Special Assessments, Taxes, and Fees

The following definitions are intended to help a property owner and the general public understand the various additional charges that may be added to their property tax bill. This information is provided as a free general resource, so it should not be considered technical nor legal advice.

Assessment, Benefit Assessment, or Special Assessment – Also known as a “Special Benefit Assessment” (or simply “Benefit Assessment”), this is a financial charge levied on parcels of land or businesses, based on the special benefit received from the service or capital improvement. The benefit criteria and formula are typically called a “Method of Assessment.”

Benefit – The notion of Benefit is extremely important in the case of a Special Assessment. There must be demonstrated s pecial benefit to a parcel of land to validate a Special Assessment. Proposition 218 defines special benefit as “a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large. General enhancement of property value does not constitute special benefit.” General benefit is available to the public, and therefore cannot be charged to property owners.

Business Improvement District (“BID”) – A BID is a form of an Assessment that primarily provides enhanced support for a business or commercial area.

Community Facilities District (“CFD”) – This is a common and popular type of Special Tax district that can fund ongoing maintenance services, capital projects, or both. It is allowed under the Mello-Roos Community Facilities Act of 1982, and is found in California Government Code Section 53311 et seq .

Fee/Property-related Fee or Charge– This is any other charge levied as an incident of property ownership that is not the basic property tax ( ad valorem ), a special tax, or an assessment.

Mello-Roos District – Henry Mello and Mike Roos were the two California legislators who wrote the Community Facilities Act of 1982; thus, a Community Facilities District (see definition above) is often termed a “Mello-Roos District.”

Proposition 13 – The historic “property tax revolt” measure passed by California voters in 1978 added Article XIIIA to the California Constitution, which rolled back property taxes to 1 percent of the “assessed value” of a parcel of land, and required any new Special Taxes to be approved by two-thirds of the voters.

Proposition 218 – The so-called “Right to Vote on Taxes Act” was approved by California voters in 1996. It added Articles XIIIC and XIIID to the California State Constitution, and thus affects the over 6,000 Local Governmental Agencies across the state. The primary results were stricter definitions of assessments, special taxes, fees and charges (including the addition of the new term “property-related fees”), and a general mandate for some type of voter approval for any new or increased tax, assessment, or property-related fee.

Special Financing District (“SFD”) – This term, while not part of the legal lexicon or State statutes, refers to all Special Assessments, Special Taxes, and Fees that are levied by local public agencies on parcels of land. An SFD is nearly always a dependent entity, tied to a city, county, school, or special district. An SFD is not to be confused with a Special District, such as a water district.

Special Tax – This is a financial charge that is calculated via some type of special tax formula (or Rate and Method of Apportionment, in the case of a Community Facilities District), and is levied annually on property (or other basis in the case of a transient occupancy or utility tax) for a defined period of years.

If you need to inquire about a specific charge for a specific parcel and NBS provides services for the relevant public agency, please call (800) 676-7516 for information.

Updated June 12, 2008