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T 0'. BOARD OFSUPERVISORS
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FROM: PHIL BATCHELOR, COUNTY ADMINISTRATOR
Costa
County
February 16, 1999 " , •�
DATE: + ctrutt
SUBJECT. LEGISLATION: SB 231, 232, 233
(SENATE LOCAL GOVERNMENT COMMITTEE)
SPECIFIC REOU'£ST(S)OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION_:
ADOPT a',position in SUPPORT of SB 231, 232, and 233 by the Senate Local
Government Committee which will validate actions taken by local governments to
cure inadvertent errors in issuing bonds and changing boundaries in 1999.
BACKGROUND:
Banks, pension funds, and other investors will not buy public agencies' securities
unless they are sound investments. Investors rely on legal opinions from bond
counsels to assure them of the bonds' credit worthiness. Without legislative action
to cure technical errors, bond counsels are reluctant to certify bonds as good credit
risks.
Each year the Legislature adopts annual Validating Acts that retroactively fix
procedural errors or omissions that public officials might inadvertently make. The
annual bills affect the state government, as well as counties, cities, special districts,
school districts, and redevelopment agencies.
Senator Richard Rainey,the Chair of the Senate Local Government Committee, has
asked that the Board of Supervisors consider taking a public position supporting the
three 1999 Validation Acts. Since the Validation Acts improve the County's credit
rating and make it possible for the County to sell its annual Tax and Revenue
Anticipation Notes, it is recommended that the Board indicate its support for SB 231,
232, and 233.
CONTINUED ON ATTACHMENT: ---- YES SIGNAPURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR =---FI.ECOMMENDATION OF 80ARD COMMITTEE
APPROVE OTHER
2IGNATUREj§jtya&4evZ,
ACTION OF BOARD ON February 23 1999 —APPROVED APPROVED AS RECOMMENDED Xy- OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
.-XX UNANIMOUS(ABSENT --- ---- } AND CORRECT COPY OF AN ACTION TAKEN
AYES: DOES: ANIS ENTERED ON THE MINUTES OF THE BOARD
ASSENT. ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED E P js`r jI a r Y.—
Contact. PHIL BATCHELOR,CLERK OF THE BOARD OF
cc: See Page 2 SUPERVISORS AND COUNTY ADMINISTRATOR
BY _✓ 'DEPUTY
/ z
4
cc: County Administrator
Treasurer-Tax Collector
Auditor-Controller
Laura Lockwood, Manager, Capital Facilities and Debt Management
Tony Eneay Senior Deputy County Administrator
Senator Richard Rainey
Room 4090 State Capitol
Sacramento, CA 95814
LesSpahnn
Heim, Noack, Kelly & Spahnn
1121 L Street, Suite 100
Sacramento, CA 95814
-2-
F-292 (7T{�j,�\-542 P-002/003 FEB 04 '99 06:49
ME!.t8ERS r�� a 001A iIT7E.P-A",STANT
i� :.lifurTSLiT fL�is{Zt#1CY .IANC~LEONARC BROWN
K. MAURICE JOHANNESSEN c+ONSULTA.InS
.; K MONTEIT ICs PETER M. � ATTR
CON!TERATA APRIL E. MANAT7
RICHARD POLANCO
ADAM 8.SCHIF tint 191 22. 2
FAX(91e)3z��s�z9e
W W W.Semcs.g4V/IOGCOY
RICHARD K: RAINE'Y
CHAIRMAN
February 1, 1999
Mr. Les Spahnn
Heim,Noak&Spahnn
1121 L Sheet, Suite 100
Sacramento, California 95814
Dear Lees:
Following, our traditional practice,the Committee has again introduced the three annual'Validat-
ing acts. Serrate Bills 231, 232., and 233 will cure public officials' inadvertent errors in issuing
bonds and changing boundaries in 1999.
Because the Committee's bills help your clients succeed in the municipal band market and avoid
problems with boundary changes, l invite you to share these gills with them. Each year we need
to explain the importance of the'Validating Acts to our colleagues. With new legislators taking
office in 1999,. it is more important than ever for these bills to have a long list of supporters.
Having your client's letter of support for our bills will help the Committee rove them through
the legislative.process. If possible,S would appreciate having your letter by February 26.
If you have any questions about these bills, please contact Peter Detwiler at the Committee's of-
fice. If you think that the Committee can; help in some other way,please let me know.
Sincerely,
lRainey
Chairn=
En s
STA'T'E CAPITOL ROOM 410 SACRAMENTO, CALIFORNIA 95814
F-292 T-542 P-003'003 FEB 04 199 08:50
Validating Acts of 1999
Senate Bills 231 232, and 233
Problem. Banks,pension funds, and other investors will not buy public agencies' securities un-
less they are sound investments. Investors rely on legal opinions from bond counsels to assure
them of the bonds' credit worthiness. Without legislative action to cure technical errors,band
counsels are reluctant to certify bonds as good crest risks.
Solution. Enact"Validating Acts"that correct minor errors.
B&Skzround. For more than 54 years,the Legislature has adopted annual Validating Acts that
retroactively fix procedural errors or omissions that public officials might inadvertently make.
The annual bills affect the state government, as well as counties, cities, special districts, school
districts, and redevelopment agencies.
In Miller v. McKenna 23.Cal.2d 774 (1944), the California Supreme Court explained that the
"Legislature'.may cure irregularities or omissions to comply with provisions of a statute which
could have been omitted in the first instance.,
The Validating Acts save taxpayers' money. Strong legal opinions result in higher credit ratings
which result in lower interest rates which result in lower borrowing costs which result in saving
money for taxpayers.
In recent years, the usual practice has been for all of the members of the Senate Local Govern-
ment Committee to jointly author the annual Validating Acts. In 1998, the Committee's bills
were: SB 120, SB 2384, and SB 1381.
Following its usual practice, the Senate Local Government Committee, chaired by Senator Rich-
ard Yom. Rainey, has authored the three Validating Acts for 1999. Senate Bill 231, the First Vali-
dating Act o€ 1999,will take effect when chaptered, probably in the late spring. Senate Bill 232,
the Second Validating Act,is also an urgency bill and will reach Governor Gray Davis in the late
summer, validating the mistakes committed after the chaptering of SB 23.1. The'Third Validat-
ing Act,Senate Bill 233, takes effect on January 1, 2000, covering the last few months of 1999.
SENATE BILL No. 231
Introduced by Committee on Local Government (Senators
Rainey (Chair), Baca, Johannessen, Monteith, Perata,
Polanco,and Schiff
January 25, 1999
An act to validate the organization, boundaries, acts,
proceedings, and bonds of public bodies, and to provide
limitations of time wherein actions may be commenced, and
declaring the urgency thereof, to take effect immediately.
LEGISLAME COUNSEUS DIGEST
SB 231, as introduced, Committee on Local
Government. Validations.
This bill world enact the First Validating Act of 1999, which
would validate the organization, boundaries, acts,
proceedings, and bonds of the state and counties, cities, and
specified districts, agencies, and entities.
This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 213. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California dei enact as follows:
1 SECTION 1. This act may be cited as the First
2 Validating Act of 1999.
3 SBC. 2. As used in this act:
4 (a) "Public body„ means the state and all
5 departments, agencies, boards, commissions, and
6 authorities of the state. "Public body" also means all
99
SB 231 —2-
1
2-1 counties, cities and counties, cities, districts, authorities,
2 agencies, boards, commissions, and other entitles,
3 whether created by a general statute or a special act,
4 including, but not limited to, the following:
5 Agencies, boards, commissions, or entities constituted
6 or provided for under or pursuant to Chapter 5
7 (commencing with Section 6500) of Division 7 of Title 1
8 of the Government Code.
9 Air pollution control districts of any kind.
10 .Air quality management districts.
I I Airport districts.
12 Assessment districts, benefit assessment districts, and
13 special assessment districts of any public body.
14 Bridge and highway districts.
15 California water districts.
16 Citrus pest control districts.
17 City maintenance districts.
18 Community college districts.
19 Community development commissions.
20 Community facilities districts.
21 Community redevelopment agencies.
22 Community rehabilitation districts.
23 Community services districts.
24 Conservancy districts.
25 Cotton pest abatement districts.
26 County boards of education.
27 County drainage districts.
28 County flood control and water districts.
29 County free library systems.
30 County maintenance districts.
31 County sanitation districts.
32 County service areas.
33 County transportation commissions.
34 County water agencies.
35 County water authorities.
36 County water districts.
37 County waterworks districts.
38 Department of Water Resources and other agencies
39 acting pursuant to fart 3 (commencing with Section
40 11100)of Division 6 of the Water Code.
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-3— SB 231
1 Distribution districts of any public body.
2 Drainage districts.
3 Fire protection districts.
4 Flood control and water conservation districts.
5 Flood control districts.
6 garbage and refuse disposal districts.
7 garbage disposal districts.
8 geologic hazard abatement districts.
9 Harbor districts.
10 Harbor improvement districts.
11 Harbor, recreation, and conservation districts.
12 Health care authorities.
13 Highwaydistricts.
14 Highway interchange districts.
15 Highway'lighting districts.
16 Housing authorities.
17 Improvement districts or improvement areas of any
18 public body.
19 Industrial development authorities.
20 Infrastructure financing districts.
21 Integrated financing districts.
22 Irrigation districts.
23 Joint highway districts.
24 Levee districts.
25 Library districts.
26 Library districts in unincorporated towns and villages.
27 Local agency formation commissions.
28 Local health care districts.
29 Local health districts.
30 Local hospital districts.
31 Local transportation authorities or commissions.
32 Maintenance districts.
33 Memorial districts.
34 Metropolitan transportation commissions.
35 Metropolitan water districts.
36 Mosquito abatement or vector central districts.
37 Municipal improvement districts.
38 Municipal utility districts.
39 Municipal water districts.
40 Nonprofit corporations.
99
B 231 —4-
1
4-
1 Nonprofit public benefit corporations.
2 Open-space maintenance districts.
3 Parking authorities.
4 Parking districts.
5 Permanent read divisions.
6 Pest abatement districts.
7 Police protection districts.
8 Port districts.
9 Project areas of community redevelopment agencies.
10 Protection districts.
11 Public cemetery districts.
12 Public utility districts.
13 Rapid transit districts.
14 Reclamation districts.
15 Recreation and park districts.
16 Regional justice facility financing agencies.
17 Regional park and open-space districts.
18 Regional planning districts.
19 Regional transportation commissions.
20 Resort improvement districts.
21 Resource conservation districts.
22 River port districts.
23 Road maintenance districts.
24 Sanitary districts.
25 School districts of any kind or class.
26 Separation of grade districts.
27 Service authorities for freeway emergencies.
28 Sewer districts.
29 Sewer maintenance districts.
30 Small craft harbor districts.
31 Stone and'pome fruit pest control districts.
32 Storm drain maintenance districts.
33 Storm drainage districts.
34 Storm drainage maintenance districts.
35 Storm water districts.
36 Toll tunnel authorities.
37 Traffic authorities.
38 Transit development boards.
39 Transit districts.
40 Unified and union school districts' public libraries.
99
-5— SB 231
1 Vehicle parking districts.
2 Water agencies.
3 Water authorities.
4 Water conservation districts.
5 Water districts.
6 Water replenishment districts.
7 Water storage districts.
8 Wine grape pest and disease control districts.
9 Zones, improvement zones, or service zones of any
10 public body.
11 (b) "Bonds" means all instruments evidencing an
12 indebtedness of a public body incurred or to be incurred
13 for any public purpose, all leases, installment purchase
14 agreements, or similar agreements wherein the obligor is
15 one or more public bodies, all instruments evidencing the
16 borrowing of money in anticipation of taxes, revenues, or
17 other income of that body, all instruments payable from
18 revenues or special funds of those public bodies, all
19 certificates of participation evidencing interests in the
20 leases, installment purchase agreements, or similar
21 agreements, and all instruments funding, refunding,
22 replacing, or amending any thereof or any indebtedness.
23 (c) "Hereafter" means any time subsequent to the
24 effective date of this act.
25 (d) "Heretofore" means any time prior to the
26 effective date of this act.
27 (e) "Now" means the effective date of this act.
28 SBC. 3. All public bodies heretofore organized or
29 existing under, or under color of, any law, are hereby
30 declared to have been legally organized and to be legally
31 functioning as those public bodies. Every public body,
32 heretofore described, shall have all the rights, powers,
33 and privileges, and be subject to all the duties and
34 obligations, of those public bodies regularly formed
35 pursuant to law.
36 SEC. 4. The boundaries of every public body as
37 heretofore established, defined, or recorded, or as
38 heretofore actually shown on maps or plats used by the
39 assessor, are hereby confirmed, validated, and declared
40 legally established.
99
SB 231 —6-
1
-61 SEC. 5. All acts and proceedings heretofore taken by
2 any public body or bodies under any law, or under color
3 of any law, for the annexation or inclusion of territory into
4 those public bodies or for the annexation of those public
5 bodies to any other public body or for the withdrawal or
6 exclusion of territory from any public body or for the
7 consolidation, merger, or dissolution of any public bodies
8 are hereby confirmed, validated, and declared legally
9 effective. This shall include all acts and proceedings of the
10 governing board of any public body and of any person,
11 public officer, board, or agency heretofore done or taken
12 upon the question of the annexation or inclusion or of the
13 withdrawal or exclusion of territory or the consolidation,
14 merger, or dissolution of those public bodies.
15 SEC. 6. All acts and proceedings heretofore taken by
16 or on behalf of any public body under any law, or under
17 color of any law, for, or in connection with, the
18 authorization, issuance, sale, execution, delivery, or
19 exchange of bonds of any public body for any public
20 purpose are hereby authorized, confirmed, validated,
21 and declared legally effective. This shall include all acts
22 and proceedings of the governing board of public bodies
23 and of any person, public officer, board, or agency
24 heretofore done or taken upon the question of the
25 authorization, issuance, sale, execution, delivery, or
26 exchange of bonds.
27 All bonds of, or relating to, any public body heretofore
28 issued shad be, in the form and manner issued. and
29 delivered, the legal, valid, and binding obligations of the
30 public body. All bonds of, or relating to, any public body
31 heretofore awarded and sold to a purchaser and hereafter
32 issued mid delivered in accordance with the contract of
33 sale and other proceedings for the award and sale shall be
34 the legal, valid, and binding obligations of the public
35 body. All bonds of, or relating to, any public body
36 heretofore authorized to be issued by ordinance,
37 resolution, order, or other action adopted or taken by or
38 on behalf of the public body and hereafter issued and
39 delivered in accordance with that authorization shall be
40 the legal, valid, and binding obligations of the public
99
-7— SB 231
1 body. All bonds of, or relating to, any public body
2 heretofore authorized to be issued at an election and
3 hereafter issued and delivered in accordance with that
4 authorization shall be the legal, valid, and binding
5 obligations of the public body. Whenever an election has
6 heretofore been called for the purpose of submitting to
7 the voters of any public body the question of issuing bonds
8 for any public purpose, those bonds, if hereafter
9 authorized by the required vote and in accordance with
10 the proceedings heretofore taken, and issued and
11 delivered in accordance with that authorization, shall be
12 the legal, valid, and binding obligations of the public
13 body.
14 SEC. 7. (a) This act shall operate to supply legislative
15 authorization as may be necessary to authorize, confirm,
16 and validate any acts and proceedings heretofore taken
17 pursuant to authority the Legislature could have supplied
18 or provided for in the law under which those acts or
19 proceedingswere taken,
20 (b) This act shall be limited to the validation of acts
21 and proceedings to the extent that the same can be
22 effectuated ander the state and federal Constitutions.
23 (c) This act shall not operate to authorize, confirm,
24 validate, or legalize any act, proceeding, or other matter
25 being legally contested or inquired into in any legal
26 proceeding now pending and undetermined or that is
27 pending and undetermined during the period of 30 days
28 from and after the effective date of this act, and shall not
29 operate to authorize, confirm, validate, or legalize any
30 act, proceeding, or other matter that has heretofore been
31 determined in any legal proceeding to be illegal, void, or
32 ineffective.
33 (d) This act shall not operate to authorize, confirm,
34 validate, or legalize a contract between any public body
35 and the United States.
36 SEC. 8. Any action or proceeding contesting the
37 validity of any action or proceeding heretofore taken
38 under any law, or under color of any law, for the
39 formation, organization, or incorporation of any public
40 body, or for any annexation thereto, exclusion therefrom,
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SB 231 —8-
1
--8-1 or ether change of boundaries thereof, or for the
2 consolidation, merger, or dissolution of any public bodies,
3 or for, or in connection with, the authorization, issuance,
4 sale, execution, delivery, or exchange of bonds thereof
5 upon any ground involving any alleged defect or illegality
6 not effectively validated by the prior provisions of this act
7 and not otherwise barred by any statute of limitations or
8 by laches ',shall be commenced within six months of the
9 effective date of this act; otherwise each and all of those
10 matters shall be held to be valid and in every respect legal
11 and incontestable. This act shall not extend the period
12 allowed for legal action beyond the period that it would
13 be barred by any presently existing valid statute of
14 limitations.
15 SI C, 9. Nothing contained in this act shall be
16 construed to render the creation of any public body, or
17 any change in the boundaries of any public body,
18 effective for purposes of assessment or taxation unless the
19 statement, together with the map or plat, required to be
20 filed pursuant to Chapter 8 (commencing with Section
21 54900) of Part 1 of Division 2 of 'Title 5 of the Government
22 Code, is filed within the time and substantially in the
23 manner required by those sections.
24 SEC. 10. This act is an urgency statute necessary for
25 the immediate preservation of the public peace, health,
26 or safety within the meaning of Article IV of the
27 Constitution and shall go into immediate effect. The facts
28 constituting the necessity are:
29 In order to validate the organization, boundaries, acts,
30 proceedings, and bonds of public bodies as soon as
31 possible, it is necessary that this act take immediate effect.
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