ACA 23

Bill Subjects

Constitutional Revision Taxpayer Protection And Government Accountability Act Taxation

Abstract

(1) The California Constitution requires a state statute that would result in any taxpayer paying a higher tax to be imposed by an act passed by two-thirds vote of the each house of the Legislature. This measure would instead require any change in state law, defined to include a state statute, and, among other things, a state executive order, state regulation, or other legal authority, that would result in any taxpayer paying a new or higher tax to be imposed by an act passed by a 23 vote of the each house of the legislature and submitted to the electorate and approved by a majority vote. The measure would require an act submitted to the voters to specify the duration of the tax, the expected revenue generated, and a limitation on how the revenue may be used, and would require that the ballot materials for a measure providing for the imposition of a tax contain specified information in that regard. The measure would require any proposed change to the use of the revenue to also be adopted by an act passed by 23 vote of the each house of the legislature and submitted to the electorate and approved by a majority vote. The California Constitution defines "tax" for purposes of the above-described provisions to mean any levy, charge, or exaction of any kind imposed by the state, except for 5 specified types of charges, including, among others, a charge imposed for a specific benefit conferred or a privilege granted directly to the payor that is not provided to those not charged and does not exceed the reasonable costs of conferring the benefit or granting the privilege. Under existing provisions of the California Constitution, the state bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which the costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits from, the governmental activity. This measure would instead provide that every levy, charge, or exaction of any kind imposed by state law is either a tax or an exempt charge. The measure would revise the above-described definition of "tax" for these purposes to mean every levy, charge, or exaction of any kind imposed by state law that is not an exempt charge. The measure would define the term "exempt charge" by making various changes to the current exceptions for specified charges, including removing the exception for conferring a benefit or granting a privilege, and adding new exceptions for purposes of increasing reimbursement rates or payments under Medi-Cal and for the promotion of California tourism, as specified. The measure would require any change in state law which results in any taxpayer paying a new or higher exempt charge to be imposed by an act passed by each of the 2 houses of the Legislature, as specified. The measure would also revise the above-described provisions relating to the state's burden of proof to instead require that the state prove by clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and not a tax, that the amount of the exempt charge is reasonable, and that the amount charged does not exceed the actual cost, as defined, of providing the service or product to the payor, and would specify various factors that may or may not be considered in making that determination. (2) The California Constitution provides that all taxes imposed by a local government are either general taxes or special taxes, and requires that taxes imposed, extended, or increased by a local government be submitted to the electorate and approved by a majority vote, in the case of general taxes, or a 23 vote, in the case of special taxes. The California Constitution defines "tax" for these purposes to mean any levy, charge, or exaction of any kind imposed by local government, except for 7 specified charges, which include the same 5 exceptions as for state taxes, as described above, and 2 additional exceptions for a charge imposed as a condition of property development and for assessments and property related fees, as specified. Under existing provisions of the California Constitution, a local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity. This measure would make similar changes to the above-described changes for state tax purposes, including, among other things, expanding the voter submission requirement to any change to local law, defined to include, among others, a local ordinance, resolution, or other local authority; defining "exempt charge" by making various changes to the current exceptions for specified nontax charges, including removing the exception for conferring a benefit or granting a privilege; and requiring that the ballot materials for a measure providing for the imposition of a tax include specified information relating to the rate and duration of the tax and the use of the revenue derived from the tax. The measure would require that a local tax comply with the applicable voter approval requirements for general and special taxes, as described above, regardless of whether the tax is proposed by the governing body or by an elector. The measure would also prohibit a levy, charge, or exaction imposed as a condition of property development from regulating vehicle miles traveled as a condition of property development or occupancy and would add new categories of exempt charges to include charges for businesses in specified tourism marketing or improvement areas and for providing specified health care services. The measure would require any change to an exempt charge to be imposed only by the governing body of a local government or by the initiative power, except as specified. The measure would also revise the above-described provisions relating to a local government's burden of proof with regard to taxes and exempt charges in a manner similar to the above-described changes to the state's burden of proof. The measure would also prohibit any amendment to a charter to provide for the imposition, extension, or increase of a tax or exempt charge, as specified. (3) The measure would make any tax or exempt charge, whether state or local, that was adopted after January 1, 2022, but prior to the effective date of the measure, that was not adopted in compliance with the measure's provisions void unless reenacted in compliance with the applicable of the above-described requirements. (4) The California Constitution defines the power of referendum of the electors to mean the power to approve or reject statutes or parts of statutes except urgency statutes, statutes calling elections, and statutes providing for tax levies or appropriations for usual current expenses of the State. This measure would define the term "tax" for purposes of the power of referendum to mean every levy, charge, or exaction of any kind imposed by state or local law that is not an exempt charge, as described above. (5) The California Constitution prohibits tax, assessment, fee, or charge from being assessed by any agency upon any parcel of property or upon any person as an incident of property ownership, except as specified. The measure would instead prohibit a tax, assessment, fee, charge, or surcharge from being assessed upon any parcel of property or upon any person as an incident of property ownership and would make various changes to those specified exceptions. (6) The California Constitution, except as otherwise provided by federal law or the California Constitution, requires that all property be taxed and assessed at the same percentage of fair market value, as provided. The California Constitution limits the maximum amount of any ad valorem tax on real property to 1% of full cash value of that property, as specified, and requires that this 1% tax be collected by the counties and apportioned according to law to the districts within the counties. The California Constitution requires that all property taxed by local government be assessed in the county, city, and district in which it is situated. The measure would require all proceeds from the taxation of property to be apportioned according to law to the districts within the counties, and would additionally require that all property taxed by the state be assessed in the county, city, and district in which it is situated. (7) The measure would require the measure to be construed liberally in order to effectuate its purposes, as specified, and would void a conflicting measure that appears on the same statewide election ballot if this measure receives a greater number of affirmative votes. The measure would declare that its provisions are severable. The measure would provide for and make an appropriation for an independent counsel to defend the measure if the Governor and the Attorney General refuse to do so.