Agenda Item No
CITY OF YUCAIPA
AGENDA REPORT
TO:Honorable Mayor and City Council
FROM:Joe Pradetto, Director of Governmental Affairs
Phil White, Director of Finance
FOR:City Council Meeting of March 11,2024
SUBJECT: Adoption of Resolution Opposing Initiative No. 2l-0042A1 and Joining the "Stop the Taxpayer Deception Act" Coalition
RECOMMENDATION:
That the City Council adopt Resolution No. 2024-06, Opposing Initiative No. 2l-00424'1 and Joining the "Stop the Taxpayer Deception Act" Coalition.
BACKGROUND:
On Jan. 4, 2022, the Califomia Business Roundtable filed the "Taxpayer Protection and Government Accountability Act" or AG# 2l-0042A1. On Feb. 1,2023, the measure qualified for the November 2024 ballot.
The Taxpayer Protection and Government Accountability Act would change the California Constitution to expand the definition of a tax, increase thresholds for approving a new tax, and require fees to reflect actual costs and restrict the costs to "the minimum amount necessary." According to the nonpartisan and independent Legislative Anaylst's Office (LAO), the measure would add administrative costs and burdens to the process of adopting user fees and open local fees and taxes to legal challenge, creating difficult and uncertain operating conditions. The LAO concluded the measure would have the following major fiscal effect: "Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts."
Reductions on local goveffrment tax revenues have impacts on core services and infrastructure, including fire and emergency response, law enforcement, streets and roads, drinking water, sewer sanitation, parks, libraries, affordable housing, homelessness prevention, and mental health services.
The League of Califomia Cities, along with a broad coalition of local goverrrments, labor and public safety leaders, infrastructure advocates, and businesses, strongly opposes this initiative.
Local goverrrment revenue-raising authority is already restricted by state statute and constitutional provisions, including the voter approved provisions of Proposition l3 of 1978, Proposition 218 of 12 1996, and Proposition 26 of 2010. The Taxpayer Protection and Government Accountability Act adds and expands restrictions on voters and local government tax and fee authority.
Major Provisions
Fees and Charges
Except for licensing and other regulatory fees, fees and charges may not exceed the "actual cost" of providing the product or service for which the fee is charged. "Actual cost" is the "minimum amount necessary." The burden to prove the fee or charge does not exceed "actual cost" is changed to "clear and convincing" evidence.
Requires fees and charges paid for the use of local and state goveffrment property and the amount paid to purchase or rent govemment property to be "reasonable." These fees and charges are currently allowed to be market-based. Whether the amount is "reasonable" (introducing a new legal standard aiming to force below market fee and charge amounts) must be proved by "clear and convincing evidence." The standard may significantly reduce the amount large companies (e.g., oil, utilities, gas, railroads, garbage/refuse, cable, and other corporations) will pay for the use of local public property.
Prohibits fees on new development based on vehicle miles traveled.
Taxes
o Taxes and fees adopted after Jan. 1,2022, that do not comply with the new rules, are void unless reenacted.
o Invalidates Upland decision that allows a majority of local voters to pass special taxes. The measure specifies that taxes proposed by the initiative are subject to the same rules as taxes placed on the ballot by a city council.
o Expressly prohibits local advisory measures which allow local voters to express a preference for how local general tax dollars should be spent. . Requires voter approval to expand existing taxes (e.g., Utility, Transient Occupancy) to new territory (e.9., annexations) or to expand the tax base (e.g., new utility service) o New taxes can only be imposed for a specific time period. . City charters may not be amended to include a tax or fee. o All state taxes require majority voter approval.
Fines and Penalties
May require voter approval of fines, penalties, and levies for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties.
o
o
DISCUSSION:
Fees and Taxes
Taxes and fees differ in their application and intent. Taxes include charges that pay for services of general benefit. There does not need to be a relationship between the tax paid and the benefit provided. Fees, however, are charges applied to and intended to pay for a specific benefit or service. Fees must reflect the reasonable cost of providing the benefit or service.
Local governments levy a variety of fees to provide public services. Local goveming bodies may adopt new fees or revise existing ones with a majority vote. Common fees include:
. Building permits and planning fees.
. Nuisance abatement charges, such as for weed, rubbish, and general nuisance abatement to fund community safety, code enforcement, and neighborhood cleanup programs. . Commercial franchise fees.
. Emergency response fees.
. Document processing and duplication fees.
. Transit fees, tolls, parking fees.
. Facility use charges, fees for parks and recreation services.
Virtually every city, county, and special district must regularly (e.9., annually) adopt increases to fee rates and revise rate schedules to accommodate new users and activities. Most of these would be subject to new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges imposed by local agencies, including council-adopted increases to simply accommodate inflation, Cal Cities estimates the amount of local government fee and charge revenue at risk is approximately $2 billion per year including those adopted since Jan. I ,2022.
Over ten years, $20 billion of local government fee and charge revenues will be at heightened legal peril.
Hundreds of local tax measures were approved in 2022 that likely do not comply with the provisions of the initiative. Nearly $2 billion of annual revenues from these voter-approved measures will cease ayear after the effective date of the measure, reducing the local public services funded by these measures, unless the tax is re-submitted for voter approval.
Adding the words "the mimumum amount necessary" to the requirement that fees reflect the actual cost of providing a service presents more challenges. "The mimumum amount necessary" is subjective. If a city determines to offer a higher level of service of any kind, it could be sued because the service exceeds "the minimum amount necessary." This would have a profound impact to the way services are provided and financed.
Impact on City
As the City looks to correct and recover from a structural deficit, one of the key strategies is pursuing full cost recovery. Staff have been engaged in fee studies to ensure our fees capture all associated costs for specific services that provide limited or no direct benefit to the community as
a whole. This measure would significantly impair this effort. Additionally, if the City decides to pursue new revenue to protect critical services, like police and fire protection or emergency medical services, the thresholds would be nearly insurmountable. This measure poses an existential threat to the City's ability to fix its structural budget deficit.
Fines and Penalties
Under existing law, cities are required to provide due process before imposing a penalty or fine for violation of its municipal code:
l. A local agency must adopt administrative procedures that govern imposing fines and penalties, including providing a reasonable period of time for a person responsible for a continuing violation to correct or remedy the violation [Gov't Code 53069.4].
2. Notice must be given to the violating party before imposing the penalty; and give the party an opportunity to be heard and present any facts or arguments lMerco Construction Engineers v. Los Angeles Unified School District (1969) 274 CA2d 154, 1661.
3. The fine may not be "excessive" [U.S. Constitution amendments VIII and XIV].
The initiative converts administratively-imposed fines and penalties into taxes unless a new, undefined, and ambiguous "adjudicatory due process" is followed. This provision may put at risk authority to impose fines and penalties for violations of state and local law.
The City has several fines and penalties that may be impacted by this measure. These include Code Enforcement citations used to protect the quality of our neighborhoods, structures and fines for repeated false alarms that draw on limited police resources, and parking citations.
Conclusion
If passed, the Taxpayer Protection and Govemment Accountability Act will have a high cost of compliance and uncertain legal future that will create burdensome regulatory hoops that increase the cost of doing business. It will eliminate many of the options available to the City to fix its structural deficit without impacting services to our residents and tax payers.
FISCAL IMPACT:
The Taxpayer Protection and Govemment Accountability Act will change the model to support fees. The City's General Fund receives approximately $1.3 million in revenues from fees, permits, fines and penalties. The revenue is anticipated to remain intact; however, the costs associated with defending the fees, permits, fines and penalties is anticipated to increase significantly as a result of the Taxpayer Protection and Government Accountability Act.
Attachments:
1. Resolution No .2024-06
2. Full Text of Initiative No . 2l-0042A1
Approved By:k
ATTACHMENT 1
RESOLUTION NO.2024-06
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF YUCAIPA, CALIFORNIA, OPPOSING INITIATM #21-0042 At
WHEREAS, an association representing Califomia's largest corporations is spending tens of millions of dollars to promote a deceptive ballot measure currently eligible for the November 2024 statewide ballot; and
WHEREAS, the measure threatens billions of dollars every year in local government funding for services like fire and emergency response, law enforcement, affordable housing, services to support homeless residents, mental health services, and more; and WHEREAS, the measure would make it more difficult for local voters to pass measures to fund services and prevents voters from passing advisory measures that provide direction on how they want their local tax dollars spent; and
WHEREAS, the measure contains intentionally restrictive language that will encourage hundreds of frivolous lawsuits against cities and local governments - costing taxpayers many millions and stopping investments in vital local services; and WHEREAS, the measure would make it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and saf'ety, and our neighborhoods; and
WHEREAS, the measure is opposed by hundreds of local governments, teachers, firefighters, working families and local elected officials.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YUCAIPA HEREBY RESOLVES AS FOLLOWS:
Section I The City of Yucaipa opposes Initiative #21-0042a1 (Taxpayer Protection and Govemment Accountability Act).
Section 2 The City of Yucaipa joins the "Stop the Taxpayer Deception Act" coalition to protect public safety and local goverrrment services.
PASSED, APPROVED, and ADOPTED this I lth day of March, 2024.
Justin Beaver, Mayor
ATTEST
Ana V. Sauseda, CMC
Director of General Services/City Clerk
ATTACHMENT 2
BELL, MCANDREWS & ETILTACIIIT, LLP
ATTORNEYS ANO COUNSELOFIS AT LAVY
455 CAPTTOL MALL, SL.lITE CIOO
SACFIAMENTO. CALITOFIN IA €)5814
(916' 14-?-7757
FAX (916) 442-775E
rn*w.bmhlew.com
21 oo4z Amcrt
]anuary 4,2022 RE,CE,tVED
Anabel Renteria
Initiative Coordinator
Office of the Attorney General
State of California
PO Box 994?55
Sacramento, CA 9424+25550
JAN 0 't 20U
IMTIA ITVTE COORDTNATOR
ATTORNEY GENERAL'S OFFICE
Re: Initiative 2].0042- Amendrnent Number One
Dear Initiative Coordinator:
Fursuant to subdivision (b) of Section 9002of the Elections Code, enclosed please find Amendment #7 to Initiative No. 27-W2 "The Taxpayer Protection and Govemment Accountability Act." The amendments are reasonably gerrnane to the themg purpose or subiect of the initiative me.rsure as originally proposed.
I am the proponent of the measure and request that the Attorney General prepare a circulating title and summary of the measure as provided by law, using the amended language.
Thank you for your time and attention Processing my request.
Thomas \,V. Hiltachk
21-oo42Amdt.#l
The Taxpayer Protection and Government Accountability Act [Deleted codified text is denoted in strikeet*. Added codified text is denoted by italics ond qlderline.l 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 in 2021 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 rnore in hidden "fees" passed through to consumers in the price they pay for products, services, food, fuel, utilities and housing. Since 2O10, government revenue from state and local "fees" has more than doubled.
(c) California's high cost of living not only con$ibutes to the state's skyrocketing rates of poverty 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 years, nearly 300 major corporations relocated to other states, not counting thousands more smal! businesses that were forced to move, sell or close. (d) California voters have tried repeatedly, at Breat 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 Proposation 13 (19781, Proposition 52 (1986), Proposition 218 (1995), 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, Bovemment lawyers, 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 accountabitity over higher taxes and charges by requiring any tax measure placed on the ballot- 1 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 clariff 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 Governorto 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, heahhcare, 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 loca!, 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 two- thirds vote and voter approval requirements for government revenue increases created by the courts including, but not limited to, Connobis Coalition v. City of Upland, Chomber of Commerce v. Air Resources Boord, Schmeer v. Los Angeles County, lohnson v. County of Mendocino, Citizens Assn. of Sunset Beoch v.
Oronge County Local Agency Formation Commission, and Wilde v. City of Dunsmuir.
Section 4. Section 3 of Article XlllA of the California Constitution is amended to read:
Sec.3fu) Everv levy. chorge. or exoction of any kind imoosed bv stote low is either o tax or on exempt choroe.
btfil 14 Any change in state stat{rt€ /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 memberc elected to each of the two houses of the Legislature, ond submitted to the eledorate oqd oooroved bv o maioriltlote except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be imposed. Each Act shall include:
lAl A specilic durotion oI time thot the tax will bg.imoosed ond on estimote of the annual omount exoected to be defived from the tox.
B) A soecific ond leaollv bindina ond enforceoble limitotion on how the revenue from the tax con be soent. tf the revenue from the tox con be soent for unrestricted aenerol revenue purposes. then a statement thot the tan revenue can be spent for "unrestricted oenerol revenue ourposes" shall be included in o seporote. stand-olone section. Anv orooosed chonoe tothe use of the revenue from the tox sholl be odooted bv o seoorote oct thot is oassed bv not less tbon two-thirds of oll qembers elected to-egch of th-e two houses of the Ledisloture ond submitted to the electorote ond ooproved bv o maioritv vote. (21 The title ond summary and bollot label or ouestion reauired for o meosure oursuont to the Elections Code shall. for eoch meosure oroviding for the imoosition of o tox. includino o meosure proposed bv on elector oursuont to Article ll. include:
(Al The tvoe ond_qqount or rote of the tox:
(91 The durotion of the tax; ond
2 Et The use.gtfthe revenue derived from the tox...
kl Anv chanoe in stote low which resulF in ony toxoayer oovina o new or hioher exempt chg!'ge must be imoosed bv on oct oossed by-e-ach of the two houses of the Leoisloture. Each od sholl soecilv the tvoe of exemot choroe os provided in subdivision bl ond the amount or rote of the exemot choroe to be imoosed, ldl$)As used in this section ond in Section 9 of Article I. "tat'' means everv a#l levy, charge, or exaction of any kind imposed by the5tate stote low thot is not oeexeppt choroe. e*cept{h€{elleurine kl As used in this section, "exe-mgt charge" means onlv the followino:
the benefit er grantinG the privilege te the Fayer,
A)+2+ A reosonoble charge impeseC for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the rees€nable octuol costs to the State of providing the service or product to the payor.
IAP+ A charge imBese*'for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the ad m in istrative enforcement a nd adjudication thereof.
Bl A lew. choroe. or exodion collected from locol units oJ aovernment heolth core providers or heolth core seruice olans thot is orimorilv used bv the State of Colifornio for the Lurooses of inueasing reimbursement rotes or oavments under the Medi-Cal orogrom and the revenues of which ore orimorilv used to finance the non-federol oortion of Medi-Col medical assistonce expenditures- (41 A reosonoble charge impesed for entrance to or use of state property, or the purchase, rental, or lease of state property, except charges governed by Section 15 of Artacle Xl. (5) A finq or penalty, @ includina onv aoolicoble interestfor nonoovmentthereof. imposedbythejudicialbranchofgovernmentorMostoteodministrative enforcement ooencv oursuont to odiudicotorv due orocess. to ouni$h a violation of law. (61 A lew. charoe. ossessment. or exoction coll.ected for the oromotion of Colifornio tourism ourcuant to Chaoter 1 (commencine with Sestion 139951 of Part 4.7 of Division 3 of Title 2 of the Government Code. /fl{4 Any tax or exemo! charge adopted after January l, 2022 ?ol{t, but prior to the effective date of thls act, that was not adopted in compliance with the requirements of this section is void 12 months after the effectivedateofthisactunlessthetaxorexemotchareeisreenacted taurbY{he€errer+e+ in compliance with the requirements of this section. @@(d|TheStatebearstheburdenofprovingby@cleardndconvincinaevidence that a levy, charge, or other exaction is on exemot choroe and not a tar- The State beors the bur provino bv cleor ond convincina evidence thot the amount of the exemot choroe is reosonoble ond thol the omount choroed does not exceed the actual cost of orovidino the service or product to the o.gyor. ,{he* the ameunt is ne mere than neeessary te €ever the reas€nable eests ef the gevernmental aetiviU and 3 that the manner in whieh these eests are alleeated te a Bayer bear a fair er reasenable relatienshiB te the Baye/s burCen+et er b
Ql The retention of revenue bv&r the povmentto d non-oovernmentolentity of.q levy- choroe. or exodion of onv kind imoosed bv stqte law, sholl not be a loctor in determininq whether the lew- choroe. or exoction is o tox or exemot choroe.
Bl The choroderizotion of o lew. choroe. or exodion ol ony kind as beina voluntorv- or ooid in exchonge for o benefit, orivileoe. ollowance. outhorizotion. or asset sholl not be o foctor in determining whether the lew. chorae. or exaction is o tax or an exemot choroe.
l4J The use of revenue derived frorn the lew. choroe or exoction sholl be a foctor in determinino whether the lew, chorae. or exaction is o tox or exemot chorae. lhl As used in this seqion:
fi) "Actuol cost" of providino o xrvice or orodud.meons: fil the minimum omount necessaru to reimburse the oovernment for the cost of orovidino the service or orodud to the oovor ond liil where the omount charoed ls not used bv the oovernment for onv ouroose other thon reimburcino thot cost. ln computino "octuol cos( the moximum o?nountthat mavbe imoosed isthe oduolcost less allothersources of revenue includino. but not limited to toxes. other exemot choroes- gronts, and stote or federol funds received to provide such seruice or produ4.
l2l "Wnd". includes but is not limited to- doing ony of the followina with resoed to o tax or exemot choroe: lenothenino its durotion. delovino or elir?inoting its exoirotion. exoandino its ooolication to a new territaru or closs of oovor, or expdndino the bose to which its rote is opolied. l3l "lmoose" meons odoot. enoct- reenoct- creote. estoUish. @llect. increose or extend. (4) "Stote lo$/' includes. but is not limited to. anv state stotute. stfre,regulotion. stote executive order. stote lesolution. stote rulino- stote ooinion letter, or other leoal authoriil or interlretotion odopted. enocted, enforceil issued or imolemented bv the leaislotive or executive branches of stote oovernment. "Stote lqw" Coes not include octions token bLthe Regents of the Univergrty of eofifornia. Trustees of the Californio Stote Univercitv or the Boord of Gousrnors of the Colifornio Communittt Colleoes.
Section 5. Section 1 of Article Xlll C of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
(gl "Actual cost" of oroviding o service or oroduct meon,: lil the minimum omount necessorv to reimburse the aovernment for the cost of orovidino the service or prodJtgt to the oavor. ond (iil where the omount choroed is not u\ed by the aovernment for onv purpose other than reimbursingthot cost. ln comoutino "octuol cos( the moximum amount that mav be imoosed is the actuol cost less all other sources of revenue includino. but not limited to toxes. other exemot choroes. orontl. and stote or federol funds received to orovide s.uch service or produd.
h) "Extend" includes. but is not limitedto. doino onv of the followino with resoectto o tox. exemptchorqe. or ArtigLe Xlll D ossessment. fee. or charoe: lenothenino its durotion delovina or eliminotina its exoirotion^ exoondino its aoplicotion to o new territorv or closs of povo!. or exoondino the bose to which its rote is opolied.
4 /gl{a) "General taf' means any tax imposed for general governmental purposes. (dl'lmoose" means odoot. enod reenoct- creote. establish. collect. increose. or-extend.
GL$) "Local government'' means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental enlitv, or on elector oursuont t the initiotive power provided bv a chorter or stotute.
(fl "Local ldw" includes. but isltot limited to onv ordinonce resolution reaulotion. rulino. ooinion letter or other leoolouthoriw or interpretotion adopted. enocted. enforced, issued or implemented bv a locol oovemment..
tgl(el "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.
InLl*l "Special tat'' means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a generalfund.
tl {$ As used in this article, gnd in Section 9 of Article ll- "tax" means every aaylery, charge, or exaction of any kind, imposed by a local 6everement low thot's not on exemot ghgrge.ffi (il As used in this section. "exemot choroe" meons onlv the followino:
@$ A reosonoble charge impes€d for a specific loc_ol government service or product provided directly to the payorthat is not provided to those not charged, and which does not exceed the reasenable octuol costs to the local government of providing the service or product.
Q)Pl Acharge imBeseC for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. (!)14] A reosonoble charge impesed for entrance to or use of local government property, or the purchase, rental, or lease of local governrnent property.
tA lS+ A finq or penalty, @ includino onv opolicable interest for nonoovment thereof. imposed by the judicial branch of government or a local government odministotive enforcement ogencv oursuont to odjudicatorv due orocess- ase+esslt-ef to ounish a violation of law.
E)$l A charge imposed as a condition of property developmenl. No lew, cttgrge, or exoction reoulotino or reloted to vehicle miles traveled mov bg-imoosed os o condition of oroLerty develooment or occupancv. l6lF)ln qg.sessment fee. orchoroe@
tne++evisiense+ subiectto Article XttI O, or an ossessment im !lg. distict. g.pgrkina and business imorovement areo. or a propertv and business imorovement distrid.
I
5 Ol A choroe imoosed for o soecific heolth core seruice orovided directlv to tbe povor and thot is not. provided to-lhose not choroed. ond which does not exceed the reasonable costs to the locgl qovernment of orovidino the heolth core service, -As,gtg-d in th.is poroaraph. o "heofth care service' means o seruice licensed or exemotfrom lice?sure bv the stote pursuontto Chooters 7. 7.3. or 2 of Division 2 of the Heolth ond Sofetv Code.
The leeal Bevernment bearc the burden ef previn8 by a prepenCeranee ef the evidenee that a lew ehargei ir-er
reasenable relatienship te the paye/s burdens enr er benefits reeeiveC ftem; the Eevernmentalaetivity, Section 5. Section 2 of Article Xlll C of the California Constitution is amended to read:
Sec. 2. Loca! Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(al Everv lew. choroe. or exoction of onv kind imposedbv local low is either a tax or on exempt choroe. All taxesimposed byany localgovernment shall be deemed to be eithergeneraltaxes or specialtaxes. Special purpose districts or agencies, including school distracts, 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 rate 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)
su$ivisi€n{+{d} No local lout
mayirnposffianyspecialtaxunlessanduntilthattaxissubmittedtotheelectorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. ldl The title ond. sumnaru ond bollot label or ouestion reguired for o measure oursuont to the Elections Code sholl. for eoch measure orovidino forthe imoosition of g-tax. include:
fil The tuoe and omount.gr rote of the tox:
2l the duration of the tax: and
(31The use of the revenue derived from the tox. lf the oroposed tax is o oeneraltox. the phrose 'for genefol oovernment use" shall Erequired. ond no odvisorv megsure noy oooear on the some ballot thot would indicate that the revenue from the aenerol tax will. could. or should be used for o soecific ouroose. bl Onlv the oovernino bodv of o local oovernment other than on elector ounuont to Article Il or the initiotive oower orovided bv o chorter or stotute, sholl hove the outhoritv to imoose onv exemot choroe.
The aovernino bodv sholl imoose an e$p.mg!choroe bv on ordinance soecifuina the tvpe of exemot choroe 6 os ofovided in Section 7(il ond the omount or rote of the exemot chorae to be imoosed. ond oossed by the aovernino bodv. ThLs subdivision shall not applv to chorges specified in ooroorooh l7l of subdivision (il of Section 7.
ffl No amendment to a Charter which orovides for the imoosition extension. or increose ol o tox or exemot charae sholl be submitted to or ooproved bv the electorc. nor shall dnv such omendment to o Chorter hereofter submitted to or oporoved bv the electors becomq efrgctive for anv ouroue. bl Anv tox or exempt choroe odooted ofter Joqlgry 7. 2022 but orior to the effective dote-gf this oct. thot wos not odooted in compliance with the reouirgmelts of this section is void 72 months ofielthe effective date of this oct unless the tax or exemot chorae is reengcted in comolionce with the reouirements of this section.
lhlfit The locol oovernment beorc the burden of orovino bv clear ond Sonvincina evidence thot o lew. choroe or exoction is on exemot choroe ond not a tox. The locol oovernment bearc the burden of provino bv cleor and convincina evidence,that the omount of the exemot choroe is reosonoble ond thot the omount choroed does not exceed the odud!_cost of providino the service or oroduct to the oavor. (21 The retention of revenue bv. or the oavment to. o non-agvernmeFtgl entittt of o lew. choroe. or exoction of onv kind imoosed bv a locol law. sholl not be o foctor in determinino whether the lew, charoe or exoction is a-tox or exempt chorue:
[3] The chorocterizotion of o lew. gharge or exoction of onv kind imoosed bv a locol low os beino oaid in exchonoe for o benefit. orivileoe allowonce oulhorization. or osset. sholl not be foctofs _in determinino whether the lew, charae or exoction is a tox or on exemot choroe. (4| The use of revenue derived flgm the lew. choroe or exoction sholl be o foctor in determinino Whether the lew. chorae. or exoction is a tox or exemot choroe.
Section 7. Section 3 of Arficle Xll! D of the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, eJcharte, or surchorge, ind shall be assessed @yragenq upon any parcel of property or upon any person as an incident of property ownership except:
(1)The ad valorem propefi tax impesedprreuan*-te described in Section 7fu) of Article Xlll and SeAion 7bl of Article Xlll A, ond described ond enoaed pursuant to the voter aoproval reouirement in Section 7(b) glArticle XlllA.
(2)Any special non-od volorem tax receiving a two-thirds vote of ouolified eledors pursuant to Section 4 of Article Xlll
district bv the Leoislature ourcuont to stotute os it existed on December 37. 2027. (3) Assessments as provided by this article.
(4) Fees or charges for propefi 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 l and 14 of Article XIll are arnended to read:
Sec. 1 Unless othenrise 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 fullvalue.
(b) All property so assessed shall be taxed in proportion to its full value. kl All oroceeds fp-A the taxation of orooerttr sholl be oooortioned occordino to low to the districts within the counties.
Sec. 14. All property taxed by stgte or local government shall be assessed in the county, city, and district in which it is situated . Notwithstondina onv other provi,ion of low. such stote or lgcal orooertv taxes shall be oooortioned occordino to lqw to the districts within the counties.
Section 9. GeneralProvisions
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (1) ln the event that this initiative measure and another initiative measure or measures relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other initiative measure or rneasures 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 measure 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 2022" 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) !f this initiative 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. lf 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 portaons 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:
(U 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 law, the Attorney General shallappoint independent counsel to hithfully 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 deterrnining the qualifications of independent counsel and shall obtain written affrmation from independent counselthat independent counsel willfaithfully and vigorously defend this Act. The written affirmation shall be made publicly available upon request. (3)A continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscalyears, in an amount necessary to cover the costs of retaining independent counselto 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, from intervening to defend this Act.
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