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GOVERNOR TO SPONSOR FLOOD CONTROL AND STORM WATER FEE LEGISLATION The administration announced this week that "the governor has given his full support to sponsor three bills~ to deal with flood control issues, including exempting stonn water fees the 2/3 vote requirement of Proposition 218. This exciting announcement culminates several months of quiet behind the scenes lobbying by several local government and other groups, including the League. The administration's package will include legislation to address liability and funding related to flood control. Of importance to cities, it will in- clude a constitutional amendment to exempt stonn water/drainage and flood control project fees from Proposition 218'g two-thirds voter requirement (The current exemptions only apply to sewer, water and garbage assessments). Assembly Member Tom Hannan will be the author of the stonn water-flood controVProposition 218 piece of the package. It is our understanding that the bill initially will cover a flood control ex- emption, but will be amended to add stonn water fees. The language will be similar to that included in last session's ACA 1O, carried by Assembly Member Hannan. Unfortunately, ACA 10 stalled in the Assembly, since it needed a two-thirds vote to pass. WIth the govemor's support, this year's effort to reach the 2/3 vote threshold is likely to be more successful. If passed, this bill would appear on the next statewide general election ballot, which will be March 2006, unless a special elec- tion is called earlier. The League thanks the governor and Assem- bly Member Hannan for taking on this important legislative effort and for recognizing the need also to include stonn water fees in any legislative to address Proposition 218 constraints that they relate to flood control. As soon as more details are available, we'll let city officials know. For more infonnation contact Yvonne Hunter, 916.658.8242, email yhunter@cacities.org. 9.A -7 IRS FUEL REG. from page 1 . . . . . . . . . The regulations have been prepared to imple- ment the American Jobs Creation Act, which was enacted in 2004. The act contained provisions that would change the procedures under which state and local governments (and nonprofit educa- tional organizations) may claim an exemption from federal motor fuel excise taxes and apply for a refund of any taxes paid. The changes affect only refunds for tax paid on gasoline purchased at retail outlets, but not refunds on diesel fuel. As passed, the tax on gasoline purchased in bulk would continue to be handled as it has in the past. Under the recently issued IRS regulations, credit card and fleet card companies that have been handling the administration of tax refunds on these types of purchases will no longer be able to do so as of March 1, 2004. As a result, local governments may have to begin collecting infor- mation on their retail gasoline purchases so that they can be in position to apply directly for refunds. The National League of Cities (NLC) is ac- tively lobbying the IRS to extend the effective date to provide Congress with adequate time to pass legislation that will specifically allow fleet card issuers to continue administering refunds. NLC anticipates a response from the IRS in the coming days, and will forward any additional infonnation to its members as it develops. A background paper with more infonnation on the issue is available on the Federal Priorities page of the League of California Cities' website at www.cacities.orQ/federal. Questions regarding this issue can be ad- dress the NLC staff Janine Jones-Smith or Nicole Young at iones-smithcœnlc.org or youngcœnlc.org or 202-626-3020. For more information on this and other LEAGUE issues, visit www .cacities.org. PAGE 2/PRIORITY FOCUS Visit the League's Official Web Site--www.cacities.org