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SCA-15 Local government taxation, assessments, fees, and charges: voter approval. (2017-2018)

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Constitutional Amendment No. 15


Introduced by Senator Nguyen
(Principal coauthor: Senator Bates)
(Coauthors: Senators Anderson, Berryhill, Cannella, Fuller, Gaines, Moorlach, Morrell, Nielsen, Stone, Vidak, and Wilk)

September 14, 2017


A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending Sections 1 and 2 of Article XIII C thereof, and by amending Sections 2 and 3 of Article XIII D thereof, relating to local government.


LEGISLATIVE COUNSEL'S DIGEST


SCA 15, as introduced, Nguyen. Local government taxation, assessments, fees, and charges: voter approval.
The California Constitution conditions the imposition of a general tax by a local government upon the approval of a majority of its voters voting on the tax. The California Constitution requires the election for the vote on a general tax to be consolidated with a regularly scheduled election for members of the governing body of the local government, except in cases where the members of the governing body of the local government, by a unanimous vote, declare an emergency. The California Constitution conditions the imposition of a special tax by a local government upon the approval of 2/3 of the voters voting on the tax. The California Constitution defines “local government” for these purposes to mean any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity.
This measure would specify that the electorate exercising its initiative power is within the definition of “local government,” and that these conditions and requirements apply to the exercise of that power.
The California Constitution prohibits an assessment or property-related fee or charge from being assessed by an agency on any parcel of property unless it meets certain requirements. Existing provisions of the California Constitution require an agency to follow specified procedures in imposing or increasing an assessment or property-related fee or charge, and condition the imposition or increase of an assessment or property-related fee or charge, with certain exceptions, upon the absence of a majority protest on the part of owners of affected parcels and, in the case of a property-related fee or charge, upon approval by either a majority vote of the owners of the subject parcels or a 2/3 vote of the voters residing in the affected area. The California Constitution defines “agency” for these purposes to mean any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity.
This measure would specify that the electorate exercising its initiative power is within the definition of “agency,” and that the existing requirements and procedures apply to the exercise of that power.
Vote: 2/3   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

Resolved by the Senate, the Assembly concurring, That the Legislature of the State of California at its 2017–18 commencing on the fifth day of December 2016, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, that the Constitution of the State be amended as follows:

First—

 That Section 1 of Article XIII C thereof is amended to read:

SECTION 1.
 Definitions.  As used in this article:
(a) “General tax” means any tax imposed for general governmental purposes.
(b) “Local government” means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity. Notwithstanding any other law including, but not limited to, Articles II and XI, “local government” includes the electorate exercising its local initiative power, whether that power is derived from constitutional, statutory, or local government charter authority and without regard to whether the exercise of the local initiative power is direct or indirect.
(c) “Special district” means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies.
(d) “Special tax” means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.
(e) As used in this article, “tax” means any levy, charge, or exaction of any kind imposed by a local government, except the following:
(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.
(2) A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.
(3) A charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.
(4) A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.
(5) A fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law.
(6) A charge imposed as a condition of property development.
(7) Assessments and property-related fees imposed in accordance with the provisions of Article XIII D.
The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.

Second—

 That Section 2 of Article XIII C thereof is amended to read:

SEC. 2.
 Local Government Tax Limitation.  Notwithstanding any other provision of this Constitution:
(a) All taxes A tax imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes. is either a general tax or a special tax. A special district or agency, including a school district, has no authority to levy a general tax.
(b) No A local government may shall not impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall is not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body.
(c) Any general tax imposed, extended, or increased, without voter approval, by any local government on or after January 1, 1995, and prior to the effective date of this article, shall November 6, 1996, may continue to be imposed only if approved by a majority vote of the voters voting in an election on the issue of the imposition, which election shall be held within two years of the effective date of this article is held no later than November 6, 1998, and in compliance with subdivision (b).
(d) No A local government may shall not impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be is not deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved.
(e) Notwithstanding any other law including, but not limited to, Articles II and XI, this section, including, but not limited to, the voter approval requirements in subdivisions (b) and (d), applies to the exercise of the local initiative power, whether that power is derived from constitutional, statutory, or local government charter authority and without regard to whether the exercise of the local initiative power is direct or indirect. This subdivision shall not be construed to alter the scope of, or otherwise limit the exercise of, the local initiative power pursuant to Section 3 of this article.

Third—

 That Section 2 of Article XIII D thereof is amended to read:

SEC. 2.
 Definitions.  As used in this article:
(a) “Agency” means any local government as defined in subdivision (b) of Section 1 of Article XIII C. Notwithstanding any other law including, but not limited to, Articles II and XI, “agency” includes the electorate exercising its local initiative power, whether that power is derived from constitutional, statutory, or local government charter authority and without regard to whether the exercise of the local initiative power is direct or indirect.
(b) “Assessment” means any levy or charge upon real property by an agency for a special benefit conferred upon the real property. “Assessment” includes, but is not limited to, “special assessment,” “benefit assessment,” “maintenance assessment” and “special assessment tax.”
(c) “Capital cost” means the cost of acquisition, installation, construction, reconstruction, or replacement of a permanent public improvement by an agency.
(d) “District” means an area determined by an agency to contain all parcels which will receive a special benefit from a proposed public improvement or property-related service.
(e) “Fee” or “charge” means any levy other than an ad valorem tax, a special tax, or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including a user fee or charge for a property related service.
(f) “Maintenance and operation expenses” means the cost of rent, repair, replacement, rehabilitation, fuel, power, electrical current, care, and supervision necessary to properly operate and maintain a permanent public improvement.
(g) “Property ownership” shall be deemed to include tenancies of real property where tenants are directly liable to pay the assessment, fee, or charge in question.
(h) “Property-related service” means a public service having a direct relationship to property ownership.
(i) “Special benefit” means a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute “special benefit.”

Fourth—

 That Section 3 of Article XIII D thereof is amended to read:

SEC. 3.
 Property Taxes, Assessments, Fees and Charges Limited. (a) No An agency shall not assess a tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except:
(1) The ad valorem property tax imposed pursuant to Article XIII and Article XIII A.
(2) Any special tax receiving a two-thirds vote pursuant to Section 4 of Article XIII A.
(3) Assessments as provided by this article.
(4) Fees or charges for property related property-related services as provided by this article.
(b) For purposes of this article, fees for the provision of electrical or gas service shall are not be deemed charges or fees imposed as an incident of property ownership.
(c) Notwithstanding any other law including, but not limited to, Articles II and XI, this article, including, but not limited to, Sections 4 and 6, applies to the exercise of the local initiative power, whether that power is derived from constitutional, statutory, or local government charter authority and without regard to whether the exercise of the local initiative power is direct or indirect. This subdivision shall not be construed to alter the scope of, or otherwise limit the exercise of, the local initiative power pursuant to Section 3 of Article XIII C. This subdivision shall not be construed to authorize or otherwise allow the exercise of the local initiative power where exercise of that power is not lawful or otherwise not permitted with respect to an assessment, fee, or charge.