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ACA-4 Local government financing: affordable housing and public infrastructure: voter approval.(2017-2018)

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ACA4:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Constitutional Amendment
No. 4

Introduced by Assembly Member Aguiar-Curry
(Coauthors: Assembly Members Chiu, Eggman, Eduardo Garcia, Gloria, Limón, McCarty, Mullin, Rubio, Santiago, and Ting)

February 17, 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 4 of Article XIII   A thereof, by amending Section 2 of, and by adding Section 2.5 to, Article XIII   C thereof, by amending Section 3 of Article XIII   D thereof, and by amending Section 18 of Article XVI thereof, relating to local finance.


LEGISLATIVE COUNSEL'S DIGEST


ACA 4, as introduced, Aguiar-Curry. Local government financing: affordable housing and public infrastructure: voter approval.
(1) The California Constitution prohibits the ad valorem tax rate on real property from exceeding 1% of the full cash value of the property, subject to certain exceptions.
This measure would create an additional exception to the 1% limit that would authorize a city, county, or city and county to levy an ad valorem tax to service bonded indebtedness incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county, as applicable, and the proposition includes specified accountability requirements.
(2) The California Constitution conditions the imposition of a special tax by a local government upon the approval of 2/3 of the voters of the local government voting on that tax, and prohibits these entities from imposing an ad valorem tax on real property or a transactions or sales tax on the sale of real property.
This measure would authorize a local government to impose, extend, or increase a special tax for the purposes of funding the construction, rehabilitation or replacement of public infrastructure or affordable housing, if the proposition proposing that tax is approved by 55% of its voters voting on the proposition and the proposition includes specified accountability requirements. This measure would also make conforming changes to related provisions.
(3) The California Constitution prohibits specified local government agencies from incurring any indebtedness exceeding in any year the income and revenue provided in that year, without the assent of 2/3 of the voters and subject to other conditions. In the case of a school district, community college district, or county office of education, the California Constitution permits a proposition for the incurrence of indebtedness in the form of general obligation bonds for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities, to be adopted upon the approval of 55% of the voters of the district or county, as appropriate, voting on the proposition at an election.
This measure would similarly lower to 55% the voter-approval threshold for a city, county, or city and county to incur bonded indebtedness, exceeding in any year the income and revenue provided in that year, that is in the form of general obligation bonds issued to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing projects, if the proposition proposing that bond includes specified accountability requirements.
Vote: 2/3   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  
Resolved by the Assembly, the Senate concurring, That the Legislature of the State of California at its 2017–18 Regular Session 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 A thereof is amended to read:

SECTION 1.
 (a) The maximum amount of any ad valorem tax on real property shall not exceed One 1 percent (1%) of the full cash value of such that property. The one 1 percent (1%) tax to shall be collected by the counties and apportioned according to law to the districts within the counties.
(b) The limitation provided for in subdivision (a) shall not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any of the following:
(1) Indebtedness approved by the voters prior to before July 1, 1978.
(2) Bonded indebtedness for to fund the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition.
(3) Bonded indebtedness incurred by a school district, community college district, or county office of education for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities, approved by 55 percent of the voters of the district or county, as appropriate, voting on the proposition on or after the effective date of the measure adding this paragraph. November 8, 2000. This paragraph shall apply only if the proposition approved by the voters and resulting in the bonded indebtedness includes all of the following accountability requirements:
(A) A requirement that the proceeds from the sale of the bonds be used only for the purposes specified in Article XIII A, Section 1(b)(3), this paragraph, and not for any other purpose, including teacher and administrator salaries and other school operating expenses.
(B) A list of the specific school facilities projects to be funded and certification that the school district board, community college board, or county office of education has evaluated safety, class size reduction, and information technology needs in developing that list.
(C) A requirement that the school district board, community college board, or county office of education conduct an annual, independent performance audit to ensure that the funds have been expended only on the specific projects listed.
(D) A requirement that the school district board, community college board, or county office of education conduct an annual, independent financial audit of the proceeds from the sale of the bonds until all of those proceeds have been expended for the school facilities projects.
(4) (A) Bonded indebtedness incurred by a city, county, or city and county for the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing, or the acquisition or lease of real property for public infrastructure or affordable housing, approved by 55 percent of the voters of the city, county, or city and county as appropriate, voting on the proposition on or after the effective date of the measure adding this paragraph. This paragraph shall apply only if the proposition approved by the voters and resulting in the bonded indebtedness includes all of the following accountability requirements:
(i) A requirement that the proceeds from the sale of the bonds be used only for the purposes specified in this paragraph, and not for any other purpose, including city, county, or city and county employee salaries and other operating expenses.
(ii) A list of the specific projects to be funded, and a certification that the city, county, or city and county has evaluated alternative funding sources.
(iii) A requirement that the city, county, or city and county conduct an annual, independent performance audit to ensure that the funds have been expended only on the specific projects listed.
(iv) A requirement that the city, county, or city and county conduct an annual, independent financial audit of the proceeds from the sale of the bonds until all of those proceeds have been expended for the public infrastructure or affordable housing projects, as applicable.
(v) A requirement that the city, county, or city and county post the audits required by clauses (iii) and (iv) in a manner that is easily accessible to the public.
(vi) A requirement that the city, county, or city and county appoint a citizens’ oversight committee to ensure that bond proceeds are expended only for the purposes described in the measure approved by the voters.
(B) For purposes of this paragraph, “affordable housing” shall include housing developments, or portions of housing developments, that provide workforce housing affordable to households earning up to 150 percent of countywide median income, and housing developments, or portions of housing developments, that provide housing affordable to lower, low-, or very low income households, as those terms are defined in state law.
(C) For purposes of this paragraph, “public infrastructure” shall include, but is not limited to, projects that provide any of the following:
(i) Water or protect water quality.
(ii) Sanitary sewer.
(iii) Treatment of wastewater or reduction of pollution from stormwater runoff.
(iv) Protection of property from impacts of sea level rise.
(v) Parks.
(vi) Open space and recreation facilities.
(vii) Improvements to transit and streets and highways.
(viii) Flood control.
(ix) Broadband expansion in underserved areas.
(x) Local hospital construction.
(c) Notwithstanding any other provisions of law or of this Constitution, a school districts, district, community college districts, and district, county offices office of education education, city, county, or city and county may levy a 55 percent vote ad valorem tax pursuant to subdivision (b).

Second—

 That Section 4 of Article XIII A thereof is amended to read:

SEC. 4.
 Cities, Counties and special districts, Except as provided by Section 2.5 of Article XIII C, a city, county, or special district, by a two-thirds vote of the qualified electors of such district, its voters voting on the proposition, may impose special taxes on such district, a special tax within that city, county, or special district, except an ad valorem taxes tax on real property or a transaction transactions tax or sales tax on the sale of real property within such City, County that city, county, or special district.

Third—

 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 Any tax imposed by any a local government shall be deemed to be is either a general taxes tax or a special taxes. Special purpose districts tax. A special district or agencies, agency, including a school districts, shall have no power district, has no authority to levy a general taxes. tax.
(b) No A local government may 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 may continue to be imposed only if that general tax is 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 no later than November 6, 1996, and in compliance with subdivision (b).
(d) No Except as provided by Section 2.5, a local government may 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 is not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved.

Fourth—

 That Section 2.5 is added to Article XIII C thereof, to read:

SEC. 2.5.
 (a) The imposition, extension, or increase of a special tax by a local government for the purpose of funding the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing, or the acquisition or lease of real property for public infrastructure or affordable housing, is subject to approval by 55 percent of the voters in the local government voting on the proposition, if all of the following conditions are met:
(1) The proposition is approved by a majority vote of the membership of the governing board of the local government.
(2) The proposition contains all of the following accountability requirements:
(A) A requirement that the proceeds of the tax only be used for the purposes specified in the proposition, and not for any other purpose, including general employee salaries and other operating expenses of the local government.
(B) A list of the specific projects that are to be funded by the tax, and a certification that the local government has evaluated alternative funding sources.
(C) A requirement that the local government conduct an annual, independent performance audit to ensure that the proceeds of the special tax have been expended only on the specific projects listed in the proposition.
(D) A requirement that the local government conduct an annual, independent financial audit of the proceeds from the tax during the lifetime of that tax.
(E) A requirement that the local government post the audits required by subparagraphs (C) and (D) in a manner that is easily accessible to the public.
(F) A requirement that the local government appoint a citizens’ oversight committee to ensure the proceeds of the special tax are expended only for the purposes described in the measure approved by the voters.
(b) For purposes of this section, the following terms have the following meanings:
(1) “Affordable housing” shall include housing developments, or portions of housing developments, that provide workforce housing affordable to households earning up to 150 percent of countywide median income, and housing developments, or portions of housing developments, that provide housing affordable to lower, low-, or very low income households, as those terms are defined in state law.
(2) “Public infrastructure” shall include, but is not limited to, the projects that provide any of the following:
(A) Water or protect water quality.
(B) Sanitary sewer.
(C) Treatment of wastewater or reduction of pollution from stormwater runoff.
(D) Protection of property from impacts of sea level rise.
(E) Parks.
(F) Open space and recreation facilities.
(G) Improvements to transit and streets and highways.
(H) Flood control.
(I) Broadband expansion in underserved areas.
(J) Local hospital construction.

Fifth—

 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.A or Section 2.5 of Article XIII C.
(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.

Sixth—

 That Section 18 of Article XVI thereof is amended to read:

SEC. 18.
 (a) No A county, city, town, township, board of education, or school district, shall not incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such that year, without the assent of two-thirds of the voters of the public entity voting at an election to be held for that purpose, except that with respect to any such public entity which is authorized to incur indebtedness for public school purposes, any proposition for the incurrence of indebtedness in the form of general obligation bonds for the purpose of repairing, reconstructing or replacing public school buildings determined, in the manner prescribed by law, to be structurally unsafe for school use, shall be adopted upon the approval of a majority of the voters of the public entity voting on the proposition at such election; nor unless before or at the time of incurring such indebtedness provision shall be made for the collection of an annual tax sufficient to pay the interest on such indebtedness as it falls due, and to provide for a sinking fund for the payment of the principal thereof, on or before maturity, which shall not exceed forty years from the time of contracting the indebtedness.
(b) Notwithstanding subdivision (a), on or after the effective date of the measure adding this subdivision, in the case of any school district, community college district, or county office of education, any proposition for the incurrence of indebtedness in the form of general obligation bonds for the construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities, for the purposes described in paragraph (3) or (4) of subdivision (b) of Section 1 of Article XIII A, shall be adopted upon the approval of 55 percent of the voters of the district or county, school district, community college district, or county office of education, or city, county, or city and county, as appropriate, voting on the proposition at an election. This subdivision shall apply only to a proposition for the incurrence of indebtedness in the form of general obligation bonds for the purposes specified in this subdivision only if the proposition meets all of the accountability requirements of paragraph (3) or (4) of subdivision (b) (b), as appropriate, of Section 1 of Article XIII A.
(c) When two or more propositions for incurring any indebtedness or liability are submitted at the same election, the votes cast for and against each proposition shall be counted separately, and when two-thirds or a majority or 55 percent of the voters, as the case may be, voting on any one of those propositions, vote in favor thereof, the proposition shall be deemed adopted.