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ANALYSIS <br /> <br />Restricting Local Tax Authority <br />This initiative would drastically limit local revenue authority for cities and other local <br />agencies, by: <br /> <br />· Eliminating local authority to impose a tax for general purposes by majority vote <br />and instead requires all local proposed tax increases subject to a two-thirds vote. <br />This proposal also requires two-thirds approval of all members of the local <br />legislative body before a tax can be placed on the ballot. <br />· Requiring a two-thirds vote to “extend” a tax to new territory, a new class of <br />payor, or expanded base. For cities, this would limit all future annexations by <br />requiring a separate two-thirds vote of the affected residents prior to applying any <br />existing city tax. Other limitations may apply to a local interpretation that an <br />existing local tax applies to a business or product. <br />· Expanding the definition of a tax to include payments voluntarily made in <br />exchange for a benefit received, which may cover local franchise fees. <br />· Prohibiting any tax to be placed on the ballot unless it either specifically identifies <br />by binding and enforceable limitation how it can be spent, with any change <br />requiring re-approval by the electorate, or states in a separate stand-alone <br />segment of the ballot that the tax revenue is intended for “unrestricted revenue <br />purposes.” <br />· Requiring tax measures to be consolidated with the regularly scheduled general <br />election for members of the governing body, unless an emergency is declared by <br />a unanimous vote of the governing body. <br />· Expanding the application of this act to include actions and “legal authority” that <br />may be “enforced” or ‘”implemented” by a local government. <br />· Requiring a tax imposed by initiative to also be subject to a two-thirds vote. <br />· Clarifying that a levy, charge, or exaction retained by and payable to a non- <br />governmental entity is a tax, if the local agency limits in any way the use of the <br />proceeds. <br /> <br />Restricting Local Fee Authority <br />This initiative restricts the ability of a local government to impose fees or charges, other <br />than those subject to Proposition 218, by: <br />· Prohibiting a fee or charge from being imposed, increased, or extended unless <br />approved by two-thirds vote of the legislative body. <br />· Authorizing a referendum on decisions of a legislative body to impose, increase <br />or extend a fee or charge triggered by petitions signed by 5% of affected voters. <br />· Requiring a fee or charge proposed by initiative to be subject to a two-thirds vote <br />of the electorate. <br />9.C. - Page 2