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Home My WebLink AboutMINUTES - 01141997 - C32 TO: BOARD OF SUPERVISORS -L-- � 1. �P_o� Contra i.. FROM: PHIL BATCHELOR, COUNTY ADMINISTRATOR Costa County DATE: January 6, 1997 ------ SUBJECT: q--SUBJECT: LEGISLATION: AB 1 (AGUTAR) - FREEZE OF THE PROPERTY TAX TRANSFER AND ITS GRADUAL RETURN TO LOCAL GOVERNMENTS SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ADOPT a position in SUPPORT of Assembly Bill 1 (AB-1) by Assemblyman Fred Aguiar which would freeze the amount of the property tax transfer to the State and gradually return it to those local governments from whom it was taken. BACKGROUND: The Board of Supervisors has vigorously opposed the transfer of millions of property tax dollars from the County, cities, and special districts to the State beginning in the 1992-93 fiscal year and continuing to the present. Assemblyman Fred Aguiar has introduced AB 1 which, as introduced, would do all of the following: 1. Effective for the 1997-98 fiscal year and all subsequent fiscal years, freeze the amount of the transfer at the 1996-97 fiscal year level. 2. Effective with the 1997-98 fiscal year, reduce the amount of the reduction and transfer of the property tax by an as yet unspecified schedule, with the reduced transfer being allocated back to local taxing jurisdictions in proportion to the amounts which would otherwise have to be transferred to the State by each jurisdiction. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): Yd22 .�Z� ACTION OF BOARD ON japumy 1 d 1997 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I 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 SUPERVISORS ON THE DATE SHOWN. ATTESTED Contact: IL BATCHELOR,C K OF THE BOARD OF CC: SUPERVISORS AND COUNTY ADMINISTRATOR See Page 2 BY + ,DEPUTY S Having the Legislature place these provisions in State law has the advantage of allowing the freeze to be implemented a year earlier than is the case with ACA 4, which must go to the voters in June 1998 for approval. However, having these provisions in a statute rather than in the Constitution runs the risk of the Legislature at some time in the future being able to modify or repeal the freeze and transfer back to local governments. It also requires the approval of the Governor, which a Constitutional Amendment does not. However, it is probably more appropriate to pursue a statutory solution initially and only turn to the Constitutional Amendment if a statutory solution proves unsuccessful. We are, therefore, recommending that the Board of Supervisors support AB 1. cc: County Administrator Auditor-Controller County Counsel Tony Enea, CAD's Office Les Spahnn Heim, Noack, Kelly & Spahnn 1121 L Street, Suite 100 Sacramento, CA 95814 Casey Sparks, Executive Director Urban Counties Caucus 1100 K Street, Suite 101 Sacramento, CA 95814 -2- l� CALIFORNIA LEGISLATURE-1997-98 REGULAR SESSION ASSEMBLY BILL No. 1 Introduced by Assembly Member Aguiar December 2, 1996 An act to add Section 97.43 to the Revenue and Taxation Code, relating to local government finance, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1, as introduced, Aguiar. Local government finance: property tax revenue allocation: local agency relief. Existing law requires the county auditor, in each fiscal year, to allocate property tax revenues to local jurisdictions in accordance with specified formulas and procedures, and generally provides that each jurisdiction shall be allocated an amount equal to the total of the amount of revenue allocated {rsl 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 modifies these general allocation provisions 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 in that county for 99 r AB 1 — 2 — allocation to school districts, community college districts, and the county office of education. This bill would modify these reduction and transfer requirements, for the 1997-98 fiscal year and each fiscal year thereafter, by prohibiting the total amount allocated to a county's Educational Revenue Augmentation Fund pursuant to those requirements from exceeding the total amount allocated to that fund for the 1996-97 fiscal year. This bill would also require, commencing with the 1997-98 fiscal year, that each reduction and transfer amount calculated for a local agency in a county be annually reduced in accordance with an unspecified schedule, and that the revenues not allocated to the county's Educational Revenue Augmentation Fund as a result of these reductions be instead allocated among the local agencies in the county, as provided. By imposing new duties in the annual allocation of ad valorem property tax revenues, 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 no reimbursement is required by this act for a specified reason. This bill would declare that.it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. The people of the State of California do enact as follows- 1 SECTION 1. Section 97.43 is added to the Revenue 2 and Taxation Code, to read: 3 97.43. (a) Notwithstanding any other provision of 4 this article, for purposes of ad valorem property tax 5 revenue allocations for the 1997-98 fiscal year and in each 6 fiscal year thereafter, the auditor shall comply with both 7 of the following requirements: 8 (1) The auditor shall not allocate to the county's 9 Educational Revenue Augmentation Fund a total 99 - 3 — AB 1 1 amount of ad valorem property tax revenue that exceeds 2 the total amount of ad valorem property tax revenue that 3 was allocated to the county's Educational Revenue 4 Augmentation Fund in the 1996-97 fiscal year. 5 (2) (A) The auditor shall allocate to the county's 6 Educational Revenue Augmentation Fund only that 7 percentage specified in subparagraph (B) of each 8 amount of ad valorem property tax revenue that is 9 required to be allocated to that fund rather than a local 10 agency as a result of the total reductions calculated for 11 that local agency pursuant to Sections 97.2 and 97.3. 12 (B)' For purposes of subparagraph (A), the allocation 13 percentages are as follows: 14 15 Fiscal Year Percentage 16 1997-98 17 — and each fiscal year thereafter 0 18 19 (b) In the 1997-98 fiscal year and each fiscal year 20 thereafter, any amount of ad valorem property tax 21 revenue that is allocated to a county's Educational 22 Revenue Augmentation Fund as a result of any limit or 23 reduction established in subdivision (a) shall instead be 24 allocated among the local agencies in the county in 25 accordance with each local agency's proportionate share 26 of the total amount of ad valorem property tax revenues 27 that would be required to be allocated to the county's 28 Educational Revenue Augmentation Fund in the absence 29 of this section. 30 SEC. 2. No reimbursement is required by this act 31 pursuant to Section 6 of Article XIII B of the California 32 Constitution because this act provides for offsetting 33 savings to local agencies or school districts that result in 34 no net costs to the local agencies or school districts, within 35 the meaning of Section 17556 of the Government Code. 36 Notwithstanding Section 17580 of the Government 37 Code, unless otherwise specified, the provisions of this act 38 shall become operative on the same date that the act 39 takes effect pursuant to the California Constitution. 99 AB 1 — 4 - 1 SEC. 3. This act is an urgency statute necessary for the 2 immediate preservation of the public peace, health, or 3 safety within the meaning of Article IV of the 4 Constitution and shall go into immediate effect. The facts 5 constituting the necessity are: 6 In order to provide as soon as possible that measure of 7 fiscal relief that will allow local agencies to begin to 8 restore an adequate level of essential public services, it is 9 necessary that this act take effect immediately. 0 99