Bill Text: CA AB68 | 2011-2012 | Regular Session | Introduced
Bill Title: Tax Equity Allocation formula: County of Santa Clara.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-02-01 - Died pursuant to Art. IV, Sec. 10(c) of the Constitution. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB68 Detail]
Download: California-2011-AB68-Introduced.html
BILL NUMBER: AB 68 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Beall
DECEMBER 14, 2010
An act to amend Section 98 of the Revenue and Taxation Code,
relating to local government finance.
LEGISLATIVE COUNSEL'S DIGEST
AB 68, as introduced, Beall. Tax Equity Allocation formula: County
of Santa Clara.
Existing property tax law requires the county auditor, in each
fiscal year, to allocate property tax revenue to local jurisdictions
in accordance with specified formulas and procedures, and generally
requires that each jurisdiction be allocated an amount equal to the
total of the amount of revenue allocated to that jurisdiction in the
prior fiscal year, subject to certain modifications, and that
jurisdiction's portion of the annual tax increment, as defined.
Existing property tax law also reduces the amounts of ad valorem
property tax revenue that would otherwise be annually allocated to
the county, cities, and special districts pursuant to these general
allocation requirements by requiring, for purposes of determining
property tax revenue allocations in each county for the 1992-93 and
1993-94 fiscal years, that the amounts of property tax revenue deemed
allocated in the prior fiscal year to the county, cities, and
special districts be reduced in accordance with certain formulas. It
requires that the revenues not allocated to the county, cities, and
special districts as a result of these reductions be transferred to
the Educational Revenue Augmentation Fund (ERAF) in that county for
allocation to school districts, community college districts, and the
county office of education.
Existing property tax law requires the auditor of each county with
qualifying cities, as defined, to make certain property tax revenue
allocations to those cities in accordance with a specified Tax Equity
Allocation (TEA) formula established in a specified statute and to
make corresponding reductions in the amount of property tax revenue
that is allocated to the county. Existing law requires the auditor of
Santa Clara County, for the 2006-07 fiscal year and for each fiscal
year thereafter, to reduce the amount of property tax revenue
allocated to qualified cities in that county by the ERAF
reimbursement amount, as defined, and to commensurately increase the
amount of property tax revenue allocated to the county ERAF, as
specified.
This bill would, for the 2012-13 fiscal year and for each fiscal
year thereafter, delete the requirement that the auditor of Santa
Clara County reduce the amount of property tax revenues allocated to
qualified cities in that county by the ERAF reimbursement amount, and
commensurately increase the amount of property tax revenues
allocated to the county ERAF.
This bill would make legislative findings regarding the necessity
of a special statute.
By imposing new duties in the allocation of ad valorem property
tax revenues in the County of Santa Clara, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 98 of the Revenue and Taxation Code is amended
to read:
98. (a) In each county, other than the County of Ventura, having
within its boundaries a qualifying city, the computations made
pursuant to Section 96.1 or its predecessor section, for the 1989-90
fiscal year and each fiscal year thereafter, shall be modified as
follows:
With respect to tax rate areas within the boundaries of a
qualifying city, there shall be excluded from the aggregate amount of
"property tax revenue allocated pursuant to this chapter to local
agencies, other than for a qualifying city, in the prior fiscal year,"
an amount equal to the sum of the amounts calculated pursuant to the
TEA formula.
(b) (1) Except as otherwise provided in this section, each
qualifying city shall, for the 1989-90 fiscal year and each fiscal
year thereafter, be allocated by the auditor an amount determined
pursuant to the TEA formula.
(2) For each qualifying city, the auditor shall, for the 1989-90
fiscal year and each fiscal year thereafter, allocate the amount
determined pursuant to the TEA formula to all tax rate areas within
that city in proportion to each tax rate area's share of the total
assessed value in the city for the applicable fiscal year, and the
amount so determined shall be subtracted from the county's
proportionate share of property tax revenue for that fiscal year
within those tax rate areas.
(3) After making the allocations pursuant to paragraphs (1) and
(2), but before making the calculations pursuant to Section 96.5 or
its predecessor section, the auditor shall, for all tax rate areas in
the qualifying city, calculate the proportionate share of property
tax revenue allocated pursuant to this section and Section 96.1, or
their predecessor sections, in the 1989-90 fiscal year and each
fiscal year thereafter to each jurisdiction in the tax rate area.
(4) In lieu of making the allocations of annual tax increment
pursuant to subdivision (e) of Section 96.5 or its predecessor
section, the auditor shall, for the 1989-90 fiscal year and each
fiscal year thereafter, allocate the amount of property tax revenue
determined pursuant to subdivision (d) of Section 96.5 or its
predecessor section to jurisdictions in the tax rate area using the
proportionate shares derived pursuant to paragraph (3).
(5) For purposes of the calculations made pursuant to Section 96.1
or its predecessor section, in the 1990-91 fiscal year and each
fiscal year thereafter, the amounts that would have been allocated to
qualifying cities pursuant to this subdivision shall be deemed to be
the "amount of property tax revenue allocated in the prior fiscal
year."
(c) "TEA formula" means the Tax Equity Allocation formula, and
shall be calculated by the auditor for each qualifying city as
follows:
(1) For the 1988-89 fiscal year and each fiscal year thereafter,
the auditor shall determine the total amount of property tax revenue
to be allocated to all jurisdictions in all tax rate areas within the
qualifying city, before the allocation and payment of funds in that
fiscal year to a community redevelopment agency within the qualifying
city, as provided in subdivision (b) of Section 33670 of the Health
and Safety Code.
(2) The auditor shall determine the total amount of funds
allocated in each fiscal year to a community redevelopment agency in
accordance with subdivision (b) of Section 33670 of the Health and
Safety Code.
(3) The auditor shall determine the total amount of funds paid in
each fiscal year by a community redevelopment agency within the city
to jurisdictions other than the city pursuant to subdivision (b) of
Section 33401 and Section 33676 of the Health and Safety Code, and
the cost to the redevelopment agency of any land or facilities
transferred and any amounts paid to jurisdictions other than the city
to assist in the construction or reconstruction of facilities
pursuant to an agreement entered into under Section 33401 or 33445.5
of the Health and Safety Code.
(4) The auditor shall subtract the amount determined in paragraph
(3) from the amount determined in paragraph (2).
(5) The auditor shall subtract the amount determined in paragraph
(4) from the amount determined in paragraph (1).
(6) The amount computed in paragraph (5) shall be multiplied by
the following percentages in order to determine the TEA formula
amount to be distributed to the qualifying city in each fiscal year:
(A) For the first fiscal year in which the qualifying city
receives a distribution pursuant to this section, 1 percent of the
amount determined in paragraph (5).
(B) For the second fiscal year in which the qualifying city
receives a distribution pursuant to this section, 2 percent of the
amount determined in paragraph (5).
(C) For the third fiscal year in which the qualifying city
receives a distribution pursuant to this section, 3 percent of the
amount determined in paragraph (5).
(D) For the fourth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 4 percent of the
amount determined in paragraph (5).
(E) For the fifth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 5 percent of the
amount determined in paragraph (5).
(F) For the sixth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 6 percent of the
amount determined in paragraph (5).
(G) For the seventh fiscal year and each fiscal year thereafter in
which the city receives a distribution pursuant to this section, 7
percent of the amount determined in paragraph (5).
(d) "Qualifying city" means any city, except a qualifying city as
defined in Section 98.1, that incorporated prior to June 5, 1987, and
had an amount of property tax revenue allocated to it pursuant to
subdivision (a) of Section 96.1 or its predecessor section in the
1988-89 fiscal year that is less than 7 percent of the amount of
property tax revenue computed as follows:
(1) The auditor shall determine the total amount of property tax
revenue allocated to the city in the 1988-89 fiscal year.
(2) The auditor shall subtract the amount in the 1988-89 fiscal
year determined in paragraph (3) of subdivision (c) from the amount
determined in paragraph (2) of subdivision (c).
(3) The auditor shall subtract the amount determined in paragraph
(2) from the amount of property tax revenue determined in paragraph
(1) of subdivision (c).
(4) The auditor shall divide the amount of property tax revenue
determined in paragraph (1) of this subdivision by the amount of
property tax revenue determined in paragraph (3) of this subdivision.
(5) If the quotient determined in paragraph (4) of this
subdivision is less than 0.07, the city is a qualifying city. If the
quotient determined in that paragraph is equal to or greater than
0.07, the city is not a qualifying city.
(e) The auditor may assess each qualifying city its proportional
share of the actual costs of making the calculations required by this
section, and may deduct that assessment from the amount allocated
pursuant to subdivision (b). For purposes of this subdivision, a
qualifying city's proportional share of the auditor's actual costs
shall not exceed the proportion it receives of the total amounts
excluded in the county pursuant to subdivision (a).
(f) Notwithstanding subdivision (b), in any fiscal year in which a
qualifying city is to receive a distribution pursuant to this
section, the auditor shall reduce the actual amount distributed to
the qualifying city by the sum of the following:
(1) The amount of property tax revenue that was exchanged between
the county and the qualifying city as a result of negotiation
pursuant to Section 99.03.
(2) (A) The amount of revenue not collected by the qualifying city
in the first fiscal year following the city's reduction after
January 1, 1988, of the tax rate or tax base of any locally imposed
tax, except any tax that was imposed after January 1, 1988. In the
case of a tax that existed before January 1, 1988, this clause shall
apply only with respect to an amount attributable to a reduction of
the rate or base to a level lower than the rate or base applicable on
January 1, 1988. The amount so computed by the auditor shall
constitute a reduction in the amount of property tax revenue
distributed to the qualifying city pursuant to this section in each
succeeding fiscal year. That amount shall be aggregated with any
additional amount computed pursuant to this clause as the result of
the city's reduction in any subsequent year of the tax rate or tax
base of the same or any other locally imposed general or special tax.
(B) No reduction may be made pursuant to subparagraph (A) in the
case in which a local tax is reduced or eliminated as a result of
either a court decision or the approval or rejection of a ballot
measure by the voters.
(3) The amount of property tax revenue received pursuant to this
chapter in excess of the amount allocated for the 1986-87 fiscal year
by all special districts that are governed by the city council of
the qualifying city or whose governing body is the same as the city
council of the qualifying city with respect to all tax rate areas
within the boundaries of the qualifying city.
Notwithstanding this paragraph:
(A) Commencing with the 1994-95 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city becoming the successor agency to a
special district, that is dissolved, merged with that city, or
becomes a subsidiary district of that city, on or after July 1, 1994.
(B) Commencing with the 1997-98 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city withdrawing from a county free library
system pursuant to Section 19116 of the Education Code.
(4) Any amount of property tax revenues that has been exchanged
pursuant to Section 56842 of the Government Code between the City of
Rancho Mirage and a community services district, the formation of
which was initiated on or after March 6, 1997, pursuant to Chapter 4
(commencing with Section 56800) of Part 3 of Division 3 of Title 5 of
the Government Code.
(g) Notwithstanding any other provision of this section, in no
event may the auditor reduce the amount of ad valorem property tax
revenue otherwise allocated to a qualifying city pursuant to this
section on the basis of any additional ad valorem property tax
revenues received by that city pursuant to a services for revenue
agreement. For purposes of this subdivision, a "services for revenue
agreement" means any agreement between a qualifying city and the
county in which it is located, entered into by joint resolution of
that city and that county, under which additional service
responsibilities are exchanged in consideration for additional
property tax revenues.
(h) In any fiscal year in which a qualifying city is to receive a
distribution pursuant to this section, the auditor shall increase the
actual amount distributed to the qualifying city by the amount of
property tax revenue allocated to the qualifying city pursuant to
Section 19116 of the Education Code.
(i) If the auditor determines that the amount to be distributed to
a qualifying city pursuant to subdivision (b), as modified by
subdivisions (e), (f), and (g) would result in a qualifying city
having proceeds of taxes in excess of its appropriation limit, the
auditor shall reduce the amount, on a dollar-for-dollar basis, by the
amount that exceeds the city's appropriations limit.
(j) The amount not distributed to the tax rate areas of a
qualifying city as a result of this section shall be distributed by
the auditor to the county.
(k) Notwithstanding any other provision of this section, no
qualifying city shall be distributed an amount pursuant to this
section that is less than the amount the city would have been
allocated without the application of the TEA formula.
( l ) Notwithstanding any other provision of this
section, the auditor shall not distribute any amount determined
pursuant to this section to any qualifying city that has in the prior
fiscal year used any revenues or issued bonds for the construction,
acquisition, or development, of any facility which is defined in
Section 103(b)(4), 103(b)(5), or 103(b)(6) of the Internal Revenue
Code of 1954 prior to the enactment of the Tax Reform Act of 1986
(P.L. 99-514) and is no longer eligible for tax-exempt financing.
(m) (1) The amendments made to this section, and the repeal of
Section 98.04, by the act that added this subdivision shall apply for
the 2006-07 fiscal year and each fiscal year thereafter.
(2) For the 2006-07 fiscal year and for each fiscal year
thereafter, all of the following apply:
(A) The auditor of the County of Santa Clara shall do both of the
following:
(i) Reduce the total amount of ad valorem property tax revenue
otherwise required to be allocated to qualifying cities in that
county by the ERAF reimbursement amount. This reduction for each
qualifying city in the county for each fiscal year shall be the
percentage share, of the total reduction required by this clause for
all qualifying cities in the county for the 2006-07 fiscal year, that
is equal to the proportion that the total amount of additional ad
valorem property tax revenue that is required to be allocated to the
qualifying city as a result of the act that added this subdivision
bears to the total amount of additional ad valorem property tax
revenue that is required to be allocated to all qualifying cities in
the county as a result of the act that added this subdivision.
(ii) Increase the total amount of ad valorem property tax revenue
otherwise required to be allocated to the county Educational Revenue
Augmentation Fund by the ERAF reimbursement amount.
(B) For purposes of this subdivision, "ERAF reimbursement amount"
means an amount equal to the difference between the following two
amounts:
(i) The portion of the annual tax increment that would have been
allocated from the county to the county Educational Revenue
Augmentation Fund for the applicable fiscal year if the act that
added this subdivision had not been enacted.
(ii) The portion of the annual tax increment that is allocated
from the county to the county Educational Revenue Augmentation Fund
for the applicable fiscal year.
(m) The amendments made to this section by the act that added this
subdivision shall apply for the 2012-13 fiscal year and each fiscal
year thereafter.
SEC. 2. The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the unique fiscal pressures being experienced by
qualifying cities, as defined in Section 98 of the Revenue and
Taxation Code, in the County of Santa Clara.
SEC. 3. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
