy stays in the juvenile hall.

This measure would do all of the following:

B    Require the Board of Corrections (BOC) to collect and maintain information on juvenile halls regarding minors detained
     in the juvenile hall who are awaiting transfer to a non-secure placement.

B    In the event that the minor is detained in the juvenile hall for more than 15 days pending placement, require the minor,
     minor’s counsel, and a probation officer to appear at periodic reviews before the court, which are required to be held
     every 15 days.

B    Require the probation officer to report on specified elements related to the efforts to find appropriate placement for
     these minors, with specific timeframes associated with the reporting requirements.

B    If a placement has not been executed within 30 days of the court order, mandate the return of the child to his/her home
     or the home of an appropriate relative or transfer the minor to another appropriate facility.
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B    Require the BOC to make determinations of which counties are out of compliance with the placement overload
     standard for juvenile halls and mandate that counties notified of non-compliance to submit to the BOC a placement
     action plan that identifies ways to accelerate placement of minors into non-secure facilities.

B    Define noncompliance as any county in which the average length of stay for minors awaiting placement in a non-secure
     facility exceeds 20 days for any six months in any calendar year.

B    Identify required elements of the placement action plan.

Counties are urged to review the provisions of AB 2496. It would appear that this measure, as currently drafted, represents a
significant new workload for probation departments. We understand that this effort is viewed as a work in progress, so we
encourage counties to contact us as soon as practical with their specific concerns on this measure. AB 2496 is set to be
heard in April 16 in Assembly Public Safety.

Local Review of Licensing Alcohol Establishments
AB 2577 – Request for Comment
Assembly Member Dave Cox has introduced AB 2577 on behalf of Sacramento County. This measure would expressly
permit a local government to attach to the licensing of alcohol establishments certain conditions to address public safety and
community concerns.

By way of background, the Legislature amended in 1994 the Alcohol Beverage Control Act (Business and Professions Code
Section 23000 et seq.) to permit the Department of Alcoholic Beverage Control (ABC) to deny an application for a liquor
license if “the issuance would tend to create a law enforcement problem, or if issuance would result in … undue
concentration of licenses.” The statute also defines the term “undue concentration.” Section 23958.4 sets up a mechanism,
however, for a local government to override the ABC denial by making a finding that public convenience or necessity (PCN)
would be served by issuing the license. In Sacramento County, a number of PCN findings have been made. The county
established a local process for receiving and processing PCN applications and incorporated into this process the
attachment of certain conditions and limitations relative to the operation of the alcohol establishment. The ABC recently
contacted the county to alert them to the fact that the act of attaching conditions or restrictions to the PCN was not
permissible. AB 2577 would allow all counties to subject the approval of a liquor license to certain conditions deemed to be
appropriate and necessary.

CSAC is interested in learning (1) if other counties would be affected by the provisions of AB 2577; (2) what current practices
are in place in other affected counties regarding PCN applications; and (3) the potential impact AB 2577 would have on
existing practices. Counties are urged to contact CSAC as soon as is practical with comments or input on this measure. AB
2577 will be heard before the Assembly Governmental Organization Committee on April 22.

Brown Act
AB 3035 – Request for Comment
AB 3035, a measure by the Assembly Judiciary Committee, seeks to amend the Brown Act as well as the Bagley-Keene Act,
which applies to state agencies. This measure would require notices and writings of public meetings "be made available in
appropriate alternative formats upon request by a person with a disability." The notice must also include information on how
to request disability-related auxiliary aids or services. This measure will be heard on April 16 in the Assembly Judiciary

The sponsor of the bill is the Department of Rehabilitation, and the purpose of the measure is to provide a cross-reference in
state law to existing federal requirements contained in Americans with Disabilities Act (ADA). This legislative effort is an
outgrowth of a statewide interagency task force looking at state ADA compliance. Counties are encouraged to review the
provisions of AB 3035 to ensure that nothing in the bill imposes any greater duty or obligation on local agencies than we
already bear under the ADA. Information regarding implementation of the ADA is available from the U.S. Department of
Justice at www.usdoj.gov/crt/ada/adahom1.htm. It might be particularly instructive to refer to Title II Technical Assistance
Manuals, Title II Highlights, and the ADA and City Governments: Common Problems. It is imperative that we hear from any
April 11, 2002                                    &6$& /(*,6/$7,9( %8//(7,1                                                Page 13

county that views this measure as an imposition of additional costs or services beyond what is already required by federal
law. Please contact CSAC as soon as is practical with questions or concerns on this measure.

Marriage License .ees
SB 1479 – Watch
SB 1479, by Senator Bill Morrow, would permit counties to offer a premarital preparation course. In exchange, participating
couples would receive a $7 discount on their marriage license. As now provided in statute, the $10 fee associated with the
issuance of a marriage license (Government Code Section 26840) is distributed as follows: $1 to the county recorder; $1 to
the county clerk; $1 to the State Registrar of Vital Statistics; and the remaining $7 to either the county recorder or to the county
general fund for other purposes. It is this latter portion that would be discounted for couples taking part in the marriage
preparation course.

Nothing in this measure would require counties to offer the marriage preparation course or to otherwise reduce the marriage
license fee. Recently, the bill was amended to clarify that in order for the provisions contained in SB 1479 to be carried out, a
county would need to adopt a local ordinance to provide for the $7 reduction. SB 1479 is scheduled for hearing in the Senate
Local Government Committee on April 24.

SB 1618 – Request for Comment
Senator Sheila Kuehl also has introduced a bill relative to marriage license fees. SB 1618 proposes to increase by $10 (from
$23 to $33) the marriage license fee authorized in Government Code Section 26840.7. The bill further specifies that of the $33
collected, $6 should be used, to the extent feasible, to develop or expand domestic violence centers to target underserved
areas and populations. The amount presently dedicated in statute for DV centers is $4. Counties are urged to contact CSAC
with their comments. The measure will be heard in the Senate Judiciary Committee on April 23.

            “Where the willingness is great, the difficulties cannot be great.”
                                 Niccolo Machiavelli

Housing, Land Use and Transportation
.or more information, contact DeAnn Baker at 916/327-7500, ext. 509, or e-mail dbaker@counties.org

AB 1866 – Oppose
AB 1866, by Assembly Member Roderick Wright, would recast provisions of planning and zoning law. Under existing law,
when a developer of housing proposes a housing development within the jurisdiction of the local government, the city or
county must provide the developer with incentives or concessions for the production of lower income housing units within the
development, if the developer meets specified requirements. AB 1866 would prohibit a local government from exercising
discretionary review when approving a second unit, revises density bonus law, provides that the interests of a developer in
securing a density bonus overrides all other local policies and laws, and establishes a legal process in which developers are
favored to prevail when they sue local governments.

CSAC is opposed to this bill, along with the League of California Cities and the California Chapter of the American Planning
Association, because it would remove a local governments discretionary approval of second units, and would remove our
flexibility to design ordinances that meet the needs of a specific community. This bill requires local governments to grant
additional densities and concessions to developers, which could result in overriding the general plan or providing additional
bonuses when it may not be needed. This bill also prohibits local governments from applying any local development
standard, ordinance, general plan amendment, local coastal plan, or other local law that will have the effect of precluding the
development of the density bonus units. This provision would severely restrict a local government’s ability to have other
ordinances, including those that would protect agricultural land, open space, or other important local issues.
Page 14                                           &6$& /(*,6/$7,9( %8//(7,1                                          April 11, 2002

AB 1866 was heard in the Assembly Local Government Committee on April 10. Assembly Local Government Chair Alan
Lowenthal expressed concerns regarding the provision that removes local government discretion and asked that the bill be
held over for two weeks. After a lengthy discussion, the committee agreed to hold the bill so that the author could meet with
the opponents to try and work out some of the problem areas of the bill. However, CSAC understands that the author and
sponsor intend to move forward with the bill in some manner. Your suggestions and comments are welcome.

AB 2275—Oppose Unless Amended
AB 2275, by Assembly Member Sam Aanestad, failed passage before the Assembly Transportation Committee, however the
bill was granted reconsideration. This measure would place certain restrictions on the ability to program local rehabilitation
projects within the State Transportation Improvement Program (STIP). The author did amend the bill to raise the population
threshold to 100,000, thus those counties below 100,000 in population would be authorized to program local rehabilitation
projects within the STIP. .urther, the bill would not take effect until 2008-09 when Proposition 42 monies become significant
to cities and counties. CSAC remains opposed to the bill, along with the League of California Cities, because it would reduce
the current flexibility for local elected officials sitting on regional agencies to program STIP dollars as appropriate. This
flexibility remains critical for several reasons:

.irst, California is losing its investment in the local system. The backlog on the local system for rehabilitation has grown to an
$11 billion problem that is increasing by $400 million annually. This is due to several factors including the declining revenue
source cities and counties rely upon for preservation of the local system – the local subvention of the state gas tax.
Unfortunately, in 1990 when the last nine-cent gas tax was passed, cities and counties traditional 50 percent share was
reduced to only 23 percent or 2.07 cents of the 9 cent increase, which has resulted in over a $3 billion loss to cities and
counties over the last decade. Seventy-seven percent of the increase or nearly 7 cents was directed to fund the SHOPP
(preservation of the state system) and the STIP.

Second, an efficient use of all transportation monies is critical. Allowing rehabilitation projects will save taxpayers 5 to 10
times as much should a road deteriorate to the point of requiring reconstruction, which is an uncontested eligible project
within the STIP. .urther, should project delivery problems continue for expansion projects, rehabilitation projects should
remain an option to put these taxpayer dollars to work without delay.

Third, Proposition 42 will not provide significant new revenues to cities and counties to address this need until 2008-09. In
fact, cities and counties will actually receive no revenue in 2006-07 and 2007-08. .urther, the projected revenue stream under
Proposition 42 is not nearly enough to declare victory over the local maintenance and rehabilitation problem or retire the
backlog outlined above.

AB 2511 – Support if Amended
AB 2511, by Assembly Member John Dutra, would require certain public utilities to enter into relocation agreements with
public entities, in connection with a transit or transportation capital improvement project. This bill would require that a
relocation agreement be entered into and that the agreement must be executed within 120 days of the public utility receiving
written notice from the public entity. The agreement must include several elements. AB 2511 also provides that if a public
utility abandons the relocation work, the public entity may, but is not required to, assume the work.

CSAC has serious concerns over the current version of the bill because we believe that it would force counties to enter into
contracts with utilities for the relocation projects. Currently, utilities are responsible for 100 percent of these relocation costs
because most counties have rights-of-way, which predate easements to utilities. We are concerned that this language would
force counties to negotiate these contracts and could increase costs to counties to pay for these projects. However, it is our
understanding that AB 2511 will be amended to provide that entering into contracts would be optional, and removes the 120-
day requirement.

We are in support of the provisions in the bill that would allow local governments to prevent utilities from halting these
relocation projects during times of financial difficulty, which occurred during the energy crisis in 2001. CSAC had concerns
with the suspension of these projects and raised this concern with the Public Utilities Commission. This bill would provide an
additional option to local governments to take over these projects if a utility neglects to finish the relocation, which would help
to ensure that these projects are completed in a timely manner.
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If this bill is amended to provide that entering relocation agreements is optional and would not require counties to negotiate
the costs of these projects, CSAC will be in strong support. AB 2511 is scheduled to be heard in the Assembly Transportation
Committee on April 15.

Agriculture and Natural Resources
.or more information, contact Karen Keene at 916/327-7500, ext. 511, or e-mail kkeene@counties.org.

Water Quality
Total Maximum Daily Loads

SB 469 – Chapter 20
The Governor has signed SB 469, by Senator Dede Alpert. This measure requires the State Water Resources Control Board
(SWRCB) to complete, by January 1, 2004, guidelines to be used by the SWRCB and regional water quality control boards to
develop lists of impaired bodies of water and to develop and implement actions related to total maximum daily loads
(TMDLs) of water pollutants. SB 469 also reduces, from 90 days to 60 days, the maximum review time spent on a water
quality control plan resubmitted by a regional board to the water board due solely to the addition of a TMDL component in
the plan.

Waste Discharge Requirements

SB 1342 – Support
SB 1342 by Senator Bill Morrow would require the State Water Resources Control Board and regional water quality control
boards to prescribe and enforce waste discharge requirements for municipal separate storm sewer systems in conformance
with the "maximum extent practicable" standard set forth in the Clean Water Act.

The maximum extent practicable (MEP) standard is the statutory standard that is supposed to be used by National Pollutant
Discharge Elimination System (NPDES) permit writers when evaluating local stormwater management programs.
Unfortunately, California’s permit writers cannot seem to agree upon what constitutes an acceptable program, thus leading
to an inconsistent application of the MEP standard throughout the state. CSAC is supporting this measure because it would
appropriately require the state to recognize the Congressional maximum extent practicable standard, and it would ensure
that permit writers adhere to this standard. SB 1342 is scheduled to be heard before the Senate Environmental Quality
Committee on April 22.

Civil Liability

AB 2351 – Support
AB 2351, by Assembly Member Joe Canciamilla, would revise the Mandatory Minimum Penalty (MMP) provisions of the
Water Code to ensure that municipalities and other NPDES-permit holders are not unfairly penalized for violations that could
not have been prevented and have minimal or no effect on water quality. This measure is sponsored by the League of
California Cities and the California Association of Sanitation Agencies (CASA). According to the League and CASA’s
Information Sheet, AB 2351 would do the following:

    B    Exempt from mandatory minimum penalties violations that occur due to start-up of new or refurbished biological
         treatment process.

    B    Specify that violations that occur due to a “single operational upset” outside the agency’s control shall be counted
         as a single violation for mandatory penalty purposes only.

    B    Expand the opportunity to use Supplemental Environmental Projects (SEPs) beyond the first $3,000 penalty.

    B    Make other technical and clarifying changes.
Page 16                                         &6$& /(*,6/$7,9( %8//(7,1                                       April 11, 2002

    AB 2351 is scheduled to be heard before the Assembly Environmental Safety and Toxic Materials Committee on April 16.

Sudden Oak Death
AB 2251—Support
As amended on April 9, AB 2251, by Assembly Member Joe Nation, would require the Department of .orestry and .ire
Protection (CD.) to implement a program to detect, remove, and treat, if possible, trees infected with Sudden Oak Death
disease. The program would encourage tree management and replanting in urban and other infected areas and assist
counties in seeking innovative solutions to problems caused by Sudden Oak Death. AB 2251 would further require the
director of CD. to take all necessary steps to prevent or retard the introduction, establishment, and spread of the disease.
Both CD. and the Department of .ood and Agriculture are directed to cooperate in enforcing quarantine and pest abatement
provisions as they may relate to the new program. The bill would also require CD. to provide technical assistance to local
government, homeowner neighborhood groups, and nonprofit organizations on Sudden Oak Death. It would also authorize
the state to loan surplus equipment to local tree maintenance programs. Lastly, AB 2251 would, subject to the appropriation
of funds in the Budget Act of 2002, allocate $6,000,000, for the management of Sudden Oak Death. This measure is
scheduled to be heard before the Assembly Natural Resources Committee on April 15, 2002.

SB 39XX – Watch
SB 39XX, by Senate Pro Tem John Burton and Senator Jackie Speier, would authorize the California Public Utilities
Commission (PUC) to implement and enforce standards for maintenance and operation of electric generation facilities to
ensure their reliable operation. This bill would provide that the PUC and the Independent System Operator (ISO) must jointly
establish the California Electricity Generation .acilities Standards Committee which would adopt standards for the
maintenance and operation of facilities.

SB 39XX, would allow the PUC to enforce the protocols for the scheduling of powerplant outages of the ISO. This bill is
intended to provide the state with the power to inspect power plants and ensure that if a powerplant is offline it is for
legitimate reasons. This bill passed the Assembly on April 8 and passed the Senate on April 11. It is currently pending on the
Governor’s desk.

Direct Access

AB 2686 - Pending
Under existing law, the direct access provisions are suspended for a period of time determined by the Public Utilities
Commission, until the Department of Water Resources (DWR) no longer supplies power. AB 2686, by Assembly Member Bill
Leonard, would remove the suspension of direct access to retail customers. This bill is currently pending in the Assembly
Utilities and Commerce Committee.

SB 1519 - Watch
SB 1519, by Senator Debra Bowen, would authorize a retail end use customer who purchases power from an electrical
corporation to acquire renewable power service from an alternate provider if the customer purchases and continues to
receive electrical power with a minimum renewable power content of 80 percent or greater. This bill would require a
customer who elects renewable power service from an alternate provider to pay DWR’s net unavoidable costs of power
procurement attributable to that customers purchases from DWR that are uncollected. The bill would also authorize the DWR
to impose a fee if a nonresidential retail end use customer previously served by an alternate provider acquires service from
an electrical corporation.

This bill is similar to SB 27XX, also by Senator Bowen. This bill is scheduled for hearing in the Senate Energy, Utilities and
Communications Committee on April 23.
April 11, 2002                                  &6$& /(*,6/$7,9( %8//(7,1                                              Page 17

SB 1612 – Pending
SB 1612, by Senator Tom McClintock, would suspend the prohibition on direct access created in 2001 through the DWR
power purchasing agreement. SB 1612 is currently pending in the Senate Energy, Utilities and Communications Committee.

Washington, DC Report
.or more information, contact Ron Waterman or Joe Krahn, Waterman and Associates, at 202/898-1444, or e-mail
Congress returned to Washington, DC the week of April 8 from its two-week spring hiatus poised to tackle a number of hot-
button issues. Lawmakers will be in session for the next seven weeks before they break for the Memorial Day recess, which
is expected to begin May 24.

The Senate reconvened April 8 to face a schedule that includes consideration of an energy policy bill, a major trade
package, election reform, and a defense authorization measure. The debate on energy legislation could be quite time
consuming, with over 50 amendments likely to be offered on the floor.

On the other side of the Capitol, the House returned to town April 9 with a crowded agenda that includes taxpayer protection
legislation and a pension security bill. House leaders scheduled a short workweek, as the lower chamber will not be in
session on April 12.

.or his part, President Bush stepped up the pressure on the Democratic-controlled Senate, calling for immediate action on
judicial appointments and approval of terrorism insurance legislation. The president also chided Senate leaders for failing to
act on “fast track” trade legislation, and his aides recently scolded the upper chamber for failing to act on a comprehensive
energy package.

Back on Capitol Hill, both chambers continued their fiscal year 2003 appropriations committee hearings. Congressional
hearings were held this past week on homeland security and welfare reform reauthorization.

Of course, the debate on these and other issues are occurring while the crisis in the Middle East heats up and the nation
continues to fight the war on terrorism. Events abroad are being closely watched by House and Senate leaders on both sides
of the aisle and may very well affect the congressional agenda if matters further deteriorate.

Homeland Security
During the week of April 8, the Senate Appropriations Committee held a series of homeland security-related hearings.
Among others, members of the committee heard testimony from county and city officials, governors, first responders, and
infrastructure security specialists.

Testifying before the panel on April 10 was Javier Gonzales, commissioner from Sante .e County, New Mexico, and
president of NACo (National Association of Counties). CSAC’s Washington representative assisted NACo in the preparation
of Commissioner Gonzales’ testimony.

In his statement to the committee, Gonzales highlighted CSAC’s recent anti-terrorism survey. He noted that CSAC projects
that California’s counties will spend over $90 million above budget by the end of the state fiscal year on various homeland
security-related costs.

Gonzales also discussed NACo’s Task .orce on Homeland Security, as well as the Bush administration’s $3.5 billion .irst
Responder Initiative. Although he voiced support for increased funding for homeland security, Gonzales indicated that
counties remain concerned over the administration’s proposed justice funding cutbacks. Under the president’s fiscal year
2003 budget, the State Criminal Alien Assistance Program (SCAAP) would be eliminated, and the Local Law Enforcement
Block Grant would be cut and consolidated into a new Justice Assistance Block Grant.

On a related matter, the California congressional delegation is preparing a bipartisan letter on homeland security that will be
sent to the chairman and ranking member of the House Appropriations Committee. The letter requests an appropriation of
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$17.8 million for California to create a comprehensive public safety training and communications network for the state’s first

Nationwide, a federal investment of $169.5 million would be needed to provide public safety training and communications
technology for all first responders. It should be noted this funding would not come out of the administration’s $3.5 billion .irst
Responder Initiative.

TAN. Reauthorization
On April 10, Representative Wally Herger (R-CA) introduced what will be the primary Temporary Assistance to Needy
.amilies (TAN.) reauthorization bill in the House. Herger, the chairman of the House Ways and Means Human Resources
Subcommittee, also was set to convene a welfare reauthorization hearing at press time.

Herger’s bill, entitled “The Personal Responsibility, Work and .amily Promotion Act of 2002,” closely mirrors the Bush
administration’s welfare reauthorization plan. Accordingly, a major component of the bill is a proposal to increase TAN.
work requirements starting next fiscal year.

Under current law, at least 50 percent of welfare families are required to participate in work and/or other related activities.
The Herger legislation, however, like the president’s plan, would increase the work requirement by five percent per year. By
fiscal year 2007, this would mean that 70 percent of welfare families would be required to participate in work or other
designated activities.

In addition, like the Bush proposal, the Republican welfare bill would require that families be engaged in work or other
allowable activities for an average of 40 hours per week (current law requires single and two-parent families to be engaged
in work-related activities for 30 and 35 hours a week, respectively). The legislation would allow a four-week per year cushion
for sick leave and holidays.

The measure also would provide special accommodations for parents with infants, as well as individuals who require
substance abuse treatment, rehabilitation, work-related education or training, or job search/job-readiness assistance. The bill
stipulates that up to two days per week could be spent in the aforementioned activities, but would be limited to not more than
three consecutive months in any period of 24 consecutive months.

The House measure also follows President Bush’s request with regard to funding for child care. Under the bill, $4.8 billion
would be provided through the Child Care and Development Block Grant (CCDBG), the same level of funding as the current
year. The legislation also would increase the amount of TAN. funds that states are allowed to transfer to the CCDBG from 30
percent to a total of 50 percent per year. The transfer amount would be limited to 20 percent if the state elected to transfer 10
percent to the Social Services Block Grant.

In addition, the measure would remove from the federal definition of assistance the costs of providing transportation and
child care. This change would help remove current barriers that discourage states from using existing TAN. funding
streams on these types of activities since these services can count against the lifetime limits on aid.

With respect to the child support program, the bill would provide financial incentives for states to pass through as much child
support as possible to custodial parents and their children, especially those that have left the welfare rolls. Under current
law, the government retains a substantial portion of the child support arrearage funds that are collected in cases where
families are or have received welfare.

The Herger bill also reflects the president’s plan to provide up to $300 million annually for programs that encourage “healthy,
stable marriages.” Activities under the new program would include pre-marital education and counseling, as well as
research and technical assistance. Additionally, the legislation includes a $20 million grant to support community efforts
aimed at improving parenting skills and promoting responsible fatherhood.

.inally, the measure adopts the president’s plan to offer broad new waiver authority for programs that fall under the
jurisdiction of the House Ways and Means Committee. The proposal would allow states to conduct “superwaiver”
demonstration projects to improve program effectives and/or integrate current programs in order to improve service
April 11, 2002                                    &6$& /(*,6/$7,9( %8//(7,1                                                Page 19

On a related matter, Representative Buck McKeon (R-CA) recently introduced legislation that would reauthorize those
welfare-related programs that are under the jurisdiction of the House Education and Workforce Committee. McKeon serves
as chairman of the 21st Century Competitiveness Subcommittee.

It should be noted that McKeon’s bill, the “Working Toward Independence Act of 2002,” is similar to the Herger legislation
with regard to the bill’s provisions on TAN. work participation requirements. The McKeon bill does include, however, a
more expansive child care title.

Under the legislation, states would be encouraged to create partnerships with public and private entities to increase the
supply and quality of child care services. Additionally, the measure seeks to better coordinate child care services with other
early childhood education programs – including Head Start, Early Reading .irst, Even Start, and state-sponsored pre-
kindergarten programs.

State Criminal Alien Assistance Program (SCAAP)
The Department of Justice’s Bureau of Justice Assistance (BJA) recently announced the fiscal year 2002 SCAAP awards.
While BJA normally announces SCAAP allocations in the fall, this year the agency publicized awards in late March.

As has been the trend in recent years, a large number of new jurisdictions applied for and are receiving SCAAP payments.
.or fiscal year 2002, 150 new jurisdictions applied for SCAAP, representing a 29 percent increase in eligible applicants from
last year.

With regard to California, this year the state will receive approximately $143 million in SCAAP funding, a decrease of $15
million. California’s counties, however, are receiving an $8 million increase, for a total of nearly $75 million in fiscal year 2002
funding. The combined state-county total of $218 million represents roughly 40 percent of the overall funds.

Disproportionate Share Hospitals/Upper Payment Limit
The House Energy and Commerce Committee recently announced that it plans to consider a Medicare reform bill by early
May. Among other things, the package is expected to include enhanced payments to providers and a modest prescription
drug benefit. At this point, no funding has been set aside to address changes to the Medicaid program.

It should be noted, however, that there is growing pressure on committee leaders to address a number of Medicaid items,
including fixing the “cliff” in Disproportionate Share Hospital (DSH) payments. In public comments this week, a member of
the committee’s majority staff included DSH among a list of items that may be addressed in the Medicare legislation.

Nationally, participating hospitals will lose an estimated $1.3 billion in DSH payments in 2003 if scheduled cuts are allowed
to proceed. California hospitals are projected to lose approximately $184 million.

On a related Medicaid funding matter, a federal district judge in Arkansas recently directed the secretary of Health and
Human Services (HHS) not to implement the final upper payment rule before May 14. The final rule would cut Medicaid
reimbursements to public hospitals.

The decision comes in response to a lawsuit filed by several national hospital groups and public health organizations,
including a number from the state of California. The suit claims that HHS failed to provide the requisite amount of time for the
Senate to review the agency’s new rule. Under the Congressional Review Act, Congress has 60 days to review a regulation
before it goes into effect.

The overall goal of the legal action is to permanently block the implementation of the UPL rule, which would cut Medicaid
reimbursements to non-state public hospitals from 150 percent to 100 percent of what Medicare pays for the same services.
The change is projected to cost California over $1 billion through 2008, and $300 million annually thereafter.

The Arkansas judge has indicated that he would issue a final ruling on the entire lawsuit prior to May 14.
Page 20                                                               &6$& /(*,6/$7,9( %8//(7,1                                                           April 11, 2002

Bill Index
AB 2686 - Pending................................................................16     AB 2878 – Oppose Unless Amended .................................. 4
AB 1122 – Support .................................................................4    AB 2937 – Update ................................................................ 10
AB 1839 – Oppose ...............................................................10      AB 3035 – Request for Comment ....................................... 12
AB 1866 – Oppose ...............................................................13      SB 1519 - Watch .................................................................. 16
AB 1906 – Support .................................................................5    SB 39XX – Watch ................................................................. 16
AB 1957 – Support ...............................................................11     SB 469 – Chapter 20............................................................ 15
AB 2018 – Support in Concept ...........................................10              SB 657 – Support ................................................................... 4
AB 2075 – Support .................................................................9    SB 823 – Chapter #21........................................................... 8
AB 2116 – Watch ....................................................................7   SB 1342 – Support ............................................................... 15
AB 2251—Support ...............................................................16       SB 1406 – Request for Comment ....................................... 11
AB 2275—Oppose Unless Amended ................................14                        SB 1479 – Watch .................................................................. 13
AB 2351 – Support ...............................................................15     SB 1612 – Pending............................................................... 17
AB 2496 – Request for Comment .......................................11                 SB 1618 – Request for Comment ....................................... 13
AB 2511 – Support if Amended...........................................14               SB 1732 – Co-sponsor........................................................... 9
AB 2577 – Request for Comment .......................................12                 SCA 10 – Support .................................................................. 5
April 11, 2002                       &6$& /(*,6/$7,9( %8//(7,1           Page 21

                            2002 Calendar of Events

15               CSAC Executive Committee Meeting, Sacramento
17               CAOAC Meeting, Sacramento
22-23            Northern California County Supervisors Association
                 (NCCSA), Sierra County
22-24            NACo Western Interstate Region, Billings, Montana

13               CSAC Board of Directors Meeting, Sacramento

12 – 16          NACo Annual Conference, New Orleans, LA

8                CSAC Executive Committee Meeting, Sacramento

18-19            NCCSA, Colusa County
26-27            CSAC Executive Committee Retreat, Placer County

8-11             Regional Council of Rural Counties Annual Conference,
                 Placer County
16-18            CAOAC Annual Meeting, Mariposa County

18-22            CSAC Annual Conference, Pasadena
21               CSAC Board of Directors Meeting, Pasadena

5-6              CSAC Officers Retreat, Napa County

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