HomeMy WebLinkAboutMINUTES - 02231999 - C57 TO: BOARD OF SUPERVISORSh ontr .
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PHIL BATCHELOR, COUNTY ADMINISTRATOR
>� Costa
February 16, 1999 ,
County
DATE: ('{3
SUBJECT: LEGISLATION: AB 349 (TORLAKSON)
SPECIFIC REOUEST(S)On RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
ACKNOWLEDGE that the Board of Supervisors is the SPONSOR of AB 349 by
Assemblyman Torg Torlakson which would provide the County with a one-time
reduction in its contribution to the Educational Revenue Augmentation Fund (ERAF)
in the 1999-2000 fiscal year,
BACKGROUND:
The Board's 1999 Legislative program contains a provision that the Board will
"'SPONSOR legislation to allow the original Teeter counties to recover the
advantage other counties got in converting to Teeter."
Assemblyman Tom Torlakson has agreed to author this legislation for the Board and
has introduced AB 349 for this purpose.
Desmond Teeter was the County Auditor-Controller a number of years ago and
became the County's first County Administrator. He designed a system of
distributing property taxes which benefitted all jurisdictions. This mechanism was
written into State law and provided each county with the option to makes use of this
mechanism if it wished to do so. Those counties that opted in to using this
mechanism became known as "Teeter Counties". The five original Teeter counties
were Conga Costa, El Dorado, Modoc, Siskiyou, and Solano.
CONTINUED Cid ATTACHMENT: YES SIt NATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR -RECOMMENDATION OF 80ARD COMMITTEE
APPROVE OTHER
SIGNATURES
ACTION OF BOARD ON � �N�� � � _ APPROVED AS RECOMMENDED __X OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
XX UNANIMOUS(ABSENT n _ -} 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.
+ Page +2 g ATTESTED F x ry 23.. 1999
Contact: See age PHIL BATCHELOR.CLERK OF THE BOARD OF
CC'. SUPERV:SDRS AND COUNTY ADMI'dISTRATOR
BY ,DEPUTY
'0! 61
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This legislation would provide the five original Teeter counties the same one-time
advantage that all other counties which became Teeter counties after the 1993-94
fiscal year received, namely that they were allowed to retain the portion of the
property 'tax that would otherwise have been transferred to the ERAF which
represented the delinquent property taxes in the year in which the conversion to a
Teeter county was implemented.
In a non-Teeter county, all taxing jurisdictions receive their property tax revenue as
it is received by the County, meaning they do not receive their share of delinquent
property taxes until the taxes and any penalties are paid. In a Teeter county, the
County advances the amount of the delinquent property taxes to each taxing
jurisdiction and repays itself when the taxes are paid by retaining the penalties which
are paid, instead of sharing those with the other taxing jurisdictions.
When a county converts to being a Teeter county, therefore, all taxing jurisdictions
receive a one-time windfall because they receive their share of the delinquent taxes
immediately instead of having to wait for the taxes to be paid. Section 97.36 was
added to the Revenue & Taxation Code in 1994 (AB 3347, Chapter 1167, Statutes
of 1994) and amended in 1996 (SB 1845, Chapter 1058, Statutes of 1996) to
prevent the schools from receiving this windfall on that portion of the property taxes
which were being taken from the county. However, Section 97.36 provides that it
only applies to counties which convert to being Teeter counties in the 1994-95 or
subsequent fiscal years. This unfairly excludes the five original Teeter counties
which, in effect, did give the schools their share of the delinquent property taxes.
We would like to have these five counties treated equitably by applying the same
rule to them. The total amount involved for the 1995-96 fiscal year was $13.1
million, of which $6.9 million was for Contra Costa. Enactment of this legislation
would require the State to backfill the schools for this amount on a one-time basis.
AB 349 would provide this one-time financial benefit to all five of the original Teeter
counties.
Since AB 349 is consistent with the Board's adopted 1999 Legislative Program, it
would be appropriate for the Board to acknowledge that it is the sponsor of AB 349.
cc: County Administrator
Auditor-Controller
Tony Enea, Senior Deputy County Administrator
Assemblyman Tom Torlakson
Room 2003 State Capitol
Sacramento, CA 95814
Les Spahnn
Heim, Noack, Kelly & Spahnn
1121 L Street, Suite 100
Sacramento, CA 95814
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CALIFORNIA LEGISLATURE--1999-2000 REGULAR SESSION
ASSEMBLY BILL No. 349
Introduced by Assembly.Member Torlakson
February 11, 1999
An act to amend Section 97.36 of the Revenue and Taxation
Code, relating to local government finance.
LEGISLATIVE COUNSEL'S DIGEST
AB 349, as introduced, Torlakson. Property tax revenue
allocations, Teeter Ilan counties: revenue shift reduction.
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 1.993694 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
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AB 349 —2—
Educational
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Educational revenue Augmentation Fund in that county for
allocation to school districts, community college districts, and
the county office of education.
Existing law modifies these reduction and transfer
provisions by decreasing a "qualified county's" reduction and
transfer amount, attributable in the "designated fiscal year"
to the reduction and transfer amount determined for that
county in the 1993--94 fiscal year, by the amount of increased
allocations made in the designated fiscal year to certain
educational entities as a result of that county's adoption of a
specified alternative method for the distribution of ad
valorem property tax. revenues. Existing law defines a
"qualified county" as a county that has first implemented this
alternative distribution method in the 1994-95 fiscal year or
any subsequent fiscal year, and defines the "designated fiscal
year" as the first fiscal year in which the relevant "qualified
county" first implemented this same alternative distribution
method.
This bill would instead define a "qualified county" as any
county that has implemented this specified alternative
distribution method, and would, with respect to counties that
first implemented this alternative distribution method prior
to the 1993-94fiscal year, define the "designated fiscal year"
as the 1999-200£1 fiscal year. Ey imposing new duties upon
county auditors in the annual allocation of ad valorem
property tax revenues, this bill would impose a
state-mandated local program. This bill would also mare
additional nonsubstantive, technical, and clarifying changes.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
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-3— AB 349
The people of the State of California do enact as follows:
1 SECTION 1, Section 97.36 of the Revenue and
2 Taxation Cade is amended to read:
3 97.36. (a) Notwithstanding any other provision of
4 this chapter, for the designated fiscal year, the amount of
5 the revenue allocation reduction with respect to a
6 qualified county that is attributable in that fiscal year to
7 the reduction determined for that county for the 1993-94
8 fiscal year pursuant to paragraph (1) of subdivision (a) of
9 Section 97.3 or its predecessor section shall be redueed
10 decreased by the amount of any increased revenues,
11 allocated in the designated fiscal year in that county to a
12 "qualifying school entity" as defined in paragraph (5) of
13 subdivision (a) of section 97.3 or its predecessor section,
14 that would not have been so allocated but for that county
15 being a qualified county.
16 (b) For purposes of this section:
17 (1) A "qualified county" means a county or city or and
18 county that has first implemented for the 1994-95 or any
19 subsequent fiscal year the alternative procedure for the
20 distribution of property tax levies that is authorized by
21 Chapter 2 (commencing with Section 4701) of Part 8.
22 (2) For purposes of this section,"designated fiscal
23 year" means
24 qeeAified est the following:
25 (A) In the case of a qualified county that first
26 implemented the alternative method for the distribution
27 of property tax levies that is authorized by Chapter 2
28 (commencing with Section 4701) of Part 8 in the 1994-95
29 fiscal year or thereafter, the first ir-st fiscal year in which the
30 relevant qualified county first implemented that
31 alternative method for the distribution of property tax
32 levies that is authorized by Chapter 2 (commencing with
33 Section 4701) of Part 8.
34 (P) In the case of a qualified county that first
35 implemented the alternative method for the distribution
36 of property tax levies that is authorized by Chapter 2
37 (commencing with ,Section 4771) of Part 8 prior to the
38 1993-94fiscal year, the 199.9-2000 fiscal year.
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AB 349 —4-
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1 SEC. 2. leo reimbursement is required by this act
2 pursuant to Section 6 of Article XIII B of the California
3 Constitution because this act provides for offsetting
4 savings to local agencies or school districts that result in
5 no net costs to the local agencies or school districts, within
6 the meaning of Section 17556 of the Government Code.
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