BILL ANALYSIS                                                                                                                                                                                                    



                                                                    AB 2801


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2801 (Gallagher) - As Amended May 4, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          Yes


          SUMMARY:  This bill, regarding protest proceedings for  
          property-related fees, pursuant to Proposition 218, requires the  
          local agency to maintain all written protests for a minimum of  
          two years following the date of the hearing to consider written  
          protests.


          FISCAL EFFECT:


          Unknown, likely minor, potentially reimbursable mandate costs  
          (GF). Local agencies would likely incur minor ongoing costs to  
          store records. Although not required, many local agencies  
          already hold these records, sometimes electronically. These  








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          costs could be subject to state-reimbursement to the extent  
          local agencies file a claim for reimbursement and the Commission  
          on State Mandates determines specified activities are subject to  
          reimbursement. 


          COMMENTS:


          1)Purpose.  According to the author, "AB 2801 adds needed  
            transparency to the fee protest procedure first implemented by  
            Proposition 218, which voters approved in 1996.  Proposition  
            218 provides a streamlined protest procedure in place of an  
            election when local agencies propose increases in water,  
            sewer, or refuse collection rates.  The agency must mail a  
            specified notice to affected ratepayers and allow them at  
            least 45 days before the hearing on the increase to submit  
            written protests.  If a majority of the ratepayers submit  
            timely written protests, the rate increase is tabled.  To  
            ensure that ratepayers are not disenfranchised, uniform  
            standards should be adopted across California for how protest  
            notices should be accepted and retained. 


          2)Proposition 218.  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  








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            property-related service.  The fee imposed on any parcel or  
            person cannot exceed the proportional cost of the service that  
            is attributable to the parcel.  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.  One written protest per parcel,  
            filed by an owner or tenant of the parcel, is counted in order  
            to calculate the majority protest.  Current law is silent on  
            maintaining written protests. However, ballots submitted  
            during proposed assessment proceedings under Proposition 218  
            must be preserved for a minimum of two years.


          3)Prior Legislation.  


             a)   SB 553 (Yee), Chapter 215, Statues of 2013, applied many  
               of the requirements in current law for assessment ballot  
               procedures to the elections for property-related fees  
               submitted to property owners.  


             b)   SB 321 (Benoit), Chapter 580, Statutes of 2009, imposed  
               additional requirements on local governments when  
               conducting assessment ballot proceedings, pursuant to  
               Proposition 218.  


             c)   AB 2218 (Gaines) of 2008, held on the Senate  
               Appropriations Suspense File, would have imposed new  








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               restrictions on local governments, when conducting  
               property-related fee and assessment ballot proceedings,  
               pursuant to Proposition 218.  


             d)   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.  


          


          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081