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HomeMy WebLinkAboutMINUTES - 03051996 - C20 ' I C. � TO: BOARD OF SUPERVISORS Contra FROM: PHIL BATCHELOR, COUNTY ADMINISTRATOR Costa County DATE: February4 29 1996 .req_Ceco)U C' SUBJECT: LEGISLATION: SB 1590 (O'Connell) - MAKING PROPOSITION 62 REQUIREMENTS PROSPECTIVE SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ADOPT a SUPPORT position on SB 1590 by Senator Jack O'Connell, which would provide that the decision of the California Supreme Court in Santa Clara County Transportation Authority v. Guardino, 11 Cal. 4th 220, shall not be applicable to any action in which the validity of a tax or tax increase is contested, if the ordinance or resolution imposing or increasing the tax was adopted prior to December 14, 1995. BACKGROUND: The decision of the California Supreme Court in the Santa Clara County Transportation Authority case surprised most local government officials because it appears to be contrary to the court of appeal decision in the Woodlake decision, which had been cited without question in the Supreme Court's decision in Rossi v. Brown. Local governments relied on the Woodlake decision, which determined that Proposition 62's voter approval requirement for a general tax imposed by a local government violated the provision of the California Constitution prohibiting a referendum of a tax levy. Senator Jack O'Connell has introduced SB 1590 which would recognize the reliance of local governments on the Woodlake decision and provide that the decision on Proposition 62 is not retroactive and would, therefore, control only future new general taxes or increases in general taxes. CONTINUED ON ATTACHMENT: YES SIGNATURE: 7�114 RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE .L APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON March S. 1996 APPROVED AS RECOMMENDED OTHER X IT IS BY THE BOARD ORDERED this matter is REFERRED to the Finance Committee. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT III ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED March 5, 1996 Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF cc: SUPERVISORS AND COUNTY ADMINISTRATOR See Page 2 BY Lj I B ,DEPUTY Contra Costa County has in place a transient occupancy tax, real estate transfer tax and business license tax, all of which might be in jeopardy if the provisions of Proposition 62 were determined to be retroactive. Senator O'Connell is seeking as much local government support as possible. It is recommended that the Board of Supervisors go on record in support of SB 1590 in order to protect existing taxing authority and revenue, recognizing that future increases in these taxes or the imposition of new taxes will require voter approval under the Santa Clara County Transportation Authority decision. cc: County Administrator County Auditor-Controller County Counsel Les Spahnn: Heim, Noack, Kelly & Spahnn 1121 L Street, Suite 100 Sacramento, CA 95814 -2- SENATE BILL No. 1590 Introduced by Senator O'Connell (Principal coauthors: Senators Craven and Solis) (Coauthor: Senator Beverly) February 16, 1996 An act to add Section 53716 to the Government Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST SB 1590, as introduced, O'Connell. Local taxation: court l decision: prospective application. Existing law requires the imposition of a general tax by a local government or district to be approved by a majority of the voters voting on the tax at an election. This bill would make the decision of the California Supreme Court in Santa Clara County Transportation Authority v. Guardino (1995), 11 Cal. 4th 220, in which the court upheld the validity of this general tax voter approval requirement, inapplicable to any tax that was first imposed.or increased by an ordinance or resolution adopted prior to December 14, 1995. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. The people of the State of California do enact as follows.- 1 SECTION I. The Legislature hereby finds and 2 declares as follows: - 3 (a) In City of Woodlake v. Logan, 230 Cal. App. 3d 1058 4 (hereafter Woodlake) , a California court of appeal 99 I SB 1590 — 2 - 1 2 -1 determined that Proposition 62's voter approval 2 requirement for a general tax imposed by a local 3 government violated the provision of the California 4 Constitution prohibiting a referendum of a tax levy. The 5 analysis of this case was cited without question in the 6 California Supreme Court's decision in Rossi v. Brown, 9 7 Cal. 4th 688 (hereafter Rossi) . 8 (b) The rule of law set forth in Woodlake. was 9 consistent with a long line of cases that held that the 10 California Constitution provided no power of referenda 11 or voter approval requirement with respect to general 12 tax measures (see, e.g. City of Westminister v. County of 13 Orange, 204 Cal. App. 3d 623) . 14 (c) Local governments relied extensively upon the 15 longstanding principles reiterated in the Woodlake case 16 in enacting tax measures and pledging the anticipated tax 17 revenues to the repayment of bonds, to development 18 projects of benefit to the community, to payment of 19 long-term contractual obligations, and to the provision of 20 services to the community. 21 (d) Many of these tax measures were enacted in 22 response to reallocations of property tax revenue and 23 other revenue losses resulting from actions taken by the 24 state in response to its own budgetary problems during 25 the last several years. 26 . (e) The Woodlake case remained unchallenged until 27 December 14, 1995, when the California Supreme Court, 28 in Santa Clara County Transportation Authority v. 29 Guardino, 11 Cal. 4th 220 (hereafter Santa Clara) , as 30 modified on denial of rehearing, held that the voter 31 approval requirement of Proposition 62 for general taxes 32 did not violate the constitutional prohibition against a 33 referendum of a tax levy. 34 (f) Local governments could not reasonably have 35 foreseen that the Woodlake decision would be 36 disapproved by the California Supreme Court, in light of 37 the fact that the court repeatedly declined to address the 38 issue of Proposition 62's constitutionality. 39 (g) Consequently, it would be manifestly unfair and 40 unjust, and would cause severe economic hardship, 99 - 3 — SB 1590 )val 1 inequity, and disruption, to apply the decision in the cal 2 Santa Clara case retroactively so as to threaten taxes rnia 3 previously imposed by local governments in reasonable The 4 reliance on existing law, as embodied in the Woodlake the 5 and Rossi decisions. n g 6 (h) Local governments throughout the state and the 7 recipients of the public services those agencies provide, was 8 as well as parties to local government contracts and the 9 holders of bonds and other debt instruments, are nda 10 dependent upon uninterrupted funding from those taxes 3ral 11 potentially affected by the Santa Clara case for the Y of 12 provision of essential public services, including police; 13 fire, and other public safety services. the 14 (i) Public policy will be served by preventing the ,ase 15 disruptive and unjust effect of applying the Santa Clara tax 16 case retroactively to threaten or impair taxes initially .ent 17 imposed in reliance on the law at the time of the of 18 Woodlake decision. a of 19 (j) The retroactive application of the Santa Clara 20 decision to taxes previously imposed pursuant to the in `} 21 Woodlake decision would require layoffs of public ind 22 employees, including public safety officers, would the 23 impede or require termination of many public projects, .ing 24 threaten or eliminate matching fund programs with the 25 state and federal governments, and adversely affect the ntil 26 state's economy. urt, 27 (k) In Forster Shipbldg. Co. v. County of L.A., 54 Cal. V. 28 2d 450, the California Supreme Court held that the as 29 Legislature, as well as the courts, has the authority to iter 30 apply California Supreme Court decisions, that overrule Lxes 31 a prior statement of the law, prospectively only. It is the A a 32 purpose of this act to limit the application of the Santa 33 . Clara decision by having it apply only to those tax ave 34 ordinances and resolutions adopted after December 14, be 35 1995, the date of the Santa Clara decision, after which t of 36 there could no longer be justifiable reliance on the the 37 Woodlake line of cases. 38 SEC. 2. Section 53716 is added to the Government and 39 Code, to read: 1ip� 99 99 SB 1590 — 4 - 1 4 - 1 53716. (a) The decision of the California Supreme 2 Court in Santa Clara County Transportation Authority v. 3 Guardino, 11 Cal. 4th 220, as modified on denial of 4 rehearing, shall not be applicable to and shall not control 5 any action or proceeding in which the validity of a tax or 6 tax increase is contested, questioned, or otherwise in 7 issue, if the ordinance - or resolution imposing or 8 increasing, that tax was adopted prior to December 14, 9 1995. 10 (b) In no event shall any action or proceeding 11 contesting, questioning, or otherwise placing in issue the 12 validity of any portion of this section on any grounds be 13 filed any later than the 30th day after the effective date 14 of this section. r O 99 DATE: REQUEST -To SPEAK FORM (THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. NAME: ali 000PHONE: ;?2-9-x/0 ADDRESS: _ 20 /I(i4 CrTY: . AW T/(. 2- I am speaking formyself OR organization: C2AZA4 7-A 74*'AYAL05 Check one: NAME OF ORGANIZ-XTION) I wish to speak on Agenda Item # C0 2O My comments will be: general for against X Imish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider.