Amended in Senate February 26, 2013

Senate Constitutional Amendment No. 7

Introduced by Senator Wolk

(Coauthor: Senator Leno)

(Coauthor: Assembly Member Williams)

December 3, 2012

Senate Constitutional Amendment No. 7—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending begin delete Section end delete begin insert Sections end insert 1 and 4 of, and by adding Section 4.5 to, Article XIII A thereof, by amending Section 2 of Article XIII C thereof, by amending Section 3 of Article XIII D thereof, and by amending Section 18 of Article XVI thereof, relating to public libraries.

LEGISLATIVE COUNSEL’S DIGEST

SCA 7, as amended, Wolk. Local government financing: public libraries: 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 for a rate imposed by a city, county, city and county, or special district to service bonded indebtedness incurred to fund public library facilities, that is approved by 55% of the voters of the city, county, city and county, or special district, as begin delete applicable. end delete begin insert applicable, if the proposition meets specified requirements. end insert

(2) The California Constitution conditions the imposition of a special tax by a city, county, or special district upon the approval of 2⁄3 of the voters of the city, county, or special district 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 the imposition, extension, or increase of a special tax by a city, county, city and county, or special district for the purpose of funding public libraries, upon the approval of 55% of its voters voting on the proposition, begin delete and end delete begin insert if the proposition meets specified requirements. This measure end insert 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 public libraries.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

Resolved by the Senate, the Assembly concurring, That the
Legislature of the State of California at its 2013-14 Regular
Session commencing on the third day of December 2012,
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 1 percent of the full cash
value of that property. The 1 percent tax 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 July 1, 1978.

(2) Bonded indebtedness for 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 to fund
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
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 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)  begin insert (A) end insert begin insert   end insert Bonded indebtedness, approved by 55 percent of the
voters of a city, county, city and county, or special district, as
applicable, voting on the proposition on or after the effective date
of the measure adding this paragraph, incurred by the city, county,
city and county, or special district to fund the construction,
reconstruction, rehabilitation, or replacement of public library
facilities, including the furnishing and equipping of public library
facilities, or the acquisition or lease of real property for public
library facilities. begin insert This paragraph shall apply only if the proposition
approved by the voters includes all of the following accountability
requirements: end insert

begin insert

(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 personnel and operating expenses
of the public library.

end insert begin insert

(ii) A list of the specific public library facilities projects to be
funded and certification that the city, county, city and county, or
special district has evaluated the degree to which existing public
library facilities are inadequate in meeting the needs of, and the
degree to which the proposed public library facilities projects
respond to the needs of, the residents in the library service area,
in the development of that list.

end insert begin insert

(iii) A requirement that the city, county, city and county, or
special district conduct an annual, independent performance audit
to ensure that the funds have been expended only on the public
library facilities projects listed.

end insert begin insert

(iv) A requirement that the city, county, city and county, or
special district 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 library facilities projects.

end insert begin insert

(B) For purposes of this paragraph, “special district” has the
same meaning as that term is used in subdivision (c) of Section 1
of Article XIII C, but does not include a redevelopment agency.

end insert

(c) Notwithstanding any other provisions of law or of this
Constitution, a school district, community college district, county
office of education, city, county, city and county, or special district
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.  

Except as provided by Section 4.5, a city, county, or
special district, by a two-thirds vote of its voters voting on the
proposition, may impose a special tax within that city, county, or
special district, except an ad valorem tax on real property or a
transactions tax or sales tax on the sale of real property within that
city, county, or special district.

Third--  

That Section 4.5 is added to Article XIII A thereof, to
read:

SEC. 4.5.  

The imposition, extension, or increase of a special
tax by a city, county, city and county, or special district, as may
otherwise be authorized by law for the purpose of funding public
libraries, is subject to approval by 55 percent of the voters in the
city, county, city and county, or special district, as applicable,
voting on the begin delete proposition. end delete begin insert proposition, if all of the following
conditions are met: end insert

begin insert

(a) The proposition is approved by a majority vote of the
membership of the governing board of a city, county, city and
county, or special district.

end insert begin insert

(b) The proposition contains all of the following accountability
requirements:

end insert begin insert

(1) A list of the specific purposes and programs that are to be
funded.

end insert begin insert

(2) A requirement that the proceeds be used only for the
purposes and programs specified in the proposition, and not for
any other purpose.

end insert begin insert

(3) To ensure compliance with paragraph (2), a requirement
that the governing board of a city, county, city and county, or
special district conduct an annual, independent financial audit of
the amount of special tax proceeds collected and expended, and
the specified purposes and programs funded.

end insert begin insert

(4) To ensure compliance with paragraph (2), a requirement
that the governing board of a city, county, city and county, or
special district establish a citizens’ oversight committee to review
all expenditures of proceeds and financial audits, and report its
findings to the governing board and to the public.

end insert

Fourth--  

That Section 2 of Article XIII C thereof is amended to
read:

SEC. 2.  

Notwithstanding any other provision of this
Constitution:

(a) Any tax imposed by any local government is either a general
tax or a special tax. A special district or agency, including a school
district, has no authority to levy a general tax.

(b) 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 is not
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, 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 no later than November
6, 1996, and in compliance with subdivision (b).

(d) Except as provided by Section 4.5 of Article XIII A, 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 is not deemed to have been
increased if it is imposed at a rate not higher than the maximum
rate so approved.

Fifth--  

That Section 3 of Article XIII D thereof is amended to
read:

SEC. 3.  

(a) An agency shall not assess a tax, assessment, fee,
or charge 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 or, as applicable, a 55-percent vote
pursuant to Section 4.5 of Article XIII A.

(3) Assessments as provided by this article.

(4) Fees or charges for begin delete property related end delete begin insert property-related end insert services
as provided by this article.

(b) For purposes of this article, fees for the provision of electrical
or gas service are not 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)  begin delete No end delete begin insert A end insert county, city, town, township, board of
education, or school begin delete district, end delete begin insert district end insert shall begin insert not end insert incur any
indebtedness or liability in any manner or for any purpose
exceeding in any year the income and revenue provided for 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 begin delete such end delete public entity that 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 that election; nor unless before or at the time of
incurring the indebtedness begin delete , end delete provision shall be made for the
collection of an annual tax sufficient to pay the interest on the
indebtedness as it falls due, and to provide for a sinking fund for
the payment of the principal thereof, on or before maturity begin delete , which end delete
begin insert that end insert shall not exceed begin delete forty end delete begin insert 40 end insert years from the time of contracting
the indebtedness.

(b) Notwithstanding subdivision (a), on or after November 8,
2000, 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, shall be adopted upon the approval of 55 percent of the
voters of the district or 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 if the proposition meets all of the accountability
requirements of paragraph (3) of subdivision (b) of Section 1 of
Article XIII A.

(c) Notwithstanding subdivision (a), on or after the effective
date of the measure adding this subdivision, in the case of any city,
county, or city and county, any proposition to incur indebtedness
in the form of general obligation bonds shall be adopted by 55
percent of the voters of the city, county, or city and county, as
applicable, voting on the proposition at an election, where the
general obligation bonds would fund public libraries, including,
but not limited to, the construction, reconstruction, rehabilitation,
or replacement of public library facilities, the furnishing and
equipping of public library facilities, or the acquisition or lease of
real property for public library facilities.

(d) 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 begin delete or a majority end delete or 55 percent begin insert or a
majority end insert 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.