HomeMy WebLinkAboutAGENDA REPORT 2022 0316 CCSA REG ITEM 10DCITY OF MOORPARK, CALIFORNIA
City Council Meeting
of March 16, 2022
ACTION APPROVED STAFF
RECOMMENDATION, INCLUDING
ADOPTION OF RESOLUTION NO. 2022-
4083. (ROLL CALL VOTE: UNANIMOUS).
BY A. Hurtado.
D. Consider Resolution Opposing Potential Ballot Initiative #21-0042A1 (Limits Ability
of Voters and State and Local Governments to Raise Revenues for Government
Services). Staff Recommendation: Adopt Resolution No. 2022-4083, opposing
potential Ballot Initiative #21-0042A1. (ROLL CALL VOTE REQUIRED) (Staff:
Brian Chong, Assistant to the City Manager)
Item: 10.D.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Brian Chong, Assistant to the City Manager
DATE: 03/16/2022 Regular Meeting
SUBJECT: Consider Resolution Opposing Potential Ballot Initiative #21-0042A1
(Limits Ability of Voters and State and Local Governments to Raise
Revenues for Government Services)
BACKGROUND
California’s ballot initiative process gives Californians a way to propose laws and
constitutional amendments without the support of the Governor or the Legislature.
Several dozen potential ballot initiatives have been submitted to the California Attorney
General seeking inclusion on the November 2022 statewide ballot. The California
Business Roundtable has submitted potential Ballot Initiative #21-0042A1.
According to the Attorney General, potential Ballot Initiative #21-0042A1 “limits ability of
voters and state and local governments to raise revenues for government services.” The
League of California Cities, along with various labor and public safety leaders,
infrastructure advocates, and businesses, is standing in opposition to the proposed
Initiative and is encouraging its members to also oppose it. As such, staff recommends
that the City Council adopt the attached resolution (Attachment 1) opposing Ballot
Initiative #21-0042A1.
Initiative proponents are currently circulating petitions to collect enough signatures from
California registered voters to qualify for the November 2022 ballot. Because the Initiative
would be a Constitutional Amendment, proponents must collect 997,139 signatures of
California registered voters (equal to 8% of the total votes cast for Governor in the last
gubernatorial election) to qualify for the ballot.
DISCUSSION
The full text of Initiative #21-0042A1 is provided as Attachment 2; a brief summary
prepared by the Attorney General of California, is provided as Attachment 3; and the State
Legislative Analyst’s Office analysis of the Initiative and its expected impacts is provided
as Attachment 4.
Item: 10.D.
113
Honorable City Council
03/16/2022 Regular Meeting
Page 2
If passed by California voters, the Initiative would effectuate the following:
Limits Voter Authority Over Taxes
• Changes the requirement for new taxes or tax increases proposed by the California
State Legislature. Currently, they must receive approval by two-thirds of both the
State Senate and the State Assembly or a majority vote of the statewide electorate.
The Initiative would require approval of two-thirds of both the State Senate and the
State Assembly and a majority vote of the statewide electorate.
• Prohibits local advisory measures where local voters provide direction to their
elected officials on how local tax dollars should be spent.
• Removes the ability for a majority of local voters to pass special taxes in certain
instances, changing it to a two-thirds majority.
Restricts Local Fee Authority to Provide Local Services
• Sets new standards for fees and charges paid for the use of local and state
government property, such as by waste haulers, cable television providers,
telecommunications providers, electrical utilities, natural gas utilities, and oil
companies (the City receives approximately $1.15 million in these franchise fees
annually).
• Changes the process to amend property owner additions and contributions into
Community Facilities Districts.
Threatens Traffic Impact Fees
• Prohibits local governments from charging a developer a fee related to vehicle
miles traveled and thereby undermines many traffic impact fees. New
development creates traffic and necessitates improvements to traffic
infrastructure, such as new streets, wider streets, traffic signals, etc. Developers
construct these improvements directly and/or pay traffic impact fees to cover off-
site improvements, such as street widening. One of the traditional ways of
calculating a development’s share of traffic impact fees is by basing them on
“vehicle miles traveled” caused by the development.
Restricts Local Taxing Authority
• Requires new taxes or tax increases to have a stated duration (cannot be
permanent).
• Requires voter approval to expand existing taxes to new (annexed) territory or
when expanding the tax base.
Restricts Authority of Governments to Issue Fines and Penalties for Violations
• Requires voter approval of fines, penalties, and levies for violations of state and
local laws unless a new, undefined adjudicatory process is used to impose the
fines.
114
Honorable City Council
03/16/2022 Regular Meeting
Page 3
Broadly, according to the Attorney General of California, the Initiative, “limits ability of
voters and state and local governments to raise revenues for government services.”
With respect to Moorpark specifically, the Initiative would pose a significant long-term
threat to the City’s ability to raise revenues necessary to provide municipal services. For
example, requiring votes and higher voter thresholds to annex properties into the City or
into a Community Facilities District would make it much more difficult to properly manage
the City’s finances when engaging in those activities. If a new neighborhood is built or
annexed into the City, and the City must provide municipal services to those
neighborhoods, then the residents of those neighborhoods should pay assessments and
taxes to the City to receive them. The Initiative could undermine this logical and
longstanding process if voters in the new or annexed neighborhood voted against paying
those assessments/taxes.
Consistency with City’s Legislative Platform
On February 16, 2022, the City Council adopted an updated Legislative Platform for the
City. Opposing Initiative #21-0042A1 is authorized by multiple tenets of the Legislative
Platform. It should be noted that the Legislative Platform notes that “City positions in
support of legislation on a specified topic shall be construed as opposition to something
that shall do the opposite.”
7.1 Support measures that provide greater fiscal independence to cities and result
in greater stability and predictability in local government budgeting.
7.3 Oppose legislation that (A): Eliminates or restricts the taxing authority of cities
over development; (B) Weakens existing Government Code Section 66000 fee
authority; or (C) Redefines any development, tax, condition, or other monetary
charge as development fees.
7.9 Support the establishment of a constitutionally-protected funding structure for
local government.
7.13 Support legislation to authorize a simple majority of the voters in a city or
county to establish local priorities, including the right to increase taxes or issue
general obligation bonds.
8.4 Support legislation that would provide additional resources to cities to finance
local transportation systems, facilities, and improvements, including the Safe
Routes to Schools programs.
8.14 Support efforts to develop funding policies and incentives at the state and
federal level to ensure funding for the maintenance, repair, and rehabilitation of
public infrastructure.
115
Honorable City Council
03/16/2022 Regular Meeting
Page 4
FISCAL IMPACT
There is no direct fiscal impact to the City associated with opposing proposed
Initiative #21-0042A1. In the event that it is approved by California voters, the Initiative
would have a negative, and potentially a substantially negative, fiscal impact on the City.
COUNCIL GOAL COMPLIANCE
This action is consistent with the following City Council Goals:
• City Council Goal 3, Objective 9 (3.9):
“Identify revenue enhancement strategies.”
• City Council Goal 3, Objective 10 (3.10):
“Identify cost savings and fee schedules that recover costs for City services.”
STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED)
Adopt Resolution No. 2022-____, opposing potential Ballot Initiative #21-0042A1.
Attachment 1: Resolution No. 2022-___
Attachment 2: Text of Potential Ballot Initiative #21-0042A1
Attachment 3: Initiative Summary by California Attorney General
Attachment 4: Legislative Analyst’s Office Analysis
116
ATTACHMENT 1
RESOLUTION NO. 2022-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MOORPARK, CALIFORNIA, OPPOSING BALLOT
INITIATIVE #21-0042A1 AND JOINING THE ‘NO ON
INITIATIVE #21-0042A1’ COALITION
WHEREAS, the California Business Roundtable has filed proposed ballot
initiative #21-0042A1, seeking to be included on the November 2022 statewide ballot;
and
WHEREAS, the measure creates new constitutional loopholes that allow
corporations to pay far less than their fair share for the impacts they have on our
communities, including local infrastructure, our environment, water quality, air quality,
and natural resources; and
WHEREAS, the measure includes undemocratic provisions that would make it
more difficult for local voters to pass measures needed to fund local services and
infrastructure, and would limit voter input by prohibiting local advisory measures where
voters provide direction on how they want their local tax dollars spent; and
WHEREAS, the measure makes 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 safety, and our neighborhoods; and
WHEREAS, the measure puts billions of dollars currently dedicated to state and
local services at risk, and could force cuts to public schools, fire and emergency
response, law enforcement, public health, parks, libraries, affordable housing, services
to support homeless residents, mental health services, and more; and
WHEREAS, the measure would also reduce funding for critical infrastructure like
streets and roads, public transportation, drinking water, new schools, sanitation, and
utilities.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City of Moorpark opposes Initiative #21-0042A1.
SECTION 2. The City of Moorpark will join the ‘No on Initiative #21-0042A1’
coalition, a growing coalition of public safety, labor, local government, infrastructure
advocates, and other organizations throughout the state.
SECTION 3. Staff shall send a copy of this adopted resolution to the League of
California Cities at BallotMeasures@calcities.org.
117
Resolution No. 2022-____
Page 2
SECTION 4. The City Clerk shall certify to the adoption of this resolution and
shall cause a certified resolution to be filed in the book of original resolutions.
PASSED AND ADOPTED this 16th day of March 2022.
________________________________
Janice S. Parvin, Mayor
ATTEST:
___________________________________
Ky Spangler, City Clerk
118
BELL, McANDREWS & HILTACHK, LLP
Anabel Renteria
Initiative Coordinator
ATTORNEYS AND COUNSEL-ORS AT I.AW
455 C APITO L MALL, S UITE 600
SACRAMENTO, CALIFOE=INIA 95014
(916) 44;a-7757
FA X [916) 44-;a-77 59
www.bmhlaw.c om
January 4, 2022
2 1 -0 0 4 2
RECEI VED
JAN O 4 2022
Office of the Attorney General
State of California
INITIATIVE COO RDINATOR
ATTORNEY GENERAL'S OFFICE
PO Box 994255
Sacramento, CA 94244-25550
Re: Initiative 21-0042 -Amendment Number One
Dear Initiative Coordinator:
Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please
find Amendment #1 to Initiative No. 21-0042 "The Taxpayer Protection and
Government Accountability Act." The amendments are reasonably germane to the
theme, purpose or subject of the initiative measure as originally proposed.
I am the proponent of the measure and request that the Attorney General
prepare a circulating title and summary of the measure as provided by law, using the
amended language.
Thank you for your time and attention processing my request.
Sincerely,
~~
Thomas W. Hiltachk
ATTACHMENT 2
119
2 1 -0 0 4 2 Arndt. # /
The Taxpayer Protection and Government Accountability Act
[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 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 local tax 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 $234 billion in new and higher taxes
and fees.
(b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions
more in hidden "fees" passed through to consumers in the price they pay for products, services, food,
fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than
doubled.
(c) California's high cost of living not only contributes 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. In the past four years, nearly 300 major corporations relocated to other states, not
counting thousands more small businesses that were forced to move, sell or close.
(d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes
and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what
passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These
measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition
26 (2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and
accountability, have been weakened and hamstrung by the Legislature, government 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) In enacting this measure, the voters reassert their r ight to a voice and a vote on new and higher taxes
by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees
and other charges are passed or rejected by the voters themselves or a governing body elected by voters
and not unelected and unaccountable bureaucrats.
(b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency
and accountability over higher taxes and charges by requiring any tax measure placed on the ballot-
1
120
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 of the revenue generated by the tax.
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new
or increased form of state government revenue, by any name or manner of extraction paid directly or
indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the
Governor to ensure that the purposes for such charges are broadly supported and transparently debated.
(d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that
taxpayers have the right and ability to effectively balance new or increased taxes and other charges with
the rapidly increasing costs Californians are already paying for housing, food, childca re, gasoline, energy,
healthcare, education, and other basic costs of living, and to further protect the existing constitutional
limit on property taxes and ensure that the revenue from such taxes remains local, without changing or
superseding existing constitutional provisions contained in Section 1{c) of Article XIII A.
(e) In 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, Cannabis Coalition v. City of Upland, Chamber of Commerce v. Air Resources
Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v.
Orange County Local Agency Formation Commission, and Wilde v. City of Dunsmuir.
Section 4. Section 3 of Article XIII A of the California Constitution is amended to read:
Sec. 3(a} Every levy, charge. or exaction of any kind imposed by state law is either a tax or an exempt
charge.
illlJ1l ~ Any change in state statute Jaw which results in any taxpayer paying a new or higher tax must
be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature, and submitted to the electorate and approved by a maiority vote, 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:
(A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected
to be derived from the tax.
(BJ A specific and legally binding and enforceable limitation on how the revenue from the tax can be spent.
If the revenue from the tax can be spent for unrestricted general revenue purposes. then a statement that
the tax revenue can be spent for "unrestricted general revenue purposes " shall be included in a separate,
stand-alone section . Any proposed change to the use of the revenue from the tax shall be adopted by a
separate act t hat is passed by not less than two-thirds of all members elected to each of the two houses
of the Legislature and submitted to the electorate and approved by a maiority vote.
(2) The title and summary and ballot label or question required for a measure pursuant to the Elections
Code shall. for each measure providing for the imposition of a tax, including a measure proposed by an
elector pursuant to Article II, include:
{A) The type and amount or rate of the tax;
(BJ The duration of the tax: and
2
121
(CJ The use of the revenue derived from the tax.
(c} Any change in state law which results in any taxpayer paying a new or higher exempt charge must be
imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of
exempt charge as provided in subdivision (e ), and the amount or rate of the exempt charge to be imposed.
Ml._fbt As used in this section and in Section 9 of Article II, "tax" means every aA1f levy, charge, or exaction
of any kind imposed by the State state law that is not an exempt charge. e1<eept the follo•Ning:
(e) As used in this section. "exempt charge" means only the following:
(1) a el:iarge imposes fer a s1=1eeifie eenefit eonferreEl or pri'+'ilege granteEl aireetly to tl:ie 13ayor tl:iat is not
1=1ro>viaeEl to tl:iose not et:iargeEI, anEI whiel:i aoes not e1<ceeEl tl:ie reasonal3Ie costs to tl:ie State of eonferring
the benefit or granting the pri¥ilege to the 1=1a¥OF.
ill {-2+ A reasonable charge irnposeEl 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 rnasonable actual costs
to the State of providing the service or product to the payor.
f.11 ~ A charge in,poseEl 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 administrative enforcement and adjudication thereof.
(3) A levy, charge. or exaction collected from local units of government. health care providers or health
care service plans that is primarily used by the State of California for the purposes of increasing
reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily
used to finance the non-federal portion of Medi-Cal medical assistance expenditures.
(4) A reasonable charge iR'l13oseEl for entrance to or use of state property, or the purchase. rental, or lease
of state property, except charges governed by Section 15 of Article XI.
(5} A fine, or penalty, or other monetary el:large including any applicable interest for nonpayment thereot
imposed by the judicial branch of government or the State, as a result of a state administrative
enforcement agency pursuant to adiudicatorv due process, to punish a violation of law.
(6} A levy, charge, assessment, or exaction collected for the promotion of California tourism pursuant to
Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code.
flL~Any tax or exempt charge adopted after January 1, 2022 ~, but prior to the effective date of this
act, that was not adopted in compliance with the requirements of this section is void 12 months after the
effective date of this act unless the tax or exempt charge is reenacted B'l the begislatuFe anel signea into
law ey tl:ie <iio¥ernoF in compliance with the requirements of this section.
[gl[.JlJG:} The State bears the burden of proving by a preponEleranee oftl:le clear and convincing evidence
that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of
proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that
the amount charged does not exceed the actual cost of providing the service or product to the payor. ,tR-a-t
tl:ie amouRt is RO n,ore tl:ian neeessary to cover the reasonable costs of the go•.•emn,ental actii,•i:t>,• ane
3
122
that the manner in •Nhiel.:i these cests are allecated ts a pa·1er bear a fair er reasenable relatienshi13 ts the
13a·1or's b1:1relens on, or benefits reeei11eel from, the go•.ieFRmental actit.iit'(
(2) The retention ofrevenue by, or the payment to. a non-governmental entity ofa levv. charge, or exaction
of any kind imposed by state law, shall not be a factor in determining whether the levy. charge, or exaction
is a tax or exempt charge.
(3) The characterization of a levy, charge, or exaction of any kind as being voluntary, or paid in exchange
for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the
levy, charge, or exaction is a tax or an exempt charge.
/4} The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether
the levy, charge, or exaction is a tax or exempt charge.
(h) As used in this section:
(1) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse
the government for the cost of providing the service or product to the payor, and {ii) where the amount
charged is not used by the government for any purpose other than reimbursing that cost. In computing
"actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue
including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to
provide such service or product.
(2) "Extend" includes, but is not limited to, doing any of the following with respect to a tax or exempt
charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new
territory or class ofpayor, or expanding the base to which its rate is applied.
(3) "Impose" means adopt, enact, reenact, create, establish, collect, increase or extend.
(4) "State law" includes, but is not limited to. any state statute, state regulation, state executive order.
state resolution, state ruling, state opinion Jetter, or other legal authority or interpretation adopted,
enacted. enforced, issued, or implemented by the legislative or executive branches of state government.
"State law" does not include actions taken by the Regents of the University of California, Trustees of the
California State University, or the Board of Governors of the California Community Colleges.
Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read:
Sec. 1. Definitions. As used in this article:
{a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse
the government for the cost of providing the service or product to the payor. and {ii) where the amount
charged is not used by the government for any purpose other than reimbursing that cost. In computing
"actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue
including, but not limited to taxes. other exempt charges, grants, and state or federal funds received to
provide such service or product.
(b) "Extend" includes, but is not limited to. doing any of the following with respect to a tax. exempt charge,
or Article XIII D assessment. fee, or charge: lengthening its duration, 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.
4
123
.lfl..W 11General tax" means any tax imposed for general governmental purposes.
(d} "Impose" means adopt, enact, reenact, create, establish, collect, increase, or extend.
{clJb} "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 entity, or an elector pursuant to Article fl or
the initiative power provided by a charter or statute.
(f) "Local law" includes. but is not limited to, any ordinance, resolution, regulation. ruling, opinion letter,
or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local
government.
{gl_{t} "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.
f11L{d} "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific
purposes, which is placed into a general fund.
111 i@} As used in this article, and in Section 9 of Article II, "tax" means every aRV-levy, charge, or exaction
of any kind, imposed by a local go,;ernmeRt law that is not an exempt charge., exeept tl=le fellowiRg:
(i) As used in this section, "exempt charge" means only the following:
(1) A cl=large imposeel fer a speeifie beAefit eoAferreel or pri,;ilege graAteel eliFeetl')' to tl=le pa1,ior tl=lat is Rot
pre1,•ieleel to these Rot ehargea, aA£l which £lees Rot exeeeel tl=le reaseAable costs to tl=le loeal gm,·ernFAeAt
of conferriAg the beAefit or graAting tl:1e pri¥ilege.
ill R} A reasonable charge imposes for a specific local government service or product provided directly
to the payor that is not provided to those not charged, and which does not exceed the reasoAable actual
costs to the local government of providing the service or product.
fl1 WA charge im13ose£l 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.
W {4t A reasonable charge imposeel for entrance to or use of local government property, or the purchase,
rental, or lease of local government property.
Ml. fSt A fine, or penalty, or other FAOA@tar,· eharge including any applicable interest for nonpayment
thereat imposed by the judicial branch of government or a local government administrative enforcement
agency pursuant to adiudicatorv due process, as a res1,1lt of to punish a violation of law.
ill -f6t A charge imposed as a condition of property development. No levv, charge, or exaction regulating
or related to vehicle miles traveled may be imposed as a condition of property development or occupanc y.
f.i1 f7t An AssessFAeRts a Rel property relate el fees assessment. fee. or charge imJ;1oseel iA aeeoraanee witl=l
the pro¥isio A5 of subject to Article XI 11 D, or an assessment imposed upon a business in a tourism marketing
district, a parking and business improvement area, or a property and business improvement district.
5
124
(7) A charge imposed for a specific health care service provided directly to the payor and that is not
provided to those not charged. and which does not exceed the reasonable costs to the local government
of providing the health care service. As used in this paragraph, a "health care service" means a service
licensed or exempt from licensure by the state pursuant to Chapters 1. 1.3, or 2 of Division 2 of the Health
and Safety Code.
The local government bears the b1:1rden of proving by a preponderance of the e .. ·ielence that a lew, charge,
or other exaction is not a ta1<, that the amo1:1nt is no more than necessaPJ' to cover the reasonable costs of
the go•,ernfflental acti•.«ity anel that tJ:ie manner in which those costs are allocateel to a pa•ror bear a fair or
reasonable relationship to the pa•ror's blslrdens on, or bene:fits receiveel from, the go1a1ernmental acfa•ity.
Section 6. Section 2 of Article XIII C of the California Constitution is amended to read :
Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) Every levy. charge. or exaction of any kind imposed by local law is either a tax or an exempt charge. All
taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special
purpose districts or agencies, including school districts, shall have no power to levy general taxes.
(b) No local Jaw go,.·ernment whether proposed by the governing body or by an elector, 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) An•r general tax imposed, el<tended, or increaseel, •.-.iitho1:1t •.·oter approval, lay any local go,.·ernment on
or after Janlslary 1, 1995, ana prior ta the effecti,.·e date of this article, shall contin1:1e to be imposed only
if appro,.·ea b1• a majority vote of the voters voting in an election OR the issye of the in:iposition, whicl::i
election sl::iall be l::ield witl::iin t•Ne 1•ears ef the effectii.ie date of this article and in com13liance with
slslbdi\·isien (b}. {El) No local law government. whether proposed by the governing body or by an elector.
may impose, eMteRd, er increase any special tax unless and until that tax is submitted to the electorate
and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is
imposed at a rate not higher than the maximum rate so approved.
{d) The title and summary and ballot label or question required for a measure pursuant to the Elections
Code shall. for each measure providing for the imposition of a tax, include:
(1) The type and amount or rate of the tax;
(2) the duration of the tax; and
(3) The use of the revenue derived from the tax. If the proposed tax is a general tax. the phrase "for general
government use" shall be required, and no advisory measure may appear on the same ballot that would
indicate that the revenue from the general tax will. could. or should be used for a specific purpose.
(e) Only the governing body of a local government. other than an elector pursuant to Article II or the
initiative power provided by a charter or statute. shall have the authority to impose any exempt charge.
The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge
6
125
as provided in Section l(i) and the amount or rate of the exempt charge to be imposed. and passed by the
governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (i) of
Section 1.
ff) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt
charge shall be submitted to or approved by the electors. nor shall any such amendment to a Charter
hereafter submitted to or approved by the electors become effective for any purpose.
(q) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that
was not adopted in compliance with the requirements of this section is void 12 months after the effective
date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this
section.
{h)(1) The focal government bears the burden of proving by clear and convincing evidence that a levy,
charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving
by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount
charged does not exceed the actual cost of providing the service or product to the payor.
(2} The retention of revenue by, or the payment to, a non-governmental entity of a levy. charge, or exaction
of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or
exaction is a tax or exempt charge.
(3) The characterization of a levy. charge. or exaction of any kind imposed by a local law as being paid in
exchange for a benefit. privilege, allowance, authorization, or asset, shall not be factors in determining
whether the levy, charge, or exaction is a tax or an exempt charge.
(4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether
the levy, charge, or exaction is a tax or exempt charge.
Section 7. Section 3 of Article XIII D of the California Constitution is amended, to read:
Sec. 3. Property Taxes, Assessments, Fees and Charges Limited
(a) No tax, assessment, fee, 6f charge, or surcharge, including a surcharge based on the value ofpropertv,
shall be assessed 13y a Ry ageRC'f upon any parcel of property or upon any person as an incident of property
ownership except:
(1) The ad valorem property tax impeseEI p1::1rsYaRt te described in Section 1(a) of Article XIII and Section
1/a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section 1/b)
Q[Article XII I A.
(2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4
of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities
district by the Legislature pursuant to statute as it existed on December 31, 2021.
(3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article.
7
126
(b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed
charges or fees imposed as an incident of property ownership.
Section 8. Sections 1 and 14 of Article XIII are amended to read:
Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States:
(a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value
standard other than fair market value is prescribed by this Constitution or by statute authorized by this
Constitution, the same percentage shall be applied to determine the assessed value. The value to which
the percentage is applied, whether it be the fair market value or not, shall be known for property tax
purposes as the full value.
(b) All property so assessed shall be taxed in proportion to its full value.
(c) All proceeds from the taxation of property shall be apportioned according to law to the districts within
the counties.
Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district
in which it is situated. Notwithstanding any other provision of/aw, such state or local property taxes shall
be apportioned according to law to the districts within the counties.
Section 9. General Provisions
A. This Act shall be liberally construed in order to effectuate its purposes.
B. (1) In 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 i ni tiative measure or
measures shall be deemed to be in conflict with this measure. In 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 ofthe other initiative measure or measures shall be null and void.
(2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the
provisions of the "Housing Affordabili t y 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) 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 and effect.
C. 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 decis ion of any
court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this
Act. The People of the State of California hereby declare that they would have adopted this Act and each
and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not
8
127
declared invalid or unconstitutional without regard to whether any portion of this Act or application
thereof would be subsequently declared invalid.
D. 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:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 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.
(2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise
due diligence in determining the qualifications of independent counsel and shall obtain written
affirmation from independent counsel that independent counsel will faithfully and vigorously defend this
Act. The written affirmation shall be made publicly available upon request.
(3) A continu ous appropriation is hereby made from the General Fund to the Controller, without regard
to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully
and vigorously defend this Act on behalf of the State of California.
(4 ) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association,
from intervening to defend this Act.
9
128
February 3, 2022
Initiative 21-0042 (Amdt. 1)
The Attorney General of California has prepared the following title and summary of the chief
purpose and points of the proposed measure:
LIMITS ABILITY OF VOTERS AND STATE AND LOCAL GOVERNMENTS TO
RAISE REVENUES FOR GOVERNMENT SERVICES. INITIATIVE
CONSTITUTIONAL AMENDMENT. For new or increased state taxes currently enacted by
two-thirds vote of Legislature, also requires statewide election and majority voter
approval. Limits voters’ ability to pass voter-proposed local special taxes by raising vote
requirement to two-thirds. Eliminates voters’ ability to advise how to spend revenues from
proposed general tax on same ballot as the proposed tax. Expands definition of “taxes” to
include certain regulatory fees, broadening application of tax approval requirements. Requires
Legislature or local governing body set certain other fees. Summary of estimate by Legislative
Analyst and Director of Finance of fiscal impact on state and local governments: Lower annual
state and local revenues, potentially substantially lower, depending on future actions of the
Legislature, local governing bodies, voters, and the courts. (21-0042A1.)
ATTACHMENT 3
129
Preprinted L ogo will go here
January 19, 2022
Hon. Rob Bonta
Attorney General
1300 I Street, 17th Floor
Sacramento, California 95814
Attention: Ms. Anabel Renteria
Initiative Coordinator
Dear Attorney General Bonta:
Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional
Taxpayer Protection and Government Accountability Act initiative (A.G. File No. 21-0042,
Amendment #1).
Background
State Government
Taxes and Fees.This year’s state budget spends over $255 billion in state funds. Over
90 percent of the state budget is funded with revenues from taxes. These include, for example,
sales taxes paid on goods and income taxes paid on wages and other sources of income. Much of
the rest of the state budget is funded by fees and other charges. Examples include: (1)charges
relating to regulatory activities; (2)charges for specific government services or products, like
fees charged to drivers to improve roads; (3)charges for entering state property, such as a state
park; and (4) judicial fines, penalties, and other charges. The State Constitution requires the state
to set fees at a reasonable level, generally reflecting the costs of the services or benefits provided.
The state uses revenue from taxes and fees to fund a variety of programs and services, including
education, health care, transportation, and housing and homelessness services.
Current Requirements to Approve Taxes and Fees.Under the State Constitution, state tax
increases require approval by two-thirds of each house of the Legislature or a majority vote of
the statewide electorate. The Legislature can reduce taxes with a majority vote of each house,
provided the change does not result in an increase in taxes paid by any single taxpayer. In many
cases, the Legislature has enacted statutes that delegate its authority to adjust fees and other
21-0042 Amdt. 1
ATTACHMENT 4
130
Hon. Rob Bonta 2 January 19, 2022
charges to administrative entities, like state departments. In these cases, these charges can be
increased or changed by the department within certain limits.
Local Government
Taxes and Fees. The largest local government tax is the property tax, which raises roughly
$75 billion annually. Other local taxes include sales taxes, utility taxes, and hotel taxes. In
addition to these taxes, local governments levy a variety of fees and other charges. Examples
include parking meter fees, building permit fees, regulatory fees, and judicial fines and penalties.
In order to be considered a fee, the charge cannot exceed the reasonable costs to the local
government of providing the associated product or service. Local governments use revenues
from taxes and fees to fund a variety of services, like fire and police, public works, and parks.
Current Requirements to Approve Taxes and Fees. State law requires increases in local
taxes to receive approval of the local governing body—for example, a city council or county
board of supervisors—as well as approval of voters in that local jurisdiction. Most proposed
taxes require a two-thirds vote of the local governing board before being presented to the voters.
Special taxes (those used for a specific purpose) require a two-thirds vote of the electorate while
other types of taxes require a majority vote of the electorate. The majority-vote general taxes can
be used for any purpose. Recent case law suggests that citizen initiative special taxes may be
approved by majority vote, rather than a two-thirds vote. Currently, local governing bodies have
the ability to delegate their authority to adjust fees and other charges to administrative entities,
like city departments. In these cases, these charges can be increased or changed by the
department within certain limits.
Proposal
This measure amends the State Constitution to change the rules for how the state and local
governments can impose taxes, fees, and other charges.
State and Local Government Taxes
Expands Definition of Tax. The measure amends the State Constitution to expand the
definition of taxes to include some charges that state and local governments currently treat as
fees and other charges. For example, certain charges imposed for a benefit or privilege granted to
a payer but not granted to those not charged would no longer be considered fees. As a result, the
measure could increase the number of revenue proposals subject to the higher state and local
vote requirements for taxes discussed below.
Requires Voter Approval for State Taxes. The measure increases the vote requirements for
increasing state taxes. Specifically, the measure requires that legislatively proposed tax increases
receive approval by two-thirds of each house and a majority vote of the statewide electorate.
Voters would still be able to increase taxes by majority vote of the electorate without legislative
action, however. Any state tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Requirements for Approving Local Taxes. Whether sought by the local governing body or
the electorate, the measure establishes the same approval requirements for increasing local
131
Hon. Rob Bonta 3 January 19, 2022
special taxes. Any local tax approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Allowable Uses and Duration of State and Local Tax Revenues Must Be Specified. The
measure requires state and local tax measures to identify the type and amount (or rate) of the tax
and the duration of the tax. State and local government general tax measures must state that the
revenue can be used for general purposes.
State and Local Government Fees
Requires the Legislature and Local Government Bodies to Impose State and Local Fees.
Fees would have to be imposed by a majority vote of both houses of the Legislature or local
governing bodies. The measure would restrict the ability of state and local governments to
delegate fee changes to administrative entities. The extent of these restrictions would depend on
future court decisions. Any fee approved between January 1, 2022 and the effective date of this
measure would be nullified unless it fulfills the requirements of the measure.
Some New State and Local Fees Could Not Exceed Actual Costs. For some categories of
fees, if the Legislature or a local governing body wished to impose a new fee or make changes to
an existing fee, the measure generally would require that the charge be both reasonable and
reflect the actual costs to the state or local government of providing the service. The measure
also specifies that actual cost should not exceed “the minimum amount necessary.” In many
cases, existing fees already reflect the government’s actual costs. In other cases, some fees would
have to more closely approximate the payer’s actual costs in order to remain fees. If a fee payer
challenged the charge, the state or local government would need to provide clear and convincing
evidence that the fee meets this threshold. State and local governments also would bear the
burden of providing clear and convincing evidence that the levy is a fee—which is not subject to
a vote by the electorate—and not a tax under the new definition.
Fiscal Effects
Lower State Tax and Fee Revenue. By expanding the definition of a tax, increasing the vote
requirements for approving taxes, and restricting administrative changes to fees, the measure
makes it harder for the Legislature to increase nearly all types of state revenues. The extent to
which revenues would be lower under the measure would depend on various factors, most
notably future decisions made by the Legislature and voters. For example, requirements for
legislative approval of fee increases currently set administratively could result in lower fee
revenues, depending on future votes of the Legislature. That lower revenue could be particularly
notable for some state programs largely funded by fees. Due to the uncertainty of these factors,
we cannot estimate the amount of reduced state revenue, but it could be substantial.
Lower Local Government Tax and Fee Revenue. Compared to the state, local governments
generally face greater restrictions to raising revenue. By expanding the definition of taxes and
restricting administrative changes to fees, the measure would make it somewhat harder for local
governments to raise revenue. Consequently, future local tax and fee revenue could be lower
than they would be otherwise. The extent to which revenues would be lower is unknown, but
132
Hon. Rob Bonta 4 January 19, 2022
fees could be more impacted. The actual impact on local government revenue would depend on
various factors, including future decisions by the courts, local governing bodies, and voters.
Possible Increased State and Local Administrative Costs to Change Some Fee Levels.In
some cases, state and local departments would need to develop methods for setting fees to reflect
actual costs if the Legislature or local governing bodies wanted to change those fees in the
future. Estimating actual costs by program and fee source could involve some added workload
for those state and local departments, which likely would be supported by fee revenue. The
extent of these administrative costs would depend on (1) whether the state and local governments
determine a fee increase is needed in order to maintain their current level of programs and
services funded through fee revenue and (2) future court decisions.
Summary of Fiscal Effects.We estimate that this measure would have the following major
fiscal effects:
•Lower annual state and local revenues, potentially substantially lower, depending on
future actions of the Legislature, local governing bodies, voters, and the courts.
Sincerely,
_____________________________
for Gabriel Petek
Legislative Analyst
_____________________________
for Keely Martin Bosler
Director of Finance
133