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California Capitol Hill Bulletin



Volume 6, Bulletin 23 -- July 15, 1999

CONTENTS OF THIS ISSUE:
Three-Fourths of Delegation has Signed Title I Letter So Far; Approps. Markup Wednesday
House Committees Continue to Move Encryption
Administration Moves to Ease Limits on Computer Exports
House Energy and Water Appropriates $75 Million for Bay-Delta
House Energy Appropriations Panel Moves to Boost Funding for Fusion, NIF, Physics Programs
Briefing Tuesday for Californians on Next Generation Internet
Study Finds JSF Fighter Production in California Would Save $2.2 Billion
Medical Confidentiality Examined in House Commerce Committee
Ways and Means Extends R&D and Other Tax Credits
ESEA Reauthorization Update
House Subcommittee Holds Hearing On Electricity Deregulation
Housing for Seniors Considered
Senate Subcommittee Holds Hearing On Trade Without Fast Track
Cox Bill Would Strike Limit on Clean Air Funds to California
State Pushing for Speed-Up of Freeze Relief Funds
Infrastructure Report: "Smart Investments"
Homebuilders Address Smart Growth
PG&E Reports on Outlook for the California Economy
PPIC Releases Study On Effects Of Local Sales Tax



To expand communications between Washington and California, the California Institute provides periodic faxed bulletins regarding current activity on Capitol Hill which directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods. The e-mail edition is made possible in part by in kind donations from Sun Microsystems and QUALCOMM, Inc.

Three-Fourths of Delegation has Signed Title I Letter So Far; Appropriations Committee to Markup on Wednesday

So far, roughly 40 members of the bipartisan California Congressional delegation have signed a letter to the Chair and Ranking member of the House Appropriations Subcommittee which handles education issues, strongly urging them to "resist efforts to include a 'hold harmless' provision for the Elementary and Secondary Education Act (ESEA) Title I funding" in the FY2000 spending measure.

The letter, being circulated by Reps. Randy "Duke" Cunningham (San Diego) and Lynn Woolsey (Petaluma), notes that "although close to 15 percent of the nation's poor children live in California, our state receives only 11 percent of the funds distributed under Title I." Signature gathering for the letter will end soon, however, as the Labor-HHS-Education panel is now scheduled to mark up its bill on the morning of Wednesday, July 21.

Offices of Members who have not yet signed but wish to do so should contact Frank Purcell with Rep. Cunningham at x5-7612 (email: frank.purcell@mail.house.gov), or Lynda Theil with Rep. Woolsey at x5-5161, (email: lynda.theil@mail.house.gov).
 

House Committees Continue to Move Encryption

The House International Relations Committee marked up H.R. 850, the SAFE Act, and the House Armed Services Committee held a hearing on the bill on Tuesday, July 13, while the Select Intelligence Committee held a hearing on the bill on Wednesday, and marked it up in closed door session on Thursday.

The International Relations Committee reported the bill by a vote of 33-5, despite the opposition of Chairman Ben Gilman (NY). During the markup, several amendments were agreed to, although ones that would have effectively gutted the bill were defeated. The committee accepted a Gejdenson (CT) amendment that requires the Secretary of Commerce to consult with the Department of Justice and other law enforcement agencies to ensure that exports are not going to U.S. designated, drug-transit countries. They also agreed to an amendment clarifying that super computers were not excluded from export restrictions merely because they contained excluded encryption software. Both were accepted by voice.

Rep. Howard Berman (Valley Village) offered several amendments. One, which was agreed to by voice vote, amended the definition of "generally available" to ensure that it did not include instances of the limited transmittal of encryption software over the Internet. Another would allow the U.S. government to require that its government contractors use encryption containing a key recovery system. This also was approved by voice vote. Another Berman amendment would have increased the length of Commerce's technical review period from 15 to 30 working days, and allowed Commerce to determine other facts regarding the export, such as the destination country and end user. Gejdenson offered a substitute to the Berman amendment, which retained the 30 day review period, but struck the other factors Commerce could investigate. The Gejdenson substitute was approved by a vote of 21-11, prior to the Berman amendment being adopted by voice vote. The Committee also defeated, by a vote of 15-22, another Berman amendment that would have preserved the Administration's right to exercise export controls on encryption should the U.S. become a party to a multilateral export control regime.

Attorney General Janet Reno and FBI Director Louis Freeh both testified in front of the House Armed Services Committee and the House Select Intelligence Committee. As expected, both continued to oppose H.R. 850. Their reasoning appears to have shifted, however, as they admit that 128-bit encryption is now available on foreign markets, but continue to oppose U.S. exports of that strength on the grounds that it may slow down the pace at which criminals and terrorists around the world begin to utilize encryption. Nevertheless, Thomas Constantine, former Administrator of the Drug Enforcement Administration, conceded in his testimony that drug lords have been increasingly relying on encryption to encode conversations since 1995.

The House Intelligence Committee marked up H.R. 850 Thursday afternoon in a closed door session and reported the bill by voice vote after approving several substantive changes. Although the details of the provisions were not available at press time, the Committee adopted an amendment that gives the President broad-based authority to ban encryption exports on national security grounds, and gives law enforcement authorities the right to seek court orders to gain access to decrypted information or plaintext, where available. The Committee, like the International Relations Committee, amended H.R. 850 to allow the U.S. government to require its contractors to use encryption products that contain a key recovery system. Finally, it authorizes funding to assist law enforcement agencies in improving their technical capabilities in decrypting data.

Proponents of H.R. 850, as it was introduced, argue that the national security amendment is too broad, and the amendment authorizing access to decrypted or plaintext data will effectively require companies to include a key recovery system in their products.

The House Armed Services Committee is expected to mark up the bill next week.
 

Administration Moves to Ease Limits on Computer Exports

The Clinton Administration announced earlier this month that it proposes to ease export controls on computers to keep pace with rapidly advancing technology. Congress has six months to review the decision, although the Administration hopes it will approve the decision in less time.

Before the Administration's announcement, individual export licenses were required for what are called Tier II countries (most of Southeast Asia, South America, and South Africa) in order to sell computers with speeds over 10,000 MTOPs (millions of theoretical operations per second). Exports to Tier III countries (e.g. China and most Middle East countries) are limited to computers with 2,000 MTOPs or less to military users, and 7,000 MTOPs or less to civilian users. Today's mass-marketed, personal computer technology, however, was in imminent striking distance of those limits. For instance, Intel expects to unveil a new microprocessor chip for use in personal computers that will have a speed exceeding the 2,000 MTOPs level; and the next general Sony PlayStation will also have a greater than 2,000 MTOPs speed.

Under the new regulations, exports to Tier II countries will not require individual licenses unless the computers exceed 20,000 MTOPs. Tier III country exports will be raised to 12,300 MTOPS for civilian use, and 6,500 MTOPs for military use. The Administration also said it will review the Tier II 20,000 MTOPs level in six months, and expects to raise it to somewhere between 32,000 and 36,000 MTOPs.

In addition, the Administration moved Brazil, the Czech Republic, Hungary, and Poland from the Tier II country list to Tier I (where the United States' closest allies are listed), thus, removing all restrictions on the speed of computers that can be exported to them.
 

House Energy and Water Appropriates $75 Million for Bay-Delta

The House Energy and Water Appropriations Subcommittee, chaired by Rep. Ron Packard (Oceanside) reported its FY2000 appropriations bill today with $75 million in funding for the Bay-Delta restoration project. Of the funding, $45 million is allocated for ecosystem restoration and $30 million for water storage studies. Bay-Delta received $75 million in funding from last year's appropriations. In June, however, the Senate appropriated only $50 million. See, Bulletin, Vol. 6, No. 20 (6/17/99) .
 

House Energy Appropriations Panel Moves to Boost Funding for Fusion, NIF, Physics Programs

On Thursday morning, the House Appropriations Subcommittee on Energy and Water Development completed action on its version of the fiscal 2000 funding bill. The bill, shepherded by Chairman Ron Packard (Oceanside), includes $250 million for the Fusion Energy Sciences program and $476 million for Inertial Confinement Fusion (ICF) programs.

Both House figures represent increases over the Senate-passed numbers; the Senate-passed FY2000 bill provided only $220 million for Fusion Energy Sciences, and $476 million for ICF. The House levels would also exceed the Administration's budget request. The fusion figure is a $27 million increase over the FY1999 levels. Report language states that the additional $10 million in the House bill is intended to further the development of high average power lasers.

Within the ICF budget, the House provides full funding of $254 million for the National Ignition Facility (NIF) which is under construction at the Lawrence Livermore National Laboratory. The Senate bill provided only $248 million for NIF construction.

The House bill would provide $715 million for High Energy Physics (HEP) programs, an increase of $19 million above 1999 levels and of $24 million above the Senate-passed level. Importantly, unlike the Senate version, the House bill does not set a $6 million limit on research and development for the next generation linear collider. This restriction in the Senate bill could have a significant adverse affect on Stanford's R&D team which has been working on the Next Linear Collider (NLC) for the past decade. Current year NLC funding is $17 million, so the Senate's $6 million limit would cut the Stanford-centered program by two-thirds.

The California Council on Science and Technology (CCST) recently endorsed the NLC, which -- in addition to Stanford -- would involve the Lawrence Livermore and Lawrence Berkeley labs in California and Illinois' Fermilab. In a letter to the California delegation, CCST noted that California would be a logical host for the NLC, which would include a 100-acre campus, a 20-mile, largely underground facility, and 2000 employees, half of whom would require advanced scientific, technical and engineering training. The CCST also points out that the U.S. lead in high energy physics may shift to Europe in 2005, when they turn on the Large Hadron proton collider, unless the U.S. keeps pace with continued work on the NLC.

The full House Appropriations Committee is expected to meet and complete action on the bill on Tuesday of next week, and floor action is expected before the August recess. Differences between the House and Senate bills will be worked out during conference, likely to take place in September.
 

Briefing Tuesday for Californians on Next Generation Internet

Next week, the Corporation for Education Network Initiatives in California (CENIC) will conduct a briefing on the Next Generation Internet in California. The briefing will take place on Tuesday, July 20, at 4:00 p.m. in Room 2257 of the Rayburn House Office Building. [Note Room Change.]

At the briefing, researchers from UCLA will demonstrate the Urban Simulation Laboratory, which is an interactive exploration of Los Angeles. With it one can fly (or drive) through various neighborhoods, inspect realistic architectural models of buildings, make queries about aspects of the buildings, etc. The system has a number of uses in urban planning, e.g., it is aiding in the rebuilding of earthquake, fire, riot and flood damaged areas of LA. It is generally useful in education, emergency response, health care delivery, and environmental research.

CENIC is developing and implementing CalREN-2, one of the nation's most advanced computing and communications network infrastructures to advance research and education. CalREN-2 is California's segment of the national Internet2 initiative that links over 100 of the nation's leading universities. CalREN-2 is partially funded by the National Science Foundation, with cost sharing from university and industry partners.

CENIC is a not-for-profit corporation formed by the California Institute of Technology, the California State University, Stanford University, the University of California, and the University of Southern California to advance the use of communications technology in research and education at California's universities. Current industrial partners include several leaders in information technology -- Cisco Systems, IBM, Pacific Bell, and Sun Microsystems. More information is available at http://www.cenic.org .
 

Study Finds JSF Fighter Production in California Would Save $2.2 Billion

A study released Monday by the California State Trade and Commerce Agency and the City of Palmdale determined that using Air Force Plant 42, the formerly classified B-2 production facility in Palmdale, would generate savings of $2.2 billion compared to alternative sites under consideration by the competing contractors for the Joint Strike Fighter (JSF) program.

The JSF is the first fighter which will be used jointly by the Air Force, Navy and Marine Corps. When the first JSF jets are operational in 2008, DOD is expected to purchase at least 2,500, with the United Kingdom to purchase 60. A unanimous letter by the California Congressional delegation last fall also highlighted the state's advantages in terms of location, economies of scale, supplier networks and a skilled workforce. Boeing and Lockheed Martin are competing for the contract, with the winning company to be selected in 2001.

The independent study, conducted by Arlington, Virginia-based SDS International, concludes that "Tremendous economic advantages of using Air Force Plant 42 for the JSF Program are irrefutable. No other potential JSF production location can claim the availability of 'turn-key' Stealth manufacturing facilities." The report added that "California's multiple tax credits, state and local incentives, skilled resident workforce, and supplier and technical support bases are superior to any in the nation." The report urges that the U.S. "Conduct a comparative market analysis of production costs and benefits at the three potential JSF production locations under consideration." In addition to the California site, the contractors are considering producing the planes in Fort Worth, Texas, or St. Louis, Missouri.

In conjunction with the report's release, Governor Gray Davis wrote Monday to Defense Secretary William Cohen strongly urging him to use the study as a template for conducting a comparative market analysis of the proposed sites. He noted that the $2.2 billion savings generated would be "the equivalent of 55 free aircraft, due to specific tax benefits the state offers." In 1998, the State Legislature passed a bill (AB 2797) authorizing a tax credit for wages paid in connection with the JSF contract.
 

Medical Confidentiality Examined in House Commerce Committee

The Health and Environment Subcommittee of the House Commerce Committee held a hearing Thursday on H.R. 2470, entitled "The Medical Information Protection and Research Enhancement Act of 1999." This bill, introduced by Rep. Jim Greenwood (PA) on Monday of this week, joins Rep. Gary Condit's (Ceres) H.R. 1941 and Rep. Edward Markey's (MA) H.R. 1057 among House proposals for federal legislation on medical confidentiality. The panel heard from a number of stakeholder groups, including industry and medical professionals. Californians participating included: Cristin Carty, vice president of the California Health Institute in La Jolla, and Paul Tang, medical director, Clinical Informatics of the Palo Alto Medical Clinic in Los Altos. Witnesses and Committee members disagreed about two major policy areas within the bill. The first was whether federal legislation should provide a national floor or ceiling. Ms. Carty was among those favoring federal legislation that serves as a ceiling (which HR 2470 does), completely preempting state laws providing a greater degree of protection. Others, including Rep. Henry Waxman (Los Angeles) and the representative of the American Psychiatric Association, argued in favor of a federal floor, with stronger state provisions allowed to stand that provide privacy protection above the federal level.

The second major policy division among attendees was the issue of a private right of action when personal medical information is misused. H.R. 2470 does not allow for a private right of action, while other alternatives do. Rep. Anna Eshoo (Atherton) urged the inclusion of such a right.

Several other issues were addressed around which further compromise seems possible, including: the definitions of "health care operations" for which information may be released; and the intersection between laws regarding "disclosure" limitations on medical information and separately defined "use" limitations. For more information, see the committee web-site at http://www.house.gov/commerce/ .

In addition, the Ways & Means Health Subcommittee, chaired by Rep. Bill Thomas (Bakersfield), has announced plans to hold a hearing on medical confidentiality on Tuesday July 20, at 2:00 pm in 1100 Longworth.
 

Ways and Means Extends R&D and Other Tax Credits

As part of its massive $864 billion tax cut, the House Ways and Means Committee extended the R&D tax credit by five years to June 30, 2004, and retroactive to July 1, 1999, when the credit expired. It also increases by one percentage point the alternative incremental credit rate (AICR). The Committee also extended the tax credits for welfare-to-work hirings and the work opportunity program, both of which are aimed at encouraging employers to hire welfare recipients and other disadvantaged persons. The Chairman's mark, authored by Rep. Bill Archer (TX), had extended both of these credits for two years, however, during markup an amendment was accepted extending the credits for two and a half years. The amendment, offered by Rep. Amo Houghton (NY) was adopted 20-12. The Committee also approved, by voice vote, an amendment by Rep. Nancy Johnson (CT) that increases by forty percent the tax credit for low-income housing investment. Both the Houghton and Johnson amendments will be paid for by slowing the decrease in the corporate capital gains rate included in the bill.

The bill may go to the House floor this month, but its future remains in doubt. The Senate Finance Committee plans to take up its $792 billion tax cut bill next week, and the Administration has issued a veto threat against the Archer proposal.
 

ESEA Reauthorization Update

Congressional consideration of the reauthorization of the Elementary and Secondary Education Act (ESEA) continued this week. On Tuesday, the Senate Committee on Health, Education, Labor and Pensions held a hearing on the Safe and Drug Free Schools program. General Barry McCaffrey was among the witnesses, and he outlined the Administration's proposal to make changes to the program. The State-by-State formula allocation of funds would remain the same. Within each state, however, the money would be distributed via a competitive grant method, with funds being distributed to no more than 50% of the local education agencies (LEA) within the State, targeted on risk factors for alcohol and drug abuse.

Another in an ongoing series of House hearings on ESEA reauthorization was held Thursday with witnesses from Reading Is Fundamental, Inc., Buck's County Schools of Doylestown, Pa., the National Association for Gifted Children, the Center for Civic Education, and the Music Educators National Conference. Testimony may soon be available on the committee's web site, http://www.house.gov/eeo/ For previous coverage of ESEA reauthorization see, Bulletin, Vol. 6, No. 21 (7/1/99) .
 

House Subcommittee Holds Hearing On Electricity Deregulation

On Thursday, July 15, the Subcommittee on Energy and Power of the House Committee on Commerce held a hearing on electricity competition, innovation and the future. The committee heard testimony from individuals representing various companies in the private sector with products, inventions and approaches which might afford the possibility of decreasing the overall cost of electricity to consumers. One innovation, outlined by Gary Mittleman of Plug Power, was the residential fuel cell concept which produces electricity through an electrochemical process. Mittleman stated that fuel cells would not only lower costs of electricity but would also "contribute to the abatement of environmental effects from combustion-based power generation by reducing emissions to near zero." Plug Power, whose with partners include the Southern California Gas Company, part of Sempra Energy, reportedly intends to begin nationwide marketing of their fuel cell product beginning in 2001. The Subcommittee intends to continue its hearings on electricity deregulation issues with additional events before the August recess. For testimony or more information contact the House Commerce Committee at http://www.house.gov/commerce .
 

Housing for Seniors Considered

The House Committee on Banking and Financial Service's Subcommittee on Housing and Community Opportunity met Wednesday to hear testimony on Chairman Rick Lazio's H.R. 202, "Preserving Affordable Housing for Senior Citizens into the 21st Century." The bill contains three major sections. One authorizes appropriations annually of $700 million for supporting housing for the elderly (section 202) for FY2000 through FY2002, and $225 million annually for supporting housing for the disabled (section 811) for the same years. A separate section provides for the conversion of certain older section 202 financing mechanisms to more modern financing mechanisms, trading direct loans, and project-based Section 8 rental assistance for new non-repayable capital advances and project rental assistance contracts (PRACs). A third section amends the program to allow a broader range of financing for upgrading and new construction of affordable housing for seniors and expanding income eligibility for developments that are designated as high vacancy.

Witnesses from the Association of Homes and Services for the Aging (AAHSA), the American Association of Retired Persons (AARP), and Jewish Community Housing for the Elderly all emphasized the growing need for housing for the elderly, the success of the 202 program historically, and supported the legislation while suggesting improvements. Rep. Barbara Lee (Oakland) emphasized the need for more construction of such housing in the Bay Area, The panelists agreed that the situation in the Bay Area is of particular concern, citing owner opt-outs of federal programs into the market rate as the leading source of California's problem.
 

Senate Subcommittee Holds Hearing On Trade Without Fast Track

The International Trade Subcommittee of the Senate Committee on Finance held a hearing on Wednesday, July 14, discussing the managing of global and regional trade policy without fast track negotiating authority for trade agreements. Testifying in support of expanding trade and reauthorizing fast track were Ambassador Richard Fisher, Deputy United States Trade Representative, and Under Secretary of Commerce, the Honorable David L. Aaron. Mr. Aaron stressed especially that the U.S. cannot forget Latin America, which is responsible for "one-half of all U.S. export growth since 1995." Furthermore, he pointed out that increased competition has led countries, such as Chile, to negotiate trade agreements with nations in the Western Hemisphere excluding the United States. He cited these factors in arguing for reauthorizing fast track.

With the World Trade Organization Ministerial Conference in Seattle approaching, the witnesses argued that fast track would aid the U.S. in these negotiations and thus increase opportunities in trade. The Committee members, in turn, urged the President to push for its reauthorization. For testimony, see http://www.senate.gov/~finance/wl7-14.htm .
 

Cox Bill Would Strike Limit on Clean Air Funds to California

A bill introduced just before the July 4 recess by Rep. Chris Cox (Newport Beach) would eliminate an arbitrary limit placed on states' ability to receive federal air pollution control funds under the Clean Air Act.

As currently written, section 105(b)(2) of the Clean Air Act states that no more than 10% of the total of funds for air pollution planning and control grants shall be granted for programs in any one State. The Cox bill, supported by the South Coast Air Quality Management District, would simply eliminate this language.

Housing 12.3% of the nation's population, California is the only state which is affected by the 10% limit. Further, California has an even higher share of the nation's population living within designated "non-attainment" areas -- localities where air pollution levels persistently exceed National Ambient Air Quality Standards, particularly for carbon monoxide, ozone, and particulate matter. Aside from the limit, funds for air pollution planning and control grants (under Title 42, section 7405 of the U.S. Code) are to be directed based on population, agency needs, and the extent of air pollution problems in the area.
 

State Pushing for Speed-Up of Freeze Relief Funds

The recent Supplemental Appropriations contained $20 million in money for emergency grants to farmworkers hurt by natural disasters. Drafted by Sens. Dianne Feinstein and Bob Graham(FL), the legislation contained report language that stated it was for Florida and California. USDA is considering distributing this money via a request for proposal. This will likely mean that proposals must be submitted by Aug. 9th, awards announced Sept. 15th, and the money distributed just before the end of the fiscal year, Sept. 30. In the areas of California harmed by the freeze, however, the money is needed now, not on the eve of the next navel orange season, according to state officials. California has already submitted a proposal to distribute the money, asking for $20 million. California Employment Development Department Director Michael Bernick wrote a letter dated July 13, 1999, to Agriculture Secretary Dan Glickman asking that he "reevaluate this process and instead work with the affected states to speed relief." The letter stated that based on EDD's estimates, the ongoing and yet unmet needs of California farmworkers and their families as a result of the freeze will be over $20 million. For background, see Bulletin, Vol. 6, Nos. 6 (2/25/99), 8 (3/4/99) & 10 (3/25).
 

Infrastructure Report: "Smart Investments"

California State Treasurer Philip Angelides recently presented a report to Governor Davis and the California Legislature entitled "Smart Investments: A Special Update of California's Debt Affordability Report" and subsequently held a series of meetings throughout the state with various elected officials and business and civic leaders to discuss its recommendations. In the report, he calls for re-investment in declining communities, and infrastructure investment that supports livable communities, sustainable development, and sound environmental practices. A major aspect of his recommendations is a focus on regional planning to meet the State's investment plan. One of the report's recommendations is that communities should have the ability to make capital investments in schools, parks and other community improvements by a majority vote, instead of the two-thirds currently required. The California Business Roundtable recently estimated that the state needs between $80 billion and $100 billion in infrastructure repairs and projects over the next decade. The Treasurer's "Smart Investments" report is available at http://www.treasurer.ca.gov/stodar.htm (note that the pdf file large, at 3.5 mbs). Alternatively, the Treasurer's Office phone number is (916) 653-2995.
 

Homebuilders Address Smart Growth

The Senate Smart Growth Task Force on Monday hosted a briefing by the National Association of Homebuilders (NAHB) on NAHB's vision for smart growth. Group representatives discussed their new publication, Smart Growth: Building Better Places to Live, Work and Play, including a historical perspective on the demographics that are currently driving housing needs, and a look back at previous growth management movements and planning trends. The top five goals NAHB has presented to its members as smart growth objectives are: more efficient land use, paying for infrastructure, promoting inner-city and inner-suburban development, preserving open space and the environment, and preserving housing choice. Los Angeles and Riverside were discussed as the top two population growth cities for the near future. Presenters noted that while Americans favor the ideas of smart growth, personal preferences drive the housing construction market, and a national survey found 88% of people want to live in a single-family home with a back-yard, and 83% prefer a single-family home in the suburbs in spite of commutes. NAHB can be reached at (202) 822-0254.
 

PG&E Reports on Outlook for the California Economy

Pacific Gas and Electric Company released a report, authored by Dr. Tapan Munroe and Dr. William Jackman, titled California Economic Outlook and Key Issues, 1999 and Beyond. The report predicts that, while there will be a gradual slowing of the economy in California, the state will remain ahead of the pace of the national economy in new job creation. Industries singled out as excelling in expansion sustainment for 1999 in California were construction, software, and business services. The report breaks California down into four major economic regions: San Diego, the Central Valley, Los Angeles and the San Francisco Bay Area. It details the need for maintenance and expansion of infrastructure in California, most importantly the need for education infrastructure. The authors note that, "from the fifties to the seventies, California was among the nation's leaders in investment in education, its transportation system, and other infrastructure. But, the state has slipped from being at the top of the class to almost the bottom." The report also shows an overview of economic effects in agriculture for California as well as a general overview of the economy for the nation.

For more information about this study, see the PG&E web site at http://www.pge.com .
 

PPIC Releases Study On Effects Of Local Sales Tax

The Public Policy Institute of California (PPIC) has released a new report in a series on California public finance titled, California Cities and the Local Sales Tax, authored by Paul G. Lewis and Elisa Barbour. The study focuses on the effects that sales tax has on land-use decisions and how benefits from sales taxes vary among cities in California. The study found that retail development is favored over other developments by a significant number of city governments, due largely to their generation of revenues from sales taxes. The study also shows that highly populated cities with fewer people per household tend to have benefit more significantly from sales tax revenue. For more information on this topic, or a copy of the study, contact PPIC via their web site at http://www.ppic.org or call 415-291-4400.
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