Bill Text: CA ACA23 | 2023-2024 | Regular Session | Introduced
Bill Title: Constitutional revision: taxation: Taxpayer Protection and Government Accountability Act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-06-25 - From printer. May be heard in committee July 25. [ACA23 Detail]
Download: California-2023-ACA23-Introduced.html
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Constitutional Amendment
No. 23
| Introduced by Assembly Member Essayli |
June 24, 2024 |
A resolution to propose to the people of the State of California a partial revision to the Constitution of the State, by amending Sections 1 and 14 of Article XIII thereof, by amending Section 3 of Article XIII A thereof, by amending Sections 1 and 2 of Article XIII C thereof, and by amending Section 3 of Article XIII D thereof, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
ACA 23, as introduced, Essayli.
Constitutional revision: taxation: Taxpayer Protection and Government Accountability Act.
(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 2/3 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 2/3 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 2/3 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.
Digest Key
Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
WHEREAS, Californians are overtaxed. We pay the nation’s highest state income tax, sales tax, and gasoline tax. According to the United States 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 $234,000,000,000 in new and higher taxes and fees; and
WHEREAS, 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; and
WHEREAS, California’s high cost of living not only contributes to the state’s sky rocketing rates of poverty and homelessness, it is also 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 business that were forced to move, sell, or close; and
WHEREAS, 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); and
WHEREAS, 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; and
WHEREAS, In enacting this measure, the voters reassert their right to a voice and 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 be passed or rejected by the voters themselves for a governing body elected by voters and not by unelected and unaccountable bureaucrats. Furthermore, the purpose and intent of the voters in enacting this measure is to do all of the following:
(a) Increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballot, 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.
(b) 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 those charges are broadly supported and transparently debated.
(c) 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, childcare, gasoline, energy, health care, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from those taxes remains local, without changing or superseding existing constitutional provisions contained in subdivision (c) of Section 1 of Article XIII A.
(d) 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 (2017) 3 Cal.5th 924; California Chamber of Commerce v. State Air Resources Board (2017) 10 Cal.App.5th 604; Schmeer v. County of Los Angeles (2013) 213 Cal.App.4th 1310; Johnson v. County of Mendocino (2018) Cal.App.5th 1017; Citizens Association of Sunset Beach v. Orange County Local Agency Formation Commission (2012) 209 Cal.App.4th 1182; and Wilde v. City of Dunsmuir (2020) 9 Cal.5th 1105; now, therefore, be it
Resolved by the Assembly, the Senate concurring, That the Legislature of the State of California at its 2023–24 Regular Session commencing on the fifth day of December 2022, two-thirds of the membership of each house concurring, hereby proposes to the people of the State of California, a partial revision of the Constitution of the State as follows:
First—
That this measure shall be known, and may be cited, as the Taxpayer Protection and Government Accountability Act.Second—
That Section 1 of Article XIII thereof is 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.
Third—
That Section 14 of Article XIII thereof is amended to read:SEC. 14.
(a) All property taxed by the state or a local government shall be assessed in the county, city, and district in which it is situated.(b) Notwithstanding any other law, any state or local property taxes shall be apportioned according to law to the districts within the counties.
Fourth—
That Section 3 of Article XIII A thereof 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.(b) (1) Any change in state statute
law 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 majority 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 both of the following:
(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.
(B) 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, standalone section. Any proposed change to the use of the revenue from the tax shall be adopted by a separate act that 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 majority 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 all of the following:
(A) The type and amount or rate of the tax.
(B) The duration of the tax.
(C) 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 shall 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.
(b)
(d) As used in this section,
section and in Section 9 of Article II, “tax” means any every levy, charge, or exaction of any kind imposed by the State, except the following: state law that is not an exempt charge.
(1)A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the State of conferring the benefit or granting the privilege to the payor.
(e) As used in this section, “exempt charge” means only the following:
(2)
(1) A reasonable charge imposed 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 reasonable
actual costs to the State of providing the service or product to the payor.
(3)
(2) A charge imposed 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 revenue of which are primarily used to finance the nonfederal portion of Medi-Cal medical assistance expenditures.
(4) A reasonable charge imposed 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, penalty, or other monetary charge
fine or penalty, including any applicable interest for nonpayment thereof, imposed by the judicial branch of government or the State, as a result of
a state administrative enforcement agency pursuant to adjudicatory 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, as those provisions read on January 1, 2024.
(c)
(f) Any tax or
exempt charge
adopted after January 1, 2010,
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 by the Legislature and signed into law by the Governor in compliance with the requirements of this section.
(d)
(g) (1) The State bears the burden of proving by a preponderance of the
clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and 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. 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.
(2) The retention of revenue by, or the payment to, a nongovernmental entity of a levy, 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 an 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 that the amount charged is the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor and that 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 the service or product.
(2) “Extend” includes, but is not limited to, doing any of the following with respect to a tax or exempt charge:
(A) Lengthening its duration.
(B) Delaying or eliminating its expiration.
(C) Expanding its application to a new territory or class of payor.
(D) Expanding the base to which its rate is applied.
(3) “Impose” means adopt, enact, reenact, create, establish, collect, increase, or extend.
(4) (A) Except as otherwise provided in subparagraph (B), “state law” includes, but is not limited to, any state statute, state regulation, state executive order, state resolution, state ruling, state opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by the legislative or executive branch of state government.
(B) “State law” does not include actions taken by the Regents of the University of California, the
Trustees of the California State University, or the Board of Governors of the California Community Colleges.
Fifth—
That Section 1 of Article XIII C thereof is amended to read:SECTION 1.
(a) “Actual cost” of providing a service or product means that the amount charged is the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor and that 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 or exempt charge:
(1) Lengthening its duration.
(2) Delaying or eliminating its expiration.
(3) Expanding its application to a new territory or class of payor.
(4) Expanding the base to which its rate is applied.
(a)
(c) “General tax” means any tax imposed for general governmental purposes.
(d) “Impose” means adopt, enact, reenact, create, establish, collect, increase, or extend.
(b)
(e) “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.
(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.
(c)
(g) “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.
(d)
(h) “Special tax” means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.
(e)
(i) As used in this article, and in Section 9 of Article II, “tax” means any every
levy, charge, or exaction of any kind imposed by a local government, except the following:
law that is not an exempt charge.
(1)A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.
(j) “Exempt charge” means only the following:
(2)
(1) A reasonable charge imposed 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 reasonable actual costs to the local government of providing the service or product.
(3)
(2) A charge imposed 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.
(4)
(3) A reasonable charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.
(5)
(4) A fine,
penalty, or other monetary charge fine or penalty, including any applicable interest for nonpayment thereof, imposed by the judicial branch of government or a local government, as a result of government administrative enforcement agency pursuant to adjudicatory due process to punish a violation of law.
(6)
(5) A charge imposed as a condition of property development.
A levy, charge, or exaction regulating or related to vehicle miles traveled shall not be imposed as a condition of property development or occupancy.
(7)Assessments and property-related fees imposed in accordance with the provisions of Article XIII D.
The 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.
(6) An assessment, fee, or charge subject to Article XIII D, or an assessment imposed upon a business in a tourism marking district, a parking and business improvement area, or a property and business improvement district.
(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, “health care service” means a service licensed or exempt from licensure by the state pursuant to Chapter 1 (commencing with Section 1200), Chapter 1.3 (commencing with Section 1248), or Chapter 2 (commencing with Section 1250) of Division 2 of the Health and Safety Code, as those provisions read on January 1, 2024.
Sixth—
That Section 2 of Article XIII C thereof is amended to read:SEC. 2.
(a) All taxes Every levy, charge, or exaction of any kind imposed by law is either a tax or an exempt charge. Any tax imposed by any local government shall be deemed to be either a
general taxes tax or a special taxes. Special purpose districts or agencies, including school districts, tax. A special district or agency, including a school district, shall have no power to levy a general taxes. tax.
(b) No A local government
may law, whether proposed by the governing body or by an elector, shall not 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)Any general tax imposed, extended, or increased, without voter approval, by any local government on or after January 1, 1995, and prior to the effective date of this article, shall continue to be imposed only if approved by a majority vote of the voters voting in an election on the issue of the imposition, which election shall be held within two years of the effective date of this article and in compliance with subdivision (b).
(d)No
(c) A local government may impose, extend, or increase law, whether proposed by the governing body or by an elector, shall not impose 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, including a measure proposed by an elector pursuant to Article II, include all of the following:
(1) The type and amount or rate of the tax.
(2) The duration of the tax.
(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 specific purpose.
(e) (1) 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
government body shall impose an exempt charge by an ordinance specifying the type of exempt charge as provided in subdivision (j) of Section 1 and the amount or rate of the exempt charge to be imposed, and passed by the governing body.
(2) This subdivision shall not apply to the charges specified in paragraph (7) of subdivision (j) of Section 1.
(f) An amendment to a charter that provides for the imposition, extension, or increase of a tax or exempt charge shall not 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.
(g) 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 local 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 nongovernmental entity of a levy, charge, or exaction of any kind imposed by local law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or an 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 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.
Seventh—
That Section 3 of Article XIII D thereof is amended to read:SEC. 3.
(1) The ad valorem property tax imposed pursuant to Article XIII and
described in subdivision (a) of Section 1 of Article XIII and subdivision (a) of Section 1 of Article XIII A, and described and enacted pursuant to the voter approval requirement in subdivision (b) of Section 1 of Article XIII A.
(2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4 of Article XIII A.
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.
(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.
Eighth—
(a) (1) This measure shall be liberally construed in order to effectuate its purposes.(2) (A) In the event that this measure and another measure relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures appears on the same statewide election ballot, the other measure shall be deemed to be in conflict with this measure. In the event that this measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other measure shall be null and void.
(B) In furtherance of this paragraph, the Legislature and the voters hereby declare that this measure conflicts with the provisions of the Housing Affordability and Tax Cut Act of 2022 (Initiative 21-0023) and the Tax Cut and Housing Affordability Act (Initiative 21-0032), both of which would impose a new state property tax, called a “surcharge,” on certain real property, and would provide the revenue derived from the tax to the State, rather than retained in the county in which the property is situated for the use of the county and cities and districts within the county, in contradiction of the provisions of this initiative.
(3) If this measure is approved by the voters, but superseded in whole or in part by a conflicting measure approved by the voters at the same election, and the conflicting measure is later held invalid, this measure shall be self-executing and given full force and effect.
(b) The provisions of this measure 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 decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this act. The Legislature hereby declares that it would have proposed, and the voters hereby declare that they would have adopted, this measure and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not declared invalid or unconstitutional without regard to whether any portion of this act or application thereof would be subsequently declared invalid.
(c) If this measure is approved by the voters and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and the Attorney
General refuse to defend the measure, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 (commencing with Section 12500) of Part 2 of Division 3 of Title 2 of the Government Code, or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this measure 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 qualification 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 continuous 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) This subdivision does not prohibit a bona fide taxpayers association from intervening to defend this measure.
