Foreclosure activity plunges in California with new laws in effect

New California forecloure actions posted a sharp plunge in the first quarter to levels not seen since the last housing boom.

Lenders filed 18,567 mortgage default notices on California houses and condominiums during the first three months of the year. That was a 51.4% drop from the previous quarter and a 67.0% drop from the first quarter of 2012, according to real estate firm DataQuick.

The filing of a notice of default is the first step in California's formal foreclosre process.

The firm reported the numbers Tuesday. It attributed the drop to rising home prices, a stronger economy and government interventions designed to curtail foreclosures.

In particular, a series of new laws backed by state Atty. Gen. Kamala D. Harris that place new regulations on foreclosre practices appears to have played a big role in the sharp reduction, DataQuick reported. 

"It appears last quarter's drop was especially sharp because of a package of new state foreclosure laws-- the 'Homeowner Bill of Rights'-- that took effect Jan. 1," John Walsh, DataQuick president, said in a news release." Default notices fell off a cliff in January, then edged up."

Once lenders adjust to the new regulations, the numbers could pick up again, Walsh noted.

Default notices remained more revalent in California's cheaper neighborhoods, according to DataQuick. And most of the loans going into default were born between 2005 and 2007.

Among the state's biggest counties, loans were least likely to go ito default in the less-affluent Riverside, San Bernardino, Solano and San Joaquin counties.

The number of homes taken back by lenders through the foreclosure process also fell dramatically last quarter. The total number of homes taken back by lenders through the foreclosure process also fell dramatically last quarter. The total number of trustees deeds filed on homes 35.7% from the previous quarter and 55.1% from the first quarter of 2012 A lender records a trustees deed on a property after it's been foreclosed upon. 

via LA Times

California Lawmakers Seeks to Buck Anti-Abortion Trend

A California lawmaker, bucking a trend in other states to restrict abortion, has proposed to broaden access by permitting nurse-midwives and others to perform procedures now done only by doctors.

The measure by Assembly Majority Leader Toni Atkins, a San Diego Democrat, would allow abortions by midwives, physician assistants and nurse practitioners in the first 12 weeks of pregnancy. Atkins said the bill is aimed at women in counties without abortion providers. The proposal goes before the Assembly Health Committee today.

California isn’t alone in its course. New York Governor Andrew Cuomo, a Democrat, has vowed to decriminalize late-term abortions when a woman’s health -- not just her life -- is at risk. A Washington plan to require insurers to cover abortions, backed by Democratic Governor Jay Inslee, passed the state House only to be turned back in the Senate by a Republican-dominated coalition.

“California has a history of forward-looking, innovative solutions to problems, from technology to health care,” Atkins said by e-mail. “Even though we are a strongly pro-choice state, more than half our counties have no abortion provider.”

“It’s appalling,” said Camille Giglio, a lobbyist for California Right to Life, an anti-abortion group. “They are using the excuse of fewer abortion clinics to promote cheaper abortions for the clinics by lesser-trained people who are using abortions for their livelihood rather than a service to women.”

Democratic Control

While Democrats control both chambers of the California legislature, a similar bill failed last year after some Democrats said they were concerned that abortions performed by non-physicians wouldn’t be as safe. The bill was amended to allow nurse practitioners and other clinicians to perform non- surgical abortions, and was signed by Governor Jerry Brown, a Democrat. Atkins’s bill would remove that restriction.

Researchers at the University of California, San Francisco, in January published a study in the American Journal of Public Health that said that complications from abortions conducted by nurse practitioners, nurse midwives or physician assistants were “clinically equivalent” to those performed by physicians.

If approved by lawmakers, California would be the fifth state to permit non-physician abortions, joining Montana, New Hampshire, Oregon and Vermont, according to a UC-San Francisco study. Thirty-nine states require a licensed physician.

New Restrictions

While the U.S. Supreme Court’s 1973 decision in Roe v. Wade struck down many state laws restricting abortion, statutes vary across the U.S. A flurry of new restrictions have been added in the past three years.

“States that are run by largely Republican and largely pro-life legislatures and governors are looking to push out from what they see as very substantial restrictions on their ability to create what they believe is better policy in this area,” said David Masci, a senior researcher with thePew Research Center’s Forum on Religion & Public Life, based in Washington.

In Kansas, Governor Sam Brownback signed legislation April 19 that bans abortions on the basis of fetal gender, declares that life begins at fertilization and prohibits public funding for abortions.

In North Dakota Governor Jack Dalrymple signed a law on March 26 making it a felony for a doctor to perform a nonemergency abortion once a fetal heartbeat can be detected, as early as six weeks into a pregnancy, with no exceptions for victims of rape or incest.

Legislators in 13 other states, including Alabama, South Carolina, Iowa and Mississippi, introduced similar legislation in the first three months of this year, according to Guttmacher.

Close Clinics

Alabama lawmakers in April joined six other U.S. states to require doctors performing abortions to have hospital-admitting privileges, which the legislation described as a safety measure and opponents said is an effort to close clinics.

The California legislation was praised by abortion-rights advocates.

“We are excited to see positive, proactive legislation moving,” said Tarek Rizk, director of communication for Washington-based NARAL Pro-Choice America. “It’s inspiring to see that some states are tackling these pro-woman maneuvers when there are other states that have pushed very aggressive anti- woman and anti-abortion laws.”

via Bloomberg

Jerry Brown Starts Push to Revamp California's Environmental Law

As Gov. Jerry Brown toured China over the last week, he repeatedly contrasted that nation's speedy construction of modern transportation systems and other key public works with what he characterized as a lack of vision back home.

A pillar of his plan to let the "bulldozers roll" on big projects in California has been an overhaul of the state's landmark environmental law, which can tangle development in litigation for years.

Yet before he even boarded his return flight, the governor said he was giving up on any substantial revision this year of the 40-year-old law, which he says stands in the way of progress.

The appetite for such change "is bigger outside the state Capitol than it is inside," Brown said as he sipped tea in the southern port city of Shenzhen on his last full day of events abroad. "This is not something you get done in a year. There are very powerful forces that are strong in the [Democratic] Party that will resist."

In fact, his plans to change the law, coupled with his infrastructure agenda, already face resistance on several fronts.

The state Democratic Party, holding its annual convention in Sacramento last weekend, had already resolved publicly that it "stands with the labor and environmental community" in support of the existing California Environmental Quality Act. Party members called on Brown and lawmakers to "oppose any efforts to weaken this law."

Nearly two dozen Democrats in the Legislature have signed a letter calling on Brown to substantially scale back his proposal for a massive water project in the Sacramento-San Joaquin River Delta.

And at a recent hearing, a group of state senators panned the administration's bid to spend $500 million to make public school and community college buildings more energy-efficient, advising that the plan be rewritten because it does not target the districts that need it most.

In addition, voter support for the high-speed rail system the governor is championing for California has slipped considerably as the cost of the project has leaped by billions of dollars.

Whether the turbulence is enough to impede Brown's infrastructure push remains to be seen. So far, the governor has opted to stay above the fray until the real deal-making begins — typically well after he issues his revised budget in May, during final spending negotiations in June and when the Legislature is preparing to adjourn at summer's end.

The governor's retreat on the environmental law took some of his allies by surprise. Senate President Pro Tem Darrell Steinberg (D-Sacramento) said he would continue to work on comprehensive legislation to "update" the act, despite Brown's remarks from overseas.

California's environmental law is one of the strictest in the nation, requiring state and local agencies to identify all potential effects of a project and take all possible steps to avoid or mitigate them. Opponents of big projects can use the requisite impact studies and reviews as tools to block any building in court.

A coalition called the CEQA Working Group catalogs cases in which it alleges the law is misused. It cites Mulholland Drive neighborhood groups, unhappy with the aesthetics of a bridge planned by theCalifornia Department of Transportation, using threats of a lawsuit to force the state to revise construction plans for the 405 Freeway.

That added millions of dollars in costs and months of delays, the group says, and prolonged the chaos of "Carmageddon."

Lawsuits by neighborhood groups have caused the environmental approval process for the Expo Line extension to Santa Monica to drag on for eight years, according to the coalition. A group called California Unions for Reliable Energy has filed dozens of environmental lawsuits that can delay construction of power plants, only to drop its objections once favorable labor agreements are secured.

The law "has turned into something it was never intended to be," said Matt Regan, vice president of the Bay Area Council, a business advocacy group promoting changes in the law. "The bulk of CEQA lawsuits filed by labor are not for environmental purposes.

"But unions are not the only ones abusing this law," he continued. "Businesses do it. NIMBYs do it. It has become the default for people who want to stop anything."

Such groups say, as Brown does, that they want to update the law, not abandon it. Every other living California governor also says the law needs updating.

George Deukmejian, Pete Wilson and Gray Davis penned an opinion piece in the Sacramento Bee earlier this year that said abuses of state environmental regulations "are threatening California's economic vitality, costing jobs and wasting valuable taxpayer dollars."

Environmentalists and labor unions say the criticism is overblown. The overwhelming majority of lawsuits filed under the law, they say, are motivated by legitimate environmental concerns. Champions of the regulations have commissioned reports tying the state's economic growth over the last few decades to the strong environmental protections.

"This is another cry for deregulation without cause or reason," said Robbie Hunter, president of the State Building and Construction Trades Council of California. "The people behind this say it is hurting the economy in this state, and we don't think it is true.

"…Our organization is desperate to cut red tape and get people to work. If we saw this law as an obstacle to projects, we would be on the other side of this thing," said Hunter, whose union is usually an ally for Brown.

"We believe the governor is a great person for the environment and making decisions on the facts," Hunter said. "All the facts are not on the table yet."

Brown seems confident that he has all the facts he needs. He vows that the law will be changed by the time he leaves office and suggested that he may yet try to extract concessions from lawmakers this year, as part of other negotiations.

"OK, you want that?" Brown said, offering a snapshot of how such negotiations might go. "I'm going to add a little reform over here."

He is leaving other options open, too. Asked if he might consider taking his case straight to voters — a move that could stir up further problems within the Democratic establishment — Brown said: "That's always a possibility."

via La Times

Senate Immigration Bill Could Reshape California

Already America's most popular immigrant gateway, California could be reshaped again by a comprehensive immigration bill that eight U.S. senators are introducing Tuesday after months of negotiations.

The bill offers an arduous 13-year path to citizenship to most of the 11 million immigrants in the country illegally, but also shifts the legal immigration system to welcome more people based on their work skills, prioritizing the most educated.

And it pumps billions of dollars into securing the U.S.-Mexico border to curtail the flow of illegal immigration.

"Silicon Valley, in terms of tech, comes out pretty good from this proposal," said Bill Ong Hing, a law professor at the University of San Francisco. "If you look at the grand scheme of things, it also definitely benefits undocumented immigrants. They're not going to get deported."

But the "ones who are most hurt," said Hing, are many average immigrants who will lose the chance to sponsor their brothers, sisters and other relatives to join them in the country.

The bipartisan group of senators postponed their announcement of the bill Tuesday in honor of the victims of the Boston Marathon bombings, but a 17-page summary obtained by the Bay Area News Group details how it would work.

In a move away from America's family-focused immigration system, it would create a new "Merit Visa" later this decade that would rank prospective permanent residents, including those now here illegally, using a point system based on their education, employment and length of U.S. residence. About 120,000 of the new visas will be available in the first year of the merit-based program, and up to 250,000 annually if the economy improves.

First, however, the measure aims at clearing an existing backlog of more than 4.5 million immigrants waiting for green cards to move here permanently, most to join relatives who have sponsored them.

And it gives a 10-year "registered provisional immigrant" status to those here illegally, as long as they have lived here since at least Dec. 2011, pay a $500 penalty fee, have not committed serious crimes and meet other requirements. They will able to work and live in the United States for a decade, but not access government benefits, and eventually can seek citizenship if they pay back taxes, learn English and qualify for an existing family or work visa.

A quicker path to citizenship would be offered to young immigrants brought to the country illegally as children and to agricultural workers.

The bill also would expand temporary visa programs for guest workers in both high-wage and low-wage jobs. It would raise the annual cap for 3-year H-1B visas, already heavily used to recruit foreign computer programmers and other Silicon Valley tech workers, from 85,000 to as many as 180,000.

Some engineers critical of the H-1B program for creating unfair competition with U.S. workers were pleased that the bill, while adding visas, bans some companies from gobbling up too many of them.

"It's better than expected," said Saratoga computer consultant Brian Berg, chairman of the Santa Clara Valley chapter of the Institute of Electrical and Electronic Engineers. "Even though the program is being expanded, the fact that outsourcers are being partly left out of this process is good news."

By outsourcers, Berg means the companies -- most of them based in India -- that rely on H-1B workers for the majority of their workforce. Companies will be banned from hiring more than 75 percent of their workforce from abroad, and will now have to pay a $10,000 fee for each additional foreign worker they hire if more than half of their workforce is here on temporary visas.

Berg was also pleased by the expansion of green cards -- permanent residency visas -- for high-skilled workers, since those immigrants are not tethered to the companies that sponsor them.

The bill would also add a new W visa for lower-skilled guest workers -- 20,000 in the first year, but the numbers would later expand or contract based on a statistical formula.

The bill would eliminate today's "diversity visa," which is awarded randomly to about 50,000 people each year from countries with low rates of immigration to the United States.

And, after the existing backlog of family visas is cleared, it would end visas for the brothers and sisters of U.S. citizens, as well as married sons and daughters over the age of 30.

"The proposal to get rid of the sibling category, which has been on the books since 1952, that's going to be very disappointing," Hing said. "It's disappointing for regular immigrants. The vast majority of people who immigrate today come on the family categories."

The so-called "Gang of Eight" senators -- four Democrats and four Republicans -- have negotiated the bill in secret for months. They are Republicans Marco Rubio of Florida, John McCain and Jeff Flake of Arizona and Lindsey Graham of South Carolina; and Democrats Chuck Schumer of New York, Robert Menendez of New Jersey, Michael Bennet of Colorado and Dick Durbin of Illinois.

Sen. Dianne Feinstein, D-San Francisco, while not part of the group, helped broker its agricultural provision after months-long negotiations between the farm industry and unions.

The first hearing on the bill is expected to happen on Friday, followed by another one on Monday.

via Mercury News

California Ban on Gay Conversion Therapy at Center of Legal Battle

When the Legislature last year backed the nation's first ban on gay conversion therapy for minors, lawmakers had in mind the experiences of people such as James Guay.

At 16, Guay's devout Southern California Christian family placed him in therapy in an attempt to put a stop to his same-sex desires. Decades later, he calls the therapy "quackery" and psychological abuse -- and is among many gays and lesbians now defending the new state law in court.

"Parents can teach their children whatever they want," said Guay, now 41, a pastor's son who lived 20 years in San Francisco until moving recently to West Hollywood. "What they don't have a right to is knowingly or unknowingly using the guise of psychotherapy to damage their children."

On Wednesday, a federal appeals court will review whether California's attempt to ban the practice on minors trampled on the rights of families to seek such counseling -- and also whether it improperly threatens professional therapists who risk the loss of licenses and livelihoods if they violate the law.

A group of therapists and parents challenged the law in January, arguing it interferes with religious practices and violates free speech rights by barring gay conversion discussions between young patients and their counselors.

The case has produced a legal standoff between a state's power to regulate what it considers harmful conduct by licensed professionals and supporters of the therapy who insist parents have a right to follow their beliefs in arranging such therapy for their children.

Two Sacramento federal judges have split over the issue, one upholding the law and the other finding it runs afoul of the First Amendment. The 9th U.S. Circuit Court of Appeals put the law on hold while the case proceeds.

The showdown is being closely watched as other states, including New Jersey and Massachusetts, move to enact similar laws. Legal experts say the case poses tough questions because the U.S. Supreme Court has not established much precedent on a state's ability to impose such restrictions on the speech of licensed professionals.

"It hasn't really told us to what extent restrictions are constitutional," said Eugene Volokh, a UCLA law professor. "This is not clear."

Attorney General Kamala Harris' office is defending the law, saying in court papers that major mental health organizations consider the therapy harmful to minors struggling with their sexual identity. State officials also say states have the power to regulate licensed professionals, and "the First Amendment is not a shield for incompetent or harmful professional conduct."

Gay rights organizations have also intervened, arguing the practice stigmatizes gay minors by suggesting they can be converted to straight and that the therapy can eventually bring on depression and even suicide.

"We're talking about protecting young people from really serious risks," said Shannon Minter, legal director of the National Center for Lesbian Rights.

But advocates of the therapy argue the state is interfering in private family relations and therapist-patient relationships, insisting minors can be helped in dealing with "unwanted same-sex attractions." In court papers, a group challenging the law says it is so overbroad it would bar a licensed therapist from counseling a minor who had been molested by "the likes of a Jerry Sandusky," referring to the former Penn State assistant football coach and convicted serial child molester.

Another group, "Parents and Friends of Ex-Gays & Gays," submitted testimony from people who say they benefited from the counseling, warning the California ban "would coercively deny thousands of Californians ... the health care support they need and desire."

Many gays and lesbians who went through the conversion therapy in their teens strongly feel California does need to abolish it. Guay, for one, says it was a damaging event in his life.

"I thought I was literally going to hell for having these thoughts, feelings and attractions," he said. "It takes years, sometimes decades, to really, truly recover."

via Mercury News

California Sells $2 Billion in Debt as Taxes Roll In

California, the most-indebted U.S. state, began a $2 billion tax-exempt general-obligation bond sale as income taxes, which account for 63 percent of revenue, outpace projections.

The state, which plans to raise $1.25 billion for capital projects and $750 million for refinancing debt, is taking orders from individual investors today. Sales to institutions such as mutual funds and final pricing will take place tomorrow, said Tom Dresslar, a spokesman for Treasurer Bill Lockyer.

California’s second general-obligation sale this year comes as individual income-tax payments have exceeded both projections and 2012 levels before the April 15 filing deadline, according to figures compiled by Controller John Chiang. 

California debt is becoming safer as the state economy rebounds and Governor Jerry Brown and lawmakers reduce long-term obligations, said John Ceffalio, municipal credit analyst for New York-based AllianceBernstein Holding LP (AB), manager of $443 billion in assets.

“For this fiscal year to date, it looks solid and is running above estimates,” Ceffalio said of California revenue. “There’s always a chance of an April surprise on one side or the other. Long-term, there’s always a chance of volatility owing to the progressive nature of California’s income tax.”

Preliminary Yields

California is offering bonds maturing in October 2023 to individual investors at a preliminary yield of 2.33 percent, according to a person with direct knowledge of the sale. That’s about 0.5 percentage point more than the interest rate on benchmark 10-year munis, similar to the spread on California’s borrowing last month, data compiled by Bloomberg show.

In the March offer, Lockyer had to raise yields on some bonds with longer maturities amid a slump in state and local debt. Yields on 20-year securities rose to 3.57 percent from 3.39 percent as a 10-day rally in the Dow Jones Industrial Average depressed the bond market.

Munis have become more attractive to investors since then, even as volume remains high as issuers take advantage of low borrowing costs to refinance, said Michael Schroeder, president and chief investment officer of Naples, Florida-based Wasmer Schroeder & Co., which manages $3.5 billion in local bonds.

“This is a better time to bring a deal,” Schroeder said by telephone. “Cal paper has performed well. There’s a higher demand for it with the higher income taxes.”

Tax Vote

California voters in November raised income-tax rates on individuals earning $250,000 or more, with levies on incomes of $1 million or more increasing 3 percentage points, to 13.3 percent.

Brown, a Democrat who backed the tax increases to fund education, said in January that California would have an $851 million budget surplus at the end of June, its first in more than a decade.

Through Feb. 28, California’s income-tax collections for the year that began July 1 exceeded projections by $4.5 billion, according to figures from Chiang’s office. As of April 5, state income-tax payments exceeded 2012 levels by almost $10 billion, or 29 percent, according to Chiang’s office.

While the trend is encouraging, investors continue to view California debt with caution, Schroeder said. The volatility of income-tax receipts in California was exacerbated by the increases on the highest earners and by one-time events such as the initial stock offering byFacebook Inc. (FB) in May, he said.

“We tend to place some significance on those numbers,” Schroeder said of the income taxes, “but you have to look at the overall picture of what is behind those numbers.”

via Bloomberg

Jerry Brown Seeks Chinese Funding for California High-Speed Rail

California Gov. Jerry Brown heads to China this week to seek investments in his state’s “green” projects, including an astronomically expensive high-speed rail project that is floundering despite receiving tens of billions in federal stimulus money.

Brown begins a week of meetings on Tuesday with a focus on bilateral trade and investment opportunities, as well as opening a new California foreign trade and investment office.

China’s rail system is the longest in the world, covering 5,800 miles, and is heavily financed by the government, according to the San Jose Mercury News. Brown will ride the rail system from Beijing to Shanghai accompanied by Dan Richard, the chairman of California’s high-speed rail board, Dan Richard, according to the Mercury News.

California’s rail project, which would run from Los Angeles to San Francisco, faces increasing skepticism at home, with costs soaring and not much to show for it. The project has nearly tripled in cost since it was approved by voters in 2008. Most recently, the California High-Speed Rail Authority Board upped its estimate by another $97 million, just for planning costs, according to the Mercury News, bringing planning costs alone to $878 million.

As CNN reported last month, not a single rail has been laid for the high-speed train, and a report released last fall estimates the rail system could cost as much as $118 billion. The project has so far been awarded $3.5 billion in federal stimulus funds, and California wants tens of billions more.

And that’s where China comes in. The country invested an estimated $1.3 billion in the state in 2011, according to the Asia Society, and Brown is hoping for much more.

“We’re going to facilitate billions of dollars of investments,” Brown said in a speech last week, according to the Los Angeles Times. “Not overnight, but over time.”

Washington Examiner

California Businesses Lead the Charge to Drop the Penny

According to the United States Mint, pennies have become more expensive to make than they’re worth. Literally. It costs two cents to produce a one-cent coin, the data suggests. And pennies are 97.5 percent zinc, which requires mining that damages the environment, critics are quick to add.

For these reasons and more, two California businesses have joined other local shops that have stopped accepting the coin. Perhaps energized by Canada’s recent decision to stop manufacturing pennies, Cheeseboard Pizzeria and Mike’s Bikes in Berkeley are part of a of a growing movement to ban the one-cent coin.

As Shelby Pope from the East Bay Express reports

Although Mike’s Bikes and Cheeseboard Pizzeria still accept pennies as payment, neither store hands them out in change. Instead, both stores round transactions down in the customer’s favor to the nearest nickel. Although the stores lose a little from the rounding, Adams said it’s ultimately worth it: “For us, it’s a net savings. It’s more convenient, and the time it takes to roll the pennies and deal with them makes it worth it.”

Worker/owner Ridwan Schleicher of Cheeseboard Pizzeria said the eatery stopped using pennies in August 2012 because “we just got sick of dealing with them.” (The Cheeseboard cheese shop and bakery next door still uses pennies, however.) “There’s been no negative reaction. People are pretty excited.”

But not everyone is on board with the movement to drop the penny, as Pope explains:

But according Robin Adams, policy director of Americans for Common Cents, pennies are getting a bad rap and they aren’t as expensive to make as the US Mint contends. “The actual cost of producing the penny includes overhead from the US Mint,” Adams said. “If you take the penny out of circulation, the proportion that Mint applies to overhead would end up going somewhere else — like, for example, the nickel.”

Adams also argued that if the penny were to be retired, charities that rely on penny drive donations would be hit the hardest. Furthermore, he said there’s no guarantee that businesses would round in the customer’s favor, and, if they don’t, it would harm low-income consumers. “The natural tendency is for people to round up,” he said. “You can say [rounding] doesn’t make a whole lot of difference, a couple of cents here and there, but it does for people who are on stringent personal budgets.”

via Salon Magazine

California City to Vote on Banning Drones

 City Council here is set to vote on a proposal Thursday to ban drones in residential areas, what could be the first law of its kind in California.

The proposed ordinance bans the flying of "unmanned aircraft that can fly under the control of a remote pilot or by a geographic positions system (GPS) guided autopilot mechanism" up to 400 feet above areas zoned residential. Anything flying higher is in Federal Aviation Administration jurisdiction.

A "drone permit" from the city would be required to make recordings of a single residence, along with written permission from the homeowner.

"Technically, people can use these things to tape people's homes and backyards and put it on YouTube," said Steve Quintanilla, city attorney in this Palm Springs, Calif., suburb of about 20,000.

Remote-controlled drones, capable of flying at low altitudes while equipped with cameras or even weapons, have raised fears of inescapable surveillance by law enforcement from civil liberties advocates. Some 30 states are considering laws curbing their use by authorities, generally by requiring them to first get a probable cause warrant.

In February in Charlottesville, Va., home of the University of Virginia, the council passed a resolution urging the state to limit the use of police spy drones but does not ban drones in the city's air space. St. Bonifaciuis, Minn., population 2,300, followed later in February with its version of an ordinance initiated by the Rutherford Institute civil-liberties group that also forbids operating a drone in the city except on an owner's land.

But the genesis of Rancho Mirage's proposal was a homeowner, annoyed at the buzz of his neighbor's hobby.

"It sounded like a weed-eater, or weed whacker, and I wondered, 'Who's out doing their landscaping on a Sunday afternoon?" said Steve Sonneville, who was trying to relax in his backyard about six weeks ago. "Then I heard it getting louder and louder, and I looked up and realized it was coming from overhead."

The airborne drone, held up by four rotors, was about 50 feet above him.

"It was slowly going back and forth over the backyard of my home," said the defense contractor who works out of the Marine Corps Air Ground Combat Center in Twentynine Palms, Calif. "I knew right away what it was and what was going on."

It took Sonneville a few minutes to find two men in the common area of his gated community piloting the drone remotely.

"I told them, 'I don't think you should be flying that in a subdivision, we have an expectation of privacy.' And they were very cooperative, and basically understood what I was trying to get at," Sonneville said.

The next day he emailed Rancho Mirage Mayor Scott Hines to voice his concerns.

Quintanilla said he never considered expanding the ban to cover the wider concerns. "Law enforcement is a whole different issue. This is an issue of privacy between neighbors."

Quintanilla said nothing in current law can halt bold invasions of privacy or stop a sex offender from using a drone to search for prey.

Hines, whose family gave him a drone for his birthday last year, said he has played with his iPad-controlled drone in his backyard and taken it to Joshua Tree National Park.

He believes the current language in the draft ordinance might be a little too broad.

"I think individuals should be able to use their own property and perhaps common areas of communities to enjoy the technology with their families. Where one crosses the line is by infringing on the privacy of others," he said.

Councilwoman Iris Smotrich said she's never had a personal encounter with a drone but has read up on the new technology and favors passing tougher regulations as well as the exemption for law enforcement.

"I think law enforcement should be able to use whatever technology is available to them to enforce our laws and make our citizens safe," she said.

Sonneville said he hopes the council will consider adding protections against excessive law enforcement surveillance, not in the proposal now.

Peter Bibring, a senior staff attorney for the American Civil Liberties Union of Southern California, said he's not aware of any proposed or passed laws clamping down on non-law-enforcement use of drones statewide.

A bill has been introduced in the California Senate to clarify that drones do fall under existing invasion of privacy laws, he said.

Use of commercial drones for everything from package delivery to crop dusting is expected to explode once the FAA, which now bans them, comes up with regulations allowing them in, expected to happen by 2015.

via USA Today

California Workers Face a Growing Education Gap, Study Says

A growing education gap in California could diminish workers’ chances of finding jobs in the coming years, according to a study.

Post-recession, companies increasingly look for employees with skills and education beyond a high school diploma, according to a study from Corinthian Colleges and economic consulting firm Encina Advisors. That’s a big problem in the Golden State, where demand for community colleges already outstrips available spots by 591,000.

“California has begun a transition to a new economy that requires post-secondary education and skills in healthcare, education, service industries and management,” the report says. “The new economy has created jobs which are yet to be filled, and the state lacks trained, qualified individuals to fill them.”

During the economic recovery, some companies have complained that a lack of qualified workers leads to trouble filling open positions. Recent studies have found that many firms are waiting longer to hire and demanding workers with college degrees.

The study estimates that under-educated Californians could lose out on billions of dollars of income over the next decade. During that time, an estimated 2.45 million Californians who want a community college education will be unable to find an open spot.

On average, those aged 25 to 34 with an associate’s degree make $6,432 more per year compared to a worker with just a high school diploma.

“This gap between educational and vocational training ‘demand’ versus ‘supply’ represents a significant barrier to further economic recovery and growth,” the report said.

via LA Times

Judge Allows California City to Enter Bankruptcy, Largest Municipality to go Bust

Stockton, Calif., became the most populous city in the nation to go broke Monday, after a judge accepted the city's application to enter bankruptcy. 

In the closely watched decision, U.S. Bankruptcy Judge Christopher Klein said the bankruptcy declaration was needed to allow the city to continue to provide basic services. He determined Stockton would not be able to perform "its obligations to its citizens on fundamental public safety as well as other basic government services without" the protections provided under bankruptcy proceedings. 

Stockton was facing a $26 million shortfall when it filed for bankruptcy last summer, the result of the housing bust and soaring pension obligations. After cutting a quarter of their police force and other city services to the bone, officials argued bankruptcy was their only option. 

The city of nearly 300,000 people has become emblematic of government excess and the financial calamity that resulted when the housing bubble burst. 

Its salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures beginning in the mid-2000s and a 70 percent decline in the city's tax base. 

The city's creditors wanted to keep Stockton out of bankruptcy -- a status that would likely allow the city to avoid repaying its debts in full. 

They argued the city had not cut spending enough or sought a tax increase that would have allowed it to avoid bankruptcy. 

Matthew Walsh, an attorney for the bond holders, declined to comment after Monday's ruling. 

Attorneys for the city said the city's budget and services had been cut to the bone. 

"There's nothing to celebrate about bankruptcy," said Bob Deis, Stockton's city manager. "But it is a vindication of what we've been saying for nine months." 

The Chapter 9 bankruptcy case is being closely watched nationally for potential precedent-setting implications. 

The $900 million that Stockton owes to the California Public Employees' Retirement System to cover pension promises is its biggest debt. So far Stockton has kept up with pension payments while it has reneged on other debts, maintaining that it needs a strong pension plan to retain its pared-down workforce. 

The creditors who challenged Stockton's bankruptcy petition are the bond insurers who guaranteed $165 million in loans the city secured in 2007 to pay its contributions to the CalPERS pension fund. That debt got out of hand as property tax values plummeted during the recession, and money to pay the pension obligation fell short. 

Legal observers expect the creditors to aggressively challenge Stockton's repayment plan in the next phase of the process. 

By 2009 Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions, and the most generous health care benefit in the state -- coverage for life for all retirees plus a dependent, no matter how long they had worked for the city.