BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 552 HEARING: 5/4/11
AUTHOR: Huff FISCAL: No
VERSION: 4/26/11 TAX LEVY: No
CONSULTANT: Lui
MELLO-ROOS ACT PROTESTS
Prohibits bribing voters or landowners in Mello-Roos Act
protest proceedings.
Background and Existing Law
The Mello-Roos Community Facilities Act allows counties,
cities, special districts, and school districts to levy
special taxes (parcel taxes) to finance a wide variety of
public works, including parks, recreation centers, schools,
libraries, child care facilities, and utility
infrastructure. A Mello-Roos Community Facilities District
(CFD) issues bonds against these special taxes to finance
the public works projects. Mello-Roos Act special taxes
can also fund a limited list of public services: police
services, fire protection, recreation programs, library
services, museum operations, park maintenance, flood
protection, hazardous waste cleanup, street and road
maintenance, lighting of parks, parkways, streets, roads,
and open space, snow plowing and removal, and graffiti
management and removal.
The Mello-Roos Act is an important feature of the local
fiscal landscape, providing local officials with a key tool
for accumulating the public capital needed to pay for
public works projects that make new residential development
possible. Since 1985, CFDs have issued over $18 billion in
long-term bonds, mostly for capital improvements. Without
access to Mello-Roos bond funding, many builders would have
to pay higher development impact fees and raise housing
prices.
To form a CFD, a local government's legislative body must
adopt a resolution of intention to form the CFD and must
set a public hearing within 30 to 60 days of the
resolution's adoption. The local government must publish a
SB 553 -- 4/26/11 -- Page 2
notice of the public hearing's time, date, and place in a
newspaper at least seven days before the hearing. The
public notice must include a summary of the resolution, the
effect of protests made by registered voters or landowners
against the establishment of the CFD, a description of the
special tax, and a description of the voting procedure.
At the public hearing, the legislative body hears public
comments for and against the proposed CFD. The legislative
body must abandon the process of forming the CFD for at
least one year if:
50% or more of the registered voters, or six
registered voters-whichever is more-submit oral or
written protests that are not withdrawn by the end of
the hearing, or
The owners of at least 50% of the land area subject
to the proposed special tax submit protests that are
not withdrawn by the end of the hearing.
If there is no majority protest, the legislative body can
form the CFD, subject to the 2/3-voter approval of the
special tax.
The Elections Code prohibits the use of any gift, payment,
promise of office or employment, use of force, violence,
coercion, intimidation, or solicitation of votes near a
polling place to corrupt a voter. Any conviction of voter
corruption could result with imprisonment in jail or
prison, plus a fine not exceeding $1,000 for misdemeanors
or $10,000 in felony cases.
Housing developers worry that the Mello-Roos Act CFD
protest proceedings don't have the same protections against
voter manipulation that apply to elections.
Proposed Law
Senate Bill 552 prohibits anyone from offering a voter or
landowner consideration to file a protest, withdraw a
protest, or forgo the filing of a protest in a proceeding
to form a community facilities district. SB 552 also
prohibits a voter or landowner from accepting or receiving
consideration to file a protest, withdraw a protest, or
forgo the filing of a protest.
SB 553 -- 4/26/11 -- Page 3
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Senate Bill 552 protects the
integrity of Mello-Roos Act protest proceedings by applying
limitations to CFD formation proceedings that are similar
to limitations that apply to elections. Because a
Mello-Roos CFD formation protest is not an election, the
Elections Code provisions do not apply. Public protests
about financing community facilities or services deserve
the same sanctity as regular elections and deserve the same
protections.
2. Cherry-picking . While SB 552 tries to ensure that
voters and landowners are not manipulated to stop or to
form a CFD, does it go far enough? Why don't all the
Elections Code protections apply to Mello-Roos district
elections? Why cherry-pick and stop at outlawing
"considerations?" One rule of statutory interpretation is:
the expression of one thing is the exclusion of the other
(expressio unius est exclusio alterius). The Committee may
wish to ask whether, by prohibiting only offers of
"consideration," SB 552 appears to condone violence,
coercion, intimidation, or solicitation of votes near a
polling place to corrupt a voter.
Support and Opposition (4/28/11)
Support : California Taxpayers Association.
Opposition : Unknown.