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HomeMy WebLinkAboutMINUTES - 11041986 - 1.22 TO: BOARD OF SUPERVISORS nn,�..� FROM: Phil Batchelor �.kntra County Administrator CWlC1 DATE: October 20, 1986 C ^ SUBJECT: Reimbursement for Administrative Costs of the Supplemental Property Tax Roll SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION: Acknowledge receipt of this report from the County Administrator on the passage of legislation authorizing the County to reimburse itself for the administrative costs of the Supplemental Property Tax Roll. BACKGROUND: During Budget Committee hearings on the 1986-87 County Budget, a request was made that this office provide the Board of Supervisors with a copy of legislation introduced in 1985 by Senator Rose Ann Vuich which would have authorized the County to reimburse itself for the administrative costs of the Supplemental Property Tax Roll. This office was also asked to provide the Board with the status of any other similar legislation. When the Supplemental Property Tax Roll was created by the Legislature in 1983 the entire revenue for the 1983-84 fiscal year was allocated to the schools. Beginning in the 1984-85 fiscal year the proceeds of the roll were allocated to the County, cities, schools, and special districts. Initially, no provision was made for the County to be reimbursed for the substantially increased cost of processing the Supplemental Roll. This was particularly burdensome during the 1983-84 fiscal year because the County did not receive any of the proceeds of the Supplemental Roll. As a result, urgency legislation was passed and signed by the Governor on September 26, 1983 (AB 399, Chapter 1102, Statutes of 1983 ) . AB 399 added Section 75 . 60 to the Revenue and Taxation Code. This section authorized counties to withhold the amount of their administrative costs, up to 5% of the proceeds of the Supplemental Roll. This authorization was only for the 1983-84 and 1984-85 fiscal years. The authorization expired June 30, 1985 . In addition, AB 399 appropriated $10 million for the 1983-84 fiscal year to reimburse counties whose administrative costs exceeded the 5% limit. This additional appropriation was available only for the 1983-84 fiscal year. Section 75.60 CONTINUED ON ATTACHMENT! _ YES SIGNATURE; 4�&Z-h I, /,,&'�Za� _ RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE X APPROVE OTHER ;Ae � SIGNATURE(S1: Z�ff e� ACTION OF BOARD ON November 4, 1986 APPROVED AS RECOMMENDED � OTHER VOTE OF SUPERVISORS 1 HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: . ABSTAIN: OF SUPERVI S ON THE DATE SHOWN. CC: County Administrator ATTESTED Assessor PHIL BATCHELOR. CLERK OF THE BOARD OF Treasurer-Tax Collector SUPERVISORS AND COUNTY ADMINISTRATOR Auditor-Controller BY �� ,DEPUTY M382/7-83 Page 2 was further amended in 1984 by urgency legislation (AB 2345, Chapter 946, Statutes of 1984--effective September 10, 1984) . AB 2345 clarified that the costs could be reimbursed regardless of when they were incurred. Senator Vuich introduced SB 580 in 1985 in an effort to delete the sunset date of June 30, 1985 and thereby allow counties to continue to reimburse themselves for the administrative costs of processing the Supplemental Roll. SB 580 passed the Legislature late in the 1985 Session, but was vetoed by the Governor. A copy of SB 580 is enclosed for the information of the Board Members, but is not intended to be attached to this Order. In his veto message the Governor indicated he was vetoing SB 580 because counties received more money from the Supplemental Roll than their administrative costs and were, therefore, still receiving a net increase in property tax revenue. Assemblyman Hannigan introduced AB 2890 on February 5, 1986 in an effort to reinstate the ability of counties to recover the administrative costs of the Supplemental Roll as well as deal with the Governor' s objections. AB 2890 passed the Legislature and was signed by the Governor September 30, 1986. The bill is now Chapter 1457, Statutes of 1986. AB 2890 did not have an urgency clause and, therefore, does not take effect until January 1, 1987 . However, the language of Revenue and Taxation Code Section 75. 60, as amended by AB 2890, still says that the revenue may be used for the purpose of the administration of the Supplemental Roll, regardless of the date those costs are incurred. It may, therefore, be possible to recover costs incurred prior to January 1, 1987 . AB 2890 does include, however, one stringent limitation on the ability of counties to recover their administrative costs. The State Board of Equalization is required by Government Code Section 15640 to conduct surveys in each county to determine the adequacy of the procedures and practices employed by the County Assessor in the valuation of property for the purposes of taxation. The survey is required to include a sampling of assessments from the local assessment rolls sufficient in size and dispersion to insure an adequate representation of the classes of property throughout the County. These surveys are required to be repeated at least every five years. AB 2890 requires that the State Board of Equalization certify a county as eligible before the County may reimburse itself for the administrative costs of the Supplemental Roll. AB 2890 defines an eligible county as one in which the average level of assessment in the county is at least 90% of the assessment level required by statute, as determined by the survey described above which was commenced prior to January 1, 1987 , or at least 95% of the assessment level required by statute as determined by a survey commenced after January 1, 1987 . This certification shall remain valid only until the next survey is conducted by the State Board of Equalization. If a county is not certified, it may request a new survey, but, in addition to paying for the current survey, the County must pay for the cost of the new survey. In addition, AB 2890 limits reimbursement to "actual administrative costs" which are defined as "only those direct costs for administration, data processing, collection and appeal which are incurred by county auditors, assessors and tax collectors. Based on the limited amount of information available, the current Assessor, believes we will qualify for certification at the 90% level until the next survey is completed. Page 3 AB 2890 also contains a section that will require the County Auditor-Controller to develop and maintain a new system for allocating assessed values of certain public utilities and railroads to all Tax Rate Areas in the County. This requirement is not effective until the 1988-89 fiscal year. The Auditor-Controller' s Office is in the process of defining the requirements for the new system and estimates that the development costs may exceed $100,000. AB 2890 does not contain a mandate reimbursement provision for this requirement, the disclaimer stating that . .there are substantial savings and additional revenues as well as costs in this act which, in the aggregate, do not result in additional net costs" .