The March ballot will present voters with twenty statewide propositions. This report summarizes the ballot measures, provides the City’s adopted policy (if one exists), the position of the League of California Cities and a staff recommendation. Generally, staff only recommends a position if there is an existing City policy on the issue or significant impact on the City.

The statewide propositions are numbered 1A and 12 to 31. Proposition number 24 was removed from the ballot by the California Supreme Court.

There is no fiscal impact to this report. To the extent possible, fiscal impact of the propositions is included in the discussion which follows.

Publication of the agenda in the San Jose Mercury News. Copies of the report are also available on the City’s Internet site and at the public library.

Staff recommends Council adopt positions on the statewide propositions as noted in this report and summarized in Attachment A.

As is customary, staff is providing this report to afford the City Council the opportunity to take a public stand on the statewide ballot measures prior to the March primary election. Staff’s recommendations are generally based on existing City policies from documents such as the General Plan and the Legislative Action Policies (attachment B). Past positions of the Council also guide staff recommendations. New positions taken by the Council become official policies of the City and will be added to the Legislative Action Policies.

Several measures on the March ballot are bond measures, so a special note is appropriate. The City has a general policy related to bond measures (7.1.ii.7) that states, "Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund."

The State's current ratio of bonded indebtedness is approximately 4.1% and is expected to remain approximately the same even if all bond measures on the ballot are adopted.

General Plan 7.3C.1B: Adopt City policy on intergovernmental matters.

This measure changes the state Constitution’s prohibition against casinos and lotteries to authorize the Governor to negotiate compacts, subject to legislative ratification, for the operation of slot machines, lottery games, and banking and percentage card games by federally recognized Indian tribes on Indian lands in California. This measure is similar in intent to Proposition 5 adopted by the voters in 1998, but ruled unconstitutional by the court. This resolves that issue by amending the constitution.

Proponents argue that for more than a decade, Indian casinos in California have provided education, housing and healthcare for Indian people, as well as providing jobs that have aided in taking Indians off of welfare. Today, Indian gaming on tribal lands benefits all Californians by providing nearly 50,000 jobs for Indians and non-Indians and producing roughly $120 million annually in state and local taxes.

Opponents argue that instead of limiting casinos to remote locations, they could increase to some 214 casinos statewide, which is two for every tribe. Indian tribes are already buying up prime real estate for casinos. Up to 100,000 slot machines could be operational in California. A report funded by Congress reveals that there are approximately 700,000 "pathological and problem gamblers" in California, and another 1.8 million are "at risk."

The fiscal impact of this measure is uncertain for state and local tax revenues. State license fees could be in the tens of millions of dollars each year for gambling-related costs and other programs.

City Policy - No policy (the City took No Position on Proposition 5 in 1998)

LCC Position - Neutral

Recommendation - No Position

This measure provides for a bond issue of $2.1 billion of general obligation bonds to spend on the acquisition, development and protection of recreational, cultural and open space areas. This includes ensuring improved water quality, safe drinking water, protection of forests and streams, improved air quality and the preservation of agricultural land. The proposition is the largest bond measure in US history and has several components, including direct grants to all cities on a per capita basis and competitive grants. These bonds are backed by the state and will be paid by the state, including the principal and interest costs related to these bonds. Principally, these revenues come from the state personal and corporate income taxes as well as sales tax.

Proponents argue that this measure will protect and improve the environment, ensure that all funds are spent as intended and will not result in raised taxes. This measure is good for the economy and will leave a positive legacy for our children.

Opponents argue that California taxpayers will ultimately have to spend approximately $3.7 billion to repay this $2.1 billion bond. This measure is deceptive and only a small portion of the $2.1 billion will be spent on neighborhood parks and playgrounds.

The fiscal impact of this measure is mixed. All cities and counties would receive funding but state and local governments pay additional costs to operate or manage new or enhanced properties. Based on information provided regarding the per capita funding, Sunnyvale is expected to receive approximately 1.4 million dollars.

City Policy - Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund. (LAP - 7.1(ii)(7))

Support state and federal funding programs for the acquisition and development of park lands and open space. Support legislation to prohibit the sale, exchange, or transfer of park land already held in the public trust and urge the adoption of comprehensive federal policies for protection and management of all park lands. (LAP 2.2 (1))

LCC Position - Support

Recommendation - Support

Proposal -

This measure allows the state to sell $1.97 billion of general obligation bonds to aid in improving the safety, quality, and reliability of water supplies and flood protection. Of this total, $250 million will be set aside specifically to carry out the CALFED Bay-Delta plan.

This measure also requires that the funds remaining in specified accounts under the 1996 Safe, Clean, Reliable Water Supply Bond Act (Proposition 204) be used to provide loans and grants for similar types of projects funded under this measure.

Proponents argue that Proposition 13 makes our drinking water safer and cleaner. This measure fights ground water contamination; repairs corroded water pipes and sewer systems; eliminates pollution sources and protects the watersheds that provide our drinking water.

Opponents argue that Proposition 13 will cost taxpayers too much money. California legislators passed an $81 billion budget for Fiscal Year 2000 and there was a $4 billion surplus this year. If legislators had a $4 billion surplus, why didn’t they spend some of it on these projects? The lowest cost approach would be to promote private investment rather than government spending.

The fiscal impact of this measure may see local governments that develop projects with these bond funds incurring additional costs to operate or maintain the projects. The amount of these potential additional costs is unknown.

The Santa Clara Valley Water District supports Proposition 13 and expects to receive approximately $9-10 million for flood protection programs.

City Policy - Support a statewide action plan for addressing water-related issues, including availability, quality and reclamation. (LAP-3.1 (1))

Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund. (LAP - 7.1(ii)(7))

LCC Position - Support

Recommendation - Support

This proposition allows the state to sell $350 million of general obligation bonds for local library facilities. These funds provide funds that could be used to build new library facilities, expand or renovate existing libraries and provide wiring for technology. This grant program would be comparable to the 1988 program (Proposition 85). Local agencies will be required to pay 35% of the project cost. The measure places joint use project (school-library cooperation as a priority).

Proponents argue that library needs continue to grow along with our state’s population. Many libraries lack access while others require renovation and updated infrastructure. Proposition 14 is critical for expanding literacy and strengthening our educational system.

Opponents argue that this measure is the most expensive approach to building and renovating our libraries. We will still be paying off debts from this bond decades from now. This measure should be paid by our state’s surplus, not by incurring further debt.

The fiscal impact of this measure to local government will be $190 million on a statewide basis (the match requirement). Additional operating costs will be incurred, possibly adding up to $10 million annually.

The Sunnyvale Library could benefit directly if project plans were developed to expand the main library or enter into a cooperative project with a local school district. An indirect benefit to our community would come from quality library facilities in neighboring communities which are better able to serve their own residents and share resources with residents of Sunnyvale.

Support full funding for the State Public Library Fund. (LAP-6.1 (1))

Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund. (LAP - 7.1(ii)(7))

LCC Position - Support

Recommendation - Support

This measure entitles the state to sell $220 million in general obligation bonds for local crime laboratories. The money raised from the bond sales would be used for the construction, renovation, and infrastructure costs of these laboratories. In order to receive money from such bonds, a local government must provide 10 percent of total project costs (this provision could be waived or modified by the Legislature). The governing body of the local government (such as the city council of the county board of supervisors) must also agree to pay the ongoing operating costs of the laboratory.

Proponents argue that repairing deteriorating and outdated crime labs will ensure that more criminals are accurately identified, caught, convicted and punished. Proposition 15 is an investment in justice. Modern crime labs are essential to law enforcement’s ability to quickly and accurately solve crimes.

Opponents argue that bonds almost double the cost of any government project. Whenever government is involved in a building project, it costs a lot more than a privately funded project. There are alternatives to spending money on new forensic labs. The lab could be part of a local police station - or could even rent a space in a privately owned industrial park or other commercial building.

The fiscal impact of this measure could result in additional costs to local governments that receive bond funds. First, the measure could result in one-time costs to local governments for the 10 percent share of the costs of a construction or renovation project. These one-time costs would be about $20 million statewide. Second, to the extent that local governments construct new or expand existing crime laboratories as a result of the measure, they could also incur additional future costs to operate the facilities.

City Policy - Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund. (LAP - 7.1(ii)(7))

Support efforts to provide local law enforcement all necessary tools for investigation and prosecution of suspected felonies, including access to encryption as appropriate.

(LAP 4.1 (23))

LCC Position - Support

Recommendation - Support

PROPOSITION 16: VETERANS’ HOMES BOND ACT OF 2000

The measure is a $50 million bond issue that will provide funding to the Department of Veteran’s Affairs for the purpose of designing and constructing veteran’s homes in California and completing a comprehensive renovation of the Veterans’ Home at Yountville.

Funds from this bond will be allocated to replace lease-payment bonds currently available for veteran’s homes, and then fund any additional homes or renovations of an existing home.

Proponents argue that Proposition 16 will not raise your taxes. It will pay the state’s share to build two new veterans’ retirement homes that have been approved for construction by the State of California. This will include a special treatment center to treat veterans with dementia problems like Alzheimer’s Disease.

Opponents argue that the taxpayers will have to pay the interest on these bonds for the next 25 years. So, at the end, we’ll have paid about $90 million. Even if we concede that California taxpayers should pay to house veterans, the veterans could stay at privately owned retirement facilities.

The fiscal impact of this measure for the state is a net cost of $33 million over the next 25 years. Some additional state operating costs are possible as well.

City Policy - Support proposals aimed at the development of multiple criteria for determining bonded indebtedness at the state level (i.e., beyond the current criteria of a "5% of total" cap) so as to protect the solvency of the state's general fund. Review bond proposals on the state ballot on a case by case basis, considering the overall need, the ability to cover operating costs, the impact on Sunnyvale, and the impact on the state general fund. (LAP - 7.1(ii)(7))

No policy related to veteran’s homes.

LCC Position - Support

Recommendation - No Position

Proposal -

This measure modifies the current constitutional prohibition against private lotteries to permit legislative authorization of raffles conducted by eligible private nonprofit organizations for the purpose of funding beneficial and charitable works.

Also, this measure requires at least 90% of a raffles gross receipts to go directly to beneficial or charitable purposes in California, but permits this percentage to be later amended by statute passed by two-thirds vote of each house without voter approval.

Proponents argue that if a majority of voters approve Proposition 17, the ban on raffles by charitable nonprofit organizations will be removed from the State constitution. Once this occurs, the State Legislature will be able to change the Penal Code so that charitable nonprofit organizations will be able to legally conduct a fundraising raffle. As a result, these harmless activities will no longer violate the California Penal Code and constitution. Currently bingo is the only legal gambling activity for charity fund-raising.

Opponents argue that Proposition 17 would allow professional gambling organizations to run private raffles and lotteries. There is no need for Proposition 17. Existing law allows raffles for legitimate charities.

The fiscal impact of this measure would only affect state or local governments if these raffles are subsequently authorized by law. If that occurs, the proposition could have some effects on state and local revenues, though indirect, and are not expected to be significant.

City Policy - No City Policy

LCC Position - No Position

Recommendation - No Position

This measure amends the state law so that a case of first-degree murder is eligible for a finding of special circumstances if the murderer intentionally killed the victim "by means of lying in wait." This is in a case where a murderer was in a confrontation with the victim, but also in the case where the murderer waited for the victim, captured the victim, transported the victim to another location, and then committed the murder. The result of the two changes in state law would be that additional first-degree murders would be subject to punishment by death or by life in prison without the possibility for parole, instead of the present maximum prison sentence of 25 years to life.

Proponents argue that such aggravated murders should not be excluded from our death penalty or life imprisonment law. This proposition restores equal justice for the victims, families, law enforcement, and society.

Opponents argue that this proposition will expand the death penalty. Public safety will not be expanded by this proposition. It costs taxpayers $2 million more than the cost of life imprisonment each time a murderer is sentenced to death row.

The fiscal impact of this measure will be minor, as relatively few offenders will be affected by this measure.

City Policy - None specifically. The closest is:

Support efforts to provide local law enforcement all necessary tools for investigation and prosecution of suspected felonies, including access to encryption as appropriate. (LAP-4.1 (23))

LCC Position - Support

Recommendation – No Position

This measure requires longer prison sentences for offenders convicted of second degree murder of law enforcement personnel working for the California State University system and the Bay Area Rapid Transit (BART) District. It would add murder of the above stated peace officers for whom a conviction of second degree murder would result in punishment of 25 years to life, or under special circumstances, life in prison without the possibility of parole.

Proponents argue that Proposition 19 asks voters to give the same protections against the murder of CSU and BART peace officers as municipal police, county sheriffs, and the police for the University of California currently enjoy.

Opponents argue that Proposition 19 also gives off-duty and retired BART and CSU peace officers the right to carry concealed weapons. It would also allow train college police to order you to join a posse to catch criminals, opponents claim.

The fiscal impact of this measure will be increased state costs as a result of longer prison terms for the murderers who receive a life sentence without the possibility for parole. The costs are unknown, but probably minor.

City Policy - None specifically. The closest is: Support efforts to provide local law enforcement all necessary tools for investigation and prosecution of suspected felonies, including access to encryption as appropriate. (LAP-4.1 (23))

Council supported Proposition 222 regarding murder of a Peace Officer in 1998.

LCC Position - Support

Recommendation - Support

This proposition changes the way in which a portion of the annual lottery revenues is distributed to public education. Of the future growth in lottery funds, one-half must be distributed to K-14 public schools and be spent solely on instructional materials. Currently, funds can be used for any school expense (with limited exceptions). This proposition would not change the way in which "base" lottery revenues are allocated to public schools and the way the one-half of growth monies is allocated.

Proponents argue that this proposition will ensure that students have the educational materials they need. We cannot expect students to succeed with the current materials. Proposition 20 would guarantee additional projected revenues of $90 million in fiscal year 2000-2001 for textbooks and instructional materials.

Opponents argue that this proposition has no value. School instruction materials are already funded by several sources at $542 million. This proposition involves wasted expenditures on unnecessary new requirements and takes away local control.

The fiscal impact of this measure in the short-term would be that tens of millions of dollars in annual lottery revenues that go to public education would be earmarked for instructional materials. The long-term impact would be that amounts earmarked in future years would depend upon the changes in overall lottery revenue levels.

City Policy - Support clear assignment of responsibility for state and local governments with better alignment of program responsibility and funding authority, with preference for local control versus state control. (LAP 7.1(ii)(14))

LCC Position - Oppose

Recommendation - Oppose

This measure changes the procedures that involve juveniles who are transferred from juvenile court to adult court. Juveniles who are 14 years of age or older and are charged with committing certain types of crimes such as murder and sex offenses will generally not be eligible for juvenile court and would be required to be tried in adult court. Furthermore, in many cases prosecutors would be able to directly file charges against juvenile offenders in adult court without first obtaining permission from the juvenile court.

Proponents argue that this measure sends a clear message to violent juvenile offenders that they will be held accountable for their actions and the punishment will match the crime.

Opponents argue that this measure is extreme and will result in more juvenile offenders in prison. California has already taken a stance against juvenile crime and violence. State law currently allows people as young as 14 to be tried and sentenced as adults. Don’t throw away money that could be put to better use such as schools.

The fiscal impact of this measure will have potential ongoing annual costs for local government in the tens of millions of dollars to more than $100 million. Potential one -time costs would range from $200 million to $300 million.

City Policy - No policy specifically. The closest are: Support efforts to provide local law enforcement all necessary tools for investigation and prosecution of suspected felonies, including access to encryption as appropriate. (LAP-4.1 (23))

Support adequate financing of jails and criminal justice facilities. Address the need to devote equal time and energy to develop effective alternatives to incarceration, including early intervention of at-risk youth and counseling and rehabilitation programs. (LAP-4.1 (5))

LCC Position - Support

Recommendation - Support

This measure states that only marriages between a man and a woman is valid or recognized in California.

Proponents argue that marriage should only be recognized between a man and a woman. Marriage is an important part out lives and it deserves to stay the same, not be changed or redefined. They claim this is an issues of states rights and it prevents judges in other states from changing California law.

Opponents argue that Proposition 22 is unfair and unnecessary. They say voting against Proposition 22 will not legalize same-sex marriages. When companions have been together for many years, they should have a right to enjoy the same rights as men and women who have been together for many years.

The fiscal impact of this measure will be little or no impact on state and local governments.

City Policy - No policy specifically. The closest are:

Oppose mandates to enact statutes, ordinances or registration regulation to provide equal benefits under the law to domestic partners. (LAP-5 (1))

Prohibit job discrimination on the basis of sexual orientation. (LAP - 7.3 (20))

LCC Position - No Position

Recommendation - No Position

This measure would require that all election ballots for federal and state offices provide voters with the option of voting for "none of the above." Election for local offices and judges would not include the option to vote for "none of the above." Only votes cast for candidates whose names appear on the ballot or for write-in candidates would be counted when determining the nomination or election of candidates for those state and federal offices. The number of voters selecting "none of the above" would be recorded in official election returns but would not affect the outcome of the election.

Proponents argue that by giving voters the option to vote for "none of the above", more citizens will register to vote and actually vote, better candidates will be elected and negative campaigning will be reduced. This measure would result in more voter participation at a negligible cost.

Opponents argue that "none of the above" is a deficient substitute for true democracy. By voting ‘none of the above", the you are throwing away your vote. Alternatives such as Instant Runoff and Proportional Representation are reforms that give all Californians a meaningful vote.

The fiscal impact of this measure will result in minor costs to state and local governments.

City Policy - No policy specifically. The closest are:

In cooperation with County Registrar of Voters, support practices which would increase voter turnout in local elections (e.g., mail ballots, more information to voters for judicial elections). (LAP-7.3 (2))

Instant Runoff Voting if/when it is determined to be economically and technologically feasible for the county. (LAP-7.3 (7))

LCC Position - Oppose

Recommendation - No Position

This measure would revise the state laws on political campaigns for candidates and ballot measures beginning in 2001. This includes limiting financial contributions, establishing voluntary campaign spending limits, providing public funding for broadcast advertising, establishing informational Internet websites and new financial and advertising disclosure requirements for campaigns, requiring verification of contributions from major donors and making it illegal to compensate someone for voting.

Proponents argue that California is only one of six states with no limitations on the size or origin of campaign contributions. Proposition 25 will close contribution loopholes and prevent special interests by continuing to allow unlimited "soft money" to political parties.

Opponents argue that Proposition 25 has bad provisions and loopholes that will not clean up politics, but will leave the taxpayers to pay a $55 million annual bill. Proposition 25 will legally protect special interests by continuing to allow unlimited "soft money" contributions.

The fiscal impact of this measure to local government could be several million dollars annually.

City Policy - No Policy. (The City supported another campaign finance measure, Proposition 208, in 1996)

LCC Position - Oppose

Recommendation - No Position

This measure authorizes school districts and community college districts, and county education offices that evaluate safety, class size, information technology needs to issue bonds for rehabilitation, construction or replacement of school facilities and infrastructure if approved by a majority vote. In addition, new accountability requirements include annual performance and financial audits. This measure prohibits the use of bonds for salaries and other operating expenses for schools. Also, this measure requires that facilities be made available to public charter schools. It authorizes property taxes higher than the existing 1% limit by majority vote, rather than two-thirds currently required.

Proponents argue that Proposition 26 makes school boards accountable and guarantees that taxpayers will know where their money is being spent. Regular audits will ensure that school funds are spent properly, as intended.

Opponents argue that Proposition 26 will result in higher property taxes. In addition, the two-thirds vote prevents homeowners from being outvoted in bond election. Proposition 26 is not education reform; it’s increased taxes on your home.

The fiscal impact of this measure will be increased local school district costs; potentially costs could be in the hundreds of millions of dollars statewide each year. These costs are also dependent upon voter action on future local school bond issues and would vary by local school district.

City Policy - Support extending majority vote approval for local governments and school districts bonds. (LAP 7.1 (ii)(12))

LCC Position - Support

Recommendation - Support

Voters adopted Proposition 164 in 1992 establishing term limits for federal representatives, but court rulings have prevented it from being implemented. This measure permits congressional candidates to voluntarily sign a non-binding declaration of intention to serve no more than three terms in the House of representatives or two terms in the United States Senate. In addition, it requires the placement of such information on ballots and state-sponsored voter education materials when authorized by candidates. Candidates can appear on the official ballot without submitting a declaration. A declaration by the winning candidate applies to future elections for same office.

Proponents argue that Proposition 27 is an easy way to allow candidates to make their intentions clear. Voters deserve to know.

Opponents argue that we shouldn’t legislate intentions. We don’t need term limits. The voters can decide whether they should stay or leave office.

The fiscal impact of this measure is unknown. It’s probably insignificant and will result in minor election costs to the state and counties.

City Policy - No Policy (the City opposed Proposition 164 in 1992)

LCC Position - Oppose

Recommendation - No Position

This measure repeals the additional $0.50 per pack tax on cigarettes and an equivalent increase in the state tax on tobacco products, enacted by Proposition 10 in November 1998. In, addition this measure provides for the elimination of funding for the Proposition 10 early childhood development and smoking prevention programs. It prohibits the imposition of additional surtaxes on the distribution of cigarettes or tobacco products unless enacted by the state legislature and provides for the termination of the California Children and Families First Trust Fund once all previously collected taxes under Proposition 10 are appropriated and expended.

Proponents argue that Proposition 10 was a bad law that was used in ways to do harm. Proposition 10 money is used to drive people out of business, to subsidize the rich and powerful and in wasteful ways. Proposition 28, they say, emphasizes parental responsibility.

Opponents argue that Proposition 10 is sponsored by the tobacco industry. We should care about the health and well being of our children and not with tobacco’s million dollar ads that mislead the public. $600 million in funding for children's programs would be lost if this measure is passed.

The fiscal impact of this measure will be the loss of potential long-term state and local governmental savings that could otherwise result from Proposition 10. $6 million in local sales tax would be lost statewide.

City Policy - Support efforts to improve the health of California's children, including preventive health check-ups, immunizations, and prenatal care. (LAP 5G/H(4)) (The City supported Proposition 10 in 1998)

LCC Position - Oppose

Recommendation - Oppose

This measure would approve a law previously passed by the Legislature and signed by the Governor. This law formally approves 11 tribal-state compacts that were resolved in 1998, and provides procedures for approving future compacts. These compacts would not go into effect if proposition 1A is approved. This measure declares the Governor responsible for the negotiation of the compacts and authorizes the Governor to waive the state’s immunity to suit by tribes.

Proponents argue that Proposition 29 represents safeguards for California and the tribes. It provides a well-reasoned agreement on Indian gaming.

Opponents argue that Indian gaming has created more than $4 billion in economic activity and $120 million in state tax revenues.

The fiscal impact of this measure depends on whether Proposition 1A (on this ballot) is approved. If approved this proposition would have no impact on state and local finances. If Proposition 1A is not approved, this proposition would result in unknown, but probably insignificant, fiscal impacts on state and local governments.

City Policy - No City Policy

LCC Position - Neutral

Recommendation – No Position

This measure would reestablish the right to sue another person’s insurer for an insurer’s unfair claims settlement practices; permits lawsuits only if the insurer rejects a settlement request and injured party obtains a larger judgment or award against the injured party; prevents such lawsuits against public entities, worker’s compensation insurers and professional liability insurers under certain circumstances, or if convicted of drunk driving; and entitles solicitation for consensual binding arbitration of claims under $50,001 against parties covered by insurance. This measure also creates a binding arbitration system for settling certain liability cases. Insurers that agree to binding arbitration cannot be sued for unfair practices.

Proponents argue that Proposition 30 will reduce the number of lawsuits in California. When an insurance company decides to resolve your claim through arbitration or simply treats your case fairly, there will not be a need for a lawsuit. This proposition prohibits drunk drivers and uninsured motorists from suing.

Opponents argue that Proposition 30 is sponsored by personal injury lawyers and is meant to deceive the public to allow two lawsuits for the same accident. Proposition 30 opens the door for more frivolous lawsuits and fraudulent claims.

The fiscal impact of this measure will be an increase in the state insurance gross premium tax revenue, which could potentially be several million dollars each year. The fiscal impact on state courts is unknown.

City Policy – No policy specifically. The closest is: support comprehensive tort reform, including limiting the joint of several liability of government agencies to the percentage of their wrong-doing.

LCC Position - Neutral

Recommendation – No Position

This measure takes effect only if Proposition 30 is also approved. It would limit the conditions that an injured party can sue another person’s insurer for damages resulting from an insurer’s unfair claims settlement practices; limit emotional distress claims; limit property damage claims to those actually caused by a motor vehicle accident; exempt professional liability insurers from unfair claims settlement practices suits if professional’s consent is required for settlement and professional withholds that consent; provides that an insurer requesting arbitration is presumed to act in good faith; and require the state auditor to report on the effect of Proposition 30, as amended.

Proponents argue that Proposition 31 will restore the rights to sue insurers for unfair practices. Insurance companies penalized for violating the law cannot pass those penalties onto to consumer in the form of higher premiums. Approve the Fair Insurance Responsibility Act.

Opponents argue that Proposition 30 is sponsored by personal injury lawyers and will result in higher insurance rates. Proposition 31 will only hurt the general public and help the personal injury lawyers.

The fiscal impact of this measure will be that if the voters approve Proposition 30, this proposition would slightly reduce the fiscal impact that Proposition 30 would have on state revenues and have an unknown impact on state court costs. If voters disapprove Proposition 30, this proposition would have no fiscal impact on state and local governments.

City Policy - No policy specifically. The closest is: support comprehensive tort reform, including limiting the joint of several liability of government agencies to the percentage of their wrongdoing.

LCC Position - Neutral

Recommendation – No position

There is no fiscal impact to this report. To the extent possible, fiscal impact of the propositions is included in the discussion below.

This report provides the City Council the opportunity to take public positions on statewide ballot measures. Any position taken that is not currently covered by a Legislative Action Policy would be added as a new City policy.

Publication of the agenda in the San Jose Mercury News. Copies of the report are also available on the City’s Internet site and at the public library.

Staff recommends Council adopt positions on the statewide propositions as noted in this report and summarized in Attachment A.

Prepared by:

Daniel Rich
Assistant to the City Manager

Reviewed by:

Amy Chan
Assistant City Manager

Approved by:

Robert S. LaSala
City Manager