BILL NUMBER: AB 1350 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 23, 2011
AMENDED IN SENATE JUNE 16, 2011
INTRODUCED BY Assembly Member Lara
FEBRUARY 18, 2011
An act to amend Section 96.31 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1350, as amended, Lara. Property taxation: override rates:
validation by auditor.
Existing property tax law generally prohibits a local
jurisdiction, in the 1985-86 fiscal year and each fiscal year
thereafter, from imposing a property tax rate pursuant to a specified
statutory provision in excess of the rate so imposed by that
jurisdiction in specified fiscal years, unless it is imposed for
specified purposes, including, among others, to make payments in
support of certain pension programs.
This bill would, if a local jurisdiction increases or extends a
property tax rate, on or after January 1, 2012, for the purpose
specified above, require the county auditor to, prior to the increase
or extension of the property tax rate, verify that the rate
increased or extended by the jurisdiction does not exceed the maximum
rate authorized by law. This bill would require the jurisdiction to
provide the county auditor with any documentation that is necessary
to assist the county auditor in making the verification, as provided,
and to reimburse the county auditor for the actual and reasonable
costs incurred by the county auditor in administering the
verification. This bill would require the county auditor to reject
the increase or extension of any property tax rate that exceeds the
maximum rate authorized by law.
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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 96.31 of the Revenue and Taxation Code is
amended to read:
96.31. (a) For the 1985-86 fiscal year and each fiscal year
thereafter, a jurisdiction shall not impose a property tax rate
pursuant to subdivision (a) of Section 93, unless it is imposed for
one or more of the following purposes:
(1) To make annual payments for the interest and principal on
general obligation bonds approved by the voters before July 1, 1978,
and on bonded indebtedness for the acquisition and improvement of
real property approved by the voters by a two-thirds vote after June
4, 1986.
(2) To make payments to the State of California under contracts
for the sale, delivery, or use of water entered into pursuant to
California Water Resources Development Bond Act in Chapter 8
(commencing with Section 12930) of Part 6 of Division 6 of the Water
Code or to make payments to the United States or another public
agency under voter-approved contracts for the sale, delivery, or use
of water or for the repayment of voter-approved obligations for the
construction, maintenance, or operation of water conservation,
treatment, or distribution facilities, provided that the indebtedness
was approved by the voters before July 1, 1978.
(3) To make payments pursuant to lease-purchase programs approved
by the voters before July 1, 1978, provided that the jurisdiction
imposed the property tax rate in the 1982-83 fiscal year.
(4) To make payments in support of pension programs approved by
the voters before July 1, 1978, provided that the local agency
imposed the property tax rate in the 1982-83 or 1983-84 fiscal year.
(5) To make payments in support of paramedic, library, or zoo
programs approved by the voters before July 1, 1978, provided that
the jurisdiction imposed the property tax rate in the 1982-83 fiscal
year.
(6) To make payments for the interest and principal on an
indebtedness, pursuant to Section 5544.2 of the Public Resources
Code, approved by the voters before July 1, 1978, provided that the
local agency imposed the property tax rate in the 1982-83 fiscal
year.
(b) In the 1985-86 fiscal year and any fiscal year thereafter, a
jurisdiction shall not impose a property tax rate, pursuant to
subdivision (a) of Section 93, in excess of the rate it imposed in
the 1982-83 or 1983-84 fiscal year. Notwithstanding the limit imposed
by this subdivision, a higher property tax rate may be imposed
whenever necessary to make payments for any of the purposes specified
in paragraphs (1), (2), and (3) of subdivision (a). However, no
property tax rate increase in excess of the rate imposed in the
1984-85 fiscal year shall be imposed if the purpose of the rate
increase is to fund a reduction in the rates charged for water at the
time of the property tax rate increase.
(c) Notwithstanding subdivisions (a) and (b), a charter city may
levy an ad valorem property tax rate to make payments in support of a
retirement system for fire and police employees if all of the
following criteria are met:
(1) The retirement system is part of the city's charter and was
approved by the voters before July 1, 1978.
(2) The city did not levy a separate ad valorem property tax rate
to support the retirement system in the 1983-84 fiscal year.
(3) The retirement system provides for a cost-of-living adjustment
that is indexed to a consumer price index and does not limit the
annual increases which may be paid to members after their retirement.
(4) The retirement system is not currently available to newly
hired fire and police employees and will not be available in the
future.
(5) Before January 1, 1985, the city unsuccessfully litigated a
limit to the cost-of-living adjustment that may be paid to members of
the retirement system after their retirement.
(6) After July 1, 1985, the city conducted an election and a
question authorizing the levying of an ad valorem property tax for
the purpose of making payments in support of the retirement system
received the affirmative votes of at least 60 percent of those voting
on that question.
The proceeds of an ad valorem property tax rate levied pursuant to
this subdivision shall be used only to pay for the obligations of a
retirement system described by this subdivision. The proceeds shall
not be used to finance more than 75 percent of the annual obligations
of this retirement system. A city shall not levy an ad valorem
property tax pursuant to this subdivision after June 30, 2034.
(d) (1) Except as otherwise provided in paragraph (2), if a
jurisdiction imposes a rate in excess of the maximum rate authorized
by subdivision (a), (b), or (c), the amount of property tax allocated
to the jurisdiction pursuant to this chapter shall be reduced by one
dollar ($1) for each one dollar ($1) of property tax revenue
attributable to the excess rate. Any property tax revenue that has
been subtracted from a jurisdiction's allocation pursuant to this
subdivision shall be allocated to elementary, high school, and
unified school districts within the jurisdiction's jurisdiction in
proportion to the average daily attendance of each district.
(2) With respect to the ad valorem property taxes collected
pursuant to paragraph (4) of subdivision (a) in excess of the maximum
rate authorized by subdivision (b) in the 2007-08, 2008-09, and
2009-10 fiscal years for the City of Bell, all of the following shall
apply:
(A) (i) On or before December 31, 2010, the City of Bell shall pay
to the County of Los Angeles an amount equal to the amount of ad
valorem property tax collected pursuant to paragraph (4) of
subdivision (a) in excess of the maximum rate authorized by
subdivision (b) in the 2007-08, 2008-09, and 2009-10 fiscal years,
including interest thereon calculated at the average rate earned by
the City of Bell on its idle funds in the 2007-08, 2008-09, and
2009-10 fiscal years.
(ii) From the amounts paid to the County of Los Angeles as
required by clause (i), the County of Los Angeles shall make a refund
to any taxpayer who paid the ad valorem property tax collected as
specified in clause (i), in a manner generally consistent with the
County of Los Angeles tax refund practices.
(B) (i) If, by December 31, 2011, the County of Los Angeles is
unable to locate a taxpayer who paid the ad valorem property tax
collected as specified in clause (i) of subparagraph (A) in order to
make a refund to the taxpayer, those amounts remaining from those
amounts paid to the County of Los Angeles pursuant to subparagraph
(A) shall be allocated to elementary, high school, and unified school
districts as provided by paragraph (1).
(ii) The requirement of paragraph (1) shall apply only with
respect to any amounts remaining after making refunds to taxpayers as
provided by clause (i).
(C) The City of Bell shall reimburse the county auditor for the
actual and reasonable costs incurred by the county to administer this
subdivision, including applicable administrative overhead costs as
permitted by federal Office of Management and Budget Circular A-87
standards.
(e) (1) Notwithstanding any other law, if a jurisdiction increases
or extends, on or after January 1, 2012, a property tax rate as
authorized by paragraph (4) of subdivision (a) or by subdivision (c),
the county auditor shall, prior to the increase or extension of the
property tax rate, verify that the rate increased or extended by the
jurisdiction does not exceed the maximum rate authorized by this
section.
(2) The jurisdiction shall provide the county auditor, in the form
and manner and at the time prescribed by the county auditor, with
any documentation that is necessary to assist the county auditor in
making the verification required by paragraph (1).
(3) The county auditor shall reject the increase or extension of
any property tax rate that exceeds the maximum rate authorized by
this section paragraph (4) of subdivision (a)
or by subdivision (c) .
(4) The jurisdiction shall reimburse the county auditor for the
actual and reasonable costs incurred by the county to administer this
subdivision.
(f) This section shall be deemed to be a limit on the maximum
property tax rate pursuant to Section 20 of Article XIII of the
California Constitution.
SEC. 2. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
this act provides for reimbursement to a local agency in the form of
additional revenues that are sufficient in amount to fund the new
duties established by this act, within the meaning of Section 17556
of the Government Code.