HomeMy WebLinkAbout2018-05-22 - AGENDA REPORTS - TAX FAIRNESS- TRANSPARENCY AND ACCOUNTABILITY ACT (2)Agenda Item: 20
CITY OF SANTA CLARITA
' AGENDA REPORT
NEW BUSINESS
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CITY MANAGER APPROVAL: �1
DATE: May 22, 2018
SUBJECT: TAX FAIRNESS, TRANSPARENCY AND ACCOUNTABILITY ACT
OF 2018
DEPARTMENT: City Manager's Office
PRESENTER: Masis Hagobian
RECOMMENDED ACTION
City Council review the attached resolution, provided by the League of California Cities,
regarding the Tax Fairness, Transparency and Accountability Act of 2018 and provide direction
to staff.
BACKGROUND
The Tax Fairness, Transparency and Accountability Act of 2018 is a proposed initiative to
potentially be placed on the November 6, 2018, General Election ballot. The measure, sponsored
by the California Business Roundtable and the American Beverage Association, proposes to
amend the State Constitution to change the rules for how state and local governments can impose
taxes, fees, and other charges.
The League of California Cities is encouraging cities to adopt the attached resolution opposing
the Tax Fairness, Transparency and Accountability Act of 2018.
Specifically, this measure:
Requires a two-thirds vote to extend a local tax to a new territory. This would
require cities to receive two-thirds approval from affected residents prior to
applying any existing local tax on any future annexed areas. The City currently
surveys affected residents prior to an annexation but there is currently no
requirement for a vote threshold in the annexation process.
2. Expands the definition of a tax to include payments voluntarily made in exchange
for a benefit received. This would redefine current City fees including: Landscape
Maintenance District, Streetlight Maintenance District, Stormwater, and Open
Space Preservation District as taxes. In regard to any remaining local fees, this
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measure increases the vote threshold from a majority vote of a local governing body
to a two-thirds vote of a local governing body to impose or increase local fees and
other local charges.
3. Increases the vote threshold from a majority vote of the electorate to a two-thirds
vote of the electorate for approving or increasing a local general tax.
4. Requires a two-thirds approval from a local governing body (City Council/County
Board of Supervisors) before a local tax can be placed on a ballot.
5. Narrows the legal threshold from "reasonable" to "actual" costs for fees applied to
local services, permits, licenses, etc.
6. Requires a statement of allowable uses be included on the ballot with any local tax
presented to voters.
Residences in unincorporated areas within the Santa Clarita Valley pay most of their utility fees
and taxes to Los Angeles County (County). These fees include landscape maintenance district,
streetlight maintenance district, utility user tax, and library tax. After an annexation has been
completed, these County fees and taxes are replaced with City of Santa Clarita (City) fees and
taxes. However, if this measure was to pass, the City would be prohibited from applying these
local fees and taxes on newly annexed territories unless two-thirds of the affected residents in the
annexed area voted in support of the City taxes and fees.
Prior to an annexation into the City, affected residents are provided eight different opportunities
by the City and the Local Agency Formation Commission (LAFCO), a county agency which
oversees annexations, to receive information on the impacts of the annexation and formally share
any concerns. Seven of the eight opportunities for community input are currently mandated by
State law. The City conducts a survey of the affected community as part of the community input
process, which is not required by State law.
Additionally, one of the eight opportunities involves LAFCO conducting a 30 day period for
protest of an annexation, which is followed by a protest hearing. During this period, anyone who
wishes to protest an annexation can file their protest with LAFCO.
The process to provide residents of a proposed annexation information on the economic and
overall impacts of the annexation into the City are already in place. The eight opportunities for
community input on an annexation typically spans approximately two years, where staff both at
the County level and City level consider public input and provide community members
information on the impacts of the annexation.
Furthermore, prior to an annexation, the City conducts a financial impact analysis to assess the
costs and revenues of annexing a territory. This proposed measure would preempt the City's
ability to accurately complete a financial impact analysis and assess the true revenue generated
from an annexation. The City would be unable to ensure the costs of services provided to the
proposed annexed area could be fully funded by the revenue collected through taxes and fees
from the residents of the annexed area.
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Additionally, this proposed measure could result in a variance in tax and fee rates and services
among communities throughout the City. If an annexed area does not meet the two-thirds vote
threshold then the City could not apply any local taxes and current fees to the residents in the
annexed area. These taxes and fees would include the Landscape Maintenance District,
Streetlight Maintenance District, Stormwater, and Open Space Preservation District. The City
would have to assess whether services would still be provided to these areas in the absence of
any revenue in taxes and fees. In the case of the Open Space Preservation District, this proposed
measure would allow for some residents to benefit from services that they are not contributing
into at the same rate as the rest of the City's residents.
The proposed initiative requires 585,407 petition signatures to be considered for the
November 6, 2018, General Election ballot. The initiative reached the required 25 percent of
total petition signatures threshold, or 146,351 petition signatures, for circulation by the
California Secretary of State on February 23, 2017. The circulation deadline for the initiative is
July 25, 2018.
The City Council Legislative Committee met on May 8, 2018, and reviewed the Tax Fairness,
Transparency and Accountability Act of 2018. The Legislative Committee requested staff to
forward the proposed initiative for review by the City Council without a recommendation by the
Legislative Committee.
ALTERNATIVE ACTION
Other action, as determined by the City Council.
FISCAL IMPACT
The resources required to implement the recommended action are contained within the City of
Santa Clarita's adopted FY 2017-18 budget.
ATTACHMENTS
State and Local Tax Initiative - Text
Sample Resolution
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December _Z2-- _,2017
VIA PERSONAL DELIVERY
Hon. Xavier Becerra
Attorney General of California
1300 I Street,17th Floor, P.O. Box 944255
Sacramento, CA 95814
Attention; Ashley Johansson, Initiative Coordinator
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1 7 -00 50AmdI.
RECEIVED
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Re: Request for Title and Summary for Initiative Constitutional
Amendment (A.G. No. 17-0050) -Amended Language
Dear Ms. Johansson:
Pursuant to Section 9002(b) of the California Elections Code, please find
attached hereto amendments to the above -captioned initiative measure. I hereby
request that a title and summary be prepared for the initiative measure using the
amended language. My address as a registered voter, the required proponent
affidavits pursuant to Sections 9001 and 9608 of the California Elections Code, and a
check for $2,000.00 were included with the original submission.
All inquires or correspondence relative to this initiative should be directed to
Nielsen, Merksamer, Parrinello, Gross & Leoni, LLP, 1415 L Street, Suite 1200,
Sacramento, CA 95814, (916) 446-6752, Attention: Kurt Oneto (telephone:
916/446-6752).
Thank you for your assistance.
Sincerely,
(�AA "
Robert Lapsley, Proponent
Enclosure: Proposed Initiative Constitutional Amendment
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[Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and
underline.]
Section 1. Title.
This Act shall be known, and may be cited as, the Tax Fairness, Transparency and
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Accountability Act of 2018.
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Section 2. Findings & Declarations.
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(a) State and local governments' appetite for new revenue adds to the rapidly rising costs
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of living that Californians face for housing, childcare, gasoline, food, energy, healthcare, and
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education. Compared to 2009, state revenues from taxes and other sources are set to grow by 68
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percent— $72 billion, or the equivalent of more than an additional $7,200 annually for a family
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of four. Comparable growth in local government charges such as employee pensions adds
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considerably more to this total. This growing burden of taxes and other charges is hurting
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hardworking Californians who find themselves living paycheck to paycheck, and being forced to
make tough choices between paying for housing, food, or healthcare.
(b) Californians are already among the highest taxed people in the country and already
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pay among the highest tax rates in the nation for the state personal income tax, sales taxes, and
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gasoline tax. From the most recent data from the US Census Bureau, California state and local
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government general revenues collected in 2015 from taxes, fees, charges, and other non-utility
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local sources were the highest in the nation at $419 billion, making them the 9t'' highest on a per
capita basis at $8,385 per person. With 12 percent of the national population, US Census Bureau
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data shows that Californians in 2016 paid 17 percent of all taxes collected by the states including
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13 percent of all general sales taxes, 15 percent of all vehicle license fees, 16 percent of all
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property taxes, 22 percent of all corporation taxes, 23 percent of all personal income taxes, and
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29 percent of all occupation and business license fees.
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(c) Californians have tried repeatedly to force greater accountability upon government
before revenues can be increased. Voter -approved ballot measures such as Proposition 13
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(1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 (2010) required state
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and local governments to make their case to the voters on the need for increased government
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revenues.
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(d) Through these measures, voters also tried to keep govermnent honest and transparent
about why new revenues and charges are needed and how they will be used. For too long,
politicians, state and local governments, and special interests have promised that taxpayer money
will be spent for a specific purpose, only to divert its use once the money starts coming in.
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Revenues that were supposed to improve education instead have.been diverted to general salary
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and benefit increases. Revenues that were promised to improve and expand government services
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were instead diverted to pay down debts created by past government decisions. Recent major
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transportation improvements have seen cost overruns more than double their original estimate.
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Polling by the nonpartisan Public Policy Institute of California showed 88 percent of
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Californians believe state government wastes a lot or some of the money we pay in taxes and
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charges.
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(e) Contrary to the voters' intent, voter approval of government revenue increases and
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spending accountability measures have been weakened by the Legislature, the courts, and special
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interests, making it easier to raise government revenues in a myriad of ways by only a simple
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majority of the Legislature or with no vote by the public who is expected to pay the costs.
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(f) Worse, court -created loopholes have enabled governments and their surrogates to
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become less transparent about how the funds taken from taxpayers are raised and spent.
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Loopholes have been created which are used by the Legislature, local governments and even
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special interest groups to: (1) pass vaguely -worded statutes allowing unelected bureaucrats to
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impose new fees and other charges on their own that increase the costs of goods and services in
the state; (2) impose new taxes and other charges by hiding them and simply calling them by
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another name or even using the term "something else;" (3) shelter the revenues from voter
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approval by running the revenues through a nonprofit organization or another third party; and (4)
encourage "divide and tax" by malting it easier to raise taxes or charges on only a part of the
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population through simple majority votes in low turnout elections.
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Section 3. Statement ofPurpose.
(a) In enacting this measure, the voters reassert their right to require a two-thirds vote of
the Legislature at the state level, and two-thirds of voters at the local level, for increases in state
and local taxes, no matter how they are labeled nor how or by whom they are proposed. The
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voters also intend that government remain accountable to the voters for how the taxes, fees,
charges, and other government revenues extracted from Californians are spent.
(b) Furthen-nore, the purpose and intent of the voters in enacting this measure is to clarify
that any new or increased form of state revenue, by any name or manner of extraction paid
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directly or indirectly by Californians, shall be authorized only by a two-thirds vote of the
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Legislature to ensure that the purposes for such tax, fee, or other charge are broadly supported
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and transparently debated.
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(c) Furthermore, the purpose and intent of the voters in enacting this measure is also to
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ensure that taxpayers have the right and ability to effectively balance new or increased taxes,
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fees, charges, or other government revenues with the rapidly increasing costs Californians are
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already paying for housing, food, gasoline, energy, healthcare, education, and other basic costs
of living.
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(d) Furthermore, the purpose and intent of the voters in enacting this measure is to force
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transparency and accountability on how state and local revenues are utilized, so that revenues are
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used for their promised purposes, and not diverted to other uses.
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(e) Furthermore, the purpose and intent of the voters in enacting this measure is to require
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that the public be allowed to vote on any and all local taxes that were created or increased by
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regulation or other bureaucratic action.
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(f) In enacting this measure, the voters also additionally intend to reverse loopholes in the
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legislative two-thirds vote and voter approval requirements for government revenue increases
created by the courts including, but not limited to, Cannabis Coalition v. City of Upland,
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Chamber of Commerce v. Air Resources Board, and Schmeer v. Los Angeles County.
Section 4. Section 3 of Article XIII A of the California Constitution is amended, to read.
SECTION 3.
(a) Every levy, charge, or exaction of kind imposed, adopted, created, or established
by state law is either a tax or an exempt charge.
b&I (a) Any change in state statute law which results in any taxpayer paying a 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, except that no new ad valorem taxes on real property, or sales
or transaction taxes on the sales of real property, may be imposed.
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(b) As used in this section, "tax" means every any levy, charge, or exaction of any
kind imposed, adopted, created, or established by the—Stat€ state law that is not an exempt
charge. o pt the following:
(d) As used in this section. "exempt chane" means only the followinz:
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(1) n „t,; rge imposed for a ,.;�;„ b enefA , n f ,.,,e ;lege g nted difeetly to the
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payeF that is not proVided to these not 'to the State of eenfeffing the benefit or granting the privilege to the payoF.
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(2) A reasonable charge imposed for a specific government service or product
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provided directly to the payor.that is not provided to those not charged, and which does not c
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exceed the ruble actual costs to the State of providing the service or product to the payor. a
A reasonable charge imposed for the reas^,,ab4ca not to exceed the actual C
regulatory costs to the State ;n,.IIfor issuing licenses and permits, performing c
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investigations, inspections, and audits, enforcing agricultural marketing orders, imposing C.
assessments on a business by a tourism marketing district, and the administrative enforcement L
and adjudication thereof. N
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or lease of state property, except charges governed by Section 15 of Article XI. x
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fIJ (5) A fine; or penalty, or other- monetary charge including any applicable interest for ~
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nonpayment thereof, imposed by the judicial branch of government or the State, as a result a
state administrative enforcement agency pursuant to adjudicatory due process, to punish a
violation of law.
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(e) Any twi adopted after january 1, �O
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was not adopted in complianee with the Fequirements of this seetion is void 12 months after the
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effeetive date of this aet unless the tax is Feenaeted by the Legislature and signed ii+te law by the J
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Governer 0 with the o W
(e) As used in this section, "state law" includes, but is not limited to, any state statute,
state regulation, state executive order, state resolution, state ruling, state opinion letter, or other 4)
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legal authority or interpretation adopted, enacted, enforced, issued, or implemented by the
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legislative or executive branches ofstate government. Because subdivision ({hof Section 9 of Q
Article IX of this Constitution requires that the University of California shall be entirely
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independent of all political or sectarian influence, "state law" does not include acts of the
Regents of the Univetsiiy of California.
(0(1) A levy, charge, or exaction of any hind imposed, adopted, created, or established b
state law and which is retained by or navable to a non-government entity remains subiect to this
actual costs of the govemmental ^^twit service or product or regulatory task, that an exempt Q
charge is not used for any purpose other than its stated purpose, and that the manner in which
those costs are allocated to a payor bear a fair or- reasonable , elationship to the payer's burdens
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section if a state law also limits in any way how the non-government entity can use the levy,
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chaYge, or exaction.
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(2) The characterization of a levy, charge, or exaction of any kind imposed, adopted,
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created, or established by state law as being voluntary, or paid in exchange for a bene f tt,
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privilege, allowance, authorization, or asset, shall not be a factor in determining whether the
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levy. cue, or exaction is a tax or an exempt charge.
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(g) No new, increased, or extended tax shall be valid or given any effect unless:
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(1) The state law creating, increasing, or extending the tax contains a specif c and le,llY
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binding and enforceable limitation on how the revenue from the tax can be spent. tithe revenue
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from the tax can be spent for unrestricted general revenue purposes, then a statement that the tax
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revenue can be spent for "unrestricted general revenue purposes " shall be included in the
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separate, stand-alone section required by parar�(2).
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(2) A true and impartial statement of facts explicitly and affirmatively identi yin each
tax and the specific limitation on how the revenue therefrom can be spent is set forth in the state
law as a separate, stand-alone section containing no other information.
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(3) The revenue from the tax is not used° or any purpose other than those identi ted
pursuant to this subdivision.
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(h) The specific and legally bindin ag nd enforceable limitation on how the revenue from
a tax can be spent shall only be changed bya state law which is adopted by a separate act that is
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passed by not less than two-thirds of all members elected to each of the two houses of the
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Legislature.
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0 (d) The State bears the burden of proving by a pfepe ,ao,.anee of the clear and
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convincing evidence that a levy, charge, or other exaction of any kind is an exempt charge and is
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not a tax, that the amount is reasonable and no more than necessary to cover the ie-ccsonable
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actual costs of the govemmental ^^twit service or product or regulatory task, that an exempt Q
charge is not used for any purpose other than its stated purpose, and that the manner in which
those costs are allocated to a payor bear a fair or- reasonable , elationship to the payer's burdens
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on, or benefits reeeived from the governmental ,,efivit y is proportional based on the service or
product provided to the pavor as described in paragraph (1) of subdivision (d), or is
proportional to the costs to the State created b the he payor for performing the re ug latory tasks
described in paragraph Q ofsubdivision (d).
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Section S. Section 3.1 is added to Article XIII A of the California Constitution, to read. c
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SECTION 3.1.
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L) No new, increased, or extended levy, charge, or exaction of any kind that is contained Z
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in, or authorized by, a new or amended regulation shall be given any force or effect unless and c
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until the Legislature by statute approves the levy, charge, or exaction as provided in this section. Q
(b) If the levy, charge, or exaction is a tax as def ned in Section 3 of this article, then it
must be approved by not less than two-thirds of all members elected to each of the two houses of
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the Legislature. I the levy, charge, or exaction is an exempt charge as defined in Section 3 of N
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this article, then it must be approved by not less than a majoriiy of all members elected to each
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of the two houses o the Legislature. v
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(c) The Legislature shall not vote to approve any levy, charge, or exaction of kind L
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subject to this section until after the regulation containing the levy, charge, or exaction is x
approved in its final form by the Office ofAdministrative Law or any alternative or successor
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agency. No regulation containing or authorizing a levy, cue, or exaction subiect to this
section shall be fled with the Secretary of State or published in the California Code of
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emulations, or any alternative or successor publication, until the levy, charge, or exaction is
approved by the Legislature in compliance with this section.
(d) An emery regulation, including any readoption thereof, that contains or
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authorizes any new, increased, or extended levy, charge, or exaction of any kind shall not remain
in effect longer than 120 days without approval of the levy, charge, or exaction by the
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Legislature pursuant to this section, in
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(e) This section shall not apply to any new, increased, or extended levy, charge, or
exaction of any kind that is contained in, or authorized by, a new or amended regulation
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promulgated pursuant to a state tax that was adopted in compliance with Section 3. Q
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(0 Fon purposes of this section, "regulation" has the same meaning found in Section
11342.600 of the Government Code, and "emergency" has the same meaning as found in Section
11342.545 of the Government Code, as those sections read on January 1, 2017.
(g) Nothing in this section shall be interpreted as arg ant of authority to tax to any
executive branch agency or department.
Section 6. Section I of Article XIII C of the California Constitution is amended, to read: Q
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SECTION 1. =
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Definitions. As used in this article: _
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(a) "Article XIII D assessment, fee, or charge " means an assessment, fee, or charge U
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subject to Article XIII D. "General tax" sed f F genefal govenifflefital
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purposes.
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b "Localgovernment" means any county, city, city and county, a charter city
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or county, any special district, of any other local or regional governmental entity, or the
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electorate of y of the preceding p
entities when exercising the initiative ower. ~
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(c) "Special district" means an agency of the State, formed pursuant to general law or a
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special act, for the local performance of governmental or proprietary functions with limited U-
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geographic boundaries including, but not limited to, school districts and redevelopment agencies.
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(e) As used in this article, "tax" means everyany levy, charge, or exaction of any kind
imposed, adopted, created, or established by a local gevefFuRent law that is not an exempt X
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charge or Article XIII D assessment, fee, or charge.,
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(e) "Exembt charev" means only the following: °
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fD (2-) A reasonable charge imposed for a specific local government service or product E
provided directly to the payor that is not provided to those not charged, and which does not r
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exceed the reasonable actual costs to the local government of providing the service or product.
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A imposed for benefit
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(1) charge a speeifie eanfer-red or privilege gy afAed
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payor that is not provided to these not charged, and which does not exeeed the
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fD (2-) A reasonable charge imposed for a specific local government service or product E
provided directly to the payor that is not provided to those not charged, and which does not r
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exceed the reasonable actual costs to the local government of providing the service or product.
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( } A reasonable charge imposed for the reasonable le not to exceed the actual
regulatory costs to the a local government for issuing licenses and permits, performing
investigations, inspections, and audits, enforcing agricultural marketing orders, and the
administrative enforcement and adjudication thereof.
(h)(1) A levy, cue, or exaction of any kind imposed, adopted, created, or established
by a local law and which is retained by or payable to a non-government entity remains subject to
this section and Section 2 if a local law also limits in any way how the non-government entity
can use the levy, charge, or exaction.
(2) The characterization of a levy, charge, or exaction of any Bind imposed, adopted,
created, or established by a local law as being voluntary, or paid in exchange for a bene at,
privilege, allowance, authorization, or asset, shall not be factors in detePmining whether the
levy, charge, or exaction is a tax or an exempt charge.
to The local government bears the burden of proving by a pre-ponde .anee of the clear and
convincing evidence that a levy, charge, or other exaction of any kind is an exempt charge and
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purchase, rental, or lease of local government property.
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(41 (5) A fine; or penalty, of other monetary oharge including any applicable interest for
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nonpayment thereof, imposed by the judicial branch of government or a local government
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administrative enforcement agency pursuant to adjudicatory due process, �ul� to punish
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a violation of law.
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(6} A charge imposed as a condition of property development, or an assessment
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imposed upon a business by a tourism marketing district.
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(7) An Article XIII D assessment, fee, or charge ^ ssessfflents and propefty Felate
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fees imposed in accordance with the provisions of Article XIII D.
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(fl "Local law" includes, but is not limited to, any ordinance, resolution, regulation,
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ruling, opinion letter, or other legal authority or interpretation adopted, enacted, enforced,
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issued, or implemented by a local government.
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(g) "Extend" includes, but is not limited to, doing any of the following with respect to a
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tax, exempt charge, or Article XIII D assessment, fee, or charge: len tg hening its duration,
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delaying or eliminating its expiration, expanding its application to a new territory or class of
payor, or expanding the base to which its rate is applied.
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(h)(1) A levy, cue, or exaction of any kind imposed, adopted, created, or established
by a local law and which is retained by or payable to a non-government entity remains subject to
this section and Section 2 if a local law also limits in any way how the non-government entity
can use the levy, charge, or exaction.
(2) The characterization of a levy, charge, or exaction of any Bind imposed, adopted,
created, or established by a local law as being voluntary, or paid in exchange for a bene at,
privilege, allowance, authorization, or asset, shall not be factors in detePmining whether the
levy, charge, or exaction is a tax or an exempt charge.
to The local government bears the burden of proving by a pre-ponde .anee of the clear and
convincing evidence that a levy, charge, or other exaction of any kind is an exempt charge and
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not a tax, that the amount is reasonable and no more than necessary to cover the r-easo= oie
actual costs of the governmmtal aetivit service or product or regulatory task, that an exempt
charge is not used for any purpose other than its stated purpose, and that the manner in which
those costs are allocated to a payor is proportional based on the service or product provided to
the payor as described in paragraph (1) ofsubdivision (e), or is proportional to the costs to the
local government created by the payor for performing the regulatory tasks described in
paragraph (2) ofsubdivision (elbl^r A.k�or reasonable relationship to the payer -'s b,,, dms
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Section 7. Section 2 of Article XIII C of the California Constitution is amended, to read:
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SECTION 2.
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Local Government Tax Limitation. Notwithstanding any other provision of this
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(a) All tfflies imposed by any loeal govemment shall be demed to be either general tfflies c
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if it is imposed higher than the
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20.a
not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate
so approved.
(c) The governing bodv of a local government shall only submit a tax to the electoNate of
the local government by an act passed by not less than two-thirds of all members elected to the
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governing bodv Any tax so submitted shall be consolidated with a rely scheduled general N
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election for members of the governingodv o the local government, except in cases off' °
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emergency declared by a unanimous vote of the governing bodes >,
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(d) The governing body of a local government shall not impose, extend, or increase any
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exempt charge unless and until the act containing the exempt charge is passed by not less than c
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two-thirds of all members elected to the governing body. An exempt charge imposed, extended, Q
or increased by a governing bodv shall be subject to referendum pursuant to the same si nature
requirement applicable to statewide referendum measures. c
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(e) No initiative in an local ocal government may impose, extend, or increase any exempt Q.
charge unless and until the exempt charge is submitted to the electorate and approved by a two- L
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(fl No new, increased, or extended tax shall be valid orivg en any effect unless: L
(1) The act creating, increasing, or extending the tax contains a specific and legallX x
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binding and enforceable limitation on how the revenue from the tax can be spent. If the revenue ~
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from a tax can be spent for unrestricted general revenue purposes, then a statement that the tax 0
revenue can be spent for "unrestricted general revenue purnoses " shall be included in the >
separate, stand-alone section required by paragraph (2), and included in the ballot question
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tax and the specific limitation on how the revenue therefrom can be spent is set forth in the act as J
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a separate, stand-alone section containing no other information.
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(3) The revenue from the tax is not used for any purpose other than those speci acall, ci
identified pursuant this subdivision. 4)
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and shall be approved in accordance with the requirements of this section. Q
(h) An Article XIII D assessment. fee. or charoe can be extended. imposed. or created
ursuant to Article XIII D.
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Ci) In order to preserve the right of voters to vote on all local taxes as provided for in this
section, all of the following shall apply:
(L)Any imposition, increase, or extension of a local government tax that was voted on bx
the electorate of the local government after January 1, 2018, but prior to the effective date of this
subdivision, and which does not satisfy all of the requirements ofparygraph (2), shall cease to
be imposed, extended, increased, or collected unless and until the tax is approved in strict
compliance with all the requirements of paragraph (2).
(2)(A) The tax imposition, increase, or extension was approved by two-thirds of the local
government's electorate,
(B) The act imposing, increasing, or extending the tax strictly complies with subdivision
(C) The ballot question presented to voters for the tax imposition, increase, or extension
strictly complies with subdivision (fl.
Section 8. Section S is added to Article XIII C of the California Constitution, to read: ~
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SECTION 5.
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(a) This article and Section 4 ofArticle XIII A shall apply to all local lawmaking power, Ui
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whether exercised by a governing bod or by the electorate actin t�gh the initiative power.
(b Nothing in this article or Section 3 of Article XIII A shall be interpreted as altering m
the voter approval requirements for bonded indebtedness described in paragraph (3) of
subdivision (b) of Section I ofArticle XIII A.
Section 9. Section 3 of Article XIII D of the California Constitution is amended, to read:
SECTION 3.
Property Taxes, Assessments, Fees and Charges Limited.
(a) No tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of
property or upon any person as an incident of property ownership except:
(1) The ad valorem property tax imposed pursuant to Article XIII and Article XIII A.
(2) Any spial non -ad valorem tax receiving a two-thirds vote pursuant to Section 4 of
Article XIII A.
(3) Assessments as provided by this article.
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(4) Fees or charges for property related services as provided by this article.
(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 10. Liberal Construction.
This Act shall be liberally construed in order to effectuate its purposes.
Section 11. Conflicting Measures.
(a)(1) In the event that this initiative measure and another initiative measure or measures
relating to state or local vote requirements for the imposition, adoption, creation, or
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establishment 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
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this measure. In the event that this initiative measure receives a greater number of affinnative
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votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other
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initiative measure or measures shall be null and void.
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(2) Notwithstanding paragraph (1), this initiative measure shall not be deemed to be in
conflict with any other initiative measure that requires statewide voter approval of the creation,
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increase, extension, or continued imposition of any tax.
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(b) If 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
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and effect.
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Section 12. Severability.
The provisions of this Act are severable. If 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 declared invalid or unconstitutional without regard to
whether any portion of this Act or application thereof would be subsequently declared invalid.
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Section 13. Legal Defense.
If 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;
(a) 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 shall appoint
independent counsel to faithfully and vigorously defend this Act on behalf of the State of
California.
(b) Before appointing or thereafter substituting independent counsel, the Attorney a
General shall exercise due diligence in determining the qualifications of independent counsel and
shall obtain written affirmation from independent counsel that independent counsel will
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faithfully and vigorously defend this Act. The written affirmation shall be made publicly-
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available upon request.
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(c) A continuous appropriation is hereby made from the General Fund to the Controller,
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without regard to fiscal years, in an amount necessary to cover the costs of retaining independent
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counsel to faithfully and vigorously defend this Act on behalf of the State of California.
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Section 14. Effective Date. 0
Notwithstanding any other provision of the California Constitution, this act shall take
effect the day after its approval by the voters.
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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF <<CITY>> OPPOSING
THE TAX FAIRNESS, TRANSPARENCY AND ACCOUNTABILITY ACT OF 2018
WHEREAS, California's cities, counties and special districts follow strict guidelines
and existing state law regarding the establishment of reasonable fees and the
required voter approval of all local taxes; and
WHEREAS, there is a signature -gathering campaign for a state ballot measure
currently sponsored by the California Business Roundtable that would severely harm
the ability of local governments to continue to provide quality services by imposing
onerous roadblocks to raising local revenue to address community needs, services and
infrastructure improvements; and
WHEREAS, it is important for local community members, in concert with their duly -
elected officials—rather than a special interest group in Sacramento --to determine the
services and funding levels appropriate for their own cities; and
WHEREAS, the proposed ballot measure would allow businesses to escape from their
existing obligations to pay the full cost of services that they request and receive from
local agencies and benefit from; and
WHEREAS, the proposed ballot measure would then shift the burden of these
uncovered costs from business interests to local general funds supported
by taxpayers, and thereby reduce general funds available to support police, fire, park,
planning, and other community services.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF <<CITY>> DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City of <<CITY>> hereby opposes the Tax Fairness, Transparency
and Accountability Act of 2018 sponsored by the California Business Roundtable on the
grounds that this measure would harm the ability of local communities to adequately
fund services; and
SECTION 2_ The City Manager is hereby directed to email a copy of this adopted
resolution to the League of California Cities at cityletters@cacities.org
APPROVED AND ADOPTED by the Council on _, 2018.
20.b
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