California Legislature—2015–16 Regular Session

Assembly Constitutional Amendment No. 8

Introduced by Assembly Member Bloom

February 18, 2016

Assembly Constitutional Amendment No. 8—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending Sections 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 water facilities and infrastructure.

LEGISLATIVE COUNSEL’S DIGEST

ACA 8, as introduced, Bloom. Local government financing: water facilities and infrastructure: 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 the construction, reconstruction, rehabilitation, or replacement of wastewater treatment facilities and related infrastructure, potable water producing facilities and related infrastructure, nonpotable water producing facilities and related infrastructure, and stormwater treatment facilities and related infrastructure, that is approved by 55% of the voters of the city, county, city and county, or special district, as applicable, if the proposition meets specified requirements, and would authorize a city, county, city and county, or special district to levy a 55% vote ad valorem tax.

(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 instead condition the imposition, extension, or increase of a special tax by a city, county, city and county, or special district for the purpose of funding wastewater, stormwater, and water treatment, supply and delivery facilities and infrastructure, upon the approval of 55% of its voters voting on the proposition, if the proposition meets specified requirements. This measure 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 the construction, reconstruction, rehabilitation, or replacement of wastewater treatment facilities and related infrastructure, potable water producing facilities and related infrastructure, nonpotable water producing facilities and related infrastructure, and stormwater treatment facilities and related infrastructure.

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

Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2015-16 Regular
Session commencing on the first day of December 2014, 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 begin delete One end delete begin insert 1 end insert percent begin delete (1%) end delete of the
full cash value of begin delete such end delete begin insert that end insert property. The begin delete one end delete begin insert 1 end insert percent begin delete (1%) end delete tax
begin delete to end delete begin insert shall end insert 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 begin delete for end delete begin insert to fund end insert 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 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, approved by 55 percent of the voters of the district or
county, as appropriate, voting on the proposition on or after begin delete the
effective date of the measure adding this paragraph. end delete begin insert November 8,
2000. end insert 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 begin delete Article XIII end delete begin delete   end delete begin delete A, Section
1(b)(3), end delete begin insert this paragraph end insert 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.

begin insert

(4) (A) Bonded indebtedness, approved by 55 percent of the
voters of the city, county, city and county, or special district, as
appropriate, voting on the proposition on or after the effective
date of the measure adding this paragraph, incurred by a city,
county, city and county, or special district to fund the construction,
reconstruction, rehabilitation, or replacement of wastewater
treatment facilities and related infrastructure, potable water
producing facilities and related infrastructure, nonpotable water
producing facilities and related infrastructure, and stormwater
treatment facilities and related infrastructure. 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:

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.

end insert begin insert

(ii) A list of any and all specific facilities and projects to be
funded.

end insert begin insert

(iii) A requirement that the governing board of 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 specific projects listed.

end insert begin insert

(iv) A requirement that the governing board of 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 projects identified.

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, excluding a school district and redevelopment
agency.

end insert

(c) Notwithstanding any other provisions of law or of this
Constitution, school districts, community college districts, and
county offices of education may levy a 55 percent vote ad valorem
tax pursuant to begin insert paragraph (3) of end insert subdivision (b).

begin insert

(d) Notwithstanding any other provisions of law or of this
Constitution, a city, county, city and county, or special district
may levy a 55 percent vote ad valorem tax pursuant to paragraph
(4) of subdivision (b).

end insert

Second--  

That Section 4 of Article XIII A thereof is amended
to read:

SEC. 4.  

begin delete Cities, Counties and special districts, end delete begin insert Except as
provided by Section 4.5, a city, county, or special district, end insert by a
two-thirds vote of begin delete the qualified electors of such district, end delete begin insert its voters
voting on the proposition, end insert may impose begin delete special taxes on such
district, end delete begin insert a special tax within that city, county, or special district, end insert
except begin insert an end insert ad valorem begin delete taxes end delete begin insert tax end insert on real property or a begin delete transaction end delete
begin insert transactions end insert tax or sales tax on the sale of real property within
begin delete such City, County end delete begin insert that city, county, end insert or special district.

Third--  

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

SEC. 4.5.  

(a) 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
wastewater, stormwater, and water treatment, supply and delivery
facilities and infrastructure projects, 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 proposition, if all of the
following conditions are met:

(1) 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.

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

(A) A list of the specific projects that are to be funded.

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

(C) To ensure compliance with subparagraph (B), 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 projects funded.

(D) To ensure compliance with subparagraph (B), 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.

(b) For purposes of this section, “wastewater, stormwater, and
water treatment, storage, supply, and delivery facilities and
infrastructure projects” include, but are not limited to, projects that
promote any of the following:

(1) Water reuse and recycling for nonpotable reuse and direct
and indirect potable reuse.

(2) Local and regional surface and underground water storage,
including groundwater aquifer cleanup or recharge projects.

(3) Regional water conveyance facilities that improve integration
of separate water systems.

(4) Watershed protection, restoration, and management projects,
including projects that reduce the risk of wildfire or improve water
supply reliability.

(5) Stormwater resource management, including, but not limited
to, the following:

(A) Projects to reduce, manage, treat, or capture rainwater or
stormwater.

(B) Projects that provide multiple benefits such as water quality,
water supply, flood control, or open space.

(6) Conjunctive use of surface and groundwater storage
facilities.

(7) Water desalination.

(8) Improvement of water quality, including drinking water
treatment and distribution, groundwater and aquifer remediation,
matching water quality to water use, wastewater treatment, water
pollution prevention, and management of urban and agricultural
runoff.

Fourth--  

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

SEC. 2.  

begin delete Local Government Tax Limitation. end delete Notwithstanding
any other provision of this Constitution:

(a)  begin delete All taxes end delete begin insert Any tax end insert imposed by any local government begin delete shall be
deemed to be end delete begin insert is end insert either begin insert a end insert general begin delete taxes end delete begin insert tax end insert or begin insert a end insert special begin delete taxes. Special
purpose districts end delete begin insert tax. A special district end insert or begin delete agencies, end delete begin insert agency end insert
including begin insert a end insert school begin delete districts, shall have no power end delete begin insert district, has no
authority end insert to levy begin insert a end insert general begin delete taxes. end delete begin insert tax. end insert

(b)  begin delete No end delete begin insert A end insert local government may begin insert not end insert 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 begin delete shall end delete begin insert is end insert
not begin delete be end delete 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, begin delete shall end delete begin insert may end insert
continue to be imposed only if begin insert that general tax is end insert approved by a
majority vote of the voters voting in an election on the issue of the
imposition, which election shall be held begin delete within two years of the
effective date of this article end delete begin insert no later than November 6, 1996, end insert and
in compliance with subdivision (b).

(d)  begin delete No end delete begin insert Except as provided by subdivision (c) or (d) of Section
1 of, or Section 4.5 of, Article XIII end insert begin insert   end insert begin insert A, a end insert local government may begin insert not end insert
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 begin delete shall end delete begin insert is end insert not begin delete be end delete 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.  

begin delete Property Taxes, Assessments, Fees and Charges
Limited. end delete (a)  begin delete No end delete begin insert An agency shall not assess a end insert tax, assessment, fee,
or charge begin delete shall be assessed by any agency end delete 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 begin insert or, as applicable, a 55 percent vote
pursuant to subdivision (c) or (d) of Section 1 of, or Section 4.5,
of Article XIII end insert begin insert   end insert begin insert A end insert .

(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 begin delete shall end delete begin insert are end insert not begin delete be end delete 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 begin delete such end delete
begin insert that end insert 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 begin delete which end delete begin insert that end insert 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, begin delete reconstructing end delete begin insert reconstructing, end insert
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 begin delete such end delete begin insert that end insert election; nor
unless before or at the time of incurring begin delete such indebtedness end delete begin insert the
indebtedness, end insert provision shall be made for the collection of an
annual tax sufficient to pay the interest on begin delete such end delete begin insert the end insert indebtedness
as it falls due, and to provide for a sinking fund for the payment
of the principal thereof, on or before begin delete maturity, which end delete begin insert maturity 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 begin delete the effective
date of the measure adding this subdivision, end delete begin insert November 8, 2000, end insert
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.

begin insert

(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 the construction,
reconstruction, rehabilitation, or replacement of wastewater
treatment facilities and related infrastructure, potable water
producing facilities and related infrastructure, nonpotable water
producing facilities and related infrastructure, and stormwater
treatment facilities and related infrastructure.

end insert begin delete

(c)

end delete

begin insert (d) end insert  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.