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°i.A-14 Legislative Bill Action ................................ ............................... The following are summaries of just a few of the legislative bills that are currently being acted upon by the League of California Cities. For more information about these and other bills, please visit the League website's new "Issues and Advocacy" page (www.cacities.ora/ issuesandadvocacvt — a one -stop location to access information about legislation, policy issues' and related developments. You can track information on bills ( www .cackies.org/legislativesearch), locate legislators and legislative committees, send letters to legislators or the media through the online Advocacy Center, research League policy positions, access useful related links, and much more. REVENUE AND TAXATION AB 1378 (Jerome Horton). Property taxa- tion: revenue allocation reductions: condem- nations. AB 1378 requires any reduction in property tax revenue resulting from the condem- nation of state - assessed property to be applied exclusively to the local entity that condemned the property, starting with condemnations enacted after January 1, 2004. The League strongly supports local efforts to create municipal utilities and has concerns about the implications 1378 poses for other types of property condemnation procedures. State - assessed property includes all unitary, and operating nonunitary property, typically electric utility, railroad and pipeline property. In practice, property for electric utilities make up the majority of the property covered by this legislation. Under current law, unitary and operating nonunitary property is assessed by the state, and the property tax revenues are put into a county- wide pool. The property taxes from this county pool are distributed by formula to all taxing jurisdic- tions within a county. While it appears that the bill is directed only at condemnations for the formation or expansion of municipal electric utilities, the League is opposed to AB 1378 in part because of the negative prece- dent it would set with regard to how other property condemned by cities is treated as it relates to property tax allocations. If enacted, under AB 1378 cities who condemn electric distribution Property of an investor owed utility would be responsible for holding all other taxing jurisdictions harmless for the reduction in property taxes resulting from the condemnation. This fundamen- tally changes the way in which public property is treated through property taxation laws, and could open the door to similar efforts for other types of public property and condemnation procedures. While the sponsors of the bill contend that this is simply a tax equity issue, it is clear that it is also an effort to make it more difficult to form municipal electric utilities or expand existing ones. For details on this bill and to see the staff analysis, go to: www .cacities.org/legislativesearch. Staff. Jean Korinke Status: Asm Loc Gov't., hearing 4/30, Position: OPPOSE. TRANSPORTATION AND PUBLIC WORKS AB 453 (Yee). Public Works Contracts: Compensation of Contractors. AB 453 seeks to change California statutory and case law that have been in place for at least a century. AB 453 states where a private party contracting with a public entity has acted in good faith, and where the contract in question is declared invalid because of a flaw in the bidding process, the contractor who performed under said contract, in good faith, should be entitled to be paid the reasonable cost of the labor, equipment, materials and services, excluding any profit, provided by the contractor up to the date the contract is found invalid. The bill provides that if a contract with a public agency is declared void, then no payments can be made under it. Although the rule of law can be harsh at times, it has served both the state and local agencies very well over the decades. Competitive bidding laws exist to benefit and protect the PAGE 14/PRIORITY FOCUS Visit the League's Official Web Site -- www.cacities.org