BILL NUMBER: SCA 5	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 9, 2015

INTRODUCED BY    Senator   Hancock 
 Senators   Hancock   and Mitchell 

                        MARCH 26, 2015

   A resolution to propose to the people of the State of California
an amendment to the Constitution of the State, by  amending
Section 4 of Article XIIIA thereof, by amending Section 2 of Article
XIIIC thereof, and by amending Section 3 of Article XIIID thereof,
relating to taxation.   amending Section 2 of, and by
adding Sections 2.5 and 8.8 to, Article XIII     A
thereof, by adding Sections 8.8 and 14 to Article XIII  
  B thereof, and by adding Sections 8.6 and 8.7 to 
 Article XVI thereof, relating to local government finance. 


	LEGISLATIVE COUNSEL'S DIGEST


   SCA 5, as amended, Hancock.  Local government: special
taxes: voter approval.   Local government finance. 

   The California Constitution provides that all property is taxable,
unless exempted by the California Constitution or by federal law.
The California Constitution authorizes the Legislature to classify
personal property for differential taxation or for exemption by means
of a statute approved by a 2/3 vote of the membership of each house.
 
   This measure would exempt from taxation an amount up to $500,000
of tangible personal property used exclusively for business purposes.
This measure would prohibit the Legislature from lowering this
exemption amount or from changing its application, but would
authorize it to be increased consistent with the authority described
above. This measure would provide that this provision shall become
operative on January 1, 2019.  
   This measure, for owners of commercial and industrial property
subject to reassessment, who also operate a business or businesses on
that property, where the increase in assessed value as a result of
this measure exceeds 25% compared to the assessed value of the
property prior to the operation of this measure, would exempt that
portion of the assessed value that exceeds 25% as so described from
taxation for a period of 5 years if specified conditions are met.
 
   The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. For
purposes of this limitation, "full cash value" is defined as the
assessor's valuation of real property as shown on the 1975-76 tax
bill under "full cash value" or, thereafter, the appraised value of
that real property when purchased, newly constructed, or a change in
ownership has occurred.  
   This measure, commencing on the lien date for the 2018-19 fiscal
year, would require the full cash value of commercial and industrial
property, as defined, to be the fair market value of that property as
of the lien date. This measure, for the 2018-19 fiscal year, would
require only 50% of those properties that have not been reassessed at
fair market value, as specified, to be assessed at fair market
value, and by the 2019-20 fiscal year would require all other
properties that have not been brought to fair market value to be
assessed at fair market value. This bill would require owners of
property subject to reassessment as so described to pay only a
portion, as provided, of any increase in property tax due in the
first year and second years after initial reassessment to fair market
value.  
   This measure would establish the Local School and Community
College Property Tax Fund in the State Treasury, which would be
continuously appropriated for the support of school districts,
charter schools, schools operated by county offices of education, and
community college districts. The measure would require the
Controller to allocate 11% of the moneys in the fund to community
college districts based on an equal amount per unit of full-time
equivalent student receiving educational services, and 89% of the
moneys in the fund to school districts, charter schools, and county
offices of education. For school districts, charter schools, and
county offices of education, the measure would require the
Superintendent of Public Instruction to allocate the moneys based on
a formula that would include a base grant, a supplemental grant, and
a concentration grant, as specified. The measure would require moneys
from the fund to support the K-14 educational program for
instructional improvement and accountability, and would prohibit them
from being used to pay administrative costs. The measure would
require school districts, charter schools, and county offices of
education to demonstrate through their local control and
accountability plans that they are increasing or improving services
for unduplicated pupils in proportion to the increase in funds they
receive pursuant to those supplemental and concentration grant
allocations. The measure would prohibit moneys in the fund from being
subject to appropriation, reversion, or a transfer by the
Legislature, Governor, Director of Finance, or Controller for any
purpose other than those specified in the measure, or from being
loaned to the General Fund or any other fund of the state or any
local government fund. The measure would, among other things, provide
that moneys appropriated by the fund shall not be applied toward the
minimum funding requirements for school districts and community
college districts imposed by Section 8 of Article XVI of the
California Constitution, and that they shall not be considered for
purposes of calculations relating to the Budget Stabilization Account
or the Public School System Stabilization Account.  
   This measure, for each fiscal year beginning with the 2018-19
fiscal year to the 2020-21 fiscal year, inclusive, would require the
county assessor to make specified calculations to determine the total
"baseline assessed value" and the "incremental assessed percentage"
of commercial and industrial property, and to identify the "total
revised assessed value" of all commercial and industrial property in
the county as determined following the reassessment of commercial and
industrial property. This measure would require the county assessor
to make additional calculations using the total revised assessed
value and the incremental assessed value to determine the incremental
revenues available for distribution. This measure, beginning with
the 2018-19 fiscal year and for each fiscal year thereafter, would
require an amount equal to the reduction in revenues derived from the
taxes imposes pursuant to the Personal Income Tax Law and the
Corporation Tax Law for each county resulting from the higher
property taxes due to the reassessment of commercial and industrial
properties and the lower property taxes due to the exemptions
described above as estimated by the Franchise Tax Board, to be
transferred by each county auditor to the state General Fund and the
Mental Health Services Fund, as provided. This measure, beginning
with the 2018-19 fiscal year to the 2020-21 fiscal year, inclusive,
would require the county auditor, after transferring the amounts as
so described to the state General Fund and the Mental Health Services
Fund, to make specified determinations and calculations with respect
to the remaining incremental revenues, and to transfer specified
amounts to the State Controller for deposit in the Local School and
Community College Property Tax Trust Fund, for allocation and
distribution, as described above. This measure would require the
balance of the incremental revenues remaining after transferring the
amounts as so described to the Controller to be allocated among local
agencies. This measure would require the county auditor to report
the incremental revenues available for distribution and calculation
made, along with supporting documentation, to the Controller, and
would require the Controller to certify that the calculation was
properly made and to post the percentage figure for each county on
the Controller's Internet Web site. This measure, for the 2021-22
fiscal year, would require the county assessor to perform the
calculations described above, and would require the county auditor to
report the resulting percentage to the Controller. This measure, for
the 2021-22 fiscal year and each fiscal year thereafter, would
require the county auditor to make the determinations and calculation
described above, and to transfer the resulting property tax revenues
to the State Controller for deposit in the Local School and
Community College Property Tax Fund, and would require the balance of
the incremental revenues to be allocated among local agencies. 

   This measure would require all local education agencies, community
colleges, counties, cities and counties, cities, and special
districts that receive funds from the revenues generated by the
reassessment of commercial and industrial properties to publicly
disclose the amount of property tax revenues received, as specified,
and how those revenues were spent, and to publish online all public
disclosures, with a copy of each disclosure to the Controller. This
measure would require all annual public audits required of local
education agencies, community colleges, counties, cities and
counties, cities, and special districts that receive funds from the
revenues generated by the reassessment of commercial and industrial
properties to disclose the amount of property tax revenues received,
as specified, and to confirm whether the use of those revenues is
consistent with the requirements of this measure.  
   This measure would authorize expenses incurred by local education
agencies to comply with these audit and disclosure requirements to be
paid with funding from the Local School and Community College
Property Tax Fund.  
   The California Constitution prohibits the annual appropriations
subject to limitation of any entity of state or local government from
exceeding its adjusted annual appropriations limit. The California
Constitution defines "appropriations subject to limitation" as any
authorization to expend during a fiscal year the proceeds of taxes
levied by or for that entity, and defines "proceeds of taxes" to
include all tax revenues and the proceeds to an entity of government
from specified sources.  
   This measure would prohibit proceeds of taxes, and appropriations
subject to limitation of each entity of government, from including
tax revenues generated by the reassessment of commercial and
industrial property under this measure.  
   The California Constitution requires the state, whenever the
Legislature or a state agency mandates a new program or higher level
of service on any local government, to provide a subvention of funds
to reimburse the local government, with specified exceptions. 

   This measure would exclude the duty to collect the tax revenues
generated by the reassessment of commercial and industrial property
under this measure from being considered a new program or higher
level of service mandated by the state. This measure would, however,
authorize the board of supervisors of a county or city and county to
direct the county auditor to allocate to the county or city and
county an amount equal to the actual direct administrative costs
associated with the implementation of the reassessment of commercial
and industrial property.  
   The California Constitution conditions the imposition of a special
tax by a local government upon the approval of 2/3 of the voters of
the local government voting on that tax, but authorizes the
imposition of a local ad valorem tax for school facilities upon the
approval of 55% of the voters voting on that tax. 
   This measure would condition the imposition, extension, or
increase of a special tax by a local government upon the approval of
55% of the voters voting on the proposition, if the proposition
proposing the tax contains specified requirements. The measure would
also make conforming and technical, nonsubstantive changes. 

   Vote: 2/3. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


   
   WHEREAS, The majority of commercial and industrial properties are
assessed at or close to their actual market value, and their owners
are paying their share of property taxes to help support schools and
other local services. But many other commercial and industrial
properties currently are assessed far below their actual value. 

   WHEREAS, According to a recent study by USC Dornsife researchers,
owners of these under-assessed commercial and industrial properties
are avoiding over $9 billion in local property taxes that should be
going to support schools, community colleges, and other community
services such as public safety, fire protection, libraries, and
parks.  
   WHEREAS, Proposition 13 was approved by voters in 1978 to protect
homeowners from skyrocketing property taxes. But since then,
under-assessment of commercial and industrial properties has
contributed to a tax shift that has substantially increased the share
of property taxes being paid by owners of residential properties,
including both homeowners and residential rental property.  

   WHEREAS, Since 1978 the residential share of assessed value
statewide has increased from 55% to 72% of the total while the
commercial, industrial, and agricultural share of assessed value has
decreased from 45% to just 28%.  
   WHEREAS, The combination of Proposition 13 and the Williamson Act
have been effective tools in the preservation of agricultural land
and should be protected.  
   WHEREAS, When homeowners sell their homes, the property is
reassessed to the full market value of the property based on the
sales price. But many large corporations and wealthy individuals are
able to take advantage of loopholes and complex stock manipulations
to avoid reassessment when a property changes hands. For example, in
one widely publicized transaction, a wealthy CEO was able to
structure the purchase of a $200 million hotel property in a way that
prevented reassessment, avoiding more than $1.1 million a year in
local property taxes.  
   WHEREAS, California's current system of taxing commercial and
industrial properties is an impediment to fair competition. It favors
under-assessed businesses over other businesses competing for the
same customers that are assessed at their actual value. It allows
owners of under-assessed properties to avoid paying their share of
taxes to support the local public services they benefit from just as
much as the fully assessed businesses that are paying their share.
 
   WHEREAS, The current system of taxing commercial and industrial
properties also creates perverse incentives that discourage owners
from investing in improvements in order to avoid reassessment, while
these same under-assessed owners are being unfairly advantaged over
commercial and industrial property owners, starting up or expanding
an existing business, who are assessed at the full market value of
their property.  
   WHEREAS, The current system of assessing commercial and industrial
properties has had the unintended consequence of encouraging sprawl
and discouraging "smart growth," working against more efficient use
of scarce resources such as energy, water, and land.  
   WHEREAS, While the property tax on business equipment and fixtures
is an irritating burden for small businesses, particularly for those
attempting to start up or expand, it also provides revenues that
support local services. Because this measure eliminates the
under-assessment of commercial and industrial properties and thereby
other revenue to support local services, it also can provide
businesses with an exemption of up to $500,000 for equipment and
fixtures. A $500,000 exemption helps all businesses, and will
eliminate the tax on equipment and fixtures entirely for 90% of
businesses whether they own and operate their own small business or
rent their place of business.  
   WHEREAS, If commercial and industrial properties pay their fair
share of taxes, more money will be available for our public schools,
which remain funded well below the national average. Because of the
unique interactions between property tax revenues and the Proposition
98 minimum funding guarantee, however, the best way to ensure that
all school districts benefit equally from these new property tax
revenues is to place them in a special fund outside Proposition 98
and distribute them based on enrollment, with more revenues going to
those districts that have higher proportions of low-income or English
learner students and foster youth.  
   WHEREAS, If California were a country, it would have the eighth
largest economy in the world. California corporations are enjoying
record profits and many businesses are starting up, expanding, and
relocating here, even though some businesses do leave California. The
complaints of some businesses and their spokespersons about high
taxes are not an excuse for corporations and wealthy investors to
avoid paying their fair share of local property taxes as do other
businesses. Local communities are strengthened when everyone is
contributing to the common good by paying their share to support
schools, job training, public safety, fire protection, and other
local services.  
   WHEREAS, Reforming commercial and industrial property assessments
to bring under-assessed properties up to their full value will remove
tax-induced disincentives to investment in commercial and industrial
property, provide a level playing field for businesses to compete,
and require owners of under-assessed properties to join with the
majority of businesses already paying their fair share to support
local schools and other community services.  
   WHEREAS, Proposition 13 limits property tax rates to 1% of
assessed value. Requiring assessors to bring assessments of
under-assessed commercial and industrial properties up to their
actual market value will not affect the 1% limitation on rates in any
way. Property tax rates on California businesses will continue to be
among the lowest in the country. 
    Resolved by the Senate, the Assembly concurring, That the
Legislature of the State of California at its 2015-16 Regular Session
commencing on the first day of December 2014, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California that the Constitution of the State be
amended as follows:  
  First--    That it is the intent of the people of the
State of California to do all of the following in this measure:
   (a) Eliminate the inequities and impediments to economic growth
caused by current laws governing the assessment of commercial and
industrial properties, by requiring all commercial and industrial
properties to be assessed at their full market value and reducing the
property tax on business equipment and fixtures.
   (b) Preserve in every way Proposition 13's protections for
homeowners and for rental residential properties. This measure only
affects the assessment of taxable commercial and industrial property.

   (c) Make no change to existing laws affecting the taxation or
preservation of agricultural land.
   (d) Make sure schools, community colleges, counties, cities and
counties, cities, and special districts are appropriately spending
any new revenues they receive from this measure by requiring that new
revenues and their expenditure be publicly disclosed and annually
audited and that all required disclosures and audits are easily
accessible online.
   (e) Authorize the distribution of any new revenues resulting from
the implementation of this law in the same manner as other property
tax revenues.
   (f) Ensure that the portion of any new revenues going to local
schools and community colleges is treated as new revenues that are in
addition to all other funding for schools and community colleges,
and are allocated in a manner that benefits all schools and community
colleges consistent with constitutional requirements. Accordingly,
these additional funds for schools and community colleges shall not
be considered funds of the State, shall not be subject to Proposition
98 or the Proposition 2 rainy day fund, and shall not be subject to
appropriation by the Legislature. The funds will be allocated to
school districts and community college districts based on enrollment.
School districts with higher proportions of low-income and English
learner students and foster youth will receive additional funds to
provide more or better services to those students.
   (g) To assist small businesses, whether they own or rent their
place of business, reduce the business tangible personal property tax
on equipment and fixtures for each business by exempting $500,000 of
that property from taxation. This would eliminate the tax on
equipment and fixtures for about 90 percent of all California
businesses. The Legislature would be prohibited from lowering this
exemption but would be authorized to increase it.
   (h) Provide for the phase in of the assessment of under-assessed
commercial and industrial properties to give county assessors time to
effectively implement the new law.
   (i) Provide owners of under-assessed commercial and industrial
properties time to meet their obligations under the law by phasing in
assessment increases resulting from the initial implementation of
this law. Small business owners will be eligible for additional
assistance in complying with the law through an additional five-year
phase-in for small business owner-operators. 
   Second--    That Section 3.1 is added to Article XIII
thereof, to read:  
      SEC. 3.1.  (a) For each taxpayer paying the tax on tangible
personal property used exclusively for business purposes, an amount
of up to five hundred thousand dollars ($500,000) is exempt from
taxation. Fixtures shall be included as tangible personal property
subject to this exemption, but aircraft and vessels shall not be
included. The Legislature shall not lower this exemption amount or
change its application but otherwise may increase it consistent with
the authority enumerated in Section 2.
   (b) (1) For owners of property subject to reassessment under
Section 2.5 of Article XIII A who operate a business or businesses on
that property, where the increase in assessed value as a result of
this measure exceeds 25 percent compared to the assessed value of the
property prior to the operation of this measure, that portion of the
assessed value that exceeds 25 percent compared to the assessed
value of the property prior to the operation of this measure shall be
exempt from taxation for a period of five years following the
reassessment of the property as a result of this measure, provided
that all of the following conditions are met:
   (A) The owner uses a majority of the property or properties for
their own business purpose.
   (B) The total fair market value is less than three million dollars
($3,000,000) for the entire property, including land and buildings.
Property owners owning properties in a single county shall certify
under penalty of perjury that the aggregate fair market value of all
their properties in that county does not exceed three million dollars
($3,000,000) in order to qualify for this exemption. Property owners
owning properties in more than one county must certify under penalty
of perjury that the aggregate fair market value of all of their
properties statewide does not exceed three million dollars
($3,000,000) in order to qualify for this exemption.
   (2) This exemption shall expire five years from its initial
application to a business property, at which time the property owner
shall be liable for the full amount of property taxes levied on the
property pursuant to the operation of this measure. However, property
owners who have realized a reduction in property taxes as a result
of the operation of this subdivision are not liable for the property
taxes exempted for the duration of the operation of this exemption.

  Third   --    That Section 2 of Article XIII
A thereof is amended to read: 
      SEC. 2.  (a) The "full cash value" means the county assessor's
valuation of real property as shown on the 1975-76 tax bill under
"full cash value" or, thereafter,  except as otherwise provided
in Section 2.5, the full cash value base of real property. For
purposes of this section, the full cash value base of real property
is  the appraised value of real property when purchased, newly
constructed, or a change in ownership has occurred after the 1975
assessment. All real property not already assessed up to the 1975-76
full cash value may be reassessed to reflect that valuation. For
purposes of this section, "newly constructed" does not include real
property that is reconstructed after a disaster, as declared by the
Governor, where the fair market value of the real property, as
reconstructed, is comparable to its fair market value prior to the
disaster. For purposes of this section, the term "newly constructed"
does not include that portion of an existing structure that consists
of the construction or reconstruction of seismic retrofitting
components, as defined by the Legislature.
   However, the Legislature may provide that, under appropriate
circumstances and pursuant to definitions and procedures established
by the Legislature, any person over the age of 55 years who resides
in property that is eligible for the homeowner's exemption under
subdivision (k) of Section 3 of Article XIII and any implementing
legislation may transfer the base year value of the property entitled
to exemption, with the adjustments authorized by subdivision (b), to
any replacement dwelling of equal or lesser value located within the
same county and purchased or newly constructed by that person as his
or her principal residence within two years of the sale of the
original property. For purposes of this section, "any person over the
age of 55 years" includes a married couple one member of which is
over the age of 55 years. For purposes of this section, "replacement
dwelling" means a building, structure, or other shelter constituting
a place of abode, whether real property or personal property, and any
land on which it may be situated. For purposes of this section, a
two-dwelling unit shall be considered as two separate single-family
dwellings. This paragraph shall apply to any replacement dwelling
that was purchased or newly constructed on or after November 5, 1986.

   In addition, the Legislature may authorize each county board of
supervisors, after consultation with the local affected agencies
within the county's boundaries, to adopt an ordinance making the
provisions of this subdivision relating to transfer of base year
value also applicable to situations in which the replacement
dwellings are located in that county and the original properties are
located in another county within this State. For purposes of this
paragraph, "local affected agency" means any city, special district,
school district, or community college district that receives an
annual property tax revenue allocation. This paragraph applies to any
replacement dwelling that was purchased or newly constructed on or
after the date the county adopted the provisions of this subdivision
relating to transfer of base year value, but does not apply to any
replacement dwelling that was purchased or newly constructed before
November 9, 1988.
   The Legislature may extend the provisions of this subdivision
relating to the transfer of base year values from original properties
to replacement dwellings of homeowners over the age of 55 years to
severely disabled homeowners, but only with respect to those
replacement dwellings purchased or newly constructed on or after the
effective date of this paragraph.
   (b) The full cash value base may reflect from year to year the
inflationary rate not to exceed 2 percent for any given year or
reduction as shown in the consumer price index or comparable data for
the area under taxing jurisdiction, or may be reduced to reflect
substantial damage, destruction, or other factors causing a decline
in value.
   (c) For purposes of subdivision (a), the Legislature may provide
that the term "newly constructed" does not include any of the
following:
   (1) The construction or addition of any active solar energy
system.
   (2) The construction or installation of any fire sprinkler system,
other fire extinguishing system, fire detection system, or
fire-related egress improvement, as defined by the Legislature, that
is constructed or installed after the effective date of this
paragraph.
   (3) The construction, installation, or modification on or after
the effective date of this paragraph of any portion or structural
component of a single- or multiple-family dwelling that is eligible
for the homeowner's exemption if the construction, installation, or
modification is for the purpose of making the dwelling more
accessible to a severely disabled person.
   (4) The construction, installation, removal, or modification on or
after the effective date of this paragraph of any portion or
structural component of an existing building or structure if the
construction, installation, removal, or modification is for the
purpose of making the building more accessible to, or more usable by,
a disabled person.
   (d) For purposes of this section, the term "change in ownership"
does not include the acquisition of real property as a replacement
for comparable property if the person acquiring the real property has
been displaced from the property replaced by eminent domain
proceedings, by acquisition by a public entity, or governmental
action that has resulted in a judgment of inverse condemnation. The
real property acquired shall be deemed comparable to the property
replaced if it is similar in size, utility, and function, or if it
conforms to state regulations defined by the Legislature governing
the relocation of persons displaced by governmental actions. This
subdivision applies to any property acquired after March 1, 1975, but
affects only those assessments of that property that occur after the
provisions of this subdivision take effect.
   (e) (1) Notwithstanding any other provision of this section, the
Legislature shall provide that the base year value of property that
is substantially damaged or destroyed by a disaster, as declared by
the Governor, may be transferred to comparable property within the
same county that is acquired or newly constructed as a replacement
for the substantially damaged or destroyed property.
   (2) Except as provided in paragraph (3), this subdivision applies
to any comparable replacement property acquired or newly constructed
on or after July 1, 1985, and to the determination of base year
values for the 1985-86 fiscal year and fiscal years thereafter.
   (3) In addition to the transfer of base year value of property
within the same county that is permitted by paragraph (1), the
Legislature may authorize each county board of supervisors to adopt,
after consultation with affected local agencies within the county, an
ordinance allowing the transfer of the base year value of property
that is located within another county in the State and is
substantially damaged or destroyed by a disaster, as declared by the
Governor, to comparable replacement property of equal or lesser value
that is located within the adopting county and is acquired or newly
constructed within three years of the substantial damage or
destruction of the original property as a replacement for that
property. The scope and amount of the benefit provided to a property
owner by the transfer of base year value of property pursuant to this
paragraph shall not exceed the scope and amount of the benefit
provided to a property owner by the transfer of base year value of
property pursuant to subdivision (a). For purposes of this paragraph,
"affected local agency" means any city, special district, school
district, or community college district that receives an annual
allocation of ad valorem property tax revenues. This paragraph
applies to any comparable replacement property that is acquired or
newly constructed as a replacement for property substantially damaged
or destroyed by a disaster, as declared by the Governor, occurring
on or after October 20, 1991, and to the determination of base year
values for the 1991-92 fiscal year and fiscal years thereafter.
   (f) For the purposes of subdivision (e):
   (1) Property is substantially damaged or destroyed if it sustains
physical damage amounting to more than 50 percent of its value
immediately before the disaster. Damage includes a diminution in the
value of property as a result of restricted access caused by the
disaster.
   (2) Replacement property is comparable to the property
substantially damaged or destroyed if it is similar in size, utility,
and function to the property that it replaces, and if the fair
market value of the acquired property is comparable to the fair
market value of the replaced property prior to the disaster.
   (g) For purposes of subdivision (a), the terms "purchased" and
"change in ownership" do not include the purchase or transfer of real
property between spouses since March 1, 1975, including, but not
limited to, all of the following:
   (1) Transfers to a trustee for the beneficial use of a spouse, or
the surviving spouse of a deceased transferor, or by a trustee of
such a trust to the spouse of the trustor.
   (2) Transfers to a spouse that take effect upon the death of a
spouse.
   (3) Transfers to a spouse or former spouse in connection with a
property settlement agreement or decree of dissolution of a marriage
or legal separation.
   (4) The creation, transfer, or termination, solely between
spouses, of any coowner's interest.
   (5) The distribution of a legal entity's property to a spouse or
former spouse in exchange for the interest of the spouse in the legal
entity in connection with a property settlement agreement or a
decree of dissolution of a marriage or legal separation.
   (h) (1) For purposes of subdivision (a), the terms "purchased" and
"change in ownership" do not include the purchase or transfer of the
principal residence of the transferor in the case of a purchase or
transfer between parents and their children, as defined by the
Legislature, and the purchase or transfer of the first one million
dollars ($1,000,000) of the full cash value of all other real
property between parents and their children, as defined by the
Legislature. This subdivision applies to both voluntary transfers and
transfers resulting from a court order or judicial decree.
   (2) (A) Subject to subparagraph (B), commencing with purchases or
transfers that occur on or after the date upon which the measure
adding this paragraph becomes effective, the exclusion established by
paragraph (1) also applies to a purchase or transfer of real
property between grandparents and their grandchild or grandchildren,
as defined by the Legislature, that otherwise qualifies under
paragraph (1), if all of the parents of that grandchild or those
grandchildren, who qualify as the children of the grandparents, are
deceased as of the date of the purchase or transfer.
   (B) A purchase or transfer of a principal residence shall not be
excluded pursuant to subparagraph (A) if the transferee grandchild or
grandchildren also received a principal residence, or interest
therein, through another purchase or transfer that was excludable
pursuant to paragraph (1). The full cash value of any real property,
other than a principal residence, that was transferred to the
grandchild or grandchildren pursuant to a purchase or transfer that
was excludable pursuant to paragraph (1), and the full cash value of
a principal residence that fails to qualify for exclusion as a result
of the preceding sentence, shall be included in applying, for
purposes of subparagraph (A), the one-million-dollar ($1,000,000)
full cash value limit specified in paragraph (1).
   (i) (1) Notwithstanding any other provision of this section, the
Legislature shall provide with respect to a qualified contaminated
property, as defined in paragraph (2), that either, but not both, of
the following apply:
   (A) (i) Subject to the limitation of clause (ii), the base year
value of the qualified contaminated property, as adjusted as
authorized by subdivision (b), may be transferred to a replacement
property that is acquired or newly constructed as a replacement for
the qualified contaminated property, if the replacement real property
has a fair market value that is equal to or less than the fair
market value of the qualified contaminated property if that property
were not contaminated and, except as otherwise provided by this
clause, is located within the same county. The base year value of the
qualified contaminated property may be transferred to a replacement
real property located within another county if the board of
supervisors of that other county has, after consultation with the
affected local agencies within that county, adopted a resolution
authorizing an intercounty transfer of base year value as so
described.
                                                   (ii) This
subparagraph applies only to replacement property that is acquired or
newly constructed within five years after ownership in the qualified
contaminated property is sold or otherwise transferred.
   (B) In the case in which the remediation of the environmental
problems on the qualified contaminated property requires the
destruction of, or results in substantial damage to, a structure
located on that property, the term "new construction" does not
include the repair of a substantially damaged structure, or the
construction of a structure replacing a destroyed structure on the
qualified contaminated property, performed after the remediation of
the environmental problems on that property, provided that the
repaired or replacement structure is similar in size, utility, and
function to the original structure.
   (2) For purposes of this subdivision, "qualified contaminated
property" means residential or nonresidential real property that is
all of the following:
   (A) In the case of residential real property, rendered
uninhabitable, and in the case of nonresidential real property,
rendered unusable, as the result of either environmental problems, in
the nature of and including, but not limited to, the presence of
toxic or hazardous materials, or the remediation of those
environmental problems, except where the existence of the
environmental problems was known to the owner, or to a related
individual or entity as described in paragraph (3), at the time the
real property was acquired or constructed. For purposes of this
subparagraph, residential real property is "uninhabitable" if that
property, as a result of health hazards caused by or associated with
the environmental problems, is unfit for human habitation, and
nonresidential real property is "unusable" if that property, as a
result of health hazards caused by or associated with the
environmental problems, is unhealthy and unsuitable for occupancy.
   (B) Located on a site that has been designated as a toxic or
environmental hazard or as an environmental cleanup site by an agency
of the State of California or the federal government.
   (C) Real property that contains a structure or structures thereon
prior to the completion of environmental cleanup activities, and that
structure or structures are substantially damaged or destroyed as a
result of those environmental cleanup activities.
   (D) Stipulated by the lead governmental agency, with respect to
the environmental problems or environmental cleanup of the real
property, not to have been rendered uninhabitable or unusable, as
applicable, as described in subparagraph (A), by any act or omission
in which an owner of that real property participated or acquiesced.
   (3) It shall be rebuttably presumed that an owner of the real
property participated or acquiesced in any act or omission that
rendered the real property uninhabitable or unusable, as applicable,
if that owner is related to any individual or entity that committed
that act or omission in any of the following ways:
   (A) Is a spouse, parent, child, grandparent, grandchild, or
sibling of that individual.
   (B) Is a corporate parent, subsidiary, or affiliate of that
entity.
   (C) Is an owner of, or has control of, that entity.
   (D) Is owned or controlled by that entity.
   If this presumption is not overcome, the owner shall not receive
the relief provided for in subparagraph (A) or (B) of paragraph (1).
The presumption may be overcome by presentation of satisfactory
evidence to the assessor, who shall not be bound by the findings of
the lead governmental agency in determining whether the presumption
has been overcome.
   (4) This subdivision applies only to replacement property that is
acquired or constructed on or after January 1, 1995, and to property
repairs performed on or after that date.
   (j) Unless specifically provided otherwise, amendments to this
section adopted prior to November 1, 1988, are effective for changes
in ownership that occur, and new construction that is completed,
after the effective date of the amendment. Unless specifically
provided otherwise, amendments to this section adopted after November
1, 1988, are effective for changes in ownership that occur, and new
construction that is completed, on or after the effective date of the
amendment. 
  Fourth--    That Section 2.5 is added to Article XIII A
thereof, to read:
      SEC. 2.5.  (a) (1) This section shall not apply to residential
property as defined in this section, whether it is occupied by a
homeowner or a renter. This section shall also not apply to real
property used for commercial agricultural production as defined in
this section.
   (2) For the lien date for the 2018-19 fiscal year and each lien
date thereafter, the "full cash value" of commercial and industrial
real property that is not used for commercial agricultural production
or is otherwise exempt under the Constitution or statute is the fair
market value of that property as of that date, except as provided in
subdivision (b) and (c).
   (b) (1) For the 2018-19 fiscal year only, the requirement that
those commercial and industrial properties subject to reassessment
under this section be assessed at fair market value shall apply only
to the 50 percent of such properties that have not been brought to
fair market value for any part of their property for the greatest
number of years prior to the 2018-19 lien date.
   (2) For the 2019-20 and 2020-21 fiscal years only, the assessed
value of properties assessed at full market value pursuant to
paragraph (1) shall be increased by the rate of inflation, but not
more than 2 percent.
   (3) Owners of property subject to this subdivision shall be
required to pay one-third of the amount of any increase in property
tax due and payable resulting from initial assessment to fair market
value in the first year upon receiving the new valuation required by
subdivision (b), two-thirds of the amount of any increase in property
tax due and payable in the second year, and the full amount of any
property tax due and payable in the third year after initial
reassessment to fair market value and in subsequent years thereafter.
The balance of the amounts due for the first and second years
following initial assessment to full market value shall be forgiven.
   (c) (1) All other commercial and industrial properties subject to
reassessment under this section shall be assessed at fair market
value by the lien date for 2019-20.
   (2) For the 2020-21 fiscal year only, the assessed value of
properties assessed at full market value pursuant to paragraph (1)
shall be increased by the rate of inflation, but not more than 2
percent.
   (3) Owners of property subject to this subdivision shall be
required to pay one-half of the amount of any increase in property
tax due and payable resulting from initial assessment to fair market
value in the first year upon receiving the new valuation required by
subdivision (b) and the full amount of any property tax due and
payable in the year following initial reassessment and in subsequent
years thereafter. The balance of the amount due for the first year
following initial assessment to full market value shall be forgiven.
   (d) For purposes of this section:
   (1) "Commercial and industrial real property" means any real
property that is not residential property or not used for commercial
agricultural production.
   (2) "Residential property" shall include both single-family and
multiunit structures, and the land on which such structures are
constructed, that are intended to be used and are used for long-term
residential occupancy, but shall exclude hotels, motels and similar
structures that are used primarily for transient and non-permanent
residence.
   (3) "Real property used for commercial agricultural production" is
real property that is used and zoned for producing commercial
agricultural commodities and is real property for which either of the
following applies:
   (A) The real property is an unimproved parcel to which both of the
following apply:
   (i) The parcel is used and zoned for producing commercial
agricultural commodities.
   (ii) The parcel does not contain a single-family residence or a
multifamily residence that was subdivided in accordance with the
Subdivision Map Act (Division 2 (commencing with Section 66410) of
Title 7 of the Government Code), or any successor to that law, or
that was described and conveyed in one or more deeds separating the
parcel from all adjoining property.
   (B) The parcel of real property contains only living improvements.
Improvements other than those intended and used for habitation shall
be considered commercial and industrial property for purposes of
this section.
   (e) Notwithstanding subdivision (a), it is the intent of the
voters in this section to provide a transition to fair market value
as provided in subdivision (b) and (c), for the purposes of assuring
a reasonable workload and implementation period for county assessors
and taxpayers.  
  Fifth--    That Section 8.8 is added to Article XIII A
thereof, to read:
      SEC. 8.8.  (a) All local education agencies, community
colleges, counties, cities and counties, cities, and special
districts that receive funds from the revenues generated by Section
2.5 of Article XIII A shall publicly disclose each year, including in
their annual budgets, the amount of property tax revenues they
received for that fiscal year as the result of Section 2.5 of Article
XIII A and how those revenues were spent.
   (b) All annual public audits required of local education agencies,
community colleges, counties, cities and counties, cities, and
special districts that receive funds from the revenues generated by
Section 2.5 of Article XIII A shall disclose the amount of property
tax revenues received for that fiscal year as the result of Section
2.5 of Article XIII A and confirm whether the use of those revenues
is consistent with the requirements of this act.
   (c) All local education agencies, community colleges, counties,
cities and counties, cities, and special districts receiving new
revenues generated by Section 2.5 of Article XIII A shall publish
online all public disclosures required by this measure, with a copy
of each disclosure to the Controller.
   (d) Expenses incurred by local education agencies receiving new
revenues generated by Section 2.5 of Article XIII A to comply with
the audit and disclosure requirement of this section may be paid with
funding from the Local School and Community College Property Tax
Fund, and shall not be considered administrative costs for purposes
of subsection (b) of Section 8.7 of Article XVI.  
  Sixth--    That Section 14 is added to Article XIII B
thereof, to read:
      SEC. 14.  (a) For purposes of this article, "proceeds of taxes"
shall not include the revenues generated by Section 2.5 of Article
XIII A.
   (b) For purposes of this article, "appropriations subject to
limitation" of each entity of government shall not include
appropriations of revenues generated by Section 2.5 of Article XIII
A.
   (c) The duty to collect the revenues generated by Section 2.5 of
Article XIII A shall not be considered a new program or higher level
of service mandated by the State for purposes of this article. The
board of supervisors of a county or city and county, upon the
adoption of a method identifying the actual direct administrative
costs identified in Section 75.60 of the Revenue and Taxation Code,
as that section read on July 1, 2015, that are associated with the
implementation of Section 2.5 of Article XIII A, may direct the
county auditor to allocate to the county or city and county, prior to
any allocation of property tax revenues, an amount equal to the
actual direct administrative costs, but not to exceed 3 percent of
the revenues that have been collected as a result of the
implementation of Section 2.5 of Article XIII A. The amount
determined to provide reimbursement for the actual direct
administrative costs of implementing Section 2.5 of Article XIII A
shall be deducted proportionately from the allocations to be provided
to cities, the county, and special districts, but not deducted from
the school share of any increased allocation. The board of
supervisors shall identify the ongoing costs of implementation of
Section 2.5 annually.  
  Seventh--    That Section 8.6 is added to Article XVI
thereof, to read:
      SEC. 8.6.  (a) For each fiscal year beginning with the 2018-19
fiscal year to the 2020-21 fiscal year, inclusive, county assessors
shall calculate the following:
   (1) The total "baseline assessed value" of all commercial and
industrial property in the county subject to Section 2.5 of Article
XIII A. The total "baseline assessed value" shall be calculated as
follows:
   (A) The county assessor shall identify the total assessed value of
commercial and industrial property as determined pursuant to Chapter
1 (commencing with Section 50) of Part 0.5 of Division 1 of the
Revenue and Taxation Code, as that chapter read on July 1, 2015, for
the 2017-18 fiscal year.
   (B) The amount in subparagraph (A) shall be increased by the
amount for that fiscal year determined pursuant to Section 51 of the
Revenue and Taxation Code, as that section read on July 1, 2015.
   (C) The county assessor shall add to the amount determined
pursuant to subparagraph (B) the incremental increase in assessed
value of commercial and industrial property resulting from the sale
or transfer of properties for purposes of the respective January 1
lien dates beginning with the 2018-19 fiscal year to the 2020-21
fiscal year, inclusive, provided the sale or transfer would have
triggered reassessment pursuant to Chapter 2 (commencing with Section
60) of Part 0.5 of Division 1 of the Revenue and Taxation Code, as
that chapter read on July 1, 2015.
   (D) The county assessor shall add to the amount determined
pursuant to subparagraph (C) the incremental increase in assessed
value of commercial and industrial property resulting in new
construction for purposes of the respective January 1 lien dates
beginning with the 2018-19 fiscal year to the 2020-21 fiscal year,
inclusive, as determined pursuant to Chapter 3 (commencing with
Section 70) of Part 0.5 of Division 1 of the Revenue and Taxation
Code, as that chapter read on July 1, 2015.
   (2) The county assessor shall identify the total "revised assessed
value" of all commercial and industrial property in the county as
determined following the reassessment required by Section 2.5 of
Article XIII A for each fiscal year beginning with the 2018-19 fiscal
year to the 2020-21 fiscal year, inclusive, except that for the
2018-19 and 2019-20 fiscal years, the amount of assessed value shall
be reduced to reflect the amounts actually due and payable pursuant
to subdivisions (b) and (c) of Section 2.5 of Article XIII A.
   (3) For each fiscal year beginning with the 2018-19 fiscal year to
the 2020-21 fiscal year, inclusive, the county assessor shall
subtract the amount determined pursuant to subparagraph (D) of
paragraph (1) from the amount determined pursuant to paragraph (2).
   (4) For each fiscal year beginning with the 2018-19 fiscal year to
the 2020-21 fiscal year, inclusive, the county assessor shall divide
the amount determined pursuant to paragraph (3) by the amount
determined pursuant to paragraph (2). The resulting percentage shall
be known as the "incremental assessed percentage" of commercial and
industrial property in the county subject to Section 2.5 of Article
XIII A.
   (b) For each fiscal year beginning with the 2018-19 fiscal year to
the 2020-21 fiscal year, inclusive, county assessors shall multiply
the total revised assessed value by the incremental assessed
percentage and a tax rate of one percent to determine the incremental
revenues available for distribution as the result of Section 2.5 of
Article XIII A.
   (c) For each fiscal year beginning with the 2018-19 fiscal year
and for each fiscal year thereafter, all of the following shall
apply:
   (1) An amount equal to the reduction in revenues derived from the
taxes imposed pursuant to the Personal Income Tax Law (Part 10
(commencing with Section 17001) of Division 2 of the Revenue and
Taxation Code) and the Corporation Tax Law (Part 11 (commencing with
Section 23001) of Division 2 of the Revenue and Taxation Code), as
those laws read on July 1, 2015, for each county resulting from the
higher property taxes due to the implementation of Section 2.5 of
Article XIII A and the lower property taxes due to the implementation
of Section 3.1 of Article XIII, as estimated by the Franchise Tax
Board each year for that fiscal year, shall be transferred by May 15
of each year beginning with the 2018-19 fiscal year and each fiscal
year thereafter by each county auditor to the Controller for deposit
in the General Fund and the Mental Health Services Fund,
respectively.
   (2) An amount equal to the reduction in property taxes resulting
from the exemption provided pursuant to subdivision (a) of Section
3.1 of Article XIII shall be calculated by the county auditor
beginning with the 2018-19 fiscal year and each fiscal year
thereafter. For purposes of calculating the aggregate amount of
personal property taxes exempted under that subdivision for each
fiscal year, the auditor shall apply the average annual rate of
growth of tangible personal property used exclusively for business
purposes for the period from the 2012-13 fiscal year to the 2017-18
fiscal year, inclusive, to the total tangible personal property used
exclusively for business purposes for the prior fiscal year and
subtract the amount of tangible personal property used exclusively
for business purposes not exempted for that fiscal year.
   (3) An amount equal to the value of foregone property tax revenues
pursuant to subdivision (b) of Section 3.1 of Article XIII shall be
calculated by the county auditor.
   (d) For each fiscal year beginning with the 2018-19 fiscal year to
the 2020-21 fiscal year, inclusive, the county auditor shall do the
following with the incremental revenues remaining after deducting
from those revenues the amounts determined pursuant to subdivision
(c):
   (1) Determine the combined weighted average tax rate in each
county for K-12 school districts, county offices of education and
community college districts. The weighted average tax rate in each
county for K-12 school districts, county offices of education and
community college districts shall be calculated by the county auditor
by averaging the effective combined tax rate for all of the K-12
school districts, the county office of education and all community
college districts in each tax rate area using weights for each tax
rate area determined by calculating the share of the total assessed
value of commercial and industrial property for each tax rate area of
the total assessed value of commercial and industrial property as
determined pursuant to Chapter 1 (commencing with Section 50) of Part
0.5 of Division 1 of the Revenue and Taxation Code, as that chapter
read on July 1, 2015, for the 2017-18 fiscal year for all tax rate
areas in the county.
   (2) Multiply the incremental revenues remaining after deducting
the amounts determined pursuant to subdivision (c) by the combined
weighted average tax rate determined pursuant to paragraph (1). Half
of the resulting amount of property tax revenue shall be transferred
by the county auditor to the Controller on February 1 of each fiscal
year and half of the resulting amount of property tax revenue shall
be transferred to the Controller on June 1 of each fiscal year, and
shall be deposited into the Local School and Community College
Property Tax Trust Fund for allocation and distribution as set forth
in Section 8.7 of Article XIII A.
   (3) The balance of the incremental revenues remaining after
deducting the amounts determined pursuant to subdivision (c) and the
amount transferred pursuant to paragraph (2) shall be allocated to
local agencies pursuant to Chapter 6 (commencing with Section 95) of
Part 0.5 of Division 1 of the Revenue and Taxation Code, as that
chapter read on July 1, 2015.
   (4) Report the incremental revenues available for distribution
determined pursuant to subdivision (b), the deductions attributable
to subdivision (c), and the combined weighted average tax rate in
each county for K-12 school districts, county offices of education,
and community college districts determined pursuant to paragraph (1),
along with supporting documentation, to the Controller who shall
certify that the calculation was properly calculated and post the
percentage figure for each county on the Controller's Internet Web
site.
   (e) (1) For the 2021-22 fiscal year, the county assessor shall
perform the calculations specified in paragraphs (1) to (4),
inclusive, of subdivision (a) for that fiscal year. The county
auditor shall report the resulting percentage figure to the
Controller who shall certify that the calculation was properly
calculated and post the percentage figure for each county on the
Controller's Internet Web site.
   (2) (A) For the 2021-22 fiscal year and each fiscal year
thereafter, the county auditor shall perform the calculation
specified in paragraph (2) of subdivision (d) using the result of the
calculation in paragraph (1) and the percentage determined in
paragraph (1) of subdivision (d) and shall transfer half the
resulting amount of property tax revenue to the Controller on
February 1 of each fiscal year and transfer half of the resulting
amount of property tax revenue to the Controller on June 1 of each
fiscal year, for deposit in the Local School and Community College
Property Tax Fund for allocation and distribution as set forth in
Section 8.7 of Article XIII A.
   (B) The balance of the incremental revenues remaining after
deducting the amounts determined pursuant to subdivision (c) and the
amount transferred pursuant to paragraph (A) shall be allocated to
local agencies pursuant to Chapter 6 (commencing with Section 95) of
Part 0.5 of Division 1 of the Revenue and Taxation Code as that
chapter read on July 1, 2015.
   (C) In making the calculation in subparagraph (A), the county
auditor shall calculate the amount of total revised assessed value as
if no exemption of property taxes were being provided pursuant to
subdivision (b) of Section 3.1 of Article XIII.  
  Eighth--   That Section 8.7 is added to Article XVI
thereof, to read:
      SEC. 8.7.  (a) The Local School and Community College Property
Tax Fund is hereby created in the State Treasury to be held in trust
for the purposes set forth below and is continuously appropriated for
the support of school districts, charter schools, schools operated
by county offices of education, and community college districts, as
follows:
   (1) Eleven percent (11%) to community colleges. Each year the
Controller shall allocate the funds to each community college
district based on an equal amount per unit of full-time equivalent
student receiving educational services.
   (2) Eighty-nine percent (89%) to school districts, charter
schools, and county offices of education for schools operated by the
county superintendent of schools.
   (3) Each year the Controller shall allocate the funds to school
districts, charter schools, and county offices of education based on
the following formula, to be calculated annually by the
Superintendent of Public Instruction:
   (A) A base grant based on an equal amount per enrolled student in
each school district or charter school, provided, however, that the
base grant shall be adjusted by grade span, as follows: no grade span
adjustment per enrolled student in grades kindergarten to grade 3,
inclusive; 1.5 percent more per
      enrolled student in grades 4 to 6, inclusive; 4.5 percent more
per enrolled student in grades 7 and 8; and 21 percent more per
enrolled student in grades 9 to 12, inclusive. County offices of
education shall receive a base grant per student enrolled in schools
operated by the county superintendent of schools that is 33 percent
more per enrolled student than the base grant for school districts,
but shall receive no grade span adjustments to the base grant.
   (B) A supplemental grant add-on for school districts and charter
schools equal to 20 percent of the base grant calculated pursuant to
subparagraph (A), multiplied by the percentage of unduplicated pupils
in that school district or charter school, and a supplemental grant
add-on for county offices of education equal to 35 percent of the
base grant calculated pursuant to subparagraph (A), multiplied by the
percentage of unduplicated pupils enrolled in schools operated by
the county superintendent of schools.
   (C) A concentration grant add-on for school districts and charter
schools equal to 50 percent of the base grant calculated pursuant to
subparagraph (A), multiplied by the percentage of unduplicated pupils
in that school district or charter school in excess of 55 percent of
the total enrollment in that school district or charter school, and
a concentration grant add-on for county offices of education equal to
35 percent of the base grant calculated pursuant to subparagraph
(A), multiplied by the percentage of unduplicated pupils enrolled in
schools operated by the county superintendent of schools in excess of
50 percent of the total enrollment in those schools.
   (D) An amount equal to 10.4 percent of the base grant per enrolled
student in kindergarten and grades 1 to 3, inclusive, for school
districts and charter schools that maintain an average class
enrollment of not more than 24 students for each schoolsite in
kindergarten and grades 1 to 3, inclusive, unless a collectively
bargained alternative annual average class enrollment for each
schoolsite in those grades is agreed to by the school district or
charter school.
   (E) The Superintendent of Public Instruction shall subtract from
the total of the amounts computed pursuant to subparagraphs (A) to
(D), inclusive, the amount of property tax revenue received by a
basic aid school district or basic aid charter school that exceeds
the total amount of funding it would have been entitled to that
fiscal year pursuant to the local control funding formula established
pursuant to Article 2 (commencing with Section 42238) of Chapter 7
of Part 24 of Division 3 of Title 2 of the Education Code, as that
section read on July 1, 2015. For purposes of this section, a school
district or charter school that does not receive an apportionment of
state funds pursuant to the local control funding formula shall be
considered a basic aid school district or a basic aid charter school.

   (F) For purposes of this section, enrollment shall be measured in
units of average daily attendance or its equivalent, and
"unduplicated pupil" shall mean a student who is classified as either
an English learner, eligible for a free or reduced-price meal, or a
foster youth, as defined in Section 42238.01 of the Education Code,
provided that a student may only be counted once for purposes of
making supplemental and concentration grant adjustments, regardless
of whether she or he falls within more than one of these student
subgroups. Students shall not be counted as enrolled in a school
operated by a county superintendent of schools if they are otherwise
counted as enrolled in a school district for purposes of calculating
that school district's local control funding formula allocation.
   (b) Moneys in the Local School and Community College Property Tax
Fund are dedicated to the support of the K-14 educational program for
instructional improvement and accountability, and shall not be used
to pay administrative costs. School districts, charter schools, and
county offices of education shall demonstrate through their local
control and accountability plans that they are increasing or
improving services for unduplicated pupils in proportion to the
increase in funds allocated pursuant to subparagraphs (B) and (C) of
paragraph (3) of subdivision (a).
   (c) Notwithstanding any other law, the moneys deposited in the
Local School and Community College Property Tax Fund shall not be
subject to appropriation, reversion, or transfer by the Legislature,
the Governor, the Director of Finance, or the Controller for any
purpose other than those specified in this section, nor shall such
revenues be loaned to the General Fund or any other fund of the state
or any local government fund.
   (d) Moneys allocated to community college districts, county
offices of education, school districts, or charter schools from the
Local School and Community College Property Tax Fund shall
supplement, and shall not replace, other funding for education. Funds
deposited into the Local School and Community College Property Tax
Fund and allocated from the Local School and Community College
Property Tax Fund shall not be deemed to be part of "total
allocations to school districts and community college districts from
General Fund proceeds of taxes appropriated pursuant to Article XIII
B and allocated local proceeds of taxes" for purposes of paragraphs
(2) and (3) of subdivision (b) of Section 8 or for purposes of
Section 21. Revenues derived from the taxes imposed pursuant to
Section 2.5 of Article XIII A shall not be deemed to be "General Fund
revenues which may be appropriated pursuant to Article XIII B" for
purposes of paragraph (1) of subdivision (b) of Section 8, Section
20, or Section 21, nor shall they be considered in the determination
of "per capita General Fund revenues" for purposes of subdivisions
(b) and (e) of Section 8.  
  Ninth--    This measure shall become operative on January
1, 2018, except that subdivision (a) of Section 3.1 of Article XIII
shall become operative on January 1, 2019.  
   Resolved by the Senate, the Assembly concurring, That the
Legislature of the State of California at its 2015-16 Regular Session
commencing on the first day of December 2014, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California, that the Constitution of the State be
amended as follows:
  First--  That Section 4 of Article XIII A thereof is amended to
read:
      Section 4.  A city, county, or special district, upon the
approval of 55 percent of its voters voting on the proposition, may
impose a special tax within that city, county, or special district,
except ad valorem taxes on real property or a transactions tax or
sales tax on the sale of real property within that city, county, or
special district.
  Second--  That Section 2 of Article XIII C thereof is amended to
read:
      SEC. 2.  Notwithstanding any other provision of this
Constitution:
   (a) Any tax imposed by any local government is either a general
tax or a special tax. A special district or agency, including a
school district, has no authority to levy a general tax.
   (b) A local government 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 is not 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 November 6, 1996, may continue to be imposed only if that
general tax is approved by a majority vote of the voters voting in an
election on the issue of the imposition, which election shall be
held no later than November 6, 1998, and in compliance with
subdivision (b).
   (d) (1) A local government shall not impose, extend, or increase
any special tax unless and until that tax is submitted to the
electorate and approved by 55 percent of the voters voting on the
proposition, and all of the following requirements are met:
   (A) The ballot proposition contains a specific list of programs
and purposes to be funded, and a requirement that tax proceeds be
spent solely for those programs and purposes.
   (B) The ballot proposition includes a requirement for the annual
independent audit of the amount of tax proceeds collected and the
specified purposes and programs funded.
   (C) The ballot proposition requires the governing board to create
a citizens' oversight committee to review all expenditures of
proceeds and financial audits, and report its findings to the
governing board and public.
   (2) 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.
  Third--  That Section 3 of Article XIII D thereof is amended to
read:
      SEC. 3.  (a) An agency shall not assess a tax, assessment, fee,
or charge upon any parcel of property or upon any person as an
incident of property ownership except:
   (1) The ad valorem property tax imposed pursuant to Article XIII
and Article XIII A.
   (2) Any special tax receiving The approval of that percentage of
voters on the proposition as required by this Constitution.
   (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 are not charges or fees imposed as an
incident of property ownership.