BILL ANALYSIS Ó AB 2170 Page 1 ASSEMBLY THIRD READING AB 2170 (Mullin) As Introduced February 20, 2014 Majority vote LOCAL GOVERNMENT 7-2 ----------------------------------------------------------------- |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 AB 2170 Page 2 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 AB 2170 Page 3 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. AB 2170 Page 4 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 FN: 0003118