Senator Mark DeSaulnier announced SB 673 today which is a Bill that is designed to protect local governments against corporations who may not be telling the entire story in order to win local incentives. DeSaulniers SB 673 would require companies seeking incentives of $1 million or more to pay for an independent cost benefit analysis of the incentive.
The purpose of this Bill would allow independent cost benefit analysis to point out the flaws in the large corporations claims before the city agrees to give the large corporations incentives.
Upon a quick read of the Bill, it appears to be a burden on companies, similar to that of Labor Compliance Providers in construction, but it ultimately will protect taxpayer dollars from being abused in the long run as large corporations don’t always fulfill the economic prosperity they claim to be bringing in at the time of negotiations leaving cities on the hook for the incentives.
My only beef is that if taxpayer money is going to be given to companies as incentives, SB 673 should be for a much lower amount than $1 million—say $200k which would truly protect local funds. But it’s a start.
Kudos Senator DeSaulnier.
DeSaulnier Introduces Bill Requiring Independent Analysis of Business Incentives
March 05, 2013
On February 22nd, Senator Mark DeSaulnier (D-Concord) introduced SB 673. This legislation requires that when local governments offer a business an incentive valued at over $1 million, in exchange for coming to the city or county, the business must pay for an independent cost benefit analysis of the incentive. Oftentimes local governments are promised jobs and sales tax revenue that encourages the local entity to agree to the incentive without actually knowing whether the promises will come to fruition.
“In today’s global economy it is imperative that our cities have the best possible data as they negotiate with large corporations,” DeSaulnier said. “Under SB 673 local governments will receive the necessary cost benefit analysis and have an opportunity for important independent review before agreeing to give incentives and subsidies to businesses. We need to ensure our local governments have all the facts before entering into such large and financially risky agreements.”
Bill Text
BILL NUMBER: SB 673 INTRODUCED
BILL TEXT
INTRODUCED BY Senator DeSaulnier
FEBRUARY 22, 2013
An act to add Section 65957.6 to the Government Code, relating to
land use.
LEGISLATIVE COUNSEL'S DIGEST
SB 673, as introduced, DeSaulnier. Land use: development project
review.
The Permit Streamlining Act requires the lead agency that has the
principal responsibility for approving a development project, as
defined, to approve or disapprove the project within 60 days from the
date of adoption of a negative declaration or the determination by
the lead agency that the project is exempt from the California
Environmental Quality Act, unless the project proponent requests an
extension of time.
This bill additionally would require a city, county, or city and
county, including a charter city or charter city and county, prior to
approving or disapproving a proposed development project that would
permit the construction of a retail or other commercial facility
project, as specified, to cause a cost benefit analysis to be
prepared, as specified, which would be paid for by the project
applicant. This bill would provide that the cost-benefit analysis
would include specified assessments and projections including, among
other things, an assessment of the effect that the construction and
operation of the proposed development will have on the ability of the
city, county, or city and county to implement the goals contained in
its general plan.
By increasing duties of local officials, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 65957.6 is added to the Government Code, to
read:
65957.6. Prior to approving or disapproving a permit for the
construction of a retail or other commercial facility project
estimated to receive over $1 million in subsidies, a city, county, or
city and county shall cause to be prepared a cost benefit analysis.
(a) The Office of Planning and Research (OPR) may prepare the cost
benefit analysis or contract for its preparation with a private
entity, other than the permit applicant, or another public agency.
The private entity or public agency shall be qualified by education,
training, and experience to conduct cost benefit analyses.
(b) The applicant for the development project shall pay the OPR or
state agency, or the city, county, or city and county, for the costs
of preparing the cost benefit analysis.
(c) The cost benefit analysis shall include, but is not limited
to, all of the following:
(1) A projection of the costs of public services and public
facilities resulting from the construction and operation of the
proposed development and the incidence of those costs.
(2) A projection of the public revenues resulting from the
construction and operation of the proposed development and the
incidence of those revenues.
(3) An assessment of the cost of incentives by a city, county, or
city and county.
(4) An assessment of the effect that the construction and
operation of the proposed development will have on the ability of the
city, county, or city and county to implement the goals contained in
its general plan, including, but not limited to, local policies and
standards that apply to land use patterns, traffic circulation,
affordable housing, natural resources, including water supplies,
open-space lands, noise problems, and safety risks.
(5) An assessment of whether the development would require the
demolition of housing or any other action or change that would result
in a decrease or negative impact on the creation of extremely low,
very low, low-, or moderate-income housing.
(6) An assessment of whether the development would result in the
destruction or demolition of park or other green space, playgrounds,
child care facilities, or community centers.
(7) An assessment of whether the development would result in any
other adverse or positive economic impact or blight.
(8) An assessment of whether any measures are available that may
mitigate any materially adverse economic impact identified by the
applicant.
(d) (1) The Legislature finds that the construction and operation
of retail and commercial facilities has land use, environmental,
economic, fiscal, and social equity effects that extend beyond the
boundaries of the city, county, or city and county in which it is
located.
(2) The Legislature finds that it is essential for the statewide
public health, safety, and welfare to require cities, counties, and
cities and counties to understand the potential spillover effects of
approving the construction and operation of these retail and
commercial facilities.
(3) The Legislature further finds and declares that the review and
regulation of retail and commercial facilities is a matter of
statewide concern and not merely a municipal affair, as that term is
used in Section 5 of Article XI of the California Constitution.
Therefore, this section shall also apply to charter cities and to
charter cities and counties.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.
Sources:
http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0651-0700/sb_673_bill_20130222_introduced.html
