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MTG. 3/26/85
DEPT.---'C=M'--_
CIT' -)F CAIRLSBAD -AGENDJI\ILL
LEGISLATIVE ISSUES
RECOMMENDED ACTION:
DEPT.HO. __
CITY ATTY\} cfl
CITYMGR,??l,.
That Council indicate support or opposition to the following bills •
1. SB 517 (CRAVEN) -OPPOSE
This bill adds a special district member to the San Diego LAFCO,
making 3 special district members on a 9 member board.
2. SB 286 (ELLIS) -OPPOSE
This bill would require a 15 year amortization period before a
city could remove illegal signs. The bill repudiates a 1983
compromise bill which the League of California Cities and the
Electric Sign Association agreed to.
3. AB 223 (PEACE) -OPPOSE
This bill prohibits cities from collecting unpaid tenant wat~r
bill from a land owner. This would hamper our collections and
result in higher delinquencies.
4. SB 290 (FORAN) -SUPPORT
This bill raises the gas tax by 5~ a gallon. Carlsbad would
receive about $300,000 yearly for street maintenance. There
is a clear need for more money to build and maintain state and
local highways.
5. FEDERAL REVENUE SHARING
Urge Congress to continue general revenue sharing for another
year. Carlsbad would lose $500,000 which is now used for
capital projects.
6. SB 1060 (CRAVEN) -SUPPORT
This bill appropriates $250,000 to study feasibility of building
a permanent off-campus center for San Diego State University.
7. BEACH STUDY
Corps of Engineers needs a $750,000 appropriation to continue the
beach erosion study which has been underway for two years. The
area covered is from Dana Point to the Mexican Border and includes
bluff erosion, stream sediment and other issues of interest to
Carlsbad. SANDAG Erosion Committee urges support of the Corps study •
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PAGE 2 of AB II ?' / D '-f
8. SB 1q8 -OPPOSE
This bill restricts city's ability to collect room tax from
time share projects. Jim Elliott estimates Carlsbad's
potential loss is $30,000 yearly if this bill passes.
9. AB 117 (FRAZEE) -OPPOSE
This bill allows the County to charge Redevelopment Agency for
annual preparation of tax increment roll. It is being opposed by
statewide redevelopment agencies association.
EXHIBITS:
1. SB 517, d~ted 2/21/85.
2. Legislativ2 Bulletin, dated 3/1/85.
3. Legislative Bulletin, dated 3/8/85.
4. SB 1060 and Senator Craven release, dated 3/8/85.
5. Arguments Against SB 198, dated 3/20/85
6. Letter from Finance Director, dated 8/29/84.
7. Information from Robert Frazee re AB 117.
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SENATE BILL No. 517
Introduced by Senator Craven
fl.EASE REVIEW
AND
February 21, 1985 SEND COMMENTS
@ An act to amend Section 54780.3 of the Government Code,
relating to local agency formation commissians .
LEGISLATIVE COUNSEL'S D!GESI"
SB' 517, as introduced, Craven. Local agency formation
commissions.
(1) Existing faw provides for the establishment of a local
agency formation commission in each county consisting,
generally, of 5 members, or 7 members when a commission is
augmented to provide special district representation.
Under existing law, with exceptions made for counties in
which there is no city or only one city, a local agency
formation commission consists of 2 members representing the_
county, 2 members representing cities in the county,
appointed by a city selection commission, and one member
representing the general public. A. commission may be
augmented to 7 members by the addition of 2 members
represer.ting special districts within the county.
A special provision applicable only to San Diego County,
provides for an 8th member who is required to be a member
of the legislative body of the largest city in the county,
appointed by the legislative body of that city.
This bill would increase the membership of that
commission by one additional member and would require the
commission to provide for that additional representative by
either (1) requesting the independent special district
selection committee to select a third regular member
representing special districts, or (2) appointing a second
public member who is a resident of the unincorporated
) territory of the county.
(2) T1'1e bill would declare the need for a special act.
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99 !IO
SB 517 -2-
(3) The bill would impose a state-mandated local pro~:ram l
by requiring ·a local agency formation commissiori to
undertake specified action in the selection of an a8ditional
rflpresentative, and by increasing the number of members of
a local -~gency formation commission, the expenses of which
~ P. co~ty,_cl_iarge.
(4) The California Constitution requires the stat,e to 1
reimbur~ local agencies and school districts for certain ,costs
mandated by the state. Statutory provisions establish
procedures for making that reimbursement, including: the
creation of a State Mandates Clv.ims Fund to pay thl? co~,ts of
mandates which do not exceed $500,000 statewide and cither
procedures for claims whose statewide costs exceed $5001,000. )
This bill would provide that reimbursement for ,costs
mandated by the bill shall be made pursuant to those statutory
procedures and, if the statewide cost does not e~ceed
$500,000, shall be payable from the State Mandates Claims
Fund.
(5) This bill would provide that, not-.:vitl~tanding Section
~1.5 of the Revenue and Taxation Code, this bill does not
contain a repealer, as required by that section; therefore., the
provisions of the bill would remain in effect muess and until
they are amended or repealed by a later e!tacted bill.
Vote: majority. Fiscal committee: yes. Appropriations: no.
State-mandated local program: yes.
The people of the State of California do enad as follows: ·
1 SECTION I. Section 54780.3 of the Government >
2 Code,is amended to read:
3 54780.3. · (a) In a county of the third cltw:, as
4 determined by the 1970 federal census, having more than
5 one city, any one of which has a population exceeding
6 one-third of the total population of the county, and a
7 commission of seven members, augmented pursumt to
8 Section 54782.6, there shall be appointed an eighth
9 member and that member shall, notwithstanding
10 subdivision (b) of Section 54780, be a member of: the
11 legislative body of the city in the county having the
12 largest population, appointed by the legislative body of
99 80
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-3-38 517
1 that city.
2 (b) The city legislative body shall appoint an alternate
3 member at the same time and in the same manner as it
4 appoints the regular member appointed pursuant to
5 subdivhion (a). If the regular city member is absent from
6 a commission meeting, or disqualifies himself or herself
7 from participating in a meeting, the alteniate member is
8 authorized to serve and vote in place of the regular city
9 member for that meeting. In the event the office of the
10 regular city member becomes vacant, the alternate
11 member is authorized to serve and vote in place of the
12 regular city member until the appoinbnent and
13 qualification of a regular city member to fill the vacancy.
14 (c) The city representative initially appointed to serve
15 pursuant to this section shall be appolnted to a regular
16 term to commence January 1, 1984.
17 ( d) Before the end of each fiscal ye.ar, the city shall pay
18 to the county that portion of the amoimt payable or paid
19 by the county during the fiscal yeM p.ursuant to Section
00 54Ti6.l that is atbibutahle to the .additional
21 administrative costs incurred by the. county on behalf of
22 members serving on th,~ commission pursuant to
23 subdivisions (a) and (b).
24 (e) A commission which is eniarg;ed to eight members
25 by this section and which bad bee.-1 enlarged to seven
26 members prior to January 1, 1974, pursnant to Section
Z1 54782.6, shall provide for one additional representative of
98 the unincorporated territory of the county by either (1)
29 requesting the indepe:.tdent special district selection
30 committee to meet an,J select a third regular llJ'C;::ber
31 representing special districts, or (£j sppointiI1g ~ second
32 public member wbo shall be a :r~sident of the
33 unincorporated territory of the county.
34 SEC. 2. The Legislature finds and declares that a
35 special act is necessary and that a general law cannot be
36 made applicable within the meaning of Section 16 of
37 Article IV of the California Constitution because special
· 38 facts and circumstances are applicable to the C.Ounty of
39 San Diego which are not generally applicable statewide.
40 SEC. 3. Reimbursement to local agencies and school
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SB 511 -4-
1 districts for costs mandated by the state pursuant to this
2 act shall be made pursuant to Part 7 (commencing with ·
3 Section 17:SOO) ofDivision4ofTitle 2ofthe Govetnment
4 Code and, if the statewide cost of the claim for
5 reimbursement does not exceed five hundred thousand
6 dollars ($500,000), shall be ,.nade from the State M1mdates
7 CJaims Fund.
8 SEC. 4. Notwithstanding Section 2231.5 of the
9 Revenue and Taxation Code, this act does not cc1ntain a
10 repealer, as required by that section; therefore, the
11 provisions of this act shall remain in effect lunless and
12 until they are amended or repealed by a •later tmacted
13 act. )
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League of California Cities
t«JOKser-• Saaamento95814 • (91e)"'14-S700 EXHIBIT# 2
!t7-1985
March 1, l.985 ------------------------------------
LEGISLATIVE ACTIVITIES
GSUPPORT --Transportation Finance. SB 290 (Foran) • Hearing:
March 19-Senate Transportation Ccmnittee. Senator John
Foran has set SB 290 for hearing on Tuesday, March 19 at
1:30 p.m. SB 290 represents a major increase for local
government transportation revenues (see Bulletin 13-1985). The League will forward a
breakdown of the dollars going to each city from this gasoline tax increase within a week.
The hearing before the Senate Transportation Conmittee will be the begi1:ning of a very
difficult road for SB 290. The combination of negative public reaction to any kind of tax
increasi3 coupled with the reluctance of legislators to vote for a bill which the. Governor
will not support, results in a long and difficult legislative struggle. Senator Foran and
the meni:>ers of the Senate Transportation conmittee need to hear loud and clear from.city
officials who need this vital funding for local streets and roads. What cannot be denied
is the large and growing shortfall of revenues to support the maintenance of our local
streets and roads. Conservative figures put this shortfall at $400 million to $800
million annually. ·•
With three weeks between now and the hearing date for SB 290, city officials have the
opportunity to call on Senators back in the district about SB 290. fmy appointment with a
legislator should .include specifics of what SB 290 will mean for local transportation
needs. A thorough outline of the 10 . worst transportation problems in you, c01111\unity
should be given to your Senator. If possible, business and other c0111T1unity leaders with a
direct interest in the city should accompany you when discussing SB 290 with your Senator.
SB 290 will pass only with a grass roots effort.
Mentlers of tne Senate Transportation Comnittee are: Foran, Chair: Ellis, Vice Chair;
Bergeson, Bevorly, Deddeh, L. Greene, Morgan, Robbins, Seymour, Torres, and Vuich. ____ .,. ____________ _ -----------------------------------------------------------
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0PPOdE
.~;,5 2-BG
Bill Introduced Re diatin Ma· or Parts of Com romise on Local
Regulation of Signs. SB 286 Ellis • In 1983, a compromise was
reached between the League and the Electric Sign Association
relating to city regulation of on-premise advertising signs. That
compromise was placed
that compromise.
into SB 142, enacted that year. SB 286 would repudiate key parts of
Specifically, SB 142 grandfathered the provisions of all ordinances in effect in March
1983 that regulate on-premise advertising signs. SB 286 would grandfather only those
ordinances enacted before March 1983 that provide 15-year aroortization periods for signs,
following adoption of the ordinance. The bill also provides that if an ordinance enacted
before March 1983 is amended after that date, the ordinance must then add a 15-year
amortization period.
The bill has beerr assigned to the Senate Business and Professions conmittee. City
officials should·~ontact COll11\lttee mencers objecting to both the contents of the bill and
the repudiation of • romise. COlll1\ittee meni:>ers are: Mootoya, Chair; Doolittle, Vice
Cha.ii:: carpente • Greene, McCorquodale, Rqsenthal, Royce, and Watson. .5
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EXHIBIT# 3
LEGISLATIVE BULLETIN
~-
_ League of California Cities
1400 K Street • Sacramento 95814 s (916) 444-5790
March a, 1985
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,
i8-l985
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Prohibition on Collection of Water Service Ch3rges from Landlord
or Property owner. AB 223 (Peace). AB 223 would prohibit any
city or other public entity furnishing water for residential use
to a tenant from recovering water service charges from the land-
lord or property owner without the written consent of the landlord or property owner.
Further, this bill would also prohibit water agencies from refusing service to a
subsE:quent tenant because of the non-payment of water service charges by a previous
tenant.
The League opposes AB 223 because it would effectively prevent the use of tax
assessments and liens imposed on the benefitted property for the collection of
delinquent water service charges, thereby severely hampering the ability of cities
,, and other water ·agencies to obtain payment for the services provided. In addition,
AB 223 would increase administrative costs associated with collection of water
service charges and make it more difficult to recover such adr.:inistrative costs. M!
~ has been assigned to the Asaerrbly Water, Parks, and Wildlife Cam,ittee. The
merars of that c011111ittee are: Costa (Chairman), Allen (Vice Chait-wanan), Areias,
Campbell, Filante, Herger, Hauser, Isenberg, Katz, Kelley, Peace, Norman Waters, and
Wyman. --------------------------------------
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SENATE BILL No. 1060
Introduced by Senator Craven
March 7, 1985
An act to add Section 89010 to the Education Code, relating
to the California State University, making an.appropriation
therefor, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGFST
SB 1060, as introduced, . Craven. California. . State
University: permanent off-campus center: San Diego County.
Existing law established the California State University, a
system of public postsecondary education that operates
through specified campus sites throughout this state ..
This bill would require the Trustees of the California State
University to establish a permanent off-campus center in the
northern portion of San Diego County, in order. to make
postsecondary education programs available in that area.
This bill would appropriate $250,000 to the California State
University to ~onduct a site sele-1tion study and a related
survey, as sp,3cified, pursuant to the estab~ent of the
center.
This bill would take effect immediately as an urgency
statute.
Vote: %. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no. ·
The people of the S.tate of California do enact as follows:
I SECTION 1. Section 89010 is added to the Education
2 Code, to read:
3 89010. (a) It is the intent of the Legislature that
4 public programs of postsecondary education be made
5 available to qualified persons throughout this state,
SB 1060 -2-
1 including areas of substantial existing or projected
2 population that are isolated from any campus of the
3 California State University.
4 {b) The Trustees of the California State Universil-y
5 shall establish in the northern portion of San Diego
6 County a pennanent off-campus center, the purpose of
7 which shall be to offer the education programs that are
8 generally available at campuses of the California State
9 University. I
10 SEC. 2. The sum of two hundred fifty• thousand
11 rlollars ($250,000) is hereby appropriated from the
12 General Fund to the "California State University for
J.3 allocation as follows, pursuant to the establishment of a
14 permanent off-campus center as provided by Section
15 89010 of the Education Code:
16 (a) Two hundred thousand dollars ($200,000) for the
17 performance of a site selection study, to evalµate the
18 comparative .merits of sites under consideration for the
19 center, including, but not limited to, an assessment of the
20 potential at each site for physical development and
21 expansion of the facility.
22 (h} Fifty thousand dollars ($50,000) for a detailed
23 survey of the northern portion of San Diego County, to
24 include, but not be limited to, official population
25 projet.:tions, an industry and income profile, an
9.6 asse=,sment of unmet demand for postsecondary
i'7 educational resources, and an analysis of specific
28 education program requirements of potentially quaµfied
29 students.
30 SEC. 2. This act is an urgency statute necessary for
31 the immediate preservation of the public peace, health,
32 or safety within the meaning of Article IV of the
33 Constitution and shall go into immediate effect. The facts
34 . constituting the necessity are:
35 In order to ensure the availability of adequate
36 postsecondary level educational opportunities in the
37 northern portion of San Diego County, at the earliest
38 possible opportunity, it is necessary that this act take
39 effect immediately.
O EXHIBIT # 4
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Sacramento
State Capitol, Room 3070, Sacramento, CA 95814 • (916) 445-3731
District
2121 Palomar Air,:ort Road, Suite 100, Carlsbad, CA 92008 • (619) 438,814
. Maren ~, 1985 FOR IMMEDIATE RELEASE
CONTACT: Carol Cox
438-3814
Senator William Craven CR-Oceanside) has just announced the introduction
of SB 1060 which calls for an appropriation of $250,000 to fund a feasibility
study for San Diego State University, which is the first step in the approval
process aimed at developing a 4-year branch campus of the University in
No:r: th County.
Currently, SDSU North County Center located in San Marcos, offers upper
division and post graduate courses in Business, Public Administration,
:Education and Liberal Studif.!s. "The site selection study and related studies
callea for under SB 1060", Craven said, "will document the need to irnmediatelv
expand the program offerings at the Center and will eventually lead to the
establishment of a full 4-year comprehensive branch of SDSU to be located in
~orthern San Diego County.11
The communities of North County have long shared a common dream of
having a 4-year State College/University here. The citizens of North
County went to the Legislature and the Chanceilor's office requesting the
~stablishment of a SDSU Center in 1977. Due to Senator Craven's effort
~his was successful and the Center opened its doors in 1979 at Lincoln
~unior High School in Vista. Currently, the Center is located in leased
-more-
facilities in San Marcos.
"With the growth that has occured in Northern San Diego County
and the growth projections still to be realized along with the over-
crowded conditions at the main campus", Craven stated, "there is little
doubt that there is a need for an additional campus in our area. The
Center has outgrown its current space.and ,the student enrollment has
doubled in ea:ch of the la::.-t two years and is expected to double again
in the Fall of 1985".
Craven stated "with the successful passage of SB 1060, we can
begin to do the necessary planning to finally realize the long held
conviction that North Coun~y needs a branch of SDSU here."
-30-
1.
ARGUMENTS AGAINST SB 198
March 20, 1985
From
NORMAN R. KING
City Manager
City of Palm Springs
EXHIBIT# 5
Sf>/98
Timeshare is a hotel use. It is allowed only in hotel
zones in the Palm Springs Zoning Ordinance. Thus, timeshare
is treated as a hotel in terms of land 4se and as a hotel
in terms of services provided by the communl ty. Timeshare
was approved by the City Council in Palm S~rings upon the
recommendation of a task force that included representatives
of the timeshare industry. The task force itself agreed
to the collection of transient occupancy tax from timeshares.
Without the collection of these taxes from timeshare, it
is doubtful if the City Council would have approved of
timeshares. If the room tax cannot be collected, future
development of more timeshares in Palm Springs will be
in jeopardy. '
The State Legislature is now being asked to nullify a condi-
tion under which timeshare use was approved.
2. The transient occupancy tax is used to support the Convention
& Visitors Bureau, which promotes Palm Springs as a resor~
destination. This directly benefits timeshare operations
just as much as it doas hotels. Timeshare will c<.>ntinue
to benefit from such promotion even if the state eliminates
the requirement that they, help pay for it. S.B. 198 would
not treat timeshare as a hotel in terms of taxation.
3. The requirement that the transient occupancy tax be collected
on a timeshare interest is stipulated •n the Department
oi Real Estate "white sheet", in the C C & R's which spell
out covenants running with the land, and in conditional
use permits. In most cases, the owners have been put on
notice that such a tax exists woen they purchase the
property. Owners of timeshare are nontheless trying to
escape payment of the tax. Most room tax is not now being
paid as specified. This non-payment has forced the city
to file lawsuits to gain compliance and precipitated a
resolution of the ordinances's legality by the courts,
where that determination should be made. The latest tactic
is to seek relief from the State Legislature.
4. Timeshare projects are in direct competition with hotels.
Advertisements encourage vacationers to purchase a timeshare
interest as a way to escape rising hotel rates. Such compe-
tition is undoubtedly advantageous to the consumer. However,
5.
the State Legislature is now being asked to give favorable
tax treatment to timeshare projects to the detriment of
hotels.
Timeshare represents an increasing percentage of the Palm
Springs hotel economy. It now represents 640 units or
10% of the total hotel units in the city. While timeshare
is not an important market segment in convention cities,
timeshare is likely to continue to increase its market
share in vacation destinations such as Palm Springs. Fur-
thermore, in Palm Springs we are seeing the conversion
of existing or older hotels to timeshare, meaning that
if S. B. 198 becomes law, our tax base, strongly dependent
on the tourist economy, will decline. I;i this situation,
one of our alternatives will be to attempt to discourage
timeshare development in Palm Springs. I believe this
will be the end product of S.B. 198 if it is approved and
I know that this concern is shared hy some timeshare devel-
opers around the state.
6. Passage of S.B. 198 would contradict the mandate heard
these days from the State Legislature that local governments
should raise their own revenues and depend less on the
state for financial assistance. This bill restricts existin~
local tax authority and gives special protection to a special
interest group. A similar bill was vetoed by the governor
last year.
7. Timeshare is essentially pre-paid rent for vacation use.
This is especially true when the timeshare interest is
11 floating" with respect to time and unit (that is when
the owner of the interest does not have the right to use
a specific unit at a specific time). In this sense, time-
share is simply pre-paid rent of a hotel use. In fact,
most timeshare "white papers" specifically state that
the use of one's unit is assured only if there is a "timely
reservation" and failure to reserve results in loss of
use. That's just like reserving a hotel• room.
· 8. Transient occupancy taxes collected from already approved
timeshares in Palm Springs will amount to more than $400,000
a year. This is a considerable source of revenue at a
time when the City of Palm Springs stands to lose $800 t 000
a year from general r~venue sharing cuts at the federal
level.
Taking away local funding authority is inappropriate action
for the State Legislaturet particularly at a time when
there seems to be agreement that local governments should
be given more flexibility in managing their own affairs.
This type of legislation contradicts the intent of the
State government to increase the ability of local governments
to raise their own revenue.
2
August--29, 1984
TO:
FROM: Jim Elliott
TRANSIENT OCCUPANCY T
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i EXHIBIT# 6
:SB-198
ON TIME SHARE CONDOMINIUHS
According to·our Municipal Code, a transient occupancy tax may
be assessed on any hotel which is defined as "any strucutre or
any portion of any structure which is occupied or intended or
designed for occupancy by transients for dwelling, lodging,
sleeping purposes, and includes any hotel, inn, tourist.home
or house, motel, studio hotel, bachelor hotel, lodging house,
rooming house, apartment house, dormitory, public or private
club, ••• or other similar structure or portion there of."
A transient is any "person who exercises occupancy or is
entitled to occupy by any reason of concession, permit, right
of .access, license or other agreement for a period of thirty
consecutive calendar days or less ••• "
It is my opinion that under these two definitions, time share
condominiums would be subject to taxation. Although the code
does not exclude taxation of the owner if he/she occupies the
condominium for less than 30 days, I believe it would be V6ry
difficult to collect a tax on owner occupancy under our code.
In the event that the condominium is rented or traded to another
person in exchange for goods, services or occupancy of an~ther
dwelling, taxes would be collected on the fair market value of
the goods, services or right to occupy received in the exchange.
Our present code is obviously not specific on this matter, but
this would be consistent with the rules we have appli£d to other
hotel type operations.·
I agree with Mr. King that the exclusion of the "exchange" users
from the transient occupancy tax is counter to the way we
typically interpret revenue or rent received. We have included
barter transactions in the past, although they are extremely
rare, in the computation of rents for taxation.
Page -2-·-
Transient Occupancy Tax on Time Share Condominiums
August 29, 1984
The City will have about 186 time shal·e condo units in the
very near future. Based on the assumption that a major
portion of these will be occupied on an exchange basis or
owner occupied, the City coae stands to lose between $25,000
to $35, oo·o per year in transient occupancy tax under the
proposed law (based on 1/2 occupancy in the exempt categories
and fair market value of about $500 per month).
The argument that the purchase of a time share condo is a form
of prepaid rent is new to me but makes some sense when you
consider the short amoun~ of time any one owner will spend in
residence.
From an economic view poin~, Carlsbad should go on record as
being opposed to the legislation contained in SB 1399. Mr. King
also raises the question of home rule which may be a valid
reason for the City to oppose this legislation without consider-
ation of other issues.
JFE:mmt
City of Palm Springs
Office of City Manager
619-323-820i
August 20, 1984
City Manager Frank Aleshire
1200 Elm Street
Carlsbad, California 92008
Dear Frank:
~~ :tqJ
AtfG 1984 co
.City of ~
CARLSBAD ~
bid,
It is my understanding from the League of California Cities that
your city imposes a transient occupancy tax on some types of time-
share use. As you may be aware, the Assembly has passed and the
Senate is apparently about to pass S.B. 1399 which, because of
last minute amendments by the Assembly Revenue & Taxation Committee,
will eliminate the ability of cities to impose the transient occu-
pancy tax on "exchange;~ use of timeshare.
Although the dollar impact of this change is not great for most
cities, I hope you will agree that the prohibition of the taxing
of the exchange usage (which is unquestionably a transient use)
violates a basic principle of the transient occupancy tax as cities
have imposed it, and is a change which could lead to other exemp-
tions from the tax. (The California Hotel Association has testi-
fied that even though they oppose S.B. 1399, that if it does pass, ¥ 1
they will push for additional exemptions upon hotel occupancy which {:
is arranged by a third party) • · .:.~ i
Attached is a letter to our Senator Bob Presley which outlines some
of the issues concerning the exchange usage exemption. Any assist-
ance you could arrange by contacting your senator and/or assembly-
man to request a Governor's veto would be greatly appreciated.
I have just been informed that it now looks like the Senate will
not= take up S.B. 1399 until sometime during the week of Monday,
August 27th. In such case, I hope that you would find it appropriate
to contact your senator with the request that he would oppose s.B. 1399.
Thank you very much for your assistance. Please call me should you
have any questions.
Sin~;Y•
NO~ R. KING
City Manager
NRK/nun
Post Office Box 1786, Palm Springs, California 92263-1786
;.,.
-~ ,?
• .,A .... -:· .. "
City of Palm Springs
Office of City Manager
619-323-8201
August 20, 1984
Senator Robert Presley
Thirty-sixth Senatorial District
State Capitol .
Sacramento, California 95814
Dear Bob:
Thank you for your offer to request the Governor to veto S.B. 1399
should this bill be adopted by the senate.
We would request a veto of S.B. l.399 for the followin~ reasons:
1. As amended by the Assembly Revenue & Taxation Committee,
this bill represents an unusual and unique exemption
from the transient occupancy tax for out of town visi-
tors using timeshare on an "exchange" basis. This spe-
cial exemption will be potentially opening "pandora's
box", as for the first time a city would be prohibited
from imposing the transient occupancy tax on a visitor,
whose visit is arranged by a third party; who is occupy-
ing a unit owned by another party (who is receiving con-
&ideration for allowing such usage).
2. The exemption of the exchange user from the transient o~-
cupancy tax contradicts a major feature of the transient
occupancy tax as it has been adopted by California cities.
Inherent.in the ordinances of cities which impo ■e the
transient occupancy tax is a definition of -rentN which
is defined to mean consideration valued in money, whether
received in money, goods, labor or otherwise. s.B. 1399
substantially alters this standard definition of rent
and raisea the possibility of further special interest
exemptions i~ the future.
3. The special exemption granted concerning the taxation of
exchange usage of timeshare w~s granted by the Assembly
Revenue, Taxation CQmmittee and directly contradicted
the action of the Senate Revenue, Taxation Colll'llittee
which had added language apecifically authorizing the
continued imposition of the transient occupancy tax on
the exchange use. Thia substantial difference between
the Senate and Assembly Committees should be resolved
prior to reaching the Governor's desk.
Post Office Boit 1716, Palm Sprin11, California 92263-1786
. .
;.--• ,!;.,. ,;.~,,,. page two
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4. The ·■pecial exemption granted to the exchange use~ re!ults
in•unfair competitive advantage to timeshare vis-a-vis hotels
to the extent that the visitor who occupies a hotel unit, ar-
ranged by a third party, is aubject to the transient oc-
cupancy tax; but a visitor who occupies timeshare units, ar-
ranged by a third party, would not be subject to the tax.
5. A strong argument can be made that timeshare purchase is
p~~paid rent for. the ~se of e hotel room. Most cities have
restricted timeshare development only to zones in which hotels
can be constructed. In many cases, timeshare has been ~l-
lowed only on the condition that the transient occupancy tax
would be imposed. It should not be the business of the ~tate
government to limit the authority of cities to levy the trans-
sient occupancy tax on uses which are so clearly similar to
hotel use. Nor, at this time, is it wise for the state to
impose revenue reductions on cities which have been imposing
the transient occupancy tax on timeshare usage for several
years. This is not consistent with the philo ■ophy of a state
government which has been to empower local governments to be-
come less dependent on state revenues.
6. It apE)Eara that s.B. 1399 will apply only to general law
cities and it is questionable whether the ■tate should taka
any action which will result in creating greater disparity
between the taxing authority of general law cities and char-
ter cities in the State of California.
I hope these comments will he helpful to you. Again, thl City Council
and I very much appreciate your willingness to discuss this with the
Governor. Prior to doing so, it may be helpful for you or your staff
to discuss this issue with me or Dallas Flicek. Dallas has had several
discussions with members of the Governor's staff on this issue. Also,
Xen Emanuel• of the League of Cities is very well versed on all of
these concerns and has had independent discussions with the Governor's
staff.
For your information, I have ■ent a similar letter to Assemblyman Dave
Kelley who has also o~fered to request the Governor's veto of s.B. 1399.
Thank you again for your help.
z
NORMAN R. ICING
City Manager
NRX/llllll
/CD
I\ EXHIBIT# 7
AB117 -Proposed Amendment as introduced
Section 33607 is added to the Health and Safety Code to
read:
33607. A county may require a com;nunity redevelopment
agency to ~ay ~eimbttr~em~a~ reimburse the county for aay service~
~he a~eaey ~e~~~~es ~~e ee~aey ~e-~e~£e~ffl the county performs
exclusively for a redevelopment agency pursuant to Health and
·-s·afety Code Section 33670, Section 33675, and Section 33676, or
by the special request of the community redevelopment agency.
1