BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1350|
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THIRD READING
Bill No: AB 1350
Author: Lara (D)
Amended: 6/23/11 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 06/22/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 05/19/11 (Consent) - See last page
for vote
SUBJECT : Property taxation: override rates: validation
by auditor
SOURCE : Author
DIGEST : This bill requires a county auditor, prior to
the collection of a property tax imposed for specified
purposes, to verify that a property tax increased or
extended by a jurisdiction, on or after January 1, 2012,
does not exceed the maximum rate authorized by existing
law.
ANALYSIS : Proposition 13 (1978) limited property tax
rates to one percent, cutting statewide property tax
revenues by 57 percent. The power to allocate the
remaining property tax revenues became the Legislature's
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duty.
The one percent limit on property tax rates did not apply
to ad valorem property taxes or special assessments needed
to pay the interest and redemption charges on any
indebtedness approved by voters before July 1, 1978. In
its 1982 decision in Car-man v. Alvord , the California
Supreme Court ruled that extraordinary property tax rates
(outside the usual one percent ad valorem rate) imposed to
fund employee pension systems approved by the voters before
July 1, 1978 are valid under Proposition 13.
This bill:
1.If a local government extends or increases, after January
1, 2012, an ad valorem property tax to support specified
pension programs or retirement systems, this bill
requires a county auditor to verify, before the increase
or extension, that the property tax rate does not exceed
the maximum rate authorized by law.
2.This bill requires a local government to provide the
county auditor, in the form, manner, and time prescribed
by the county auditor, any documentation that is
necessary to verify the imposed property tax rate.
3.This bill requires the county auditor to reject the
increase or extension of any property tax rate that
exceeds the maximum rate specified in state law.
4.The bill requires a local government to reimburse the
county auditor's actual and reasonable costs for
administering the bill's verification requirement.
Background
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 to pay the
City's pension obligations that exceeded the rate allowed
under state law. As a result, property owners in Bell paid
approximately $2.9 million in excessive property taxes
during those three years. Rather than allowing the county
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auditor to reallocate the excess revenues to schools, the
Legislature required the City of Bell to pay for refunds to
taxpayers who overpaid (AB 900, de León, Chapter 223,
Statutes of 2010).
To prevent local governments from imposing excessive rates
for their pensions and retirement systems, some legislators
want to require county auditors to verify that local
governments' extraordinary ad valorem property rates don't
exceed statutory limits.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 7/12/11)
California Taxpayers Association
County of Los Angeles
ASSEMBLY FLOOR : 78-0, 05/19/11 (Consent)
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Alejo, Gorell
AGB:nl 7/12/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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