AMENDED IN ASSEMBLY JUNE 20, 2024
AMENDED IN ASSEMBLY JUNE 13, 2024
california legislature—2023–24 regular session
Assembly Constitutional Amendment No. 10
Introduced by Assembly Member Aguiar-Curry Members
Aguiar-Curry and Wicks
(Coauthors: Assembly Members Bennett, Berman, Boerner, Haney, Holden, Grayson, Pellerin, Santiago, and Ward)
March 6, 2023
Assembly Constitutional Amendment No. 10—A resolution directing the Secretary of State to make amendments in Assembly Constitutional Amendment No. 1 (Resolution Chapter 173 of the Statutes of 2023) relating to housing. local government finance.
legislative counsel’s digest
ACA 10, as amended, Aguiar-Curry. Local government financing:
affordable housing and public infrastructure: voter approval.
Assembly Constitutional Amendment No. 1 of the 2023–24 Regular Session (ACA 1) would, if adopted by the people, amend Section 4 of Article XIII A, Section 2 of Article XIII C, and Section 3 of Article XIIID of, and would add Section 2.5 of Article XIIIC to, the California Constitution, relative to local finance. Under these provisions, ACA 1 would condition the imposition, e xtension, or increase of a sales and use tax or transactions and use tax imposed in accordance with specified law or a parcel tax by a local go vernment for the purposes of funding the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, including downpayment assistance, or permanent supporti ve housing, or the acquisition or lease of real
97 property for those purposes, on the proposition proposing that tax being approved by a majority vote of the membership of the governing board of the local go vernment and by 55% of its v oters v oting on the proposition and the proposition includes specified accountability requirements. ACA 1 would also make conforming changes.
This measure would remove the above-described provisions of ACA 1 relating to special tax es and mak e conforming changes in other provisions of ACA 1. The measure would direct the Secretary of State to make those amendments in ACA 1.
ACA 1 would create an additional e xception to the 1% ad v alorem property tax rate limit for an ad v alorem tax or special assessment to pay the interest and redemption charges on bonded indebtedness incurred by a city, county, or special district, as defined, to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, including downpayment assistance, or permanent supportive housing, or the acquisition or lease of real property for those purposes, if the proposition proposing that tax is appro ved by 55% of the voters of the city , county, city and county , or special district, as applicable, voting on the proposition on or after the ef fective date of ACA 1 and on the proposition including specified accountability requirements. ACA 1 would provide that this e xception applies to an ad valorem tax for these purposes that is submitted at the same election as ACA 1.
This measure would specify that the proposition proposing bonded indebtedness for which an ad valorem tax may be imposed under ACA 1, and any measure imposing an ad valorem tax for these purposes, may be voted on at the same election as ACA 1 or at a later election held after the effective date of ACA 1. The measure would also modify the definition of affordable housing for these purposes to include housing developments, or portions of housing developments, that are affordable to individuals, families, seniors, people with disabilities, v eterans, or first-time homeb uyers, who are lo wer income households or middle-income households earning up to 150% of countywide median income, capitalized operating reserv es, do wnpayment assistance programs, first-time homeb uyer programs, permanent supporti ve housing, as defined, and associated facilities, if used to serve residents of affordable housing. The measure would also modify the definition of public infrastructure for these purposes to include, among other things, facilities or infrastructure for the deli very of public services, including education, police, fire protection, parks, recreation, open 97 — 2 — ACA 10
space, emergency medical, public health, libraries, flood protection, streets or highways, public transit, railroad, airports, and seaports. The measure would make conforming changes and direct the Secretary of State to make those amendments in ACA 1.
ACA 1 would authorize the Le gislature, subject to a 2/3 2⁄3 vote, to enact laws establishing additional accountability measures consistent with the purposes and intent of the bonded indebtedness provisions of ACA 1.
This measure w ould additionally authorize the Le gislature, subject to a 2/3 2⁄3 v ote, to enact la ws imposing additional conditions or restrictions on the acquisition or lease of real property for purposes described in the bonded indebtedness provisions of ACA 1. The measure would also require that any repeal of those conditions or r estrictions be subject to a 2⁄3 vote.
ACA 1 would require the approval of 55% of the v oters of the city, county, city and county, or special district, as applicable, to incur bonded indebtedness, exceeding in any year the income and revenue provided in that year, that is in the form of general oblig ation bonds issued to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure, af fordable housing, or permanent supporti ve housing projects, if the proposition proposing that bond includes specified accountability requirements. ACA 1 would specify that this 55% threshold applies to an y proposition for the incurrence of indebtedness by a city, county, city and county, or special district for these purposes that is submitted at the same election as ACA 1.
This measure would specify that this 55% threshold applies to an y proposition for the incurrence of indebtedness by a city , county, city and county, or special district for these purposes that is submitted at the same election as ACA 1 or at a later election held after the effective date of ACA 1. The measure would direct the Secretary of State to make those amendments in ACA 1.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
line 1 Resolved by the Assembly, the Senate concurring , That the line 2 Legislature of the State of California at its 2023–24 Re gular line 3 Session commencing on the fifth day of December 2022, two-thirds line 4 of the membership of each house concurring, hereby directs the line 5 Secretary of State to make amendments in Assembly Constitutional line 6 Amendment No. 1 of the 2023–24 Re gular Session (Resolution 97 ACA 10 — 3 —
line 1 Chapter 173 of the Statutes of 2023) by remo ving Section 4 of line 2 Article XIII A of, Section 2 of Article XIII C of, and Section 3 of line 3 Article XIIID of, the Constitution, as proposed to be amended by line 4 that measure, and by removing Section 2.5 of Article XIIIC of the line 5 Constitution, as proposed to be added by that measure; and be it line 6 further
line 7 Resolved, That the Legislature hereby directs the Secretary of line 8 State to make amendments in Assembly Constitutional Amendment line 9 No. 1 of the 2023–24 Regular Session (Resolution Chapter 173 of line 10 the Statutes of 2023) by removing Section 1 of Article XIIIA, and line 11 Section 18 of Article XVI, of the Constitution, as proposed to be line 12 amended by that measure, and replacing those sections with the line 13 following Section 1 and Section 18, respectively:
line 14 That Section 1 of Article XIII A thereof is amended to read:
line 15 SECTION 1. (a) The maximum amount of an y ad v alorem line 16 tax on real property shall not e xceed 1 percent of the full cash line 17 value of that property. The 1 percent tax shall be collected by the line 18 counties and apportioned according to la w to the districts within line 19 the counties.
line 20 (b) The limitation provided for in subdivision (a) shall not apply line 21 to ad valorem taxes or special assessments to pay the interest and line 22 redemption charges on any of the following:
line 23 (1) Indebtedness approved by the voters before July 1, 1978. line 24 (2) Bonded indebtedness to fund the acquisition or improvement line 25 of real property approved on or after July 1, 1978, by tw o-thirds line 26 of the votes cast by the voters voting on the proposition. line 27 (3) Bonded indebtedness incurred by a school district, line 28 community college district, or county office of education for the line 29 construction, reconstruction, rehabilitation, or replacement of line 30 school facilities, including the furnishing and equipping of school line 31 facilities, or the acquisition or lease of real property for school line 32 facilities, approved by 55 percent of the v oters of the district or line 33 county, as appropriate, v oting on the proposition on or after line 34 November 8, 2000. This paragraph shall apply only if the line 35 proposition approved by the v oters and resulting in the bonded line 36 indebtedness includes all of the follo wing accountability line 37 requirements:
line 38 (A) A requirement that the proceeds from the sale of the bonds line 39 be used only for the purposes specified in this paragraph and not 97 — 4 — ACA 10
line 1 for any other purpose, including teacher and administrator salaries line 2 and other school operating expenses.
line 3 (B) A list of the specific school facilities projects to be funded line 4 and certification that the school district board, community college line 5 board, or county office of education has e valuated safety, class line 6 size reduction, and information technology needs in de veloping line 7 that list.
line 8 (C) A requirement that the school district board, community line 9 college board, or county office of education conduct an annual, line 10 independent performance audit to ensure that the funds have been line 11 expended only on the specific projects listed.
line 12 (D) A requirement that the school district board, community line 13 college board, or county office of education conduct an annual, line 14 independent financial audit of the proceeds from the sale of the line 15 bonds until all of those proceeds have been expended for the school line 16 facilities projects.
line 17 (4) (A) Bonded indebtedness incurred by a city , county, city line 18 and county, or special district for the construction, reconstruction, line 19 rehabilitation, or replacement of public infrastructure or affordable line 20 housing, or the acquisition or lease of real property for public line 21 infrastructure or af fordable housing, appro ved by 55 percent of line 22 the voters of the city, county, city and county, or special district, line 23 as appropriate, v oting on the proposition submitted at the same line 24 election as the measure adding this paragraph or at a later election line 25 held after the effective date of the measure adding this paragraph. line 26 This paragraph shall apply only if the proposition approved by the line 27 voters and resulting in the bonded indebtedness includes all of the line 28 following accountability requirements:
line 29 (i) A requirement that the proceeds from the sale of the bonds line 30 be used only for the purposes specified in this paragraph, and not line 31 for any other purpose, including city, county, city and county, or line 32 special district emplo yee salaries and other operating e xpenses. line 33 The administrative cost of the city , county, city and county , or line 34 special district e xecuting the projects and programs of the line 35 proposition shall not e xceed 5 percent of the proceeds from the line 36 sale of the bonds.
line 37 (ii) A requirement that the proceeds from the sale of the bonds line 38 only be spent on projects and programs that serve the jurisdiction line 39 of the city, county, city and county, or special district. 97 ACA 10 — 5 —
line 1 (iii) The specific local program or ordinance through which line 2 projects will be funded and a certification that the city , county, line 3 city and county, or special district has evaluated alternative funding line 4 sources.
line 5 (iv) A requirement that the city , county, city and county , or line 6 special district conduct an annual, independent performance audit line 7 to ensure that the funds have been expended pursuant to the local line 8 program or ordinance specified in clause (iii).
line 9 (v) A requirement that the city , county, city and county , or line 10 special district conduct an annual, independent financial audit of line 11 the proceeds from the sale of the bonds until all of those proceeds line 12 have been e xpended for the public infrastructure or af fordable line 13 housing projects, as applicable.
line 14 (vi) A requirement that the city , county, city and county , or line 15 special district post the audits required by clauses (i v) and (v) in line 16 a manner that is easily accessible to the public. line 17 (vii) A requirement that the audits required by clauses (iv) and line 18 (v) will be submitted to the California State Auditor for review. line 19 (viii) (I) A requirement that the city , county, city and county, line 20 or special district appoint a citizens’ oversight committee to ensure line 21 that bond proceeds are expended only for the purposes described line 22 in the measure approved by the voters.
line 23 (II) Members appointed to an oversight committee established line 24 pursuant to subclause (I) shall receive educational training about line 25 bonds and fiscal oversight.
line 26 (ix) A requirement that an entity owned or controlled by a local line 27 official that v otes on whether to put a proposition on the ballot line 28 pursuant to this paragraph will be prohibited from bidding on any line 29 work funded by the proposition.
line 30 (B) Notwithstanding an y other la w, if the v oters of the city , line 31 county, city and county , or special district ha ve pre viously line 32 approved a proposition pursuant to this paragraph, the city, county, line 33 city and county, or special district shall not place a proposition on line 34 the ballot pursuant to this paragraph until all funds from the line 35 previous proposition are committed to programs and projects listed line 36 in the proposition’s specific local program or ordinance described line 37 in clause (iii) of subparagraph (A).
line 38 (C) (i) The Le gislature may, by tw o-thirds v ote, enact la ws line 39 establishing accountability measures in addition to those listed in 97 — 6 — ACA 10
line 1 subparagraph (A), pro vided such la ws are consistent with the line 2 purposes and intent of this paragraph.
line 3 (ii) The Le gislature may , by tw o-thirds v ote, enact la ws line 4 imposing additional conditions or restrictions on the acquisition line 5 or lease of real property for the purposes described in this line 6 paragraph. Any r epeal of conditions or r estrictions on the line 7 acquisition or lease of real property for the purposes described in line 8 this paragraph shall require a two-thirds vote.
line 9 (D) The Legislature may, by majority vote, enact laws for the line 10 downpayment assistance programs established pursuant to this line 11 paragraph, provided that those la ws further the purposes of this line 12 paragraph.
line 13 (E) For purposes of this paragraph:
line 14 (i) (I) “Affordable housing” shall include housing line 15 developments, or portions of housing de velopments, that are line 16 affordable to individuals, families, seniors, people with disabilities, line 17 veterans, or first-time homeb uyers, who are lo wer income line 18 households or middle-income households earning up to 150 percent line 19 of countywide median income, as those terms are defined in state line 20 law. Affordable housing shall include capitalized operating line 21 reserves, as the term is defined in state law.
line 22 (II) “Affordable housing” shall also include any of the following:
line 23 (ia) Downpayment assistance programs.
line 24 (ib) First-time homebuyer programs.
line 25 (ic) Permanent supportive housing, including, b ut not limited line 26 to, housing for persons at risk of chronic homelessness, including, line 27 but not limited to, persons with mental illness. line 28 (id) Associated facilities, if used to serve residents of affordable line 29 housing.
line 30 (ii) “At risk of chronic homelessness” includes, but is not limited line 31 to, persons who are at high risk of long-term or intermittent line 32 homelessness, including persons with mental illness e xiting line 33 institutionalized settings, including, b ut not limited to, jail and line 34 mental health f acilities, who were homeless prior to admission, line 35 transition age youth experiencing homelessness or with significant line 36 barriers to housing stability , and others, as defined in program line 37 guidelines.
line 38 (iii) “Permanent supportive housing” means housing with no line 39 limit on length of stay, that is occupied by the tar get population, line 40 and that is linked to onsite or offsite services that assist residents 97 ACA 10 — 7 —
line 1 in retaining the housing, impro ving their health status, and line 2 maximizing their ability to li ve and, when possible, w ork in the line 3 community.
line 4 (iv) “Public infrastructure” shall include all any of the following:
line 5 (I) Facilities or infrastructure for the delivery of public services, line 6 including education, police, fire protection, parks, recreation, open line 7 space, emergency medical, public health, libraries, flood protection, line 8 streets or highways, public transit, railroad, airports, and seaports. line 9 (II) Utility, common carrier or other similar projects, including line 10 energy-related, communication-related, w ater-related, and line 11 wastewater-related facilities or infrastructure. line 12 (III) Projects identified by the State or local go vernment for line 13 recovery from natural disasters.
line 14 (IV) Equipment related to fire suppression, emergency response line 15 equipment, or interoperable communications equipment for direct line 16 and exclusive use by fire, emer gency response, police, or sherif f line 17 personnel.
line 18 (V) Projects that provide protection of property from sea level line 19 rise.
line 20 (VI) Projects that pro vide public broadband internet access line 21 service expansion in underserved areas.
line 22 (VII) Private uses incidental to, or necessary for , the public line 23 infrastructure.
line 24 (VIII) Grants to homeowner s for the purposes of structur e line 25 hardening of homes and structures, as defined in state law. line 26 (v) “Special district” has the same meaning as pro vided in line 27 subdivision (c) of Section 1 of Article XIII C and specifically line 28 includes a transit district, a re gional transportation commission, line 29 and an association of go vernments, except that “special district” line 30 does not include a school district, rede velopment agenc y, or line 31 successor agency to a dissolved redevelopment agency. line 32 (F) This paragraph shall apply to an y city, county, city and line 33 county, or special district measure imposing an ad valorem tax to line 34 pay the interest and redemption char ges on bonded indebtedness line 35 for those purposes described in this paragraph that is submitted at line 36 the same election as the measure adding this paragraph or at a later line 37 election held after the ef fective date of the measure adding this line 38 paragraph.
line 39 (c) (1) Notwithstanding any other provisions of law or of this line 40 Constitution, a school district, community colle ge district, or 97 — 8 — ACA 10
line 1 county office of education may levy a 55-percent vote ad valorem line 2 tax pursuant to paragraph (3) of subdivision (b). line 3 (2) Notwithstanding an y other pro visions of la w or this line 4 Constitution, a city , county, city and county , or special district line 5 may levy a 55-percent vote ad valorem tax pursuant to paragraph line 6 (4) of subdivision (b).
line 7 That Section 18 of Article XVI thereof is amended to read:
line 8 SEC. 18. (a) A county , city , to wn, to wnship, board of line 9 education, or school district, shall not incur an y indebtedness or line 10 liability in any manner or for any purpose exceeding in any year line 11 the income and revenue provided for that year, without the assent line 12 of two-thirds of the voters of the public entity voting at an election line 13 to be held for that purpose, e xcept that with respect to an y such line 14 public entity that is authorized to incur indebtedness for public line 15 school purposes, any proposition for the incurrence of indebtedness line 16 in the form of general obligation bonds for the purpose of repairing, line 17 reconstructing, or replacing public school b uildings determined, line 18 in the manner prescribed by law, to be structurally unsafe for school line 19 use, shall be adopted upon the approval of a majority of the voters line 20 of the public entity voting on the proposition at the election; nor line 21 unless before or at the time of incurring such indebtedness line 22 provision shall be made for the collection of an annual tax line 23 sufficient to pay the interest on such indebtedness as it f alls due, line 24 and to provide for a sinking fund for the payment of the principal line 25 thereof, on or before maturity , which shall not e xceed 40 years line 26 from the time of contracting the indebtedness. A special district, line 27 other than a board of education or school district, shall not incur line 28 any indebtedness or liability e xceeding any applicable statutory line 29 limit, as prescribed by the statutes go verning the special district line 30 as the y currently read or may thereafter be amended by the line 31 Legislature.
line 32 (b) (1) Notwithstanding subdi vision (a), an y proposition for line 33 the incurrence of indebtedness in the form of general oblig ation line 34 bonds for the purposes described in paragraph (3) or (4) of line 35 subdivision (b) of Section 1 of Article XIII A shall be adopted line 36 upon the approval of 55 percent of the voters of the school district, line 37 community college district, county office of education, city, county, line 38 city and county, or other special district, as appropriate, voting on line 39 the proposition at an election. This subdivision shall apply to a line 40 proposition for the incurrence of indebtedness in the form of 97 ACA 10 — 9 —
line 1 general oblig ation bonds for the purposes specified in this line 2 subdivision only if the proposition meets all of the accountability line 3 requirements of paragraph (3) or (4) of subdi vision (b), as line 4 appropriate, of Section 1 of Article XIII A.
line 5 (2) The amendments made to this subdi vision by the measure line 6 adding this paragraph shall apply to an y proposition for the line 7 incurrence of indebtedness in the form of general obligation bonds line 8 pursuant to this subdivision for the purposes described in paragraph line 9 (4) of subdi vision (b) of Section 1 of Article XIII A that is line 10 submitted at the same election as the measure adding this paragraph line 11 or at a later election held after the ef fective date of the measure line 12 adding this paragraph.
line 13 (c) When tw o or more propositions for incurring an y line 14 indebtedness or liability are submitted at the same election, the line 15 votes cast for and ag ainst each proposition shall be counted line 16 separately, and if tw o-thirds or a majority or 55 percent of the line 17 voters, as the case may be, voting on any one of those propositions, line 18 vote in favor thereof, the proposition shall be deemed adopted.
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97 — 10 — ACA 10