BILL ANALYSIS
SENATE RULES COMMITTEE SB 919
Office of Senate Floor Analyses
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THIRD READING
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Bill No: SB 919
Author: Rainey (R)
Amended: 4/14/97
Vote: 27 - Urgency
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SENATE LOCAL GOVERNMENT COMMITTEE : 5-0, 4/16/97
AYES: Ayala, Johnston, Kopp, Rainey, Watson
NOT VOTING: Calderon, Craven
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SUBJECT : Proposition 218 implementation
SOURCE : Author
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DIGEST : This bill enacts the Proposition 218 Omnibus
Implementation Act which prescribes definitions and
implementation provisions of Proposition 218 relating to
imposition of taxes, assessments and property-related fees
and charges.
This bill specifies how the constitutional requirements
apply to ongoing annual assessments with specified
exceptions.
ANALYSIS : In November 1996, California voters approved
Proposition 218, a constitutional amendment which restricts
local officials' ability to impose taxes, assessments, and
property-related fees, and imposed various voter approval
requirements on these levies. The initiative also allows
local voters to use the initiative power to reduce and
repeal local taxes, assessments and fees and charges.
Even before its passage, local officials and public finance
experts argued that Proposition 218 was unclear with
respect to the types of revenues affected, the procedures
to obtain voter approval, and the exemptions to its
provisions. The Senate Local Government Committee held a
hearing in September 1996 to discuss and catalogue some of
the questions and concerns regarding the initiative. After
California voters approved the measure, interested parties
continue to express confusion over how to implement its
provisions.
In response to numerous questions raised by the initiative,
the Legislative Analyst's Office convened meetings with
local agency representatives, taxpayer advocates, the
public finance community, legislative representatives, and
developers to discuss legislative options to clarify
Proposition 218 . After more than three months of
discussions, that group forged consensus on several issues
and is unanimously supporting the following provisions to
clean-up and clarify Proposition 218.
Rates and Amounts. Proposition 218 clarifies that local
agencies must obtain voter approval to impose, increase, or
extend a local tax, and comply with various notice,
hearing, protest, and assessment ballot procedures to
impose or increase an assessment or property-related fee or
charge. This bill permits local agencies to include a
range of rates or tax, assessment, or fee and charge
amounts in their ordinance or resolution. After complying
with the initiative's procedures, this bill allows the
agency to impose the tax, assessment, or fee or charge at
any rate or amount within the range.
Imposing Assessments. Proposition 218 requires local
officials to send affected property owners notice of a
hearing on any proposed assessment and an assessment
ballot. The measure requires agencies to tabulate
assessment ballots at its hearing and prohibits the agency
from imposing an assessment if a majority protest exists.
This bill codifies Proposition 218's procedures for
notifying property owners of a proposed assessment and
requires a signed assessment ballot to be delivered to the
address indicated on the ballot or at the agency's hearing.
This bill permits a property owner to submit, change, or
withdraw an assessment ballot prior to the conclusion of
the hearing's public testimony on the proposed assessment.
This bill specifies that assessment ballots submitted to
the agency are public records.
This bill permits any interested person to present
testimony at the hearing and allows the agency to continue
the hearing. At the hearing's conclusion, this bill
requires the agency to tabulate the assessment ballots. If
more than one owner of a multiply-owned parcel submits a
ballot, the agency must weigh each vote in proportion to
the respective ownership interests.
This bill permits an agency to use technological tabulation
methods, including punch card or bar-coded assessment
ballots. This bill specifies that assessment ballot
proceedings are not considered an "election" or "voting"
under the Constitution or the Elections Code.
After complying with this bill's notice, protest, hearing,
and assessment ballot requirements, the bill states that a
local agency need not go through these procedures again in
subsequent years unless it changes the assessment
methodology to increase the assessment or exceed a formula
or range adopted in accordance with Proposition 218 as
codified in this bill.
Exemptions. Proposition 218 exempted some existing
assessments from the initiative's new procedural
requirements, including assessments imposed exclusively to
finance the capital and maintenance costs for sidewalks,
streets, sewers, water, flood control, drainage systems, or
vector control. This bill codifies these exemptions and
defines the terms "water," "flood control," "drainage
systems," and "vector control."
Proposition 218 requires voter approval of new fees and
charges, but exempts fees and charges for sewer, water, and
"refuse collection services" from the voter approval
requirements. This bill defines "refuse collection
services" as any system to collect, transfer, store, or
dispose of solid waste by the agency, including materials
to be recycled, reclaimed, salvaged, or reused.
Current law (the Improvement Bond Act of 1915) allows local
officials to refund assessment bonds and levy reassessments
after providing public notice and holding a protest
hearing. Proposition 218 requires any new and increased
assessments to follow specified procedures including mailed
notice and the tabulation of assessment ballots. Because
local agencies' refunding bonds and reassessments reduce
property owners' overall debt, This bill exempts
reassessments imposed under the 1915 Act from the
initiative's provisions.
Superseding Statute. Current law contains over 30
different statutes which specify the procedures for
imposing new or increased benefit assessments. In
addition, the Ralph M. Brown Act contains a uniform
procedure for imposing any new or increased local
assessments. In addition, property-related fees are
subject to a variety of procedural requirements.
Proposition 218 requires existing, new, and increased
assessments, and property-related fees and charges to
comply with mailed notice, hearing, protest, and assessment
ballot or election requirements, with certain
constitutional exceptions.
This bill codifies Proposition 218's procedures for
property owner approval of assessments and specifies that
these procedures supersede existing statutory requirements.
However, this bill says that before local officials can
foreclose on a delinquent assessment, they must comply both
with Proposition 218, as codified in this bill, and
existing law's procedures.
Technical. Proposition 218 uses the following terms, but
does not define them: "identified parcel, " "registered
professional engineer," "notice by mail," "record owner,"
and "extended." This bill defines these terms in statute.
This bill also defines the term "district" as an area which
contains all the parcels which will receive a special
benefit from a proposed improvement or service. This bill
also clarifies and codifies other terms and provisions
specified in Proposition 218.
Comments
Proposition 218 (1996) regulates the imposition of local
taxes, assessments, and property-related fees and charges.
Specifically, the initiative imposes limitations and
property owner and voter approval requirements on the
imposition of local financing mechanisms, and allows voters
to enact initiatives to prohibit or repeal local levies.
Proposition 218 added two entirely new articles to the
California Constitution. These new articles use terms and
outline procedures that need additional clarification.
This bill clarifies and codifies some of Proposition 218's
provisions. The bill represents consensus solutions
crafted by local officials, public finance experts,
taxpayer advocates, and other stake-holders.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/17/97)
Association of California Water Agencies
California Association of Sanitation Agencies
California State Association of Counties
California Taxpayers Association
Howard Jarvis Taxpayers Association
League of California Cities
City of Los Angeles
County of Santa Barbara
LB:lm 4/17/97 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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