A judge ruled Monday that online travel sites such as Expedia do not owe the city of Anaheim $21 million in hotel taxes for rooms booked over the Internet, the first ruling of its kind in California on an issue that has bubbled up in cities across the country.

In her ruling, Los Angeles Superior Court Judge Carolyn Kuhl set aside last year's decision by a city hearing officer that the travel booking sites owed $21.3 million to Anaheim in back hotel taxes.

The city is reviewing its options, spokeswoman Marty DeSollar said in an e-mailed statement.

A coalition of the online travel sites, including Priceline, Expedia Inc., Orbitz, Hotwire, Hotels.com and Trip Network Inc., filed papers asking to overturn the hearing officer's ruling.

Such disputes are increasingly common between online travel companies and tourist-dependent cities.

Lawsuits or complaints have been filed around the country by cities or customers, including in Georgia, Maryland, Texas, New York, Illinois, Pennsylvania and in the California cities of San Diego and San Francisco.

A conservative legal foundation on Wednesday asked federal regulators to give a green light to corporations and unions to begin spending their treasuries to influence this year's congressional elections.

The James Madison Center for Free Speech asked the Federal Election Commission to formally throw out its rules that restrict corporate and union spending on politics, saying the step is needed to implement last week's Supreme Court decision that freed such groups to get more directly involved in election campaigns.

"This is an election year," said James Bopp, the center's attorney. "Speakers will want to exercise the First Amendment rights to political speech" outlined in last week's decision, he said, "so the FEC should adopt these regulations quickly."

Without a formal declaration by the FEC, Bopp said, advocacy groups will be hesitant to take full advantage of the new leeway the Supreme Court granted in last week's controversial 5-4 ruling, fearing they might be subject to enforcement action.

The state Supreme Court ruled in a 5-4 vote Tuesday that the governor has line-item veto power on sections of legislation that place "conditions or restrictions on previously appropriated funds.”

The decision handed down Tuesday ends a legal challenge from Senate President Pro Tempore Glenn Coffee, R-Oklahoma City, and House Speaker Chris Benge, R-Tulsa.

"This was never a hostile lawsuit, nor was it an attack on the governor’s constitutional right to line-item veto,” said Benge, R-Tulsa. "We were merely seeking clarification on the proper use of the line-item veto, which we have now received from the courts.

"While we disagree with the ruling, and agree with the dissenting opinion, we respect the court’s decision,” he said.

Legislative leaders filed two lawsuits asking the Supreme Court to decide whether Gov. Brad Henry has the authority after he used the line-item veto to change certain sections of legislation that affected agency budgets. Attorneys for Coffee and Benge argued that the governor only had the power to veto portions of appropriation bills.

A federal court order to release 40,000 inmates to relieve prison crowding in California was delayed for up to a year on Tuesday, pending a final review by the U.S. Supreme Court.
Justices turned down a challenge by Gov. Arnold Schwarzenegger's administration to the court order that forces the state to reduce its prison population. The action opens the door for another appeal by the state.

A three-judge federal panel last summer ordered the state Department of Corrections to reduce the prison population by about 40,000 inmates over two years in order to provide inmates with a constitutional level of health care. At issue for the Schwarzenegger administration is whether the judicial panel exceeded its authority in ordering the release of inmates.

"The U.S. Supreme Court's decision today is a win for the state because it guarantees there will be no early release of prisoners while the three-judge panel's latest order is appealed," said Andrea Hoch, the governor's legal affairs secretary.

The high court's decision to dismiss the appeals for lack of jurisdiction occurred as part of a long-running legal battle over California's 33 adult prisons and their often-criticized medical care for inmates.

A panel of three federal judges in August ordered the state's prison population be reduced in stages over two years to relieve the overcrowding that has caused inadequate medical and mental health care.

California's prisons have been filled to nearly twice their designed capacity of 80,000, according to the ruling.

The Supreme Court noted the state has come up with a plan to comply with the lower court's order but the three-judge panel earlier this month put it on hold pending the outcome of the appeals to the high court. With the appeals dismissed, the plan can go forward.

Improving conditions in the nation's largest state prison system has become a major legal, political and budget issue in view of California's budget crisis and high unemployment.