Incentive Programs for Local Government Recycling and Waste Reduction

Impact of Proposition 218

Voters passed Proposition 218 on November 5, 1996. This proposition, the "Right to Vote on Taxes Act," detailed many situations in which the public is required to be consulted, or participate in, decisions regarding the enactment of a wide variety of fees and taxes. Proposition 218 became effective July 1, 1997.

Because many of the economic incentives outlined above address fees and taxes enacted by local governments, city attorneys need to consider whether Proposition 218 applies. Unfortunately, many disagree about when and how Proposition 218 applies. As a result, each city’s attorney must evaluate the language of the California Constitution amended by Proposition 218 and interpret how it may apply for a given proposal.

CIWMB counsel believes that Proposition 218 does not appear to affect fees collected through direct billing, tipping fees, franchise fees or similar methods. AB 939 fees (as described above) are not necessarily covered by Proposition 218 because they do not have to be charged upon parcels, nor as an incident to property.

If fees are collected through the property tax bill, there may be some impact. However, a majority of attorneys in the field believes that Proposition 218 does not cover these fees because the fees are for services, not fee property. If the municipality set the fee at a reasonable amount, then a challenge may be less likely.

If a fee is charged on the property tax bill, the following factors may be relevant in determining if Proposition 218 applies:

• Does the agency rely on parcel maps to set the fee?
• Must the fee be paid simply because of property ownership, or must a service be requested?
• Does the property owner have the opportunity to "opt out" of the fee by declining the service?
• Is the fee based on size of the parcel, amount of service requested, or are all bills the same?
• How is the fee applied to multi-residence parcels?
• Is the fee secured by a lien at the outset of its imposition?

Next>  Santa Clara Case Study  

Table of Contents | Innovations Home | Library Home

Last updated: October 26, 2007