BILL ANALYSIS Ó
AB 1350
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1350 (Lara) - As Introduced: February 18, 2011
Policy Committee: Local
GovernmentVote:7-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill establishes new duties for county auditors, beginning
January 1, 2012, to verify that property tax rates for a
specified purpose do not exceed rates authorized by existing
law. Specifically, this bill:
1)Requires a county auditor, prior to the collection of a
property tax imposed for a specified purpose, to verify that a
property tax rate that is imposed, increased or extended by a
jurisdiction after January 1, 2012, does not exceed the
maximum rate authorized by law.
2)Requires a jurisdiction to provide the county auditor with all
necessary documentation to verify the imposed property tax
rate.
3)Requires jurisdictions to reimburse the county auditor for
costs incurred by the county auditor to administer the
verification.
FISCAL EFFECT
The state mandated costs incurred by county auditors can be
offset by fees that they can choose to charge so the bill does
not create a mandated reimbursement. Local governments will face
costs of complying with the requirements that county auditors
may place on them for verifying the imposed property tax rate.
These are not mandated costs.
COMMENTS
AB 1350
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1)Purpose. According to the author, this bill provides a
necessary check over public assets and public funds. While
local jurisdiction may pass, by resolution, an increased tax
rate like the City of Bell did, there is no mechanism in place
to verify that the tax they are voting on is legitimate or
legal because current law does not require county auditors to
verify that the tax rate imposed does not exceed the
authorized amount in current law.
2)City of Bell. Last year, an audit conducted by the State
Controller determined that officials in the City of Bell (Los
Angeles County), during the three fiscal years between 2007
and 2010, levied an extraordinary property tax rate that
exceeded the rate allowed under state law. The City of Bell
had been levying an extraordinary tax rate to pay for the
City's pension obligations. In 2007, city officials began
raising this extraordinary property tax rate above the limit
imposed by state law, and increased it by 50% by 2009-10. As
a result, property owners in the City paid approximately $2.9
million in excessive property taxes during those three years.
3)Previous legislation . AB 900 (De Leon), Chapter 223, Statutes
of 2010, required the City of Bell to pay the County of Los
Angeles an amount equal to the amount of excess ad valorem
property tax collected in FYs 2007-08, 2008-09, and 2009-10,
including interest calculated at the average rate earned by
the City on its idle funds during those years. AB 900
additionally required the County to refund the amount it
received from the City of Bell to any property taxpayers of
the City who overpaid, in a manner generally consistent with
the County's tax refund practices.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081