BILL ANALYSIS �
ACA 4
Page 1
Date of Hearing: June 15, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
ACA 4 (Blumenfield) - As Introduced: December 6, 2010
SUBJECT : Local government financing: voter approval.
SUMMARY : Amends the California Constitution to allow a city,
county, or special district, as defined, to incur bonded
indebtedness in order to fund specified public improvements and
facilities, with 55% voter approval of that city, county or
special district. Specifically, this bill :
1)Allows a city, county, or city and county, or a special
district, as applicable, 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, or special
district, where the GO bonds fund the construction,
reconstruction, rehabilitation, or replacement of any of the
following:
a) Public improvements, including, but not limited to,
improvements to transportation infrastructures, streets,
highways, sewer systems, water systems, wastewater systems,
and park and recreation facilities; and,
b) Facilities or buildings used primarily to provide
sheriff, police, or fire protection services to the public,
including the furnishing and equipping of those facilities
or buildings.
2)Lowers to 55% the voter-approval threshold for a city, county,
or city and county to incur bonded indebtedness, in the form
of GO bonds, that exceeds in one year the income and revenue
provided in that year, for the construction, reconstruction,
rehabilitation, or replacement of any of the following:
a) Public improvements, including, but not limited to,
improvements to transportation infrastructures, streets,
highways, sewer systems, water systems, wastewater systems,
and park and recreation facilities; and,
b) Facilities or buildings used primarily to provide
sheriff, police, or fire protection services to the public,
ACA 4
Page 2
including the furnishing and equipping of those facilities
or buildings.
3)Defines "special district," for purposes of this bill, as the
same meaning as that term is used in the California
Constitution for the section related to voter approval for
local tax levies, but does not include a school district or a
redevelopment agency.
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
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.
4)Prohibits specified local government agencies from incurring
any indebtedness exceeding in one year the income and revenue
provided in that year, without the assent of two-thirds of the
voters.
FISCAL EFFECT : Unknown
COMMENTS :
1)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
ACA 4
Page 3
that funds have been expended on the specific projects listed.
This bill mirrors these requirements in the Constitution in
place for school districts by providing that a city, county,
or specified special district can incur bonded indebtedness
for construction, reconstruction, rehabilitation, or
replacement of public improvements and public safety
facilities or buildings, if 55% of the voters approve. The
current threshold to pass general obligation bond measures for
cities, counties and special districts is a 2/3 vote.
2)The author notes that it is estimated that California needs at
least an additional $500 billion between now and 2025 for
maintenance, repair, and upkeep of the crumbling sewer and
storm drain systems, streets and sidewalks, overcrowded and
out-dated police stations, jails, fire stations and libraries.
The author argues that because the state is not meeting the
infrastructure needs of our growing population, there is great
need for additional financial tools to make these necessary
investments. These infrastructure investments will enhance
public safety, increase the value of real estate, and improve
the quality of life in communities as vital facilities will be
better maintained to safely serve today's population.
3)Lowering the constitutional vote threshold for special taxes
and bond indebtedness has been tried several times in past
years. ACA 7 (Nation) from the 2005-06 legislative 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 were several measures introduced in the
2009-10 session that would have revised constitutional voting
thresholds for different purposes, including ACA 10
(Torlakson), ACA 15 (Arambula),
SCA 12 (Kehoe), ACA 9 (Huffman) and SCA 6 (Simitian), none of
which were enacted.
There are currently several bills in the 2011-12 session that
would amend the California Constitution to lower the vote
threshold, including ACA 18 (Swanson), and SCA 5 (Simitian).
4)This bill requires a two-thirds vote of the Legislature.
ACA 4
Page 4
5)Support arguments: The California Professional Firefighters,
in support, write that money invested in infrastructure
creates an increase in tax revenue that can be used to help
local governments fund police, fire, schools, and other core
services.
Opposition arguments: The California Taxpayers Association, in
opposition, writes that creating another exception to
Proposition 13's 1% limit on ad valorem property taxes sets a
bad precedent, thereby eroding taxpayer protections.
6)This bill is double-referred to the Committee on
Appropriations.
REGISTERED SUPPORT / OPPOSITION :
Support
Association for Los Angeles Deputy Sheriffs
California Association of Recreation and Park Districts
California Library Association
California Narcotic Officers Association
California Park & Recreation Society
California Police Chiefs Association
California Professional Firefighters
California Special Districts Association
California State Association of Counties
Central Basin Municipal Water District
Cities of San Jose and Thousand Oaks
East Bay Municipal Utility District
East Bay Regional Park District
Fire Districts Association of California
Los Angeles County Probation Officers Union
Midpeninsula Regional Open Space District
Mosquito and Vector Control Association of California
Peace Officers Research Association of California
Riverside Sheriffs Association
Santa Clara Valley Water District
State Building and Construction Trades Council
Opposition
California Association of Realtors
CalTax
Howard Jarvis Taxpayers Association
ACA 4
Page 5
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958