BILL NUMBER: AB 551 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 25, 2010
AMENDED IN ASSEMBLY APRIL 23, 2009
INTRODUCED BY Assembly Member Furutani
(Principal coauthor: Assembly Member Blakeslee)
FEBRUARY 25, 2009
An act to add Section 97.24 to the Revenue and Taxation
Code, relating to education funding , and making
an appropriation therefor .
LEGISLATIVE COUNSEL'S DIGEST
AB 551, as amended, Furutani. Community colleges:
property tax revenues. funding study .
The California Constitution requires the state to apply a minimum
amount of funding for each fiscal year for the support of school
districts and community college districts. The amount of that minimum
funding obligation is required to be determined pursuant to one of
three tests, depending on specified factors.
Existing law requires the Board of Governors of the California
Community Colleges, in calculating each community college district's
revenue level for each fiscal year, to subtract, among other things,
local property tax revenue specified by law for general operating
support, exclusive of bond interest and redemption, from the total
revenues owed.
This bill would require the Legislative Analyst's Office to
conduct a study, by July 1, 2011, that calculates the amount of
General Fund and property tax revenues allocated to California
Community Colleges for the 1989-90 to 2009-10 fiscal years,
inclusive. The bill would require the study to analyze which form of
revenue provides the most stable funding source for California
Community Colleges.
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
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 (ERAF) in that county for
allocation to school districts, community college districts, and the
county office of education.
Existing law defines an excess tax school entity as an educational
agency for which the amount of the state funding entitlement
determined under certain provisions of existing law is zero.
This bill, commencing with the 2009-10 fiscal year, would reduce
the amount of property tax revenue allocated to each community
college district, except districts meeting the criteria of an excess
tax school entity, as defined, by 25% and require those revenues to
be deposited instead in the county ERAF for allocation to school
districts and county offices of education.
The bill would also require districts meeting the criteria of an
excess tax school entity to decide whether to retain its current
distribution of property tax revenues or participate in the
distribution of property tax revenues provided by this bill.
Vote: majority. Appropriation: yes no
. Fiscal committee: yes no .
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) California Community Colleges have historically been funded
primarily by local property taxes. Since the adoption of a series of
reforms, many community college districts are now funded by a diverse
mix of local property tax revenues and General Fund dollars.
(b) Due to instability in the housing market, the property tax
revenues provided by the counties to the community college districts
inevitably differ from the budget estimates provided by the
Department of Finance. No automatic funding adjustment mechanism
exists for community college districts.
(c) If property tax revenues fall short of Department of Finance
estimates, community college districts must address the impact of the
shortfall in the middle of the academic year.
(d) The uncertainty of community college funding severely cripples
the ability of community college districts to plan accordingly to
meet the educational demands of the community. Mid-fiscal year
adjustments to community college district budgets significantly
impact community college students, which may result in lower
retention levels and lengthier waits for a degree or certification.
(e) The uncertainty of community college funding also restricts
community college districts from confidently pursuing future academic
programs, which could suffer if an unexpected drop in property tax
revenue occurs.
SEC. 2. (a) On or before July 1, 2011, the
Legislative Analyst's Office shall conduct a study that calculates
both of the following:
(1) The amount of General Fund dollars allocated to the California
Community Colleges for the 1989-90 to 2009-10 fiscal years,
inclusive.
(2) The amount of property tax revenues allocated to the
California Community Colleges for the 1989-90 to 2009-10 fiscal
years, inclusive.
(b) Based on its findings, the study conducted pursuant to
subdivision (a) shall analyze whether General Fund dollars or
property tax revenues provide the most stable funding source for
California Community Colleges.
SECTION 1. Section 97.24 is added to the
Revenue and Taxation Code, to read:
97.24. (a) (1) Notwithstanding any other provision of this
chapter, commencing with the 2009-10 fiscal year, the amount of
property tax revenue allocated to each community college district,
except for those districts that in 2008-09 met the definition of an
"excess tax school entity" as defined in subdivision (n) of Section
95, shall not exceed the amount allocated in the 2008-09 fiscal year,
multiplied by 0.75.
(2) The amount of property tax revenues not allocated to a
community college district as a result of this subdivision shall be
deposited in the county Educational Revenue Augmentation Fund and
allocated to school districts and county offices of education.
(3) By December 12, 2009, a community college district that was an
excess tax school entity in the 2008-09 fiscal year shall provide a
written affirmative decision to the Department of Finance to do
either of the following:
(A) Continue to retain its current distribution of property tax
revenues for the 2009-10 fiscal year, and each subsequent fiscal year
thereafter.
(B) Agree to a distribution of property taxes for the district as
described in subdivision (a) of this section for the 2009-10 fiscal
year and each subsequent fiscal year.
(b) (1) This section shall not be construed to increase any
allocations of excess, additional, or remaining funds that would
otherwise have been allocated to cities, counties, cities and
counties, or special districts pursuant to clause (i) of subparagraph
(B) of paragraph (4) of subdivision (d) of Section 97.2 of, clause
(i) of subparagraph (B) of paragraph (4) of subdivision (d) of
Section 97.3 of, or Article 4 (commencing with Section 98) had this
section not been enacted.
(2) Notwithstanding any other law, no funds deposited in the
county Educational Revenue Augmentation Fund pursuant to subdivision
(a) shall be distributed to a community college district.