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HomeMy WebLinkAboutMINUTES - 03291988 - 1.44 TO: Board of Supervisors 04 FROM: Sara Hoffman, Franchise Administrator :1—, 044 DATE: March 29, 1988 SUBJECT: AB 2802 (Hill) Specific Request(s) or Recommendations(s) & Background & Justification RECOMMENDATION Oppose AB 2802 (Hill) , a bill which would reduce the cable television franchise fee by amount equal to the possessory interest tax. FINANCIAL IMPACT AB 2802 would reduce County revenue from Cable franchise fees by approximately 90, or $30,000 in 1988. This estimate is based on the valuation method currently used by the Assessors Office. However, two other valuation methods are being tested in the State. One would decrease the franchise fee by approximately 200, or $67,000 in 1988 and the other would completely eliminate the Franchise fee. According to the Assessors Office, the County would not use the latter assessment method unless directed to do so by the State Board of Equalization. If AB 2802 were interpreted to mean that the possessory interest tax revenue received by the County from both incorporated and unincorporated areas is a credit against franchise fees in unincorporated areas, AB 2802 would probably eliminate the County' s franchise fee. REASONS FOR RECOMMENDATION/BACKGROUND The possessory interest tax is basically a tax on the private use of tax exempt property ( i.-e. , the public right-a-way) . It is assessed in conformance with Article XIIIA of the California State Constitution and the property tax rules contained in Title 18 of the California Administrative Code. The County Assessor determines the value of property, which is then taxed at the appropriate local tax rate. Revenues are distributed between the County, cities, school districts, and other special districts in accordance, with the local taxing district. The Cable Franchise Fee is separate and distinct from the possessory interest tax. The Cable Communications Policy Act of 1984 provides that the franchise fee may not exceed 50 of annual gross receipts of the Cable Operator. Taxes of general applicability, such as the possessory interest tax, are specifically excluded from the definition of franchise fee. AB 2802 would effectively lower the maximum franchise fee established by federal law . to an amount equal to 50 of gross annual receipts minus the possessory interest tax. Legally, AB 2802 does not conflict with the Cable Communications Policy Act. However, in staff ' s opinion, the result is the 'same, i.e. reduced revenue to the County. —` Continued on attachment: yes Signature: Recommendation of Recomm6ndat' n of County Administrator Board Commi tee X Approve Other: Signature(s) : a&z2;�/i2�/ - Action of Board on: MAR 2 9 1988 Approved as Recommended _X Other Vote of Supervisors I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN _ Unanimous (Absent�- ) AND ENTERED ON THE MINUTES OF THE Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN. Absent: Abstain: Attested MAR 2 9 1988 Orig. Div. : CAO(Franchise) Phil Batchelor cc: County Assessor Clerk of the Board of Supervisors cc: Valuation Division, and County Administrator Assessors Office ab2802.BO By L , DEPUTY SH:eh