BILL ANALYSIS
ACA 9
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Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Anna Marie Caballero, Chair
ACA 9 (Huffman) - As Amended: April 27, 2009
SUBJECT : Local government bonds: special taxes: voter approval.
SUMMARY : Makes changes to the voting requirements contained in
the California Constitution for special taxes and bonded
indebtedness for local governments. Specifically, this bill :
1)Allows for a city, county, or city and county, to incur
indebtedness in the form of general obligation (GO) bonds to
be adopted by 55% of the voters of the city, county, or city
and county, where the GO bonds fund any or all of the
following:
a) Construction, reconstruction, rehabilitation, or
replacement of any of the following:
i) Public improvements, including, but not limited to,
improvements to transportation infrastructure, streets,
highways, sewer systems, water systems, wastewater
systems, and park and recreation facilities;
ii) Facilities or buildings used exclusively to provide
sheriff, police, or fire protection services to the
public, including the furnishing and equipping of those
facilities or buildings; or,
iii) Development of housing affordable to lower and
moderate-income households.
b) Acquisition or lease of real property for the public
improvements, facilities or buildings, and housing
described in sub part (a).
2)Provides that a proposition approved by the voters resulting
in bonded indebtedness has to include the following
accountability requirements:
a) A requirement that the proceeds from the sale of the
bonds be used only for the purposes specified, and not for
any other purpose, including public employee salaries and
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other operating expenses of a public improvement, facility
or building, or housing development;
b) A requirement that the city council, county board of
supervisors, or governing body of the special district
conduct an annual, independent performance audit to ensure
that the proceeds from the sale of the bonds have been
expended only on the specific projects listed;
c) A requirement that the city council, county board of
supervisors, or governing body of the 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 specific projects to be
funded from the bonds; and,
d) A requirement for a public process that solicits a wide
range of public comment from the community about the type
of facilities that should be funded with the bond.
3)Provides that a city, county, or special district, by a 55%
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.
4)Revises requirements in the Article XIII of the Constitution
to allow an agency to assess a special tax approved by the
voters of the city, county, city and county, or special
district, as required by the Constitution.
EXISTING LAW :
1)Authorizes cities, counties, and special districts to impose a
general tax for general governmental purposes with the
approval of a majority of the voters.
2)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
3)Authorizes school districts, community college districts, or
county offices of education to incur school bonded
indebtedness with the approval of 55% of the voters voting on
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the bond measure, requires that bond proceeds only be used for
purposes specified in the Constitution, and requires an audit
to ensure that the funds have been expended only on the
specific projects listed.
FISCAL EFFECT : Unknown
COMMENTS :
1)Constitutional requirements for voter approval of tax measures
were initiated with the passage of Proposition 13 in 1978, and
solidified with the passage of Proposition 218 in 1996. The
latter measure clarified that general taxes for general
governmental purposes require approval of a majority of
voters, while special taxes for any specified purposes must be
approved by two-thirds of voters. Proposition 39, which was
narrowly approved by 53% of California voters in 2000,
provided an exception to the two-thirds vote requirement for
special taxes by authorizing the passage of local school bond
measures by approval of 55% of the voters.
2)Article XIII of the California Constitution allows for bonded
indebtedness for 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, among other provisions, if approved by
55% of the voters. This section of the Constitution also
requires that the bond proceeds be used only for the purposes
listed, and requires annual independent auditing to ensure
that funds have been expended on the specific projects listed.
ACA 9 mirrors these requirements in the Constitution already
in place for school districts, and instead, provides that a
city, county, or special district can incur bonded
indebtedness for construction, reconstruction, rehabilitation,
or replacement of public improvements, public safety
facilities or buildings, and development of affordable
housing, if 55% of the voters approve.
3)ACA 9 will amend the California Constitution to lower the
constitutional vote requirement from two-thirds to 55% for
approval of a special tax. The author maintains that "ACA 9
brings the conversation back to the voters about how to fund
local needs." Specifically, the author notes that "for many
communities around the state, the quality, and indeed the
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viability of critical services like police and fire
protection, schools, libraries, parks, road maintenance, and
flood control will be in jeopardy without additional revenues.
Yet, to secure essential funding for these services, local
governments face the daunting prospect of bringing a special
tax measure to the voters and winning two-thirds approval.
Such measures often fail despite being supported by a strong
majority of the community."
4)Shifting to a 55% vote for special taxes and bond indebtedness
has been tried several times in the last 10 years. Among
others, ACA 7 (Nation) from the 2005-06 session would have
lowered the constitutional vote requirement from two-thirds to
55% for any special tax. ACA 10 (Feuer), 2008, would have
created an additional exception to the 1% ad valorem property
tax for transportation projects with 55% voter approval.
There are currently several other measures revising the
constitutional voting threshold for different purposes pending
in the Senate and Assembly: ACA 10 (Torlakson), ACA 15
(Arambula), SCA 12 (Kehoe), and SCA 6 (Simitian).
5)This bill requires a two-thirds vote of the Legislature.
6)This bill is also referred to the Committees on Revenue and
Taxation and Appropriations.
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REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
Association for Los Angeles Deputy Sheriffs
Association of CA Water Agencies
CA Association of Councils of Governments
CA Association of Recreation and Park Districts
CA Association of Sanitation Agencies
CA Fire Chiefs Association
CA Library Association
CA Park & Recreation Society
CA Professional Firefighters
CA Public Securities Association
CA Rural Legal Assistance Foundation
CA Special Districts Association
CA State Association of Counties
CA Teachers Association
CA Transit Association
Cities of Orinda and Santa Rosa
East Bay Municipal Utility District
Housing CA
Joint Legislative Advisory Committee of Marin
League of CA Cities
Marin County Council of Mayors and Council Members
Marin County Board of Supervisors
Peace Officer's Research Association of California
Riverside Sheriffs' Association
Sacramento Regional Transit District
San Diego County Water Authority
Santa Clara Valley Water District
Santa Cruz County Regional Transportation Commission
Self-Help Counties Coalition
Transportation Authority of Marin
Western Center on Law & Poverty
Opposition
CA Association of Realtors
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Cal-Tax
Howard Jarvis Taxpayers Association
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958