California Proposition 8, Municipality Maintenance Loans (1982)

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California Proposition 8 was on the November 2, 1982 statewide general election ballot in California as a legislatively-referred constitutional amendment, where it was approved.

Proposition 8 allows the treasurer of any city, county, or city and county to transfer to certain local agencies an amount equal to 85% of the agency's anticipated revenues during a given fiscal year. It change the California Constitution by allowing transfers to be made in amounts of up to 85% of anticipated total revenues, as opposed to 85% of anticipated tax revenues. This distinction was important, since many local agencies receive significant funding from sources other than taxes.

Election results

Proposition 8
Approveda Yes 3,367,595 51.0%

Constitutional changes

California Constitution
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Proposition 8 amended Section 6 of Article XVI of the California Constitution as follows, with new text in italics and deleted text stricken out.

Sec. SEC. 6. The Legislature shall have no power to give or to lend, or to authorize the giving or lending, of the credit of the State, or of any county, city and county, city, township or other political corporation or subdivision of the State now existing, or that may be hereafter established, in aid of or to any person, association, or corporation, whether municipal or otherwise, or to pledge the credit thereof, in any manner whatever, for the payment of the liabilities of any individual, association, municipal or other corporation whatever; nor shall it have power to make any gift or authorize the making of any gift, of any public money or thing of value to any individual, municipal or other corporation whatever; provided, that nothing in this section shall prevent the Legislature granting aid pursuant to Section 3 of Article XVI; and shall not have power to authorize the State, or any political subdivision thereof, to subscribe for stock, or to become a stockholder in any corporation whatever; provided, further, that irrigation districts for the purpose of acquiring the control of any entire international water system necessary for its use and purposes, a part of which is situated in the United States, and a part thereof in a foreign country, may in the manner authorized by law, acquire the stock of any foreign corporation which is the owner of, or which holds the title to the part of such system situated in a foreign country; provided, further, that irrigation districts for the purpose of acquiring water and water rights and other property necessary for their uses and purposes, may acquire and hold the stock of corporations, domestic or foreign, owning waters, water rights, canals, waterworks, franchises or concessions subject to the same obligations and liabilities as are imposed by law upon all other stockholders in such corporation; and
Provided, further, that this section shall not prohibit any county, city and county, city, township, or other political corporation or subdivision of the State from joining with other such agencies in providing for the payment of workers' compensation, unemployment compensation, tort liability, or public liability losses incurred by such agencies, by entry into an insurance pooling arrangement under a joint exercise of powers agreement, or by membership in such publicly-owned non- profit corporation or other public agency as may be authorized by the Legislature; and
Provided, further, that nothing contained in this Constitution shall prohibit the use of State money or credit, in aiding veterans who served in the military or naval services of the United States during the time of war, in the acquisition of, or payments for, (1) farms or homes, or in projects of land settlement or in the development of such farms or homes or land settlement projects for the benefit of such veterans, or (2) any business, land or any interest therein, buildings, supplies, equipment, machinery, or tools, to be used by the veteran in pursuing a gainful occupation; and
Provided, further, that nothing contained in this Constitution shall prohibit the State, or any county, city and county, city, township, or other political corporation or subdivision of the State from providing aid or assistance to persons, if found to be in the public interest, for the purpose of clearing debris, natural materials, and wreckage from privately owned lands and waters deposited thereon or therein during a period of a major disaster or emergency, in either case declared by the President. In such case, the public entity shall be indemnified by the recipient from the award of any claim against the public entity arising from the rendering of such aid or assistance. Such aid or assistance must be eligible for federal reimbursement for the cost thereof.
And provided, still further, that notwithstanding the restrictions contained in this Constitution, the treasurer of any city, county, or city and county shall have power and the duty to make such temporary transfers from the funds in custody as may be necessary to provide funds for meeting the obligations incurred for maintenance purposes by any city, county, or city and county, district, or other political subdivision whose funds are in custody and are paid out solely through the treasurer's office. Such temporary transfer of funds to any political subdivision shall be made only upon resolution adopted by the governing body of the city, county, or city and county directing the treasurer of such city, county, or city and county to make such temporary transfer. Such temporary transfer of funds to any political subdivision shall not exceed 85 percent of the taxes anticipated revenues accruing to such political subdivision, shall not be made prior to the first day of the fiscal year nor after the last Monday in April of the current fiscal year, and shall be replaced from the taxes revenues accruing to such political subdivision before any other obligation of such political subdivision is met from such taxes revenue.

Text of measure


The ballot title was:

Transfer of Funds by Local Governments. Legislative Constitutional Amendment.


The official ballot summary for Proposition 8 was:

"The Constitution provides exceptions from the lending of credit and gift restrictions for the making of specified temporary transfers of funds to counties, cities, districts, and other political subdivisions to meet their obligations incurred for maintenance purposes. Presently funds so transferred may not exceed 85 percent of "taxes" accruing to the political subdivision and must be replaced from "taxes" accruing before any other obligations are met from "taxes." This amendment modifies the limitation to 85 percent of "anticipated revenues" and requires repayment from "revenues" accruing before any other obligations are met from "revenues." Summary of Legislative Analyst's estimate of net state and local government fiscal impact: No direct state or local fiscal impact. As described in Analyst's estimate, when larger amounts of money are loaned it could reduce the interest costs of the borrowing local agency and, conversely, reduce the interest that would normally otherwise be earned by the nonborrowing local agencies."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office said:

"This measure has no direct state or local fiscal impact. It could, however, affect the interest earnings which local agencies derive from temporarily idle funds. Typically, the treasurer of a city or county is responsible for the management and investment of funds belonging to the city or county and other local agencies as well. The portion of these funds which is not needed for immediate payment of obligations normally is invested at market rates, producing investment income that is shared among those agencies whose funds are invested. This investment pool is also the source of funds for the temporary interest-free transfers of moneys to local agencies authorized by the Constitution. As a consequence, the amount of funds available for investment, and therefore the investment earnings generated, is reduced to the extent that these transfers are made. The borrowing agency is charged no interest on temporary transfers made pursuant to the constitutional authorization.
Therefore, to the extent that this amendment results in larger amounts of money being made available as loans from the investment pool to local agencies, it would reduce the level of interest earnings realized by nonborrowing local agencies participating in the investment pool. Conversely, this amendment would reduce interest costs for the borrowing local agencies to the extent that they would otherwise have to meet their cash flow requirements by issuing revenue anticipation notes.:

Path to the ballot

See also: Amending the California Constitution

The California State Legislature voted to put Proposition 8 on the ballot via Assembly Constitutional Amendment 56 (Statutes of 1982, Resolution Chapter 60).

Votes in legislature to refer to ballot
Chamber Ayes Noes
Assembly 63 0
Senate 37 0

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