However, so far California appellate courts have generally allowed local agencies greater latitude in charging property owners for potential or future use of a property-related service. One example is a fee on the extraction of groundwater. The impartial person may use technological methods to tabulate the ballots, including, but not limited to, punchcard or optically readable (bar-coded) ballots. However, in situations where the governing body of an agency is not responsive to the objections and protests by the public and approves a controversial property-related fee or charge, the local initiative power under Proposition 218 can generally be used to reduce or repeal the property-related fee or charge. The majority protest provision for property-related fees and charges requires an absolute majority of the owners of the identified parcels to protest against a proposed property-related fee or charge to legally preclude imposition of the levy. 4th 409 precedent-setting Supreme Court decision interpreting Proposition 218 and defining “assessments” and “property-related” fees. (e). One of the most significant provisions of Proposition 218 constitutionally reserves to local voters the exercise of the initiative power to reduce or repeal any local tax, assessment, fee or charge. Home; About Us; Proposition 218; Proposition 26; Our Experience; Blog; Recent Cases; About Us. Cal. , The California Legislature has enacted additional legal procedures relating to property-related fee or charge elections under Proposition 218. The agency must provide written notice by mail of the proposed property-related fee or charge to the record owner of each identified parcel upon which the property-related fee or charge is proposed for imposition. (b). , The Howard Jarvis Taxpayers Association argued that the court should look beyond mere dictionary definitions of "sewer" to examine the legal meaning of the term in the specific context of how that term is used in Proposition 218. XIII, § 35, subd. XIII D, § 6, subd. After approval of an assessment, the local initiative power under Proposition 218 can generally be used to reduce or repeal that assessment. This was the first time the California Supreme Court disapproved a published Court of Appeal decision with the resulting effect of taking away Proposition 218 constitutional rights and protections previously recognized by a California appellate court. Any subsequent increases in a traditional purpose assessment must comply with the procedures and approval process contained in Section 4 of Article XIII D. The traditional purpose exemption applicable to special assessments is broader in scope than the narrower election exemptions applicable to property-related fees and charges which only apply to fees and charges for water, sewer, or refuse collection services. A "general tax" is any tax imposed for general governmental purposes. Proposition 218 is a voter initiative that added Articles XIII C and XIII D to the California Constitution. Gov. Should an assessment reduction or repeal initiative qualify for the ballot, the election would be by the registered voters and the ballots would not be weighted. As a result of the absolute majority requirement, majority protests for proposed property-related fees and charges occasionally occur but not that often. However, Proposition 218 does not require an engineer's report be made available in an electronic format. The "assessment" definition refers to a levy on real property for a "special benefit" conferred upon the real property. Const., art. https://fr.wikipedia.org/w/index.php?title=Proposition_218&oldid=168895054, licence Creative Commons attribution, partage dans les mêmes conditions, comment citer les auteurs et mentionner la licence. Cal. Atty. Effective January 1, 2018, if a proposed local government measure imposes a tax or raises the rate of a tax, the ballot must include in the statement of the measure to be voted on the amount of money to be raised annually, the rate of the tax, and the duration of the tax to be levied. This is typically done in the form of a local ordinance or resolution approving the tax. , The Howard Jarvis Taxpayers Association states that some local governments, in an effort to increase the chances of passing a tax, will propose a temporary tax instead of a permanent tax. A property-related fee or charge is "increased" for purposes of Proposition 218 when an agency makes a decision that does any of the following: (1) increases any applicable rate used to calculate the property-related fee or charge; or (2) revises the methodology by which the property-related fee or charge is calculated, if that revision results in an increased amount being levied on any person or parcel of property. Const., art. Ballot questions can sometimes be misleading to many voters or may include incomplete information regarding the specifics of a tax measure. , For purposes of determining whether a property-related fee or charge complies with the five requirements, a member of the public may generally make a written request and receive a copy of any local agency supporting documentation pursuant to the California Public Records Act. The public hearing may also be continued from time to time.  This was not altered by the passage of Proposition 218. 218, § 2 [Proposition 218 Findings and Declarations]. In a legal challenge concerning the validity of an assessment, the courts typically refer to the engineer's report to determine whether the assessment complies with Proposition 218.  The underlying legal basis for the historical deferential standard of review was that the establishment of an assessment district takes place as a result of a peculiarly legislative process. Subdivision (a) of Section 6 of Article XIII D sets forth the procedures an agency must follow for any new or increased property-related fee or charge.  An assessment ballot may be submitted, changed, or withdrawn by the person who submitted the ballot prior to the conclusion of the public testimony on the proposed assessment at the required public hearing. This is especially the case since under Proposition 218 in any legal action contesting the validity of a property-related fee or charge, the burden is on the local agency to demonstrate compliance with the law. Responses may take the form of not levying the property-related fee or charge or modifying the property-related fee or charge to make it more acceptable to the public. You could also call this heading "Our philosophy" or "Our vision." Voter/taxpayer issues related to Proposition 218 elections can impact the individual voter decision-making process as well as election outcomes. XIII C, § 2, subd. Cal. , Voter approval is also required for certain new or increased property-related fees or charges.  Nevertheless, most property-related fees or charges fall within an election exemption as typical utility fees for water, sewer, or refuse collection services. Categories. A 2006 court decision clarified that Proposition 218 applies to retail water rates.  Prior to Proposition 218, voter approval of an assessment was generally not required, but a local agency could voluntarily decide to hold an election on the approval of an assessment. , In tabulating the assessment ballots, the ballots must be weighted according to the proportional financial obligation of the affected parcel. Notwithstanding any other provision of this Constitution, including, but not limited to, Sections 8 and 9 of Article II, the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.  The term "methodology" refers to a mathematical equation for calculating taxes that is officially sanctioned by a local government. 13D, § 6(a) requires 45-day notice of old-fashioned majority protest in which silence equals consent. , Special assessments on real property as well as property-related fees and charges, the types of levies ordinarily subject to Proposition 218, are generally not levied by the state. XIII D, § 6, subd. If a local water agency is not responsive to the needs of its customers and raises water utility fees and charges too much, the local initiative power under Proposition 218 provides a remedy that can generally be used to reduce or repeal those utility fee and charge increases. In holding that this argument is inconsistent with Proposition 218, the court stated that "[i]t would open up a loophole in article XIII D, section 6, subdivision (b)(3) [part of Proposition 218] so large it would virtually repeal it. (d). (h).  The benefit separation requirement under Proposition 218 helps ensure compliance with the requirement that only special benefits are assessable.  Assessment ballots must be preserved for a minimum of two years, after which they may be destroyed as provided by law.. A local government may not impose, extend, or increase any special tax unless the tax is first submitted to the electorate and approved by a two-thirds vote. Code, § 53750, subd. As public employee salary and benefit obligations increase over time, particularly with regard to pensions and public employee retiree healthcare, the impacts on the local government budget become more significant and can even lead to bankruptcy. XIII D, § 4, subd. , The voter approval requirement for taxes under Proposition 218 is triggered when a local government "imposes," "extends," or "increases" a tax.  The California Legislature adopted a statute narrowly interpreting the term "extended" for purposes of the tax provisions of Proposition 218. These procedures are mandatory and are in addition to any other procedures that may be adopted by the local agency. , The fourth requirement is intended to add a temporal component to the property-related fee or charge restrictions. XIII D, § 6, subd. XIII D, § 2, subd. (3). Gov. XIII D, § 6, subd.  Proposition 218 does not preclude assessments for public services, but under the applicable constitutional requirements only "property-related services" are generally assessable.. , When a controversial general tax measure is presented by a local government, often the only practical remedy available to voters is to make the controversial tax measure a political issue during the election campaign. Initiative Constitutional Amendment. Our Approach. Financial data are available at the state and school district levels. Palo Alto Lawsuit claims city utility fees are illegal because they’re taxes January 15, 2018 1:22 pm. Const., art. Some local governments may also claim a lack of sufficient funding for priority programs and services such as public safety. Some local government tax proposals may be relatively modest in amount, but when added to other taxes currently paid would result in a cumulative tax burden that may be unacceptably high.  Proposition 218 did not include a specific constitutional definition of "tax," but California appellate courts, prior to the passage of Proposition 26 in 2010, generally broadly construed what constitutes a "tax" such as concluding that a 911 "fee" was really a special tax subject to two-thirds voter approval. XIII C, § 1, subd. Const., art. If a tax is proposed by a local government, it is important to consider the budgetary conditions that led to placing the tax measure on the ballot. Section 5 of Article XIII D sets forth the effective date of the article. City Attorney, Auburn & Calabasas .  If written protests against the proposed property-related fee or charge are presented by a majority of owners of the identified parcels, the agency is prohibited from imposing the property-related fee or charge.  The 2017 California Supreme Court decision disapproved two previous Court of Appeal published decisions holding that a fee on the extraction of groundwater was a property-related fee under Proposition 218. Any tax imposed for specific purposes and placed in a general fund. What this meant in practical terms for a typical five-member governing body was that it would take at least three votes to approve an assessment in the absence of a majority protest and at least four votes would be required to overrule a majority protest.  Thus, the California Attorney General reached the same conclusions concerning stormwater drainage fees under Proposition 218 as the appellate court did in the Salinas case which was decided some four years later. All property-related fees and charges are subject to and must comply with the five requirements.  Yet, even an analysis of Proposition 218 in a League of California Cities publication before the November 1996 election made a distinction between storm drainage and sewer systems (and also water systems) in stating: "But, it appears that all fees and charges for water, sanitation, storm drainage, or sewer are included within the scope of the measure. Prop. Section 1 definitions include the term "local government" setting forth the public entities subject to the article.  A tax is also not "increased" under Proposition 218 in the case in which the actual payments from a person or property are higher than would have resulted when the local government approved the tax, if those higher payments are attributable to events other than an increased tax rate or revised methodology, such as a change in the density, intensity, or nature of the use of land.. First, existing laws relating to the imposition of fees or charges as a condition of property development (e.g., developer fees). Before voting on any local government property tax measure (including any local general obligation bond measure that increases local property taxes to repay the bonds), it is considered a good practice by voters to review their current property tax bill to get a better picture of the cumulative impact of any property tax measure. Proposition 218 does not legally authorize any local government to impose any tax. Since that time, the Long Beach Water Department has complied with Proposition 218 when setting water and sewer rates.  Second, existing laws relating to the imposition of timber yield taxes.  Proposition 218 supporters also urged voters to review their property tax bill which would confirm the growing list of property-related fees, charges and special assessments imposed by local governments without voter approval. All assessments must be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California. This places greater emphasis on the need for voters to carefully review the text of any tax "modernization" measure to determine whether taxes on online video streaming services would be authorized. (e). XIII C, § 2. If a tax is temporary, voter approval is required to extend a tax beyond its expiration date. California Secretary of State, Supplement to the Statement of Vote November 5, 1996, pp. The term "local government" for purposes of Proposition 218 is very broadly defined to counter a previous narrow interpretation given by the California Supreme Court under Proposition 13 which created loopholes allowing some local agencies to circumvent constitutional voter approval requirements for taxes. (d) [special taxes requiring two-thirds voter approval]. The Howard Jarvis Taxpayers Association has published various "taxpayer tools" to assist taxpayers in situations where a tax measure has been placed on the ballot by a local government..  Property owner elections with weighted voting do not violate the federal constitutional requirement of "one man, one vote" under the limited circumstances of a special-purpose unit of government assigned the performance of functions affecting definable groups of constituents more than others. As a result, most local governments in California opposed Proposition 218 when it appeared on the ballot, and remain hostile to Proposition 218. Const., art.  This means that regional governments must comply with the voter approval requirements for taxes as well as the procedures and requirements applicable to special assessments and property-related fees and charges.. " Accordingly, some state agencies are subject to Proposition 218 when they are a "special district." In Proposition 218 tax elections, it is often helpful to voters to have financial data regarding the local government proposing the tax so that voters can make a more informed voting decision concerning the merits and need for the tax.  No assessment ballot was involved. Proposition 218 does not prohibit other tools available to local governments that accomplish water conservation. L'Article XIII D a trait à l'évaluation et à la réforme de la taxe de propriété applicables aux collectivités locales. (4).  A "special tax" is any tax imposed for specific purposes, including a tax imposed for specific purposes which is placed into a general fund.  This exemption typically involves circumstances where a developer approved one or more assessments as a condition for developing property. XIII A, § 3, subd. Opinion polls may also be conducted in connection with other revenue sources requiring an election under Proposition 218 such as for a property-related fee or charge or an assessment on real property.. Code, § 53750, subd. It is common for local governments to spend significant amounts of public funds to lobby for or against proposed legislation that is contrary to the best interests of taxpayers, including supporting legislation that would erode taxpayer protections such as Propositions 13 and 218. 218 Lawyers Fighting for Ratepayers and Taxpayers. Const., art. XIII C, § 2, subd. California State Administrative Manual, § 1310.4 (June 2014). , Controversial general tax measures intended for one or more specific purposes also have the effect of circumventing California accountability laws designed to protect taxpayers by ensuring that local government taxes imposed for specific purposes are actually spent as set forth in the ballot measure.. As a result, when government, whether state or local, acts in a legislative capacity it has no authority to exercise its discretion in a way that violates Proposition 218 or undermines its effect. , Proposition 218 was initially estimated to cost local governments in California at least $100 million per year with long-term cost estimates being much greater in the billions of dollars per year, and Moody's Investors Service warned the initiative measure would cause "significantly declining credit quality.  However, if the agency desires to preserve any authority it may have to record or enforce a lien on the parcel to which a property-related service is provided, the agency must also mail notice to the record owner's address shown on the last equalized assessment roll if that address is different than the billing or service address. Cal. Also prior to Proposition 218, even if an absolute majority of property owners protested an assessment and a majority protest existed, state laws often allowed local agencies to overrule a majority protest by a specified supermajority vote requirement (typically by a four-fifths vote) of the governing body of the local agency. They hit upon assessment districts, which … Previously, in 2000, the Court of Appeal concluded that metered water rates were not subject to Prop. California's Premier Prop. Such data can also be utilized to bolster findings and declarations in a local initiative under Proposition 218, especially in connection with local government utility fee reductions or repeals that may be subject to statutory utility rate restrictions under California law. 218] required the City to subject the proposed storm drainage fee to a vote by the property owners or the voting residents of the affected area.  The new procedural requirements became legally operative on July 1, 2014. (b). However, the California Cannabis Coalition case did not involve the voter approval requirements under Proposition 218, but rather involved a narrow election timing issue (the election consolidation requirement) applicable only to general taxes which under Proposition 218 may only be levied by cities or counties in California.  An important reform under Proposition 218 is that it shifted the burden of demonstrating compliance to the local agency in a lawsuit challenging an assessment. (d). Section 3 of Proposition 218 added Article XIII C to the California Constitution. As a practical matter, this makes it much more difficult to legally justify the imposition of special assessments for public improvements or services that primarily benefit people instead of real property. , The second exemption is for any assessment imposed pursuant to a petition signed by the person(s) owning all of the parcels subject to the assessment at the time the assessment was initially imposed.  This provides local voters with a legislative remedy to address electrical or gas service utility fees and charges imposed by a local public agency that are considered excessive or unreasonable. Historically, publicly owned parcels were exempt from paying assessments on real property. , The property assessment loophole floodgates opened wide following a controversial 1992 California Supreme Court decision (known as the Knox case) holding that Proposition 13 restrictions, particularly the two-thirds voter approval requirement for local special taxes, did not apply to special benefit assessments on real property.. You can. XIII D (Proposition 218), This page was last edited on 1 December 2020, at 17:45. The water agency here did not try to calculate the cost of actually providing water at its various tier levels. Local agencies generally prefer to legally overcharge ratepayers to pay for lifeline utility rate programs because no voter approval would be required and because it would free up existing local agency funds that could be spent on other purposes. XIII D, § 5, subd. It put limits on how high and how fast property taxes could climb and required a vote of the people on new local taxes. The Silicon Valley Taxpayers case is also one of the most important and significant taxpayer protection cases in a generation (and is listed as one of the most important and influential decisions in the history of the California Supreme Court) in large part because of the California Supreme Court holding on the standard of review issue.  Thus, local politicians place tax measures on the ballot for voter approval not by a voluntary choice in support of protecting local taxpayers, but rather in response to the constitutional mandates of Proposition 218. Section 2 of Article XIII C contains the voter approval requirements for local government taxes. Const., art. When questionable or controversial informational campaigns occur, often the only practical remedy available is to make such informational campaigns a political issue during the tax measure political campaign which can adversely impact the chances of the local tax measure being approved by voters. , During the November 2010 General Election, California voters passed Proposition 26 which, in part, added a broad constitutional definition of "tax" for purposes of Proposition 218.  An example of where such a local initiative may be appropriate involves election issues or controversies associated with a property owner election, particularly where the local government adopted controversial election procedures. A local initiative to reduce or repeal the assessment is an available remedy to address such an inequity. Technically, to qualify for the exemption the election had to be legally binding and not advisory in nature. Elec. (a) [counties and general law cities]; Cal. Use of a companion advisory measure associated with an unrestricted local tax measure was found by a California appellate court to be a general tax notwithstanding the expanded special tax definition under Proposition 218.  The proportionality requirement ensures that the aggregate assessment imposed on all parcels is distributed among all assessed parcels in proportion to the special benefits conferred on each parcel. A local agency may additionally place the phrase "OFFICIAL BALLOT ENCLOSED" on the face of the envelope in a language or languages other than English. Rather than being based on an absolute majority, as was the case prior to Proposition 218, a majority protest is now determined based on the assessment ballots actually received by the local agency.  The California Legislature adopted a statute interpreting the term "extended" for purposes of the property-related fee or charge provisions of Proposition 218. To the extent that previously approved tax "modernization" measures are interpreted to include taxes on online video streaming services, voters/taxpayers have an available legislative remedy using the local initiative power under Proposition 218 to reduce or repeal any tax on online video streaming services. The general strategy is once a temporary tax passes, it will be easier for the local government to either extend or increase an already existing tax in the future. The assessment procedures and requirements are designed to ensure that any special assessment levied by an agency is a legitimate special assessment. XIII D, § 2, subd. (b), par. The substantive requirements for assessments are contained in constitutional provisions of dignity at least equal to the constitutional separation of powers provision.
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