BILL ANALYSIS AB 308 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 308 (Cook and Carter) As Amended August 19, 2010 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: | |(May 14, 2009) |SENATE: |36-0 |(August 23, | | | | | | |2010) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: E. & R. SUMMARY : Continues the property tax revenue allocation methodology for a specified utility property located in the Inland Valley Development Agency (IVDA) redevelopment project area in San Bernardino County, despite a recent change in ownership that triggers a change in allocations. The Senate amendments delete the Assembly version of this bill, and instead: 1)Provide that if a utility-owned state-assessed unitary property was constructed by a wholly owned subsidiary of a utility before January 1, 2007, and placed in service by the utility on or after January 1, 2007, and the property is located in a redevelopment project area of a joint powers authority comprised of cities and a county that adopts a resolution stating that the property is subject to a redevelopment plan, and the joint powers authority transmits a copy of the resolution stating that the property is subject to a redevelopment plan to the State Board of Equalization (BOE) and the county auditor before January 1, 2011, then, for the 2010-11 and following fiscal years (FYs), the allocation of property tax revenues shall be subject to the requirements enacted by AB 81 (Migden), Chapter 57, Statutes of 2002. 2)Provide that BOE may amend the tax rolls for FY 2010-11 in order to provide the allocations as required in 1) above. 3)State that the Legislature finds and declares that a special law is necessary in order to ensure that IVDA receives sufficient tax increment funding to repay loans, or moneys advance to, or indebtedness incurred by, the redevelopment agency to finance or refinance redevelopment projects. AB 308 Page 2 4)State that this act is an urgency statute and shall take effect immediately. 5)Add in chaptering out provisions to ensure that this bill does not conflict with SB 1398 (DeSaulnier). EXISTING LAW : 1)Requires BOE to assess public utilities for property tax purposes. 2)Provides for the following allocation formula pursuant to SB 1317 (Torlakson), Chapter 872, Statutes of 2006, for qualified public utility-owned electrical facilities built after January 1, 2007, and meeting specified conditions: a) Counties, K-14 schools, and non-enterprise special districts receive the same percentage of these property tax revenues as they received in the previous year; b) The city in which the electrical facility is located receives 90% of the remaining property tax revenues; c) The city or water districts that provide water service to the electrical facilities receive the remaining 10% of the property tax revenues; and, d) The other entities that would have previously received a share of the property tax revenues do not receive any of the revenues AS PASSED BY THE ASSEMBLY , this bill required elections officials to send a special runoff ballot, on which a voter may rank all the candidates, to every overseas voter for any election for which there may be a runoff election held within 90 days of that election. Required the elections official to tally a vote for the highest ranked candidate on a special runoff ballot if the overseas voter that cast the special runoff ballot does not return a regular ballot for the runoff election. FISCAL EFFECT : According to the Senate Appropriations Committee, this bill would result in approximately $2 million less property tax revenue for K-14 schools than they would otherwise receive beginning in FY 2010-11. This bill would also AB 308 Page 3 create a reimbursable state-mandated local program by changing the manner in which county officials allocate property tax revenues. COMMENTS : This bill continues the property tax revenue allocation methodology for a specified utility property located in the IVDA redevelopment project area in San Bernardino County under specified conditions, despite a recent change in ownership that triggers a change in allocations. AB 81 (Migden), Chapter 57, Statutes of 2002, was enacted to change the revenue allocation of power plants divested by public utilities and sold to private operators, as well as those newly constructed by merchant power plant owners, to provide for situs-based revenue allocation. In 2005, San Diego Gas and Electric sought and received special revenue allocations for a proposed new power plant to be constructed in the City of Escondido [AB 2558 (Plescia), Chapter 640, Statutes of 2004]. In 2006, the Legislature created an exception to the countywide unitary tax allocation method for all newly constructed public-utility-owned large-scale electrical generation, substation, and transmission facilities. This exception allocates a greater share of unitary property tax revenues to the city or county in which a qualified electrical facility is located [SB 1317 (Torlakson), Chapter 872, Statutes of 2006]. Formed in 1990, the IVDA is a joint powers authority comprised of the County of San Bernardino and the cities of Colton, Loma Linda, and San Bernardino. IVDA is responsible for redeveloping the non-aviation portion of the former Norton Air Force Base and surrounding properties. Southern California Edison's (SCE) Mountainview power plant is located in the City of Redlands within an IVDA redevelopment project area. Until this year, an unregulated subsidiary of SCE owned the Mountainview power plant. In March 2010, SCE took ownership of the plant. Because it is now owned by a regulated utility company, the plant's property tax revenues will be allocated using the 2006 Torlakson allocation method rather than under the 2002 Migden allocation method. Because this change reduces property tax revenues that IVDA and other local agencies receive from the Mountainview power plant, IVDA officials want the county auditor to continue to allocate property tax revenues from the plan using the Migden bill's allocation method. This bill contains an urgency clause so that BOE and the San Bernardino County Auditor can implement the bill's requirements AB 308 Page 4 for allocating property taxes from the Mountainview power plant this year. This bill requires a two-thirds vote of each house because it makes changes to the pro rata shares in which ad valorem property tax revenues are allocated among agencies in a county. Support arguments: Supporters argue that without the bill, a mere change in ownership of a power plan located within the area of the IVDA will result in a loss of funds to the agency and to surrounding cities and school districts. This bill maintains the status quo, therefore preserving the existing property tax allocation methodology. Opposition arguments: None on file. The Assembly version of this bill was deleted in the Senate, and consequently, the subject matter has not been heard by an Assembly policy committee this legislative session. Analysis Prepared by : Debbie Michel / L. GOV. / (916) 319-3958 FN: 0006582