Bill Text: CA AB1955 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Local government: compensation.

Spectrum: Moderate Partisan Bill (Democrat 9-1)

Status: (Engrossed - Dead) 2010-08-31 - Withdrawn from committee. Ordered to third reading. Read third time. Urgency clause refused adoption. (Ayes 15. Noes 19. Page 5098.) Motion to reconsider made by Senator Florez. Reconsideration granted. (Ayes 37. Noes 0. Page 5099.) [AB1955 Detail]

Download: California-2009-AB1955-Amended.html

---

BILL NUMBER: AB 1955	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 18, 2010
	AMENDED IN SENATE  AUGUST 10, 2010
	AMENDED IN SENATE  JUNE 23, 2010
	AMENDED IN ASSEMBLY  APRIL 12, 2010
	AMENDED IN ASSEMBLY  MARCH 18, 2010

INTRODUCED BY   Assembly Member De La Torre
    (   Principal coauthor:   Senator 
 Correa   ) 
    (   Coauthors:   Assembly Members 
 Block,   Eng,   Ma,   Norby, 
 Portantino,   and Solorio   ) 

                        FEBRUARY 17, 2010

   An act to amend Section 54957.6 of, and to add Sections 
12531   34096  and 54957.05 to, the Government
Code, to add Section 33138 to the Health and Safety Code, and to add
Section 17043.5 to the Revenue and Taxation Code, relating to public
officers, and declaring the urgency thereof, to take effect
immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1955, as amended, De La Torre. Local government: compensation.
   (1) Existing law charges the  Attorney General 
 Controller  with various duties, including, among others,
 attending the Supreme Court and prosecuting or defending all
causes to which the state, or any state officer is a party in his or
her official capacity   superintending the fiscal
concerns of the state  .
   Existing law authorizes a city council to enact an ordinance
providing each member of the city council a salary based on the
population of the city, and to provide for other forms of
compensation, as specified.
   This bill would require the  Attorney General 
 Controller  to determine whether a city is an excess
compensation city, as defined.  The bill would authorize a city
to request a hearing, as specified, to contest the Controller's
determination.  The bill would require the  Attorney
General   Controller, if the Attorney General concurs
with the Controller's determination,  to notify the Franchise
Tax Board and the redevelopment agency in the city of the city's
status as an excess compensation city  ,   as prescribed
 .
   (2) The Community Redevelopment Law authorizes the establishment
of redevelopment agencies in communities to address the effects of
blight, as defined, in blighted areas in those communities known as
project areas, and authorizes the agency to issue bonds.
   This bill would prohibit the agency, once the agency has received
written notice from the  Attorney General  
Controller  that the city is an excess compensation city, from
adopting a redevelopment plan for a new project area or amending an
existing redevelopment plan for existing project areas; from issuing
new bonds, notes, interim certificates, debentures, or other
obligations, as specified; and from encumbering any funds or
expending any moneys derived from any source except as specified.
   (3) The Personal Income Tax Law imposes taxes based upon taxable
income.
   This bill would, for taxable years beginning on or after January
1, 2011, increase the tax rate applicable to 50% on that portion of
the gross income of a city council member of an excess compensation
city, as defined, that is in excess of the allowable amount.
   (4) Existing law, the Ralph M. Brown Act, requires that all
meetings of a legislative body of a local agency be open and public
and all persons be permitted to attend unless a closed session is
authorized. The act authorizes a legislative body to hold a closed
session with the local agency's designated representatives regarding
various issues, including compensation, regarding its represented and
unrepresented employees, but the legislative body is prohibited from
taking final action on the proposed compensation of one or more
unrepresented employees.
   Existing law also requires that all contracts of employment with a
local agency, as defined, for certain positions be ratified in an
open session of the governing body and be reflected in the governing
body's minutes.
   This bill would require that any individual contract of employment
 or amendment to a contract of employment  with an employee
who is or will be employed by, and report directly to, the
legislative body of the local agency be ratified in an open session
of the legislative body after prescribed information regarding the
contract  or amendment to the contract  is made available
 in a conspicuous location  on the local agency's Internet
Web site, if it maintains one, and in a location that is freely
accessible to the public, no later than 7 days prior to the meeting
to ratify the contract  or amend the contract  . By
expanding the duties of local officials, these provisions would
impose a state-mandated local program.
   This bill would also specify that final action on the proposed
compensation of one or more unrepresented employees who are to be
employed by, and report directly to, the legislative body of the
local agency only be taken in open session, consistent with the
prescribed disclosure requirements. By expanding the duties of local
officials, these provisions would impose a state-mandated local
program.
   (5) The bill would express a legislative finding and declaration
that, to ensure the statewide integrity of local government,
disclosure of compensation paid to officers and designated employees
is an issue of statewide concern and not a municipal affair and that,
therefore, all cities, including charter cities, would be subject to
the provisions of the bill.
   (6) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   (7) This bill would declare that it is to take effect immediately
as an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 34096 is added to the 
 Government Code   , to read:  
   34096.  (a) If, based on a review of public records, the
Controller reasonably determines that a city meets the definition of
an "excess compensation city," as defined in subdivision (e), the
Controller shall notify the city and the Attorney General of that
determination in writing.
   (b) (1) Within 10 days of receiving the written notice from the
Controller, the city may request a hearing before the Controller to
determine if the city is in compliance with Section 36516. Upon
receipt of the written notice, the Controller shall conduct a public
hearing with at least 10 days' notice for the purpose of determining
if the city is an excess compensation city. At the hearing, the city
may demonstrate that the city is not an excess compensation city by
showing any of the following:
   (A) Evidence of the approval by the city council of an ordinance
or an amendment to an ordinance that increases the council members'
salaries, pursuant to subdivision (a) of Section 36516.
   (B) Evidence of the approval by the city's electors of a question
that increases the council members' salaries, pursuant to subdivision
(b) of Section 36516.
   (C) Any other evidence of compliance with Section 36516.
   (2) If the Controller determines that a city is an excess
compensation city after a hearing pursuant to this subdivision, the
Controller shall notify the Attorney General of that determination
and provide the Attorney General with any evidence submitted at the
hearing. The Attorney General shall be responsible for reviewing the
record of the hearing and shall concur or not concur with the
Controller's determination in writing within a reasonable time. If
the Attorney General concurs with the Controller's determination that
a city is an excess compensation city, the Controller shall proceed
with the notifications, as provided pursuant to subdivision (c).
   (c) If the city does not request a hearing or if the Controller
determines, at the hearing, with the concurrence of the Attorney
General that the city is an "excess compensation city," the
Controller shall notify, in writing, the city, the Franchise Tax
Board, and the community redevelopment agency in that city of the
city's status as an excess compensation city.
   (d) An excess compensation city may bring itself into compliance
with Section 36516. Once the city is in compliance with Section
36516, the city may submit a written request to the Controller to be
relieved of the status as an excess compensation city. If the
Controller determines that the city is in compliance with Section
36516, the Controller shall immediately notify, in writing, the city,
the Franchise Tax Board, and the community redevelopment agency in
that city of the change in status.
   (e) (1) For purposes of this section, "excess compensation city"
means any city, including a charter city, that compensates any member
of that city council in excess of the amounts specified in Section
36516. An "excess compensation city" does not include a charter city
that has a population of over 285,000 persons.
   (2) Notwithstanding paragraph (1), if the office of mayor is
independently elected, the city may demonstrate that additional
compensation paid to the mayor other than compensation for the mayor'
s position as a council member, has been provided by ordinance or in
the city's charter.  
  SECTION 1.    Section 12531 is added to the
Government Code, to read:
   12531.  (a) If the Attorney General determines that a city is an
excess compensation city, as defined in subdivision (e), the Attorney
General shall notify the city council of that city in writing and
provide the city a hearing on the matter.
   (b) At the hearing, the city shall be provided opportunity to
demonstrate that the city is not an excess compensation city, by
showing, among other things, evidence of compliance with Section
36516, evidence of submission of a salary ordinance to voters, and
evidence of an increase in salary of city council members of no more
than 5 percent per year over the base amount specified in subdivision
(a) of Section 36516.
   (c) If, after notice and hearing, the Attorney General determines
that the city has failed to demonstrate that it is not an excess
compensation city, the Attorney General shall notify the city in
writing, and notify the Franchise Tax Board and the redevelopment
agency in that city, in writing, of the city's status as an excess
compensation city.
   (d) A city that has been found to be an excess compensation city
may bring itself into compliance with Section 36516. Once the city is
in compliance with Section 36516, the city council may submit a
written request to the Attorney General to be relieved of the status
as an excess compensation city. If the Attorney General determines
that the city is in compliance with Section 36516, the Attorney
General shall immediately notify the Franchise Tax Board and the city'
s redevelopment agency, in writing, of the change in status.
   (e) (1) For purposes of this section, "excess compensation city"
means any city, including a charter city, that compensates any member
of that city council in excess of the amounts specified in Section
36516. An "excess compensation city" does not include a charter city
that specifies in the charter that the city council members shall
devote their entire time to duties related to their office.
   (2) Notwithstanding paragraph (1), if the office of mayor is
independently elected, the city may demonstrate that additional
compensation paid to the mayor other than compensation for the mayor'
s position as a council member, has been provided by ordinance or in
the city's charter. 
  SEC. 2.  Section 54957.05 is added to the Government Code, to read:

   54957.05.  Notwithstanding any other law, any individual contract
of employment  or amendment to a contract of employment 
with an employee who is or will be employed by, and report directly
to, the legislative body of the local agency shall be ratified in an
open session of the legislative body. Prior to ratifying the contract
 or amending the contract  , the legislative body shall
disclose information regarding the contract  or amendment to the
contract  , including, but not limited to, the employee's name,
the position  title  , and the total amount of salary,
benefits, retirement, and any other forms of compensation,  in a
conspicuous location  on the local agency's Internet Web site,
if it maintains one, and in a location that is freely accessible to
members of the public, no later than seven days prior to the meeting
to ratify the contract  or amend the contract  .
  SEC. 3.  Section 54957.6 of the Government Code is amended to read:

   54957.6.  (a) Notwithstanding any other provision of law, a
legislative body of a local agency may hold closed sessions with the
local agency's designated representatives regarding the salaries,
salary schedules, or compensation paid in the form of fringe benefits
of its represented and unrepresented employees, and, for represented
employees, any other matter within the statutorily provided scope of
representation.
   However, prior to the closed session, the legislative body of the
local agency shall hold an open and public session in which it
identifies its designated representatives.
   Closed sessions of a legislative body of a local agency, as
permitted in this section, shall be for the purpose of reviewing its
position and instructing the local agency's designated
representatives.
   Closed sessions, as permitted in this section, may take place
prior to and during consultations and discussions with
representatives of employee organizations and unrepresented
employees.
   Closed sessions with the local agency's designated representative
regarding the salaries, salary schedules, or compensation paid in the
form of fringe benefits may include discussion of an agency's
available funds and funding priorities, but only insofar as these
discussions relate to providing instructions to the local agency's
designated representative.
   Closed sessions held pursuant to this section shall not include
final action on the proposed compensation of one or more
unrepresented employees. Final action on the proposed compensation of
one or more unrepresented employees who are or will be employed by,
and report directly to, the legislative body of the local agency
shall occur in open session, and consistent with the disclosure
requirements of Section 54957.05.
   For the purposes enumerated in this section, a legislative body of
a local agency may also meet with a state conciliator who has
intervened in the proceedings.
   (b) For the purposes of this section, the term "employee" shall
include an officer or an independent contractor who functions as an
officer or an employee, but shall not include any elected official,
member of a legislative body, or other independent contractors.
  SEC. 4.  Section 33138 is added to the Health and Safety Code, to
read:
   33138.  (a) Upon written notification by the  Attorney
General   Controller  that the city in which the
agency is established is an excess compensation city, pursuant to
Section  12531   34096  of the Government
Code, all of the following shall apply:
   (1) The agency shall not adopt redevelopment plans for a new
project area or amend an existing redevelopment plan for existing
project areas.
   (2) The agency shall not issue new bonds, notes, interim
certificates, debentures, or other obligations, whether funded,
refunded, assumed, or otherwise, pursuant to Article 5 (commencing
with Section 33360) of Chapter 4.
   (3) The agency shall not encumber any funds or expend any moneys
derived from any source, except that the agency may encumber funds
and expend funds to pay, if any, all of the following:
   (A) Bonds, notes, interim certificates, debentures, or other
obligations issued by an agency before the imposition of the
prohibition in paragraph (2), whether funded, refunded, assumed, or
otherwise, pursuant to Article 5 (commencing with Section 33360) of
Chapter 4.
   (B) Loans or moneys previously advanced to the agency, including,
but not limited to, loans from federal, state, or local agencies, or
a private entity.
   (C) Contractual obligations that, if breached, could subject the
agency to damages or other liabilities or remedies.
   (D) Obligations incurred pursuant to Section 33445.
   (E) Indebtedness incurred pursuant to Section 33334.2 or 33334.6.
   (F) Obligations incurred pursuant to Section 33401.
   (G) Payments required under subdivision (a) of Section 33690 or
subdivision (a) of Section 33690.5.
   (b) The prohibitions identified in subdivision (a) shall be lifted
after the  Attorney General   Controller 
determines that the city is no longer an excess compensation city
pursuant to subdivision (d) of Section  12531  
34096  of the Government Code.
  SEC. 5.  Section 17043.5 is added to the Revenue and Taxation Code,
to read:
   17043.5.  (a) For each taxable year beginning on or after January
1, 2011, in addition to any other taxes imposed by this part, an
additional tax shall be imposed at the rate of 50 percent on that
portion of a qualified taxpayer's gross income that is derived from
the excess compensation city that is in excess of the amounts
specified in Section 36516 of the Government Code.
   (b) For purposes of this section:
   (1) "Qualified taxpayer" means a member of a city council of an
excess compensation city.
   (2) "Excess compensation city" means a city that has been
determined by the  Attorney General   Controller
 to be an excess compensation city pursuant to Section 
12531   34096  of the Government Code.
   (c) The following shall not apply to the tax imposed by this
section:
   (1) The provisions of Section 17039, relating to the allowance of
credits.
   (2) The provisions of Section 17041, relating to filing status and
recomputation of the income tax brackets.
   (3) The provisions of Section 17045, relating to joint returns.
  SEC. 6.  The Legislature finds and declares that the fiscal
integrity and stability of local governmental agencies in this state,
including charter cities, has a direct impact on the long-term
well-being of all the residents of this state. The likelihood of
businesses locating to or staying in the state is affected by the
perception of a functioning, transparent, and practical governmental
structure in the local governmental bodies in California. Therefore,
the Legislature finds and declares that to ensure the statewide
integrity of local government, the disclosure of compensation paid to
officers and designated employees is an issue of statewide concern
and not a municipal affair, as that term is used in Section 5 of
Article XI of the California Constitution. Therefore, this act shall
apply to all cities, including charter cities.
  SEC. 7.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
  SEC. 8.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to preserve fiscal integrity and stability of local
government agencies in this state and the perception of a
functioning, transparent, and practical governmental structure in the
local government bodies in California at the earliest possible time,
it is necessary for this measure to take effect immediately.