BILL ANALYSIS Ó SB 553 Page 1 Date of Hearing: June 26, 2013 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT K.H. "Katcho" Achadjian, Chair SB 553 (Yee) - As Amended: May 24, 2013 SENATE VOTE : 39-0 SUBJECT : Local government: assessment: elections procedures. SUMMARY : Imposes additional requirements on local governments when conducting property-related fee ballot proceedings pursuant to Proposition 218. Specifically, this bill : 1)Imposes additional requirements on local governments (used interchangeably with 'agency') when conducting elections to impose or increase property-related fees or charges in addition to any other procedures adopted by the local government pursuant to the authority and requirements granted by the California Constitution. 2)Requires, if the agency opts to submit the proposed fee or charge for approval by a two-thirds vote of the electorate in the affected area, the agency's elections official or his or her designee to conduct an election. Requires, if the election is conducted by the county elections official, that the local government, if other than the county, reimburse the county for the actual and reasonable costs incurred by the county elections official conducting the election. 3)Requires, if the agency opts to submit the proposed fee or charge for approval by a majority vote of the property owners who will be subject to the fee or charge, the following procedures in addition to the procedure contained in Section 6 of Article XIIID of the Constitution: a) Requires the phrase "OFFICIAL BALLOT ENCLOSED" to be printed, in no smaller than 16-point bold type, on the face of the envelope in which the notice of election and ballot are mailed. Permits the agency to repeat the same phrase below in a language or languages other than English; b) Requires the ballot to include the agency's address for return of the ballot, the date and location where the ballots will be tabulated, and a place where the person SB 553 Page 2 returning it may indicate his or her name, a reasonable identification of the parcel, and his or her support or opposition to the proposed fee; c) Requires the ballots to be tabulated in a location accessible to the public; d) Requires the ballot to be in a form that conceals its content once it is sealed by the person submitting it; e) Requires the ballot to be sealed until the ballot tabulation commences; f) Requires an impartial person designated by the agency who does not have a vested interest in the outcome of the proposed fee to tabulate the ballots submitted in support or opposition to the proposed fee, and provides that an impartial person includes, but is not limited to, the clerk of the agency; g) States that if the agency uses agency personnel for the ballot tabulation or if the agency contracts with a vendor for the ballot tabulation and the vendor or its affiliates participated in the research, design, engineering, public education, or promotion of the fee, the ballots shall be unsealed and tabulated in public view so as to permit all interested persons to meaningfully monitor the accuracy of the tabulation process; h) Allows the ballot tabulation to be continued to a different time or location accessible to the public, provided that the time and location are announced at the location where the tabulation commenced and is posted by the agency in a location accessible to the public; i) Authorizes the impartial person to use technological methods to tabulate the ballots including, but not limited to, punchcard or optically readable (bar-coded) ballots; j) Requires, during and after tabulation, the ballots and information used to determine the weight of each ballot to be treated as public records, as defined in the Government Code; aa) Requires ballots to be preserved for at least two years SB 553 Page 3 and references the statutes under which agencies may dispose of the ballots after that time; and, bb) States the proceeding shall not constitute an election for voting for the purposes of Article II of the Constitution or of the Elections Code. 4)Contains an operative date of July 1, 2014. 5)Provides that if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to current law. EXISTING LAW : 1)Provides notice, protest, and hearing procedures for the levying of new or increased assessments or property-related fees or charges by local government agencies pursuant to Proposition 218. 2)Defines "agency" to mean any local government including a county, city, city and county, including a charter city or county, any special district, or any other local regional governmental entity. FISCAL EFFECT : This bill is keyed fiscal. COMMENTS : 1)Article XIII D of the California Constitution [Proposition 218, 1996] distinguishes among taxes, assessments and fees for property-related revenues, and requires certain actions before such revenues may be collected. 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. The Constitution defines a fee (or charge) as any levy other than an ad valorem tax, special tax, or assessment that is imposed by a local government on a parcel or on a person as an incident of property ownership, including a user fee for a property-related service. The fee imposed on any parcel or SB 553 Page 4 person cannot exceed the proportional cost of the service that is attributable to the parcel. Additionally, a property-related fee cannot be imposed for general governmental services like police, fire, and library services. Prior to imposing or increasing a property-related fee, the local government is required to identify the parcels, mail a written notice to all the property owners subject to the fee detailing the amount of the fee, the reason for the fee, and the date, time, and location of a public hearing on the proposed fee. No sooner than 45 days after mailing the notice to property owners, the agency must conduct a public hearing on the proposed fee. If a majority of owners of the identified parcels provide written protests against the fee, it cannot be imposed or increased by the agency. Article XIII D, Section 6, subdivision (c) of the California Constitution, provides, "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." The election for the fee is required to be conducted no less than 45 days following the public hearing. Proposition 218 did not establish specific procedures for property-related fee elections, but the Constitution does permit local governments to adopt ballot procedures that are similar to those required by law for assessments. 2)This bill applies many of the requirements in current law for assessment ballot procedures to the elections for property-related fees submitted to property owners . This bill requires specified information to be printed on the ballot and establishes requirements for ballot tabulation, including that the ballots are tabulated in a location accessible to the public and by an impartial person with no vested interest in the outcome. Additionally, this bill requires that the ballots and information used to calculate a weighted vote (if applicable) are to be treated as public records, preserved for at least two years. This bill requires that a local government's elections official, or his or her designee, conduct an election for SB 553 Page 5 property-related fees submitted to the electorate . Under this bill local governments (excluding counties) are required to reimburse the county for the costs of conducting the election if it is conducted by the county elections official. This bill is sponsored by the Howard Jarvis Taxpayers Association. 3)According to the author, "Under current law, individuals who wish to monitor fee ballot elections have neither access to the tabulation process nor the ability to inspect retained ballots after an election, thus eliminating the ability of voters to dispute the results. By extending the same security and accountability to fee ballot measures that have worked very successfully for assessment ballot elections, this bill will enhance the local democratic process by ensuring fair and transparent community elections. This bill would address a lack of transparent guidelines in local elections that generated concern among voters about notification and tabulation procedures, and the ability of voters to dispute elections results." 4)This bill contains provisions similar to AB 2218 (Gaines) of 2008, which would have imposed new restrictions on local governments when conducting property-related fee and assessment ballot proceedings pursuant to Proposition 218. AB 2218 would have required an agency, by a vote of the governing board, to determine whether to submit a fee for approval by a majority of property owners subject to the fee or by a two-thirds vote of the electorate residing in the area of the affected property. If submitted to the electorate for a two-thirds vote, AB 2218 would have authorized a mailed ballot election and required the election to be conducted by a city or county elections official. If submitted to the owners of property for a majority vote, AB 2218 would have required a mailed ballot proceeding, and would have prohibited the ballots from being weighted. AB 2218 was held on the Senate Appropriations Suspense File. SB 321 (Benoit), Chapter 580, Statutes of 2009, imposed additional requirements on local governments when conducting assessment ballot proceedings pursuant to Proposition 218. AB 1260 (Caballero), Chapter 280, Statues of 2007, clarified how a public agency may provide notice when proposing a new, or increasing an existing property-related fee. SB 553 Page 6 5)The Committee may wish to consider if requiring local governments to adopt these procedures takes away flexibility granted under the Constitution to allow locals to determine their own processes. 6)Support arguments : Supporters argue that this bill will ensure more transparency in the conduct of local elections by providing the public with greater access into the process. Opposition arguments : Opposition argues that portions of the bill are too vague and lack clear definitions and guidance for elections officials. REGISTERED SUPPORT / OPPOSITION : Support Howard Jarvis Taxpayers Association [SPONSOR] California Common Cause California Taxpayers Association Opposition California Association of Clerks and Election Officials Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916) 319-3958