A local agency formation commission may impose as a condition on its approval of the incorporation of a new city the requirement that voters support a general tax funding the new city, the attorney general’s office has concluded.
The question came from the San Diego County LACFO. With a couple incorporation drives in the works, the agency wanted to determine what conditions it could impose on formation of a new city, explained San Diego LAFCO Executive Officer Michael Ott.
One possibility is having voters decide on both incorporation and a general tax at the same time, and requiring that the tax receive approval for incorporation to be valid. But, said Ott, “There had been some question as to whether a dual ballot question was legal.”
Ott said the agency’s attorney had determined a dual ballot question was legal. With a very straightforward reading of the Cortese-Knox-Hertzberg Local Government Reorganization Act (Government Code §§ 56000 – 57550), the attorney general agreed.
In the opinion, Deputy Attorney General Gregory Gonot noted that § 56886 permits LAFCOs to impose conditions on incorporations, including the levying of assessments and fees “or the approval by the voters of general or special taxes.”
“General taxes constitute one of a ‘virtually limitless array of factors’ upon which a LAFCO may condition its approval of a change of organization,” Gonot wrote, citingBoard of Supervisors v. Local Agency Formation Com., (1992) 3 Cal.4th 903, 912.
Seven years ago, the attorney general concluded in 82 Ops. Cal.Atty.Gen. 180 (1999) that a LAFCO could condition approval of a change of agency organization upon the continued collection of previously established taxes. In that opinion, the attorney general concluded that the then-Cortese-Knox Act complemented — rather than conflicted with — the state constitution’s requirements for voter approval of general tax increases. In the question raised by the San Diego LAFCO, approval of the tax and incorporation would take place at the same time, which would be permissible, Gonot concluded.
The San Diego LAFCO has not imposed such a condition on incorporation but is considering doing so for the proposed city of Rancho Santa Fe, Ott said.
“It gives incorporation proponents another tool to achieve feasibility, especially in light of the revenue-neutrality requirements that have been in effect since 1992,” Ott said.
The San Diego LAFCO also raised the question of whether the imposition of such a condition would require a two-thirds vote of the LAFCO board. Proposition 62, a 1986 follow-up to Proposition 13, requires that a resolution proposing a general tax be approved “by a two-thirds vote of all members of the legislative body of the local government.”
Gonot concluded that the Proposition 62 provision would not apply here because “LAFCO does not have the authority to ‘impose’ a tax.” Instead, all LAFCO can do is condition formation of the new city on voters’ approval of a tax, he wrote.
In a letter to Ott analyzing the attorney general’s opinion, San Diego Senior Deputy County Counsel William Dean Smith called the attorney general’s answer to the Proposition 62 question “reasonable but still subject to potential challenge should LAFCO not achieve a two-thirds vote of all its members in approving an incorporation subject to a general tax condition.”
Attorney General’s Opinion 06-210 was issued August 11, 2006. It may be found at 06 C.D.O.S. 7473, and 2006 DJDAR 10697.