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?4-3 For the last two months the League has ex- pressed strong opposition to AB 1221, by Assembly Member Darrell Steinberg and Assembly Member John Campbell. AB 1221 would mandate the ex- change of 1 /2 cent of the local sales tax of a city or county for an equivalent amount of property tax, dollar for dollar. The exchange would increase each local government's proportionate share of the property tax distributed in each county. In the future, each city or county would receive the growth on the remaining sales tax and their new, larger share of the property tax. The League's opposition was predicated on the need for substantial amendments to the bill to protect local government revenues constitutionally and to address its substantial negative impacts on cities with redevelopment agencies, effects on tax sharing agreements, and a variety of other con- cerns. In two hearings in the Assembly and in other forums the League expressed these concerns, and the authors increasingly indicated interest in ad- dressing them. On Tuesday of this week the League received a letter from the authors, offering to amend AB 1221 to address many of these concerns and to intro- duce an Assembly Constitutional Amendment if the League would support both measures. The consti- tutional amendment proposed by the authors would protect the remaining % cent sales tax (plus growth) as well as the property tax revenue in the base year of the bill. The letter indicated this would effectively prevent the ERAF shift of the early 1990s from ever happening again. For a copy of the letter, see Revenue and Taxation page of the League's website (www.cacities.org /revandtax). Presenting the offer to the League board of directors the next day, Chris McKenzie, Executive Director, expressed appreciation for the offer, saying: "Assembly Members Campbell and Steinberg have indicated in person and by letter their sincere commitment to work with the League to address our substantial concerns with the bill and to introduce a much needed constitutional amendment to protect some critical local government revenues. This is an extremely important step in the process." their profound concern about the legislation, indicating their strong opposition to the bill. In order to provide a framework for careful discussion and consideration of the authors' offer, both League President John Russo and McKenzie recommended that the board refer the matter to its standing Fiscal Reform Committee, chaired by San Diego Council Member Jim Madaffer, and that additional city officials be added to represent the cross section of concerns about AB 1221. Russo stressed it was critical that all aspects of the membership be represented as the offer is considered. The Committee is expected to hold a number of meetings in the next month on the issue and to give a progress report to the board at its mid -July meeting. If sufficient progress has been made in the discussions and analysis of the pro- posal, the board will decide whether the measure should be submitted to the General Assembly of the League for action in early September. McKenzie advised the board he would be forming a separate technical committee of city fiscal officers, city managers and consultants to determine how to best assess and analyze the possible impacts of the legislation and possible amendments. That committee will work closely with key legislative staff and fiscal analysts to assess the impacts of the bill. The Board confirmed the League's continued opposition to the bill in its current form and until the process described above can be completed. The Assembly Local Government and Revenue and Taxation Committees have approved the bill. It is presently in the Assembly Appropriations Commit- tee where it is scheduled for hearing on May 21, 2002. McKenzie further noted, however, that a growing number of cities have contacted the League about AB 1221 is considered an "automatic" candi- date for the committee's "Suspense File" because of its fiscal impacts. The deadline for the Appro- priations Committee to report all bills (including those on the Suspense File) to the floor is May 30. For the latest scheduling Information on this or other bills, visit the League's Legislative Search section on our website (www.cacities.org /legtracking). Visit the Ieague's Official Wb Site-- wNw.cacities.oxg PRIORITY FOC.T>S /PACE 3