Full Book Entry on Countywide Public Financing Authority (1996)

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States Constitution. The Court stated, among other things, that(i) the State has a legitimate interest in local neighborhood preservation, continuity and stability, and consequently may decide to structure its tax system to discourage rapid turnover in ownership of homes and businesses, and (ii) the State may legitimately conclude that a new owner at the time of acquiring his or her property does not have the same reliance interest warranting protection against higher taxes as does an existing owner. Notwithstanding the Nordlinger ruling, however, there can be no assurance that Article XIIIA will not be challenged on other constitutional grounds in the future. Legislation Implementing Article XIIIA Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any ad valorem property tax. The 1% property tax is automatically levied annually by the county and distributed according to a formula among using agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1978. Any special tax to pay voter-approved indebtedness is levied in addition to the basic 1% property tax. In the general election held November 4, 1986, voters of the State of California approved two measures, Propositions 58 and 60, which further amend Article XIIIA. Proposition 58 amends Article XIIIA to provide that the terms "purchased" and "change of ownership," for purposes of determining full cash value of property under Article XIIIA, do not include the purchase or transfer of(1) real property between spouses, and (2) the principal residence and the first $1,000,000 of other property between parents and children. Proposition 60 amends Article XIIIA and allows persons age 55 or older to transfer the lower assessed value of their current residence to another newly purchased residence of equal or lesser value. For the exemption to apply, the new residence must be located in the same county and be purchased within two years after the sale of the previous residence. Proposition 60, as such, has no direct State or local fiscal effect unless the county board of supervisors passes an ordinance implementing it. Proposition 62 On November 4, 1986, an initiative statute("Proposition 62 ")was adopted by the voters of the State which (i) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by a two-thirds vote of the governmental entity's legislative body and by a majority vote of the electorate of the governmental entity, (ii) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters within that jurisdiction, (iii) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (iv) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (v) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (vi) requires that any tax imposed by a local governmental entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988. Various provisions of Proposition 62 were declared unconstitutional at the appellate court level. On September 28, 1995, the California Supreme Court, in Santa Clara County Local Transportation Authority v. Guardino,upheld the constitutionality of the portion of Proposition 62 requiring a two-thirds vote in order for a local government or district to impose a special tax, and by implication upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. 15