BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON GOVERNANCE AND FINANCE
                         Senator Robert M. Hertzberg, Chair
                                2015 - 2016  Regular 

                              
          
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          |Bill No:  |AB 2801                          |Hearing    |6/15/16  |
          |          |                                 |Date:      |         |
          |----------+---------------------------------+-----------+---------|
          |Author:   |Gallagher                        |Tax Levy:  |No       |
          |----------+---------------------------------+-----------+---------|
          |Version:  |5/4/16                           |Fiscal:    |Yes      |
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          |Consultant|Favorini-Csorba                                       |
          |:         |                                                      |
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                 Local government:  fees and charges:  written protest



          Requires local agencies to retain written protests for a minimum  
          of two years.


           Background 

           Article XIIID of the California Constitution (Proposition 218,  
          1996) distinguishes among fees for property-related services,  
          taxes, and assessments, and local governments must take certain  
          actions before they can impose those charges.  Counties and  
          other local agencies with police powers may impose any one of  
          these charges on property owners, after meeting the requirements  
          established by Proposition 218.  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  
          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.  








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          The Legislature enacted the Proposition 218 Omnibus  
          Implementation Act to translate many of Proposition 218's  
          requirements into statutory definitions and procedures (SB 919,  
          Rainey, 1997). Prior to imposing or increasing a  
          property-related fee, a 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.  Only one  
          written protest per parcel, filed by an owner or tenant of the  
          parcel, counts in order to calculate the majority protest.  

          Additionally, the California Constitution requires voter  
          approval for most property-related fees, except for fees or  
          charges for sewer, water, and refuse collection services, which  
          are specifically exempted from the voter approval requirement.   
          State law specifies the process for seeking voter approval and  
          requires local officials to hold ballots for at least two years  
          following the election (SB 553, Yee, 2013).  Previous  
          legislation established similar procedures for assessments (SB  
          1477, Lewis, 2000).

          Some taxpayer advocates want to clarify the requirements local  
          agencies must meet following a protest hearing for a fee  
          increase.


           Proposed Law

           Assembly Bill 2801 requires an agency that proposes to charge a  
          new property related fee or increase an existing one to maintain  
          all written protests for at least two years after the hearing at  
          which the protests were counted.


           State Revenue Impact

           No estimate.










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           Comments

           1.  Purpose of the bill  . On several occasions, the Legislature  
          has recognized the value in preserving records related to  
          Proposition 218's requirements for imposing fees and charges on  
          property owners.  Most recently, SB 553 enacted a comprehensive  
          framework for conducting elections for those property-related  
          fees that require voter approval, including a requirement to  
          hold ballots for two years.  But written protests are not as  
          transparent and accessible as the ballots for other types of  
          fees and charges, even though both protests and ballots  
          determine whether a fee may be imposed.  By requiring local  
          officials to retain written protests for at least two years  
          following the protest hearing, AB 2801 takes a small but  
          important step towards preserving written protests so that the  
          public can be certain of the integrity of protest procedures.  

          2.  Mandate  .  The California Constitution generally requires the  
          state to reimburse local agencies for their costs when the state  
          imposes new programs or additional duties on them.  According to  
          the Legislative Counsel's Office, AB 2801 creates a new  
          state-mandated local program because it increases the duties of  
          local officials.  AB 2801 says that if the Commission on State  
          Mandates determines that it creates a state-mandated local  
          program, the state must reimburse local agencies by following  
          the existing statutory process for mandate claims.


           Assembly Actions

           Assembly Local Government Committee:              8-0
          Assembly Appropriations Committee:                20-0
          Assembly Floor:                                   76-0


           Support and  
          Opposition   (6/9/16)


           Support  :  Howard Jarvis Taxpayers Association (sponsor).

           Opposition  :  Unknown.










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