BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2170 HEARING: 6/11/14
AUTHOR: Mullin FISCAL: No
VERSION: 2/20/14 TAX LEVY: No
CONSULTANT: Weinberger
JOINT EXERCISE OF POWERS
Specifies that the common powers that public agencies may
jointly exercise pursuant to a joint powers agreement
include the authority to levy a fee or a tax.
Background and Existing Law
The Joint Exercise of Powers Act allows two or more public
agencies to enter an agreement to jointly exercise any
power held in common by the parties to the agreement. Each
public agency must independently possess the authority to
perform the activity that is to be performed jointly
pursuant to a joint powers agreement. The courts have
found that the Act grants no new powers to public agencies,
but merely sets up a new procedure for the exercise of
existing powers.
Sometimes an agreement creates a new, separate government
called a joint powers authority (JPA). Public officials
have created more than 700 JPAs, which are confederations
of governments working together for common purposes. A
joint powers agreement must state the purpose of the JPA or
the power to be exercised, and must provide for the method
by which the purpose will be accomplished or the manner in
which the power will be exercised. A JPA may exercise only
the powers expressly provided for in the agreement.
Some joint powers agreements creating JPAs that consist
entirely of local governments that share common powers to
levy taxes, assessments, or fees allow the JPA to exercise
those common revenue powers. However, some public agency
officials remain concerned that the Joint Exercise of
Powers Act's provisions may not extend to local
governments' common tax, assessment, and fee authority.
They want the Legislature to clarify the types of revenue
powers that a JPA can exercise pursuant to a joint powers
AB 2170 -- 2/20/14 -- Page 2
agreement.
Proposed Law
Assembly Bill 2170 specifies that the common powers that
public agencies may jointly exercise pursuant to a joint
powers agreement include, but are not limited to, the
authority to levy a fee or a tax.
AB 2170 enacts a legislative finding and declaration
stating that, because a joint powers authority has all
powers common to the contracting parties, so long as those
powers are specified in the joint powers agreement, the
bill's provision do not constitute a change in, but are
declaratory of, existing law.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Several JPAs in California
already impose taxes, fees, or assessments using powers
that are held in common by all of the public agencies
participating in those JPAs. However, some local officials
are reluctant to use a JPA to levy taxes, assessments, or
fees because the Joint Exercise of Powers Act does not
explicitly extend that authority to JPAs. In response to
this statutory ambiguity, and the conflicting legal
interpretations that it invites, AB 2170 clarifies that
JPAs may, consistent with their existing authority under
the Joint Exercise of Powers Act, raise revenues through
fees or taxes to fund important community projects.
Because a JPA only allows public agencies to exercise their
existing powers, AB 2170 does not grant any new revenue
powers to local governments. AB 2170 also does not change
any of the voter-approval thresholds or other procedural
requirements that state law imposes on local, taxes,
assessments, and fees.
2. Unnecessary . If a city or county identifies urgent
needs for which it lacks sufficient funding, state law
AB 2170 -- 2/20/14 -- Page 3
already provides ample options for imposing taxes,
assessments, or fees, with voter or landowner approval.
Simply allowing local governments to raise revenues through
a different government structure - a JPA - won't ensure any
improvements in the projects funded or services provided
with the new revenues. Because local governments already
possess a wide array of revenue powers that they can use to
finance needed infrastructure and services, it is unclear
why the authorization enacted by AB 2170 is necessary.
3. Unanswered questions . While AB 2170 may eliminate
ambiguity about whether public agencies can jointly
exercise revenue powers through a JPA, it leaves some
significant unanswered questions about how public agencies
should jointly exercise those powers. In particular, AB
2170 doesn't specify how a JPA should comply with many of
the Constitutional requirements that apply to local
government revenues. It is unclear how a JPA should comply
with the constitutional requirement that a local agency
must adopt an appropriations limit if it receives proceeds
of taxes or how a JPA's appropriations limit would relate
to the appropriations limits adopted by its member public
agencies. AB 2170 is silent about the manner in which
local agencies must jointly seek approval for taxes, fees,
or assessments. Can a JPA seek voter approval from among
all qualified voters within the JPA's entire territory? Or
must each public agency member independently obtain the
approval of its respective residents before it is entitled
to exercise revenue power jointly with other agencies? By
providing no statutory guidance to local officials, and in
the absence of any relevant case law on these questions, AB
2170 may still leave public agencies vulnerable to legal
challenges if they exercise their common revenue powers in
a manner that is inconsistent with state law. The
Committee may wish to consider amending AB 2170 to specify
the procedures that JPAs must follow when exercising their
revenue powers.
4. Let's get technical . To clarify AB 2170's provisions,
the Committee may wish to consider amending the bill to
make the following changes:
Strike out "therefor" on page 1, line 4, and
replace it with "therefore"
After the word "fee" on page 2, line 4, add the
word "assessment"
AB 2170 -- 2/20/14 -- Page 4
5. Related legislation . Assembly Bill 418 (Mullin) allows
the City/County Association of Governments of San Mateo
County - a JPA - to impose a special tax or
property-related fee to fund storm water management
programs. The Senate Governance and Finance Committee
passed AB 418 at its January 15, 2014 hearing. The bill is
currently on the Assembly Inactive File.
Assembly Actions
Assembly Local Government Committee: 7-2
Assembly Floor: 44-26
Support and Opposition (6/5/14)
Support : California State Association of Counties;
California Special Districts Association; City/County
Association of Governments of San Mateo County; John
Stewart Company; League of California Cities; Non-Profit
Housing Association of Northern California; San Francisco
Planning and Urban Research (SPUR).
Opposition : California Chamber of Commerce; California
Taxpayers Association; Howard Jarvis Taxpayers Association.