BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2170| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2170 Author: Mullin (D) Amended: 6/17/14 in Senate Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 6/11/14 AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu NOES: Knight, Walters ASSEMBLY FLOOR : 44-26, 4/28/14 - See last page for vote SUBJECT : Joint powers authorities: common powers SOURCE : Author DIGEST : This bill specifies that the common powers that public agencies may jointly exercise pursuant to a joint powers agreement include the authority to levy a fee, assessment, or a tax. ANALYSIS : The Joint Exercise of Powers Act allows two or more public agencies to enter an agreement to jointly exercise any power held in common by the parties to the agreement. Each public agency must independently possess the authority to perform the activity that is to be performed jointly pursuant to a joint powers agreement. The courts have found that the Act grants no new powers to public agencies, but merely sets up a new procedure for the exercise of existing powers. Sometimes an agreement creates a new, separate government called CONTINUED AB 2170 Page 2 a joint powers authority (JPA). Public officials have created more than 700 JPAs, which are confederations of governments working together for common purposes. A joint powers agreement must 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 for in the agreement. This bill specifies that the common powers that public agencies may jointly exercise pursuant to a joint powers agreement include, but are not limited to, the authority to levy a fee, assessment, or a tax. This bill enacts a legislative finding and declaration stating that, because a JPA has all powers common to the contracting parties, so long as those powers are specified in the joint powers agreement, the bill's provision do not constitute a change in, but are declaratory of, existing law. Comments Several JPAs in California already impose taxes, fees, or assessments using powers that are held in common by all of the public agencies participating in those JPAs. However, some local officials are reluctant to use a JPA to levy taxes, assessments, or fees because the Joint Exercise of Powers Act does not explicitly extend that authority to JPAs. In response to this statutory ambiguity, and the conflicting legal interpretations that it invites, this bill clarifies that JPAs may, consistent with their existing authority under the Joint Exercise of Powers Act; raise revenues through fees or taxes to fund important community projects. Because a JPA only allows public agencies to exercise their existing powers, this bill does not grant any new revenue powers to local governments. This bill also does not change any of the voter-approval thresholds or other procedural requirements that state law imposes on local, taxes, assessments, and fees. Related legislation Assembly Bill 418 (Mullin) allows the City/County Association of Governments of San Mateo County, a JPA, to impose a special tax or property-related fee to fund storm water management programs. CONTINUED AB 2170 Page 3 FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 6/17/14) California Special Districts Association California State Association of Counties City/County Association of Governments of San Mateo County John Stewart Company League of California Cities Non-Profit Housing Association of Northern California San Francisco Planning and Urban Research SPUR OPPOSITION : (Verified 6/17/14) California Chamber of Commerce California Taxpayers Association Howard Jarvis Taxpayers Association ARGUMENTS IN SUPPORT : According to the author, "AB 2170 simply makes clear that JPAs may, consistent with their existing authority, increase revenue for important community projects subject to all voter approval requirements provided under Proposition 218. "AB 2170 provides that the parties to the JPA may exercise any power common to the contracting parties, including, but not limited to, the authority to levy a fee or tax." ARGUMENTS IN OPPOSITION : The Howard Jarvis Taxpayers Association opposes this bill and writes, "AB 2170 would give joint powers authorities (JPA) 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." CONTINUED AB 2170 Page 4 ASSEMBLY FLOOR : 44-26, 4/28/14 AYES: Alejo, Ammiano, Atkins, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Daly, Dickinson, Eggman, Fong, Garcia, Gomez, Gonzalez, Gordon, Gray, Hall, Holden, Jones-Sawyer, Levine, Lowenthal, Mullin, Nazarian, Pan, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth Gaines, Gatto, Gorell, Grove, Hagman, Harkey, Jones, Linder, Logue, Maienschein, Melendez, Muratsuchi, Nestande, Patterson, Quirk-Silva, Salas, Wagner, Waldron, Wilk NO VOTE RECORDED: Cooley, Dababneh, Fox, Frazier, Roger Hernández, Mansoor, Medina, Olsen, V. Manuel Pérez, Vacancy AB:d 6/18/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED