BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2170
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          ASSEMBLY THIRD READING
          AB 2170 (Mullin)
          As Introduced  February 20, 2014
          Majority vote 

           LOCAL GOVERNMENT    7-2                                         
           
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          |Ayes:|Achadjian, Levine, Alejo, |     |                          |
          |     |Bradford, Gordon, Mullin, |     |                          |
          |     |Rendon                    |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Melendez, Waldron         |     |                          |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 

           SUMMARY  :  Specifies that local agencies may jointly exercise the  
          authority to levy a fee or tax.  Specifically,  this bill  :

          1)Specifies that, if authorized by their legislative or other  
            governing bodies, two or more public agencies may, pursuant to  
            the Joint Exercise of Powers Act (the Act), jointly exercise  
            the authority to levy a fee or tax.

          2)Finds and declares that, pursuant to the Act, a joint powers  
            authority has all powers common to the contracting parties, so  
            long as those powers are specified in the joint powers  
            agreement; therefore, the amendments to the Act by this bill  
            do not constitute a change in, but are declaratory of,  
            existing law.

           EXISTING LAW  :

          1)Allows, pursuant to the Act, two or more public agencies by  
            agreement to jointly exercise any power common to the  
            contracting parties, as specified, 
          if authorized by their legislative or other governing bodies.  

          2)Requires, pursuant to Proposition 13 of 1978, two-thirds voter  
            approval for a special tax.  

          3)Provides, pursuant to Proposition 218 of 1996, specified  
            notice, protest, and hearing procedures for the levying of new  








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            or increased assessments or property related fees or charges  
            by local government agencies.  

           FISCAL EFFECT  :  None

           COMMENTS  :   

          1)Purpose of this bill.  This bill specifies that local agencies  
            that enter into joint powers agreements pursuant to the Act  
            are allowed, pursuant to that agreement, to levy a fee or tax.  
             This bill is author-sponsored.

          2)Author's statement.  According to the author, "The Joint  
            Exercise of Powers Act authorizes local public agencies to  
            exercise common powers and to form joint powers agencies (JPA)  
            for purposes of jointly receiving or providing specific  
            services.  Pursuant to the Act, two or more public agencies  
            may by agreement jointly exercise any power common to them.  A  
            JPA exercises the specified common powers on behalf of the  
            contracting agencies.  The agreement must expressly state the  
            purpose of the JPA or the power to be exercised, and must  
            provide for the method by which the purpose will be  
            accomplished or the manner in which the power will be  
            exercised.  A JPA may exercise only the powers expressly  
            provided in the agreement.

            "A JPA is a public entity separate from its constituent  
            contracting parties.  Generally, a joint powers agreement  
            grants no new powers, but merely sets up a new procedure for  
            the exercise of existing powers.  A JPA is required to comply  
            with those procedural restrictions that apply to one of the  
            contracting public agencies.  

            "Though existing law seems to provide such authority, some  
            officials worry that they may lack the authority to levy taxes  
            or impose property related fees because the Joint Exercise of  
            Powers Act does not explicitly extend that authority to JPAs."

          3)Joint Exercise of Powers Act.  JPAs have existed in California  
            for nearly 100 years, and were originally created to allow  
            multiple local governments in a region to pool resources to  
            meet common needs.  The Act authorizes state and local  
            agencies to create and use a joint powers agreement, which is  
            a legal document that allows the contracting parties to  








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            exercise powers that are common to all of the contracting  
            parties.  A joint powers agreement can be administered by one  
            of the contracting agencies, or it can be carried out by a  
            new, separate public entity.  Joint powers agreements are an  
            attractive tool for local governments because they facilitate  
            more efficient service provision through collaboration, and  
            they allow local entities to issue bonds without voter  
            ratification.  Current law authorizes JPAs to jointly exercise  
            any power common to the contracting parties, if authorized by  
            their legislative or governing body.  However, current law is  
            silent on a JPA's explicit authority to levy a fee or a tax.  

          4)The California Constitution distinguishes among taxes,  
            assessments and fees for property related revenues, and  
            requires certain actions before such revenues may be  
            collected.  For a property related fee, Proposition 218  
            requires local officials to identify the parcels, calculate  
            the fee for each parcel, and conduct a majority protest  
            proceeding 45 days after mailing notice of a new fee to all  
            fee payers.  Additionally, Article XIII D, Section 6,  
            subdivision (c) of the California Constitution provides that,  
            "Except for fees or charges for sewer, water, and refuse  
            collection services, no property related fee or charge shall  
            be imposed or increased unless and until that fee or charge is  
            submitted and approved by a majority vote of the property  
            owners of the property subject to the fee or charge or, at the  
            option of the agency, by a two-thirds vote of the electorate  
            residing in the affected area."  

            Counties and other local agencies with police powers may  
            impose any one of these options on property owners, after  
            completing the Proposition 218 process.  Special districts  
            created by statute, however, must have specific authority for  
            each of these revenue sources.

          5)Related legislation.  AB 418 (Mullin) of the current  
            legislative session, pending in the Assembly, authorizes the  
            City/County Association of Governments (C/CAG) of San Mateo  
            County to impose a special tax, in compliance with Article  
            XIII C of the California Constitution, or to impose a property  
            related fee, in compliance with Article XIII D of the  
            California Constitution, to implement stormwater management  
            programs consistent with the joint powers agreement of C/CAG's  
            member agencies.








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            AB 2046 (Gomez) of the current legislative session, pending in  
            the Assembly, authorizes California JPAs to issue bonds and  
            enter into loan agreements to finance or refinance private  
            projects located outside this state, as specified.

          6)Arguments in support.  The California State Association of  
            Counties and the League of California Cities, in support,  
            assert, "The law governing joint powers authorities has always  
            allowed the contracting parties to exercise any common powers,  
            as long as they are specified in the joint powers agreement,  
            therefore, the statement that the bill is declaratory of  
            existing law is important.  This bill would clarify current  
            law so that there could be no doubt that this authority  
            extends to the imposition of fees and taxes."

          7)Arguments in opposition.  The Howard Jarvis Taxpayers  
            Association, in opposition, states, "AB 2170 would give JPAs  
            the authority to levy a fee or tax.  Currently, it is an open  
            legal question whether JPA's have the authority to do this,  
            even if they follow the appropriate constitutional guidelines  
            specified under Propositions 13 & 218.  While AB 2170 would  
            clarify this question, we believe it is unnecessary.  Local  
            government entities do not need new revenue generating  
            authority.  They can either approve a special tax with a  
            two-thirds vote, or a Proposition 218 fee or assessment with a  
            majority vote of the affected property owners."

           
          Analysis Prepared by  :    Angela Mapp / L. GOV. / (916) 319-3958 


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