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9A HOT BILLS from page 6 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . . .. .. . .. . . .. .. .. .. .. .. .. .. .. . .. .. .. .. .. .. .page 35 This makes AS 1405 substantially similar to 2005. The League is watching the bill, in part two previous bills: AS 2406 (Bermudez) of 2004, because of reports that the bill could be leveraged opposed by the League and subsequently vetoed by Republicans who are interested in expanding by Gov. Schwarzenegger; and Aa 260 (Bermudez) tax credits for businesses in a way that could of 2005, which failed passage in the Assembly potentially include both state and local taxes. Appropliations Committee due to significant state mandated costs to local governments. For example, an August 17 story published In Capitol Weekly entitled "Runner Calls for Deal on In his veto message on AB 2406 (Bermudez), Runaway Productions," reported that "Senate the Governor stated, "Fire protection service minority leader Dick Ackerman, R.lrvine, con- standards are directly dependent on the focal firmed that Republicans have been negotiating decision.making process. Local agencies are in with the Speaker's office for six months and the best position to evaluate their conditions to expect to have a package ready before the end of match community needs with available re- session. He said they were likely to roll in a sources. " research and development tax credit and a sales tax credit for manufacturer's (sic)." Additionally, the Governor vetoed AB 566 (Bermudez) last year, similar in scope to AB 1405, The articfe goes on to quote Sen. George AS 260 and AS 2406 for similar reasons as noted Runner, R-Antelope Valley: "If we could do $70 above. rmllion for Hollywood (the estimated cost of the AB 777 tax credits), it should be balanced out by $70 It is still unclear if this bill will move forward. It rmllion for other kinds of incentives. If the speaker is currently in the Senate Rules Committee, and would decide there is a dollar-for-doJ/ar amount, a committee staff has indicated that because the biN deal could be done.. was introduced so late in the session, does not contain an urgency clause, and would require There are two other "dead" bills to watch as numerous legislative rule waivers to be heard in potentially being folded into a tax credit package- the Legislature, it Is not likely to go anywhere. both sponsored by Democrats. They are: However, we encourage you to track this AB 2218 (Torr/co), as amended May 17, 2006. legislation closely. If the author is successful in Sales and use taxes: exemption: manufacturing moving the bill fofWard, it could have significant equipment. League position: Watch. impacts on your city. Visit www.cacities.org/ BillSearch to see details on the bill, and a copy of AB 2033 (lieu), as amended April 25, 2006. the League's letter of opposition. Income and bank and corporation taxes: credit: Joint Strike Rghter and Crew Exploration Vehicle. REVENUE AND TAXATION League position: Watch. AS 777 (Nuftez), as amended August 17, The League will continue to monitor these bills 2005. Taxes: credits: qualified motion picture to identify any potential impacts on local revenues. production. League position: Watch. ENVIRONMENTAL QUALITY This bill would authorize film production c0m- panies to take a credit against their personal AS 1899 (Wolk), as amended August 17- income and income taxes, as a means of reduc- Flood Protection. League position: No Pos'- ing incentives to the companies to film outside of tion at This TIme California. The bill has been parked in the Senate Revenue and Taxation Committee since August of Continued on Page 8 VIsft the League's Official Website-www.cacities.org PRtORITY FOCUS . PAGE 7 August 18, 2006 - Issue m -