Laserfiche WebLink
-37- <br />transferred from taxes to other revenues, or (iii) the voters of the entity approve a change in the <br />limit for a period of time not to exceed four years. <br /> <br />Appropriations subject to Article XIIIB generally include the proceeds of taxes levied by <br />the State or other entity of local government, exclusive of certain State subventions and refunds <br />of taxes. “Proceeds of taxes” include, but are not limited to, all tax revenues and the proceeds to <br />an entity of government from (i) regulatory licenses, user charges, and user fees (but only to the <br />extent such proceeds exceed the cost of providing the service or regulation), and (ii) the <br />investment of tax revenues. Article XIIIB includes a requirement that if an entity’s revenues in <br />any year exceed the amounts permitted to be spent, the excess would have to be returned by <br />revising tax rates or fee schedules over the subsequent two years. Certain expenditures are <br />excluded from the appropriations limit including payments of indebtedness existing or legally <br />authorized as of January 1, 1979, or of bonded indebtedness thereafter approved by the voters <br />and payments required to comply with court or federal mandates which without discretion <br />require an expenditure for additional services or which unavoidably make the providing of <br />existing services more costly. <br /> <br />Proposition 218 <br /> <br />General. On November 5, 1996, California voters approved Proposition 218, the so-called <br />“Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State <br />Constitution, which affect the ability of local governments to levy and collect both existing and <br />future taxes, assessments, and property-related fees and charges. Proposition 218, which <br />generally became effective on November 6, 1996, changed, among other things, the procedure <br />for the imposition of any new or increased property-related “fee” or “charge,” which is defined <br />as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a [local <br />government] upon a parcel or upon a person as an incident of property ownership, including <br />user fees or charges for a property related service” (and referred to in this section as a <br />“property-related fee or charge”). <br /> <br />Specifically, under Article XIIID, before a municipality may impose or increase any <br />property-related fee or charge, the entity must give written notice to the record owner of each <br />parcel of land affected by that fee or charge. The municipality must then hold a hearing upon <br />the proposed imposition or increase at least 45 days after the written notice is mailed, and, if a <br />majority of the property owners of the identified parcels present written protests against the <br />proposal, the municipality may not impose or increase the property-related fee or charge. <br /> <br />Further, under Article XIIID, revenues derived from a property-related fee or charge <br />may not exceed the funds required to provide the “property-related service” and the entity may <br />not use such fee or charge for any purpose other than that for which it imposed the fee or <br />charge. The amount of a property-related fee or charge may not exceed the proportional cost of <br />the service attributable to the parcel, and no property-related fee or charge may be imposed for <br />a service unless that service is actually used by, or is immediately available to, the owner of the <br />property in question. <br /> <br />In addition, Article XIIIC provides that “the initiative power shall not be prohibited or <br />otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. <br />The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to <br />all local governments and neither the Legislature nor any local government charter shall impose <br />a signature requirement higher than that applicable to statewide statutory initiatives.” <br /> <br />Judicial Interpretation of Proposition 218. After Proposition 218 was enacted in 1996, <br />appellate court cases and an Attorney General opinion initially indicated that fees and charges <br />levied for water and wastewater services would not be considered property-related fees and <br />8.C. - Page 62