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Home My WebLink AboutItem 4.12 AB84 Opposition CITY CLERK FILE # 660-40 AGENDA STATEMENT CITY COUNCIL MEETING DATE: September 21, 1999 SUBJECT: Opposition to Assembly Bill 84 (Floyd) , Report Prepared by Chris Foss, Economic Development Directo~/~ ATTACHMENTS: Draft letter of opposition to Govemor Davis Amended Text of Assembly Bill 84 Assembly Committee Bill Analysis Roll Call Votes - Assembly and Senate RECOMMENDATION: FINANCIAL STATEMENT: Staff recommends that the City council send a letter to Governor Davis opposing Assembly Bill 84 Unknown - potential loss of future sales taxes DESCRIPTION: Assembly Bill 84 (Floyd) is designed to prohibit public agencies from approving a retail store project of over 100,000 square feet if more than 15,000 square feet will be devoted to the sale of non-taxable merchandise. It also requires public officials to count the sales and square footage of adjacent stores if they share check stands, management, a controlling ownership interest, a warehouse, or a distribution facility. Assembly Bill 84 was originally introduced on December 9, 1998 to prohibit public agencies from using public funds to pay for membership fees in organizations that serve as political committees. It was amended in committee on September 7, 1999 to eliminate any reference to the political committees and to add the prohibition of retail store approvals. The bill is targeted to affect large stores often referred to as "big boxes" and it's supporters argue that the bill ensures that "big box retailers" don't have an unfair advantage over the traditional neighborhood grocery stores, and won't eliminate the oppommity for consumer choice. Assembly Bill 84 was passed by the State Senate on September 9, 1999 by a vote of 21 to 16. It was also passed by the State Assembly on September 10, 1999 by a vote of 43 to 31. The bill was forwarded to Governor Davis on September 10, 1999 and is currently awaiting the Governor's action. K2/G/cc-mtgs/forms/form-as.doc COPIES TO: ITEM NO. Staff feels that the adoption of this measure would have an adverse effect on the City's local land use ~' authority. It removes the City' s ability to approve specific types of retail establishments and would prohibit the City of Dublin from approving any future "big box" retailer that did not meet the standards provided in AB 84. Staff feels that the City is well aware of the effects of these types of retailers and that the City is in the best position to make the decision regarding the location of large retailers in our community. For those reasons, staff recommends that the City Council send a letter to Govemor Davis opposing this bill. A draft letter has been attached for the City Council's review and approval. September 22, 1999 The Honorable Gray Davis Govemor State Capitol Sacramento, CA 95814 Dear Governor Davis: At our meeting of September 21, ! 999, the Dublin City Council voted to oppose Assembly Bill 84 (Floyd) and to urge you to veto this ill-advised measure. Assembly Bill 84 is designed to proMbit public agencies from approving a retail store project of more than 100,000 square feet if more than 15,000 square feet will be devoted to the sale of nontaxable merchandise. We vehemently oppose this bill as it removes local land use authority over the approval of certain types of retail development and will serve to inhibit competition among retailers. For these reasons, we would respectfully request that you veto Assembly Bill 84. Sincerely, Guy S. Houston Mayor H:\ChrisWiayor\davisab84.doc AB 84 Assembly Bill - AMENDED BILL NUMBER: AB 84 BILL TEXT AMENDED AMENDED IN SENATE AMENDED IN SENATE AMENDED IN SENATE AMENDED IN SENATE AMENDED IN SENATE AMENDED IN ASSEMBLY AMENDED IN ASSEMBLY SEPTEMBER 7, 1999 JULY 14, 1999 JUNE 30, 1999 JUNE 9, 1999 APRIL 26, 1999 APRIL 8, 1999 MARCH 11, 1999 INTRODUCED BY Assembly D{cnmbcr Cran!und Members Floyd and Villaraigosa {Coauthorz Assembly }{c~bcr Frusctta) DECEMBER 9, 1998 An act to add Section 53072.5 to the Government Code, relating to ccm~ittecs retail stores 65963.2 political LEGISLATIVE COUNSEL ' S DIGEST AB 84, as amended, Cranlund Floyd Political committccsz publis entities Planning and zoning: retail stores Existing law contains provisions known as the Planning and Zoning Law. This bill would prohibit a public agency from authorizing a project or development that includes a retail store exceeding 100,000 square feet with over 15,000 square feet to be devoted to the sale of nontaxable merchandise. Existing lau generally prohibits any elected state officer, appointee, cmp!cycc, or consultant from using or permitting others tc use state resources for pc!itica! campaign activity. This bill ~:ould prokikit a city, county, special district, or ether tosal governmental agency from using public funds to pay membership dues or membership fees to any organization that is, makes defined contributions to, or establishes cr maintains, a ccmmaittcc =s defined. under tkc Political Reform Act of 197~ that is established ~nd registered with the Secretary of State on and after January 1, 1999. The bill uould provide that this prohibition does net apply to any amounts that arc payroll dcduGtcd, any payment made by an cmplcycr on bckalf of an cmp!cy=c, or any membership dues or fees paid by any local educational agency. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION I. Sccticn 53072.5 is added to the SECTION 1. The Legislature finds and declares as follows: (a) Whereas large retail stores over 100,000 square feet present unique challenges for local government. (b) Whereas large retail stores over 100,000 square feet require a significantly higher commitment of police, fire, and public safety http://www.leginfo.ca. gov/pubPoill/asm/ab_0051-0100/ab 84 bill 19990907 amended sen.html 9/13/99 AB 84 Assembly Bill - AMENDED resources as opposed to smaller neighborhood stores. (c) Whereas large retail stores over 100,000 square feet create more traffic congestion and pollution that tend to strain local streets and highways. (d) Whereas large retail stores over 100,000 square feet must generate significant moneys from sales tax revenues to offset the added costs to local government. (e) Therefore, the Legislature finds and declares that in order to finance the burden of large retail operations over 100,000 square feet, not more than i0 percent of the store sales shall be nontaxable. SEC. 2. Section 65963.2 is added to the Government Code, to read: 65963.2. (a) No project subject to approval by a public agency for a retail store, or for any development that includes a retail store, may be authorized if both of the following conditions exist: (1) The square footage of the retail store will exceed 100,000 square feet. (2) More than 15,000 square feet of the retail store will be devoted to the sale of nontaxable merchandise. (b) For ~urposes of this section, the sales and square footage of adjacent stores shall be aggregated if the stores share checkstands, management, a controlling ownership interest, a warehouse, or a dis tribu ti on ' fa cili ty. (c) The owner of a retail store with a square footage exceeding 100,000 square feet approved on or after January 1, 2000, shall annually file a report with the local agency where the retail st~re is located specifying the square footage of the retail store devoted to the sale of nontaxable merchandise during the previous y~.ar. / (d) (1) Any person may institute proceedings for injunctive or declarative relief or writ of mandate in any court of competent jurisdiction to enforce the requirements of this section. (2) If the nontaxable square footage exceeds the limits specified in paragraph (2) of subdivision (a), the court shall award the state, and not the prevailing plaintiff, an amount of not more than 50 percent of the nontaxable sales for the previous year or not more than 50 percent of the value of the square footage devoted to the sale of nontaxable merchandise, whichever is greater. (3) The court shall award court costs and reasonable attorney fees to the plaintiff should the plaintiff prevail in litigation filed pursuant to this subdivision. (4) Any penalties, costs, and fees shall be paid by the owner of the retail store. (5) The Legislature finds and declares that this act concerns matters of statewide concern, including state tax revenues and traffic. Cov2rnmcnt Code, to rcadl 55072.5. (a) No city, county, special district, cr other local governmental agency may use public funds to pay membership dues or mcrJDcrskip fees to any organization tkat is, makes any contribution to, or establiskcs or maintains, a cormT, ittcc as defined in Section 82C!3 that is established and registered uitk the Secretary of State on and after January 1, 1999. (b) For. purposes of this section, "contribution" kas tkc same meaning as' defined in Section 82015. (c} For purposes of this section, "contribution" does not include either of the fo!lowingx (1) The communication by an organization of its endorsement of a candidate made either directly to the candidate or in its membership based newsletter. (2) .~ny voter education practice otherwise permitted by law, http://www.leginfo.ca.gov/pub/bill/asm/ab_0051-0100/ab 84 bill_19990907_amended_sen.html 9/13/99 AB 84 Assembly Bill - AMENDED (d) Thiz cootion does not apply to any of the fo!!o~ingt .Amounts that arc payroll dcductod for any purpose. .A~y payment made by an cr. ploycr on behalf of an ~mp!oycc. Mcmbor~hip ducz or fee_- paid by any local cdu~ationa! agency. SEC. 2. It is the intent of the Lcgiz!aturc that nc scr~.mittcc, as defined in ~c3tion 82013 of the Covcrnmcnt Code, that is established and registered uitk the Scsretary of State on and after 3anuary 1, 1999, and that is estab!izhcd, managed, or maintained ~ith any publi3 funds shall participate in any campaign involving tho quzlificaticn or clccticn of a candidate or hallot measure. CORRECTIONS Title -- Line 2. http://www.leginfo.ca.gov/pub/bill/asrn/ab_O051-0100/ab 84 bill 19990907_amended_sen.html 9/13/99 AB 84 Assembly Bill Bill Analysis - AB 84 Page 1 Date of Hearing: September 9, 1999 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT John Longville, Chair CONCURRENCE IN SENATE AMENDMENTS AB 84 (Floyd) - As Amended: September 7, 1999 ASSEMBLY: (April 15, 1999) SENATE: 21-16 (September 9, 1999) _ (vote not relevant) Original Committee Reference: E.R. & C.A. SUMMARY : Prohibits public agencies from approving a retail store project of more than 100,000 square feet if more than 15,000 square feet will be devoted to the sale of nontaxable merchandise. The Senate amendments and instead: delete the Assembly version of the bill, 1)Prohibit state and local agencies from authorizing a retail store or a development that includes a retail store if: a) the retail store is larger than 100,000 square feet; and b) more than 15,000 square feet of the store is devoted to the sale of nontaxable merchandise. 2)Require public officials to count the sales and square footage of adjacent stores if they share check stands, management, a controlling ownership interest, a warehouse, or a distribution facility. 3)Require the owner of a retail store that is larger than 100,000 square feet approved on or after January 1, 2000, to file an annual report. The annual report' shall specify the square footage of the retail store devoted to the sale of nontaxable merchandise during the previous year. 4)Allow "any person" to sue to enforce the bill's provisions. If a store exceeds the 15,000 square foot limit, the court must require the store's owner to pay the state the greater of either: a) 50 percent of the store's non-taxable sales in the previous year, or b) 50 percent of the value of the square AB 84 Page 2 http ://www.leginfo.ca.gov/pubPoill/asrn/ab_00.../ab 84 cfa 19990909_19122 l_astn_comm.htm 9/16/99 AB 84 Assembly Bill - Bill Analysis footage devoted to nontaxable sales. 5)Require the court to award court costs and reasonable attorney fees to a prevailing plaintiff. 6)Contain five legislative findings regarding the problems caused by large retail stores, concluding that not more than 10 percent of a large retail store's sales should be nontaxable. Specify that the bill is of statewide concern which thereby overrides provisions in city charters. EXISTING LAW : 1)Provides that the police power of a state is its right to adopt regulations designed to promote the public convenience or the general prosperity, as well as regulations designed to promote the public health, public morals, or the public safety. 2)Authorizes cities and counties to establish a general plan, which is a comprehensive, long term plan for the development of the city or county. Zoning and other land use decisions must conform to the general plan. 3)Requires that local zoning ordinances be consistent with the general plan. 4)Specifies that food and health-related products (including prescription drugs) are not subject to state and local sales taxes. 5)Gives charter cities the power to control their own "municipal affairs." The courts allow statewide laws to override city charters for an issue of statewide concern. The courts are the arbiters of whether the topic is a municipal affair or an issue of statewide concern. AS PASSED BY THE ASSEMBLY , this bill prohibited a city, county, special district, or other local governmental agency from using public funds to pay mer~.ership dues or fees to any political committee, as defined by the Political Reform Act of 1974 (PRA). FISCAL EFFECT : Unknown. AB 84 Page 3 COMMENTS : Retail chains increasingly favor larger s'tores. Called "big boxes," these stores often exceed 100,000 square feet. This bill finds and declares that not more than 10 percent of a http://www.leginfo.ca.gov/pubPoill/asm/ab_00.../ab 8'4 cfa_19990909_19122 l_asm_comm.htm 9/16/99 AB 84 Assembly Bill - Bill Analysis '7 ~"'[/C_,) store's sales should be nontaxable. The bill prohibits more than 15,000 square feet devoted to nontaxable sales in stores that are larger than 100,000 square feet. The finding and declaration says 10 percent, but the prohibition says 15,000 square feet. The Legislature may wish to make these consistent. The "private attorney general doctrine" allows courts to award attorney fees to prevailing plaintiffs. When governments win lawsuits, they don't recover their attorney fees. This bill requires courts to award attorney fees to prevailing plaintiffs, even public agencies. The Legislature may wish to consider if public agencies that win lawsuits should recover attorney fees. AB 178 (Torlakson) which would limit local government subsidies to attract large retail businesses to a jurisdiction was recently passed by the Legislature and is now before the Governor. Arquments in SuDDort : Proponents argue that the bill ensures that "big box retailers" do not have an undue competitive advantage over traditional neighborhood grocery stores. If the large chains put the smaller markets out of business, consumers will have fewer choices. "Big box" retailers generate large profits that generally don't remain in the local economy. Supporters also argue that this bill would help prevent specified big box retail stores from pitting existing communities against each other in fiscal competition. This bill seeks to protect existing business districts and discourage new development typically built on the urban fringe. Arquments in ODDosition : According to opponents, this bill removes local land use authority over the approval of certain retail developments. AB 84 Page 4 Opponents note that with respect to the declaration within the bill to address the increased service costs which occur with development, the Legislature ought to continue to work toward solutions to the local government finance issue, to reduce dependency on sales taxes as a revenue source. It is also argued by opponents that this bill would result in higher retail prices by eliminating the efficiencies of putting several categories of goods under one roof. This bill also inhibits competition among retailers. This bill would prohibit local governments from approving http://www.leginfo.ca.gov/pub/bill/asrn/ab_OO.../ab 84 cfa_19990909 191221 asm comm.htm 9/16/99 AB 84 Assembly Bill - Bill Analysis grocery stores larger than 100,000 square feet, although most grocery stores are 40,000 to 60,000 square feet. REGISTERED SUPPORT / OPPOSITION : Support ~A Labor Federation, AFL-CIO CA Tax Reform Association CA Teamsters Public Affairs Council Consumer Federation of CA Dan Baker, Councilmember Second District, City of Long Beach Bruce Broadwater, Mayor, Garden Grove Tom Daly, Mayor, City of Anaheim Jenny Oropeza, Councilmember First District, City of Long Beach Miguel Pulido, Mayor, City of Santa Ana Tony P. Tirado, Supervisor, District One, Imperial County Planning Report, The States Council United Food and Commercial Workers, Region 8 Stater Bros. Markets Opposition American CA Management Corporation American Planning Association CA Business Properties Association CA Chamber of Commerce CA State Association of Counties CA Taxpayers Association Cities of Chula Vista, Lancaster, Los Angeles, Santee Costco Companies, Inc. League of CA Cities Walmart Analysis Prepared bV AB 84 Page 5 Hubert Bower / L. GOV. / (916) 319-3958 http ://www.leginfo. ca.gov/pub/bill/asrn/ab_00.../ab 84 cfa 19990909_191221 _asm_comm.htm 9/16/99 AB 84 Assembly Bill - Vote Information VOTES - ROLL CALL MEASURE: AB 84 AUTHOR: Floyd TOPIC: Planning and zoning: retail stores. DATE: 09/10/1999 LOCATION: ASM. FLOOR MOTION: AB 84 FLOYD CONCURRENCE W/O REFERENCE TO FILE (AYES 43. NOES 31.) (PASS) AYES Aroner Bock Calderon Cardenas Cardoza Cedillo Corbett Cottea Ducheny Dutra Firebaugh Florez Floyd Gallegos Granlund Hayice Hertzberg Honda Jackson Keeley Knox Kuehl Longville Lowenthal Machado Mazzoni Migden Papan Reyes Romero Scott Shelley Soto Steinberg Strom-Martin Thomson Torlakson Vincent Washington Wesson Wildman Wright Villaraigosa NOES Aanestad Ackerman Bates Battin Baugh Brewer Briggs Campbell Cox Dickerson Frusetta Leach Lempert Leonard Maddox Margett McClintock Olberg Robert Pacheco Rod Pacheco Strick!and Thompson Ashburn Baldwin Cunneen House Kaloogian Oller Pescetti Zettel Runner ABSENT, ABSTAINING, OR NOT VOTING Alquist Davis Maldonado Wayne Wiggins Nakano http ://www.leginfo.ca.gov/pub/bill/asrn/ab_O.../ab_84_vote_19990910_0214AM_asm_~oor.htm 9/16/99 AB 84 Assembly Bill - Vote Information VOTES - ROLL CALL MEASURE: AB 84 AUTHOR: Floyd TOPIC: Planning and zoning: retail stores. DATE: 09/09/1999 LOCATION: SEN. FLOOR MOTION: Assembly 3rd Reading AB84 Floyd By Perata (AYES 21. NOES 16.) (PASS) AYES Alarcon Alpeft Baca Burton Chesbro Costa Dunn Escutia Figueroa Hayden Hughes Johnston Karnette O'Connell Ortiz Peace Perata Polanco Schiff Sher Solis NOES Bowen Brulte Haynes Johnson Kelley Knight Leslie Lewis McPherson Monteith Morrow Mountjoy Poochigian Rainey Speier Vasconcellos ABSENT, ABSTAINING, OR NOT VOTING Johannessen Murray Wright http ://www. leginfo. ca.gov/pub/bill/asm/ab_00.../ab 84 vote_19990909_1202PM_sen_~oor. htm 9/16/99