BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  ACA 4
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          Date of Hearing:   July 6, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

               ACA 4 (Blumenfield) - As Introduced:  December 6, 2010 

          Policy Committee:       Local Government            Vote:    6-2

          Urgency:     No State Mandated Local Program: No           
          Reimbursable:


           SUMMARY  

          This bill proposes amending the California Constitution to allow 
          a city, county or special district to incur bonded indebtedness 
          in order to fund specified public improvements and facilities, 
          with 55% voter approval (rather than two-thirds).  Specifically, 
          this bill:  

          1)Lowers to 55% the voter-approval threshold for a city, county, 
            or city and county, to incur bonded indebtedness, in the form 
            of GO bonds for the construction, rehabilitation, or 
            replacement of specified infrastructure.

          2)Allows a city, county, or city and county, or special district 
            that has incurred indebtedness in the form of general 
            obligation (GO) bonds for specified infrastructure approved by 
            55% of the voters within the jurisdiction to increase property 
            taxes above the existing constitutional limit to pay off the 
            principal and interest of the infrastructure GO bonds.

          3)Defines the allowable infrastructure purposes to be any of the 
            following:

             a)   Public improvements, including, but not limited to, 
               improvements to transportation infrastructures, streets, 
               highways, sewer systems, water systems, wastewater systems 
               and park and recreation facilities.

             b)   Facilities or buildings used primarily to provide 
               sheriff, police or fire protection services to the public, 
               including the furnishing and equipping of those facilities 
               or buildings.








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           FISCAL EFFECT  

          One-time GF costs of about $220,000 to include an analysis of 
          this measure, and arguments for and against the measure, in the 
          state voter pamphlet.

           COMMENTS  

           1)Purpose  .  The author estimates California needs at least an 
            additional $500 billion by 2025 for maintenance, repair and 
            upkeep of the sewer and storm drain systems, streets and 
            sidewalks, police stations, jails, fire stations and 
            libraries.  The author argues that because the state is not 
            meeting the infrastructure needs of our growing population, 
            there is great need for additional financial tools to make 
            these necessary investments, and, that these infrastructure 
            investments will enhance public safety, increase the value of 
            real estate and improve the quality of life in communities as 
            vital facilities will be better maintained to safely serve 
            today's population.

           2)Background  .  Article XIIIA of the California Constitution 
            allows for bonded indebtedness by local governments.  The 
            current threshold to pass general obligation bond measures for 
            cities, counties and special districts is a 2/3 vote.  
            However, a school district, community college district or 
            county office of education may fund the construction, 
            reconstruction, rehabilitation or replacement of school 
            facilities, including the furnishing and equipping of school 
            facilities, among other provisions, if approved by 55% of the 
            voters. 

           3)Previous legislation  .  ACA 9 (Huffman) of 2009 would have 
            created an additional exception to the 1% property tax limit 
            for a rate imposed by a city, county, city and county, or 
            special district to service bond-debt for specified public 
            improvements approved by 55% of the voters of the city, 
            county, city and county, or special district.  This bill was 
            held on the Assembly floor.  ACA 10 (Feuer), 2008, would have 
            created an additional exception to the 1% ad valorem property 
            tax for transportation general obligation bonds with 55% voter 
            approval.  This bill was not heard in policy committee.
           
           4)Support.   The California Professional Firefighters contend 








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            that money invested in infrastructure creates an increase in 
            tax revenue that can be used to help local governments fund 
            police, fire, schools, and other core services.

           5)Opposition.   The California Taxpayers Association contend 
            creating another exception to Proposition 13's 1% limit on ad 
            valorem property taxes sets a bad precedent, thereby eroding 
            taxpayer protections.




           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081