and Summary of the Initiative and the Fiscal Summary of the Legislative Analyst's Office (LAO). The full text of the lnitiative from the Attorney General's Office website is provided as Attachment D to this Report.
The below statement is from the lnitiative proponent's website ( https ://taxpayerp rotectio n . com/ ) d escri b i n g spo n so rs. "Paid for by Californians for Taxpayer Protection and Government Accountability, sponsored by California homeowners, taxpayers, and busrnesses. Commiftee Top Funders California Busrness Roundtable, AMR Holdco, and Kilroy Realty LP." CalCities is advising cities to advocate against the lnitiative by sending letters and/or adopting resolutions that can be submitted to state government representatives (See Attachment A). Should the Council wish to take a position on the lnitiative, staff would submit an appropriate letter.
POLICY CONSISTENCY
It is within the discretion of the City Councilto take positions concerning federal and state legislation.
FINANCIAL CONSIDERATIONS
The California Legislative Analyst's Office (LAO) has analyzed the fiscal effects of the lnitiative, which, would be potentially significant for the state and local governments (See Attachment C), by making it more difficult for voters, the state legislature, city councils and other local legislative bodies, to increase taxes, and to raise fees. The LAO analysis concludes the changes put forth in the lnitiative would result in lower annual state and local revenues, potentially substantially lower, depending on future actions of state and local government legislatures, voters, and the courts.
LEGAL AND RISK MANAGEMENT CONSIDERATIONS
As indicated in the LAO analysis, if passed by voters, the lnitiative creates risk to all California cities, including Carpinteria, of substantially lower revenues and litigation related to the setting of fees and charges for services.
OPTIONS
1. Take action to submit a letter of opposition (staff recommendation)
2. Direct that an alternative position, i.e., support or neutral, be taken
3. Do not take a position.
G : Dave/CityCou ncil/S-Legislative Positions
Legislation Position letter
March 27 ,2023
PRINCIPAL PARTIES EXPECTED AT MEETING
None
ATTACHMENTS
A. CalCities sample letter and resolution,
B. Attorney General's Title and Summary
C. Fiscal lmpact Summary from Legislative Analyst's Office D. lnitiative Text, Office of the Attorney General
httos ://www. sos. ca. q ov/elections/bal n itiative-a nd-refe rend u mstatus/el iq i b le-statewide-i n itiative-measu res E. State Press Release
Dave Durflinger, City Manager
(805) 755-4400, d [email protected]
G : Dave/CityCou nci l/S-Legislative Positions
ATTACHMENT A
SAMPTE OPPOSE TETTER
Emoil o copy to @colcities. os well os
your Regionol Public Affoirs Monoger.
***CITY LETTERHEAD***
DATE
Bismorck Obondo
Director of Public Affoirs, Leogue of Colifornio Cities 1400 K Street, Suite 400
Socromenio, CA 95814
RE: letter Opposing Initiolive 21-OO42A1
On DATE, the City/Town of voted to oppose lnitiotive 21-0042A1, o deceptive, developer-sponsored proposition oimed for the November 2024 stotewide bollot thot would significontly jeopordize cities' obility to provide essentiol services ond infrostructure for our residents.
The meosure includes undemocrotic provisions thot would moke it more difficult for locol voters to poss meosures needed to fund locolservices ond projects ond would limit voter input by prohibiting locol odvisory meosures where voters con express o preference on how they wont iheir locol tqx dollors spent.
This meosure creotes new constitutionol loopholes thot ollow corporotions to poy for less thon their foir shore for the impocts they hove on our communities, including impocts on locol infrostructure ond our environment.
This meosure olso moy moke it much more difficult for stote ond locol regulotors to issue fines ond levies on corporotions thot violote lows iniended to protect our environment, public heolth ond sofety, ond our neighborhoods.
Unless defeoted, the meosure puts billions of dollors currently dedicoted to locol services of risk, ond could force cuts to fire ond emergency response, low enforcement, public heolth, porks, librories, offordoble housing, services to support homeless residents, mentol heolth services, ond more.
PTEASE CITE SPECIFIC IMPACTS TO YOUR CITY THAT WOUTD RESUTT FROM THIS INITIATIVE.
The meosure benefits weolthy corporotions ond reol estote developers while decimoting our locol communities ond neighborhoods.
( You moy list the ,iiY/'l,i..,oi'ttr ,i r ;i' formol opposition to lnitiotive #21-O042A1 ond include our city os port of the growing coolition of public sofety, lobor, locol government, infrostructure odvocotes, ond other orgonizotions throughout the stote opposed to this deceptive proposition.
Sincerely,
MM
Somple Resolulion lo Oppose lniliolive 2l -0042A1
WHEREAS, on ossociotion representing Colifornio's weolthiest corporotions ond developers is spending millions to push o deceptive proposition oimed for the November 2024 stotewide bollot; ond
WHEREAS, the meosure includes undemocrotic provisions thot would moke it more difficult for locol voters to poss meosures needed to fund locol services ond infrostructure, ond would limit voter input by prohibiting locol odvisory meosures where voters provide direction on how they wont their locol tox dollors spent; ond
WHEREAS, the meosure creotes new constitutionol loopholes ihot ollow corporotions to poy for less thon their foir shore for the impocts they hove on our communities, including locol infrostructure ond our environment; ond WHEREAS, the meosure moy moke it much more difficult for stote ond locol regulotors to issue fines ond levies on corporotions thot violote lows intended to protect our environment, public heolth ond sofety, ond our neighborhoods; ond WHEREAS, the meosure puts billions of dollors currently dedicoted to locol services of risk ond could force cuts to fire ond emergency response, low enforcement, public heolth, porks, librories, offordoble housing, services to support homeless residents, mentol heolth services, ond more; ond THEREFORE. BE lT RESOLVED thot the City/Town of INAME] opposes lnitiotive 2l - oo42A1;
BE lT FURTHER RESOLVED, thot the City/Town of [NAME] willjoin the No on lnitiotive 21-0042A1 coolition, o growing cooliiion of public sofety, educotion, lcbor, locol government, ond infrostructure groups throughout the stote.
We direct stoff to emoil o copy of this odopted resolution to the Leogue of Colifornio Cities of [email protected].
PASSED, APPROVED, AND ADOPTED ihis doy of _, 2023.
ATTACHMENT B
February 3,2022
Initiative 2l-0042 (Amdt. l)
The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure:
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE
CONSTITUTIONAL AMENDMENT. For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters' ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds. Eliminates voters' ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax. Expands definition of "taxes" to include certain regulatory fees, broadening application of tax approval requirements. Requires Legislature or local governing body set certain other fees. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature,local governing bodies, voters, and the courts. (21-0042AI.)
ATTACHMENT C
LAOA
January 19,2022
Hon. Rob Bonta
Attorney General
1300 I Street, lTth Floor
Sacramento, California 958 14
2L-0042 Amdt. I
RECEIVED
.Jan L9 2022
Attention: Ms. Anabel Renteria
Initiative Coordinator TNITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Dear Attomey General Bonta
Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional Taxpayer Protection and Government Accountability Act initiative (A.G. File No. 21-0042, Amendment #1).
Background
State Government
Taxes and Fees. This year's state budget spends over $255 billion in state funds. Over 90 percent of the state budget is funded with revenues from taxes. These include, for example, sales taxes paid on goods and income taxes paid on wages and other sources of income. Much of the rest of the state budget is funded by fees and other charges. Examples include: (1) charges relating to regulatory activities; (2) charges for specific government services or products, like fees charged to drivers to improve roads; (3) charges for entering state property, such as a state park; and (a) judicial fines, penalties, and other charges. The State Constitr,rtion requires the state to set fees at a reasonable level, generally reflecting the costs of the services or benefits provided.
The state uses revenue from taxes and fees to fund a variety of programs and seruices, including education, health care, transportation, and housing and homelessness services.
Current Requirements to Approve Taxes and Fees. Under the State Constitution, state tax increases require approval by twothirds of each house of the Legislature or a majority vote of the statewide electorate. The Legislature can reduce taxes with a majority vote of each house, provided the change does not result in an increase in taxes paid by any single taxpayer. ln many cases, the Legislature has enacted statutes that delegate its authority to adjust fees and other Legislative Analyst's Offi ce
Calilornia Legislature
Gabriel Petek, Legislative Analyst
925 L Street, Suite lfi)O, Sacramento. CA S-5814
(9 r 6) 445-4656
Hon. Rob Bonta January 19,2022
charges to administrative entities, like state departments. ln these cases, these charges can be increased or changed by the department within certain limits.
Local Government
Taxes and Fees. The largest local government tax is the property tax, which raises roughly $75 billion annually. Other local taxes include sales taxes, utility taxes, and hotel taxes. In addition to these taxes, local governments levy a variety of fees and other charges. Examples include parking meter fees, building permit fees, regulatory fees, and judicial fines and penalties.
In order to be considered a fee, the charge cannot exceed the reasonable costs to the local government of providing the associated product or service. Local governments use revenues from taxes and fees to fund a variety of services, like fire and police, public works, and parks.
Current Requirements to Approve Taxes and Fees. State law requires increases in local taxes to receive approval of the local governing body-for example, a city council or county board of supervisors-as well as approval of voters in that local jurisdiction. Most proposed taxes require a two-thirds vote of the local goveming board before being presented to the voters.
Special taxes (those used for a specific purpose) require a two-thirds vote of the electorate while other tlpes of taxes require a majority vote of the electorate. The majority-vote general taxes can be used for any purpose. Recent case law suggests that citizen initiative special taxes may be approved by majority vote, rather than a two-thirds vote. Currently, local goveming bodies have the ability to delegate their authority to adjust fees and other charges to administrative entities, like city departments. In these cases, these charges can be increased or changed by the department within certain limits.
Proposal
This measure amends the State Constitution to change the rules for how the state and local governments can impose taxes, fees, and other charges.
State and Local Government Taxes
Expands Dejinition of Tax. The measure amends the State Constitution to expand the definition of taxes to include some charges that state and local governments currently treat as fees and other charges. For example, certain charges imposed for a benefit or privilege granted to a payer but not granted to those not charged would no longer be considered fees. As a result, the measure could increase the number of revenue proposals subject to the higher state and local vote requirements for taxes discussed below.
Requires Voter Approval for State Taxes. The measure increases the vote requirements for increasing state taxes. Specifically, the measure requires that legislatively proposed tax increases receive approval by two-thirds of each house and amajority vote of the statewide electorate.
Voters would still be able to increase taxes by majority vote of the electorate without legislative action, however. Any state tax approved between January 1,2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.
Requirements for Approving Local Tqxes. Whether sought by the local governing body or the electorate, the measure establishes the same approval requirements for increasing local 2 Hon. Rob Bonta January 19,2022
special taxes. Any local tax approved between January 1,2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.
Allowable Uses and Duration of State and Local Tsx Revenues Must Be Specffied. The measure requires state and local tax measures to identify the type and amount (or rate) of the tax and the duration of the tax. State and local government general tax measures must state that the revenue can be used for general purposes.
State and Local Government Fees
Reqaires the Legislature and Local Government Bodies to Impose State and Local Fees.
Fees would have to be imposed by a majority vote of both houses of the Legislature or local governing bodies. The measure would restrict the ability of state and local governments to delegate fee changes to administrative entities. The extent of these restrictions would depend on future court decisions. Any fee approved between January I, 2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.
Some New Stute and Local Fees Could Not Exceed Actual Costs. For some categories of fees, if the Legislature or a local governing body wished to impose a new fee or make changes to an existing fee, the measure generally would require that the charge be both reasonable and reflect the actual costs to the state or local government of providing the service. The measure also specifies that actual cost should not exceed "the minimum amount necessary." In many cases, existing fees already reflect the government's actual costs. In other cases, some fees would have to more closely approximate the payer's actual costs in order to remain fees. If a fee payer challenged the charge, the state or local govemment would need to provide clear and convincing evidence that the fee meets this threshold. State and local governments also would bear the burden of providing clear and convincing evidence that the levy is a fee-which is not subject to a vote by the electorate-and not a tax under the new definition.
Fiscal Effects
Lower State Tax and Fee Revenue. By expanding the definition of a tax, increasing the vote requirements for approving taxes, and restricting administrative changes to fees, the measure makes it harder for the Legislature to increase nearly all types of state revenues. The extent to which revenues would be lower under the measure would depend on various factors, most notably future decisions made by the Legislature and voters. For example, requirements for legislative approval of fee increases currently set administratively could result in lower fee revenues, depending on future votes of the Legislature. That lower revenue could be particularly notable for some state programs largely funded by fees. Due to the uncertainty of these factors, we cannot estimate the amount of reduced state revenue, but it could be substantial.
Lower Local Government Tax and Fee Revenue. Compared to the state, local governments generally face greater restrictions to raising revenue. By expanding the definition of taxes and restricting administrative changes to fees, the measure would make it somewhat harder for local governments to raise revenue. Consequently, future local tax and fee revenue could be lower than they would be otherwise. The extent to which revenues would be lower is unknown, but 3 Hon. Rob Bonta January 19,2022
fees could be more impacted. The actual impact on local government revenue would depend on various factors, including future decisions by the courts, local governing bodies, and voters.
Possible Increased State and Local Administrative Costs to Change Some Fee Levels.ln some cases, state and local departments would need to develop methods for setting fees to reflect actual costs if the Legislature or local governing bodies wanted to change those fees in the future. Estimating actual costs by program and fee source could involve some added workload for those state and local departments, which likely would be supported by fee revenue. The extent of these administrative costs would depend on (l) whether the state and local governments determine a fee increase is needed in order to maintain their current level of programs and services funded through fee revenue and (2) future court decisions.
Summary of Fiscal Efficls. We estimate that this measure would have the following major fiscal effects:
. Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.
Sincerely,
4 rtt^*
for Gabriel Petek
Legislative Analyst
for
k
Keely Martin Bosler
Director of Finance
ATTACHMENT D
BELL, MCANDITEW'S & IIILTACIII{, LLP
ATTORNEYS AND C()UNSEL('FIS AT LAu,
455 CAPITOL MALL, SUITE €OO
SACRAMENTO, CALIFC}FTN IA 95AIZ}
(9)6t 412-7757
FAX (et€l 4,42-7739
ww|,.bmhlaw.com
21-AA42 Amdr#l
Anabel Renteria
Initiative Coordinator
Office of the Attorney General
State of California
IrO Box 994255
Sacramento, CA 9 42M-2,5,550
January 4,2022 RECEIVED
JAN O \ 2N2
IMTIAIT\TE COORDINATC}R
ATTORNEY OENERAf,'S OFFICE
Re: Initiative2l,-0042- Amendment Number One
Dear Initiative Coordinator:
Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please find Amendment #7 to Initiative No. 27-W2 'The Taxpayer Protection and Government Accountability Act." The amendments are reasonably germane to the themg purpose or subject of the initiative measure as originally proposed.
I am the proponent of the measure and request that the Attorney General prepare a circulating tifle and summary of the measure as provided by law using the amended language.
Thank you for your time and attention processing my request.
Thomas W. Hiltachk
21-aa4ZAmdr.*l
The Taxpayer Protection and Government Accountability Act [Deleted codified text is denoted in strikeet*. Added codified text is denoted by italics ondlnderline.i Section 1. Title
This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability Act.
Section 2. Findings and Declarations
(a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline tax. According to the U.S. Census Bureau, California's combined state and localtax burden is the highest in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state politicians in2O2l alone introduced legislation to raise more than 5234 billion in new and higher taxes and fees.
(b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions more in hidden "fees" passed through to consumers in the price they pay for products, servicet food, fuel, utilities and housing. Since 201Q government revenue from state and local "fees" has more than doubled.
(c) California's high cost of living not only conffibutes to the state's skyrocketing rates of pover\r and homelessness, they are the pushing working families and job-providing businesses out of the state. The most recent Census showed that California's population dropped for the first time in history, costing us a seat in Congress. ln the past four yearl nearly 300 major corporations relocated to other states, not counting thousands more small businesses that were forced to rnove, sell or close. (d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These measures include Proposition L3 (!978';, Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 {2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and accountability, have been weakened and hamstrung by the Legislature, government lawyerq and the courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court decisions.
Section 3. Statement of PurPose
(a) ln enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees and other charges are passed or rejected by the voters themselves or a governing body elected by voters and not unelected and unaccountable bureaucrats.
{b} Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballotL either at the state or local level-to clearly state the type and rate of any tax, how long it will be in effect, and the use ofthe revenue generated by the tax.
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarifli that any new or increased form of state government revenue, by any name or manner of extraction paid directly or indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the Governor to ensure that the purposes for such charges are broadly supported and transparently debated. (d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that taxpayers have the right and ability to effectively balance new or increased taxes and other charges with the rapidly increasing costs Californians are already paying for housing food, childcare, gasoline, energy, healthcare, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from such taxes remains local, without changing or superseding existing constitutional provisions contained in Section 1(c) of Article Xlll A. (e) ln enacting this measure, the voters also additionally intend to reverse loopholes in the legislative twothirds vote and voter approval requirements for government revenue increases created by the courts including, but not limited to, Cannabis Coalition v. City of Upland, Chomber af Commerce v. Air Resources Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. ol Sunset Besch v.
Oronge County Local Agency Formation Commission, andWilde v. City of Dunsmuir.
Section 4. Section 3 of Article XlllA of the California Constitution is amended to read:
Sec.3(o] Everv levv,Sharge. or exaction of any kind imposed bv stote law is either a tax or an exempt charqe,
(blu lql Any change in state stet{rte /ow which results in any taxpayer paying a new or higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, ond submitted to the electorg-te a?d aoproved bv o maiorllJtJote, except that no new ad valorem taxes on real propefi, or sales or transaction taxes on the sales of real property, may be imposed. Each Act shall include:
lAl A snecific duration of.time that the tax will b.g imJlo-sed and an estimote of the-annual amount exoected to be deflved framlhe tax.
Bl A specific ond leoallv bindina and enforceable limitatioQ on how the revenue from the tax cop be spent. lf the revenue from the tal< can be spent for unrestricted aeneral r-evenue purooses. then a statgmentthot the tax revenue can be spent far "unrestricted aeneral revenue purnoses" shall be included in a separate, stand-olone sectian. Anv proposed chonoe to the use of the revenue from the tax shall be adopted bv o sepprate act that is passed bv not less than two-thirds of .glJlembers elected to_easb o.f th.e two hauses of the Leaisloture ond submitted to the electorate and approlgd by a moiaritv vote.- [2] The title and summarv and bollot label or auestion reauired for o measure purgugnt to the Elections Code shall. for eoch measure orovidinq for the imnosition of a tax. includina a measUre prgoosed bv an eleaor pursuant to Article il, include:
(A) The tvpe and anount or rote of the tax:
(Bl The duration of the tox; ond
2 (C) The use of the revenue derived from the tq<.
k) Any chanqe in state low which resuqs in anv telpover povino a new or hiaher exempt.chgroe must be imposed bv on act oossed by-each of the two houses of the Leoislature. Each act shall specify the tvne of exemot charae os provided in subdivision bl. and the amount or rate of the exempt charqe to be imoosed, /dl{b}As used in this section and in Section 9 of Article {, "tax" means everv e$l levy, charge, or exaction of any kind imposed by t$eSte+e state low that is not an exempt charqe. e*eep++ne+ettewing kl As used in this section, "qgefiot charae" meons onlv the followina:
previeea te tnese net
the benefit er granting the privilete te the paYer'
El e+ A reasonable charge imp€s€C for a specific government service or product provided directly to the payorthat is not provided to those not charged, and which does not exceed the rcasen€Sle octuol costs to the State of providing the service or product to the payor.
Iil13+ A charge impese+for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the ad m in istrative enfo rcement a nd adjudication thereof.
B) A lew. charae, or e$gQtion collected from locol units ol oovernment. health care providers or health core service plans that is orimorilv used bv the Stote of Californio for the purposes-.gt.increasino reimbursement ratgs.or pavments under the Medi-Cal proarom. and the revenues of which ore prllnafilv used to finance the non-f-ederol portion of Medi-Cal medical.gssistance expenditures. (41 A reasonable charge impesed for entrance to or use of state property, or the purchase, rental. or lease of state property, except charges governed by Section 15 of Artacle Xl. (5) A fine, or penalty, includina snv onplicable interestfor nonpovmentthereof. imposedbythejudicialbranchofgovernmentor@qstateodministrative enforcement ooencv pursuont to-.adiudicotorv due process, to punish a violation of law6l A levv, charae. ossessment. or exoction collected for ihe promotian of Californio tourism pursuant to Chanter 1 (commencine witLle.gtion 139951 of Part 4.7 of,Qivision 3 of Title 2 of the Government Code, {flt4Any tax or exempt charse adopted afterJanuary L,2A22 W, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effectivedateofthisactunlessthetax@eqprchgIEisreenacted hu*AV+negeverneF in compliance with the requirements of this section. h)fi){c}.lhe5tatebearstheburdenofprovingby@cl?-qrandconvincinaevidence that a levy, charge, or other exaction is on exempt charoe and not a lax. The State bears the b provi\q bv clear and cgnyincina evidence thqt the amount of the exempt charqe is reosonoble and !hg.! the amaunt charaed dees not exceed the actuol cost of providina the service or praduct to the p.gyor. ,l*p"tthe arneunt is ne mere than ne€essary to €eyer the reasenable €ests ef the governrnental a€tivity and 3 that the manner in whieh these eests are alleeated'to a payer bear a feir er+easenable relatisnshiB te the BapgsUurOens enr er bene
(21The retention of revenue by,,orthe pavmentto. d nan-aovernm-entol entitv of a lew. charge. ar exoction of anv kind imposed bv state law, sholl not be a factof ln determininq whether the lew. charoe or exoction is a tox or exe@fr charoe.
Bl The characterizotion qf o lew. charoe. or exaction of ony kind as beina voluntarv. or pgid in exchanoe for a benqfjt.. privilege. allawance. auth?rilqlion. or asset- sholl not be o focl?_r-lLCetermining whether the lew. charge, ar exoctian is a tox or an exemot charae.
Ul The use of revenue derived from the lew. chorae g'_exaction shall be a fqctar in determinina whether the lew, chsroe, qr exaction is o tax er exemot charae. (il As used in th.is section:
(1) "Actual cost" of providina o service or prodrg! means: (il the minimum amount necessarv to reimburse the aovernment for the cost of providino the Se-fvice or product to the pavor. ond fiil where the omount chorqed is not uted by the qovetwlent for onv purpose other than reimbursina that cost. ln computinq "actual cost" the maximum omount that mav be imposed is tie qctuql.gost less all other sources of revenue includina but not limitpd to taxes. other exemnt choraes-grqntg., ond s.tgte or Iederol funds received to provide such service or produd.
Ql "Extend" includes. but is not limited to, doing any of the followino with resoect to a tax or exemot charqe: lensthening i* duration, delavino or elimifating its expirotion. expandinq its application.to a new territorv or class af povor, or expandina the lsse to which its rate is applied. (3J "lmpose" meons adopt, enact, reenact. create, establish, collect, increase or extend. (41 "State low" includes. butjg not limited to. anv state statute, state reaulotion, stote executive order. stote.resolutian. state rulino. stote opinion letter. or other leaol authoriW or interBr-etatjon odopted. enscted. enforcedrjstued. or implemented bv the leaislative or executive branches of state aovernment. "State lqv" does not include dctions tqkgp bv the Reaents of the Unive$lty of eolifornia. Trustees of the Californio State University, or the Board of Governors of the Colifornio Communitv Colleaes.
Section 5. Section 1of Article XlllC of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
(g) "Actual cast" af providina a service or product means: lil the minimum omount necessaruJo_reimburse the oovernment for thg cost of providina the service or oradj,tgt to the pavor. and (iil where the amount charqed is not used by the qovernment for ony purpose other than reimbursina that cost. ln computino "octual cost" the moxinlum_amount that mav be imposed is the actuol cost less all other sources of revenue includino. but nat limited to toxes- gther exempt charaes, grants, and st-ate or federol funds received to provide such service or product.
b) "Extend" includes. but is not limited to. doina qeY qf the followina with regteclto a tox. exempt charae. or Article Xlll D ossessmenq. feg, or chqroe: lenathenino jts duration. delavinq or eliminotina its expiration expondina it| application to o new territory or clqss of pavor, or exnandinq the base to whbh its rate is aoolied.
4 fql{a} "General tax" means any tax imposed for general governmental purposes. (d) "lmpose" meons adop,t. enact. reenoct. creqte. estoblish- collect, increose. o!-extend. /gl_(b) "[ocal government" means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity, or an elector.-purs the initiative power provided bv o charter or stqtute.
(f] "Local law" includes. but-!S!to:t lilnited to anv ordinance. resolution. reaulation. rulino. ooinion letter, or other leaal authoritv or internretlt_tion.gdopted. enacted. enforced, issued, or implemented bv a local oovernmen!.
f4|ft| "Special district" means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies. /n|{d+ "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a generalfund.
fl {4 As used in this article, and in Section 9 of Article ll. "tax" means every aaylevy, charge, or exaction of any kind, im posed by a local S$/erraffient law that is not an exqg pt charge.ffii fi| As used in this sqction. "exempt charoe" means onlv the followino:
previded ts thes€ net elr
{11+4 A reqs-onoble charge impsseg for a specific !g!government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the +easenable actuol costs to the local government of providing the service or product. e)F+ Acharge impesed for the reasonable regulatory costs to a local governrnent for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the ad min istrative enforcement a nd adjudicatio n thereof. (!l{4} A reasonable charge ;spesed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.
@+gl A fine; or penalty, @ includina anv opplicable interest for nonnavment thereof, imposed bythe judicialbranchof governmentora localgovernmentgdministrctiveenforcerneat aqencv oursuont to odiudicatorv due process, as{+esult€f to punish a violation of law. ffI t€t A charge imposed as a condition of property development. No levv. chgrae, or exaction reaulotins or reloted to vehicle miles troveled mav Q€-imposed as o condition of proLerty de-velopment ar occuponcv. /6/{+},qn agsgssment fee. orchoroe-i@
+le+revisiess€f suhiect te Atticle Xl ll D, or an assessmenl imnqsed upon a business in o tourism morketing district. o parkinq ond busin?ss improvement area. or a propertv ond business imp.rov?ment district. 5 (7.J A charae imposed for o snecific health care service orovided diregtlv Io tle poyor and that is not provided ta_tbose not choroed, and which does not exceed the reosonable costs to the locol aovernment of nrovidinq the health care serviee. .-As.qsed in this poraoraph. a "health care service" means s senice licensed or exemptfrom licq.Q!;urgby the stote pursuantto Chapters 7, 7.3, or 2 of Division 2 of the Health ond Sofetv Code.
The leeal Fevernment bears the bsrden ef preving by a prependeranee efthe eviCene€ that a levyr eharget er ether exaetien is ngt a tarF, thet the ameunt is ne mere than neeescary te eever the reasenable eests ef the gevernmentel aetivity and that the manner in whieh-thes€ €os'ts ar€ alleeated te a payer bear a fair er reasenable relatrenship-te the paye/s burdens eni er benefits reeeived frem; the gevernmental aetivity, Section 6. Section 2 of Article Xlll C of the California Constitution is amended to read:
Sec. 2. Local Government Tax limitation. Notwithstanding any other provision of this Constitution:
(aI Everv levv. Eh$se, ar exoction af anv kind impoigd bv locdl ldw is eitlor q tqxor on exempt chorqe. All taxes imposed by any local government shall be deemed to he either generaltaxes or specialtaxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes. (b) No local low may impose,
extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rat€ not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. (c) @r et*ende4er ine-ea
er after January 4 1€95i ard prier te the effeetive date ef this artieler shall eentinue-te be impesed enly sugUiYlsien{'gF{A} No local lout
may irnpose;e*tendTer-iner.eaee any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been inceased if it is imposed at a rate not higher than the maximum rate so approved.
HI The title ond sumnarv and ballot lobel or auestion resuired fiar a qgasure pursuant to the Elections Code shall, for egch measure providinq for the imposition of ,a -tax, include:
[il The tvpe dnd amount gr rdte of the tax:
Q) the durotion.gf the tax: and
(il The use of the revenue derived from the tax. ILthe proposed tox is a aeneraltax. the phrose "for aeneral government use" shall.bgrequired, ond no advisorv measure mav oppear on the same ballot thot would indicate that the revenue .from the aenerol tax will. could. or should be used for o specific purposg. (d Onlv the aovernino hodv of a locol oovernment other than an elector pursuant to Article ll or the initiative pgvgr provided bv a charter or statute, shall have the outhoritv to imLose onv exemnt chqrae.
The aoverplna body shall imoose an e!-e..m.ptchorge bv an ordinance specifuina th_e. tvoe of exeng! chorae 6 as provided in Section 1.fi| and the amount or rqte oLthe exempt choroe to be imposed, onlpassed by the qovernino bodv. TbLs_subdivision shqtl nat applv to chsrges specified in oarooranh (71 of sqbdiyision (il of Section 7.
(f) No amendment to a Charter which pro:Ides .for the imoosition, extension, or increose of a tax or exempt charae sholl be submitted to gr aporoved bv the electors..nor shg!! any such amendment to a Charter hereofter submitted to .gr.gpproved bythe electors becomg effqctive for anv ourpose. hl Anv tax or exempt charqe odopted after Janlafy,k 2022. but orior tothe effective dote. gf this act, that was not adopted i4 cgmpliance with the reauirements o.f this section is void 72 m,onths ofte.f..th.e effective date of this act unless the tax or exemat choroe is reenacted in compliance with the reauiremg:nts o.f this section.
hlf il The locol aovernment beors the burden of provina bv clear and.ponvincina evidence thot a lew. charqe or exgction is an exempt charae and not a tax, The locol oovernment beors the burden of provinl. bv clear and canvincinq evidg-nce...that the omount of the exgmpt charqe is reasonoble ond thot the omount charqed does not exceed the octual cost of providina the service gr oro.dt4ctto the pavor. (2J The retention of revenue bv,.gr the pavmentto, s non-agyernmentol entitv of o lew. chqrae, orexaction of anv kind impogd .bv a local taw. shatl not.bg g factor in determinino whether the lew. charae or exoction is a tox or exempt chorae,
f 3] The chgr.ggterizstion of a lew. charae, or exoction of anv kind imposed bv a local low os beina poid in exchanqe for a benefit. privileqe, allowonce, aulhorizqtian. or asset- shall not be foctorsi!, determinino whether the lew, charae. or exaction is o:grl or an exempt charae.
U) fhe use of revenue derived flgm the tew. charqe or exaction shq![ be o factor in determinino whgll'lR( the lew. choroe, or exoction is a tox or exempt charqe, Section 7. Section 3 of Article Xlll D of the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, e+ charge, or surchorqe, inc shall be assessed bfanyegs{r€V upon any parcel of property or upon any person as an incident of property ownership except:
(1)The ad valorem property tax impe+eC+ur:suant+e descrihed in Section 7bJ of Article Xlll and SeAion 7(d of Articlg Xtlt A. and described ond enocted pursuant to-the voter approval reouirement in Sgction 7(bJ clArticle XlllA.
(2) Any special non-od volorem tax receiving a two-thirds vote o.f quolitied electors pursuant to Section 4 of Article Xl,l A, or after receivina o tu
districLbl the Lelislature oufsuant to stotute ositgxisted on December i7. 2027. (3) Assessments as provided by this afticle.
(4) Fees or charges for property related services as provided by this article. 7 (b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership.
Section 8. Sections 1 and L4 of Article Xlll are arnended to read:
Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States:
{a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value.
(b) All property so assessed shall be taxed in proportion to its full value. k) All proceeds frry the taxation of propertv shall be aoportioned occordjqg to law ta the districts within the counties,
Sec. 14. All property taxed by stote or local government shall be assessed in the county, city, and district in which it is situated. Notwilhstandina onv other provision of law. such stote or logal Bropqrty tdxes shqll be appgttioned accordino lo law to the districts within th.e co.-Wties.
Section 9. General Provisions
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (11 ln the event that this initiative rneasure and another initiative measure or measures relatang to state or local requirementsforthe imposition, adoption, creation, orestablishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other initiative measure or measures shall be deemed to be in conflict with this measure. ln the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other initiative rneasure or measures shall be null and void. (2) ln furtherance of this provision, the voters hereby declare that this measure conflicts with the provisions of the "Housing Affordability and Tax Cut Act of 2O22" and "The Tax Cut and Housing Affordability Act," both of which would impose a new state property tax {called a "surcharge") on certain real property, and where the revenue derived from the tax is provided to the State, rather than retained in the county in which the property is situated and for the use of the county and cities and districts within the county, in direct violation of the provisions of this initiative. (3) lf this initiatlve measure is approved by the voters, but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting initiative is later held invalid, this measure shall be self-executing and given full force and effect.
C. The provisions of this Act are severable. tf any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not 8 declared invalid or unconstitutional without regard to whether any portion of this Act or application thereof would be subsequently declared invalid.
D. lf this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse to defend this Act, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 of Title 2 of the Government Code or any other laq the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counselthat independent counsel willfaithfully and vigorously defend this Act. The written affirmation shall be rnade publicly available upon request. (3| A continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (4) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association, ftom interuening to defend this Act.
I
ATTACHMENT E
FOR IMMEDIATE RELEASE
February L,2023
Contact:
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New Measure Eligible for California's November 2O24 Ballot Limits Ability of Voters ond Stote and Locol Governments to Raise Revenues for Government Services. lnitiative Constitutionol Amendment.
SACRAMENTO, CA - Secretary of State Shirley N. Weber, Ph.D. has announced that an initiative became eligible for the November 5,2024, General Election ballot. ln order to become eligible for the ballot, the initiative needed 997,I39 valid petition signatures, which is equal to eight percent of the total votes cast for governor in the November 2018 General Election. The initiative has exceeded that threshold.
On June 27 ,2024, the Secretary of State will certify the initiative as qualified for the November 5,2024, General Election ballot, unless it is withdrawn by the proponent prior to certification pursuant to Elections Code section 960a(b).
The Attorney General's official title and summary of the measure is as follows:
LIMITS ABILITY OF VOTERS AND STATE AND tOCAt GOVERNMENTS TO RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE CONSTITUTIONAL AMENDMENT. For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters' ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds. Eliminates voters' ability to advise how to spend revenues from proposed general tax on same ballot as the proposed tax. Expands definition of "taxes" to include certain regulatory fees, broadening application of tax approval requirements. Requires Legislature or local governing body set certain other fees. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts. (2L-OO42A1..)
The Secretary of State's tracking number for this measure is 1-935 and the Attorney General's tracking number is2L-OO42AI.
The proponent of the measure is Thomas W. Hiltachk. He can be reached at 455 Capitol Mall, Suite 600, Sacramento, CA 95814 and (9L6) 442-7757.
For more information about how an initiative qualifies for the ballot in California, visit www. sos. cq. q ov/e I e cti o n s/bo I I ot- m e o s u res/h ow - q u o I ifv- i n iti ative /.