Amended in Senate June 26, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 483

Introduced by Assembly Member Ting

February 19, 2013

An act to amend Section begin insert 12463 of the Government Code, and to amend Sections 95.3 and end insert 402.5 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 483, as amended, Ting. Property begin delete taxation: valuing property: comparable sales. end delete begin insert taxation. end insert

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Existing property tax law provides, pursuant to a specified formula, for a county auditor’s determination of those proportionate shares of the county’s property tax administrative costs that are attributable to the other jurisdictions in the county, and further provides for a county’s recovery from all other jurisdictions within the county, except for school entities or an Educational Revenue Augmentation Fund (ERAF), of those proportionate shares of the county’s property tax administrative costs.

end insert begin insert

This bill would authorize a county, by resolution of its board of supervisors, to recover, at any time commencing with the 2013-14 fiscal year and through the 2023-24 fiscal year, the property tax administrative cost shares attributable to school entities or an ERAF, but would reduce the amounts recoverable for the 2013-14 fiscal year and the 2014-15 fiscal year, as provided.

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This bill would require any county that recovers these additional cost shares to maintain a base level of staffing and total funding for the administration of the property tax system that is equal to or greater than the level of staffing or funding provided in the 2012-13 fiscal year. The bill would require a county that recovers the additional cost shares to use the additional amounts recovered to enhance the property tax administration system, and would prohibit the use of additional amounts recovered to supplant the level of funding that was provided for property tax administration in the 2012-13 fiscal year.

end insert begin insert

The bill would also require a county that recovers the additional cost shares to provide the Controller with information that indicates what percentage of general ad valorem property tax is allocated to each local government jurisdiction, and a comprehensive account of all of the local government services funded by general ad valorem property tax revenues. The bill would require the Controller, commencing in the 2014-15 fiscal year, to publish on its Internet Web site, with respect to each county, the percentage of general ad valorem property tax allocated to each local government jurisdiction, and for the 2015-16 fiscal year and each fiscal year thereafter, to make the information available to taxpayers via an interactive, searchable database on its Internet Web site, a specified.

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Existing property tax law requires, when valuing property by comparison with sales of other properties, in order to be considered comparable, the sales to be sufficiently near in time to the valuation date, and the properties sold to be located sufficiently near, and sufficiently alike, to the property being valued, as specified.

This bill would make a clarifying change to this provision.

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The bill would also require the State Board of Equalization to annually conduct a survey of counties, the results of which shall be presented in a report that is made available to the Legislature and the Department of Finance, on the operation of the provisions of this act.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert The Legislature finds and declares all of the
following: end insert

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(a) While the role of the assessor is not to be a revenue
generator, his or her work results in tax revenues, and all local
government agencies and taxpayers are impacted, whether
positively or negatively, by the extent to which the assessor is able
to perform his or her duties in a timely, efficient, and equitable
manner. The county assessor, the county auditor, the assessment
appeals board, and the county treasurer tax collector are the key
administrators of the property tax system. This act will restore
proper support for the administration of the property tax system.

end insert begin insert

(b) Budget cuts to local government agencies have resulted in
staff and funding reductions. County assessors’ offices have not
escaped these cuts. Neither the taxpayer nor the taxing agencies
benefit from this situation.

end insert begin insert

(c) Recognizing that K-14 education received approximately
52 percent of every property tax dollar collected in California and
acknowledging that county governments were receiving less than
20 percent of those revenues, the Legislature in 1995 acknowledged
that reductions in county assessors’ office resources and the
resultant reduction in services were detrimental to the best interests
of Californians. The Legislature initiated a loan program, the
“Property Tax Administration Program” (PTAP). For 10 years,
PTAP provided loans or grants to county assessors to support
additional work in the county assessors’ offices. Local taxing
agencies received the benefit of PTAP. Funding from the loans or
grants resulted in a 12 to 1 rate of return, as confirmed by the
California State Auditor in 2000.

end insert begin insert

(d) The administration of the property tax system, which includes
the county assessor, assessment appeals board, auditor, and
treasurer tax collector, supports our state’s public education
system and should be strengthened for the benefit of the taxpayer
as well as local entities that receive property tax revenues.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 12463 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

12463.  

(a) The Controller shall compile and publish reports
of the financial transactions of each county, city, and special
district, respectively, within this state, together with any other
matter he or she deems of public interest. The reports shall include
the appropriations limits and the total annual appropriations subject
to limitation of the counties, cities, and special districts. The reports
to the Controller shall be made in the time, form, and manner
prescribed by the Controller.

(b) Effective January 1, 2005, the Controller shall compile and
publish reports of the financial transactions of each county, city,
and special district pursuant to subdivision (a) on or before August
1, September 1, and October 1 respectively, of each year following
the end of the annual reporting period. The Controller shall make
data collected pursuant to this subdivision available upon request
to the Legislature and its agents, on or before April 1 of each year.

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(c) (1) The Controller shall, with input from counties, formulate
a plan to annually compile and publish on its Internet Web site
pursuant to paragraphs (2) and (3), information provided to it by
counties that elect to recover the proportionate cost shares of
property tax administrative costs attributable to school entities or
an Educational Revenue Augmentation Fund (ERAF) under
paragraph (2) of subdivision (b) of Section 95.3 of the Revenue
and Taxation Code, that indicates what percentage of general ad
valorem property tax is allocated to each local government
jurisdiction including, but not limited to, the county, any city, and
any special district, including school districts, and the services
provided by the county, any city, and any special district, including
any school district.

end insert begin insert

(2) Commencing in the 2014-15 fiscal year, with respect to
each county, the Controller shall publish the percentage of general
ad valorem property tax allocated to each local government
jurisdiction including, but not limited to, the county, any city, and
any special district, including school districts, on its Internet Web
site.

end insert begin insert

(3) In the 2015-16 fiscal year and each fiscal year thereafter,
the Controller shall make the information described in paragraph
(1) available to taxpayers via an interactive, searchable database
on its Internet Web site that allows visitors to input information
about their property tax liability and receive a customized,
comprehensive account of the amount of general ad valorem
property tax that is allocated to each local government jurisdiction
including, but not limited to, the county, any city, and any special
district, including school districts, and all of the local government
services funded by their general ad valorem property taxes,
including, but not limited to, the services provided by the county,
any city, and any special district, including any school district.
The account of services shall list, ordered by decreasing dollar
amount, each category of local government services.

end insert begin delete

(c)

end delete

begin insert (d) end insert  The Controller shall annually publish, on the Internet Web
site of the Controller, reports of the financial transactions of each
school district within this state, together with any other matter he
or she deems of public interest. The reports shall include the
appropriations limit and the total annual appropriations subject to
limitation of the school district. The reports to the Controller shall
be made in the time, form, and manner prescribed by the Controller.

begin delete

(d)

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begin insert (e) end insert  As used in this section, the following terms have the
following meanings:

(1) “School district” means a school district as defined in Section
80 of the Education Code.

(2) “Special district” means any of the following:

(A) A special district as defined in Section 95 of the Revenue
and Taxation Code.

(B) A commission provided for by a joint powers agreement
pursuant to Chapter 5 (commencing with Section 6500) of Division
7 of Title 1.

(C) A nonprofit corporation that is any of the following:

(i) Was formed in accordance with the provisions of a joint
powers agreement to carry out functions specified in the agreement.

(ii) Issued bonds, the interest on which is exempt from federal
income taxes, for the purpose of purchasing land as a site for, or
purchasing or constructing, a building, stadium, or other facility,
that is subject to a lease or agreement with a local public entity.

(iii) Is wholly owned by a public agency.

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begin insert SEC. 3. end insert   

end insert

begin insert Section 95.3 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

95.3.  

(a) Notwithstanding any other provision of law, for the
1990-91 fiscal year and each fiscal year thereafter, the auditor
shall divide the sum of the amounts calculated with respect to each
jurisdiction, Educational Revenue Augmentation Fund (ERAF),
or community redevelopment agency pursuant to Sections 96.1
and 100, or their predecessor sections, and Section 33670 of the
Health and Safety Code, by the countywide total of those calculated
amounts. The resulting ratio shall be known as the “administrative
cost apportionment factor” and shall be multiplied by the sum of
the property tax administrative costs incurred in the immediately
preceding fiscal year by the assessor, tax collector, county board
of equalization and assessment appeals boards, and auditor to
determine the fiscal year property tax administrative costs
proportionately attributable to each jurisdiction, ERAF, or
community redevelopment agency. For purposes of this paragraph,
property tax administrative costs shall also include applicable
administrative overhead costs allowed by the federal Office of
Management and Budget Circular A-87 standards, but shall not
include any amount reimbursed pursuant to Section 75.60 and
former Section 98.6, or include any amount in excess of the
amounts reimbursable pursuant to Section 75.60, unless a county
meets the conditions of paragraph (2) of subdivision (b) of Section
75.60. However, no amount of funds appropriated to counties for
purposes of property tax administration in Item 9100-102-001 of
the Budget Act of 1994 or any subsequent Budget Act shall result
in any deduction from those property tax administrative costs that
are eligible for reimbursement pursuant to this subdivision.

(b) (1) Each proportionate share of property tax administrative
costs determined pursuant to subdivision begin delete (a), except for those
proportionate shares determined with respect to a school entity or
ERAF, end delete begin insert (a) end insert shall begin insert , subject to an election under paragraph (2) with
respect to the proportionate share attributable to a school entity
or an ERAF, end insert be deducted from the property tax revenue allocation
of the relevant jurisdiction or community redevelopment agency,
and shall be added to the property tax revenue allocation of the
county. For purposes of applying this paragraph for the 1990-91
fiscal year, each proportionate share of property tax administrative
costs shall be deducted from those amounts allocated to the relevant
jurisdiction or community redevelopment agency after January 1,
1991.

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(2) It is the intent of the Legislature that the portion of those
shares of property tax administrative costs that are calculated by
the auditor for each fiscal year pursuant to subdivision (a) for
school entities and the county’s ERAF, that is attributable to the
county’s costs in providing boards and hearing officers for the
review of property tax assessment appeals, be calculated by local
officials and reimbursed by the state in the time and manner
specified by a future act of the Legislature that makes an
appropriation for purposes of that reimbursement.

end delete begin insert

(2) A county by resolution of its board of supervisors, may elect,
at any time commencing with the 2013-14 fiscal year, to recover
in the manner provided in paragraph (1) the proportionate cost
shares attributable to school entities or an ERAF. Any county that
so elects shall do all of the following:

end insert begin insert

(A) Maintain a base level of staffing, including contract staff,
for the administration of the property tax system, which includes
the county assessor, the county auditor, the assessment appeals
board, and the county treasurer tax collector’s office, that is in an
amount equal to or greater than the level of staffing provided in
the 2012-13 fiscal year.

end insert begin insert

(B) Maintain a total level of funding for the administration of
the property tax system, which includes the county assessor, the
county auditor, the assessment appeals board, and the county
treasurer tax collector’s office, that, independent of the additional
amounts recovered pursuant to the election, is in an amount equal
to or greater than the level of funding provided in the 2012-13
fiscal year.

end insert begin insert

(C) Use the additional amounts recovered pursuant to the
election to enhance the property tax administration system by
providing additional resources. The additional amounts recovered
shall not be used to supplant the level of funding that was provided
for property tax administration in the 2012-13 fiscal year. The
additional amounts recovered shall be used by the county assessor
for administrative costs related to assessment appeals, declines
or restoration in the full cash value base pursuant to subdivision
(b) of Section 2 of Article XIII A of the California Constitution,
compliance with mandatory audits required by Section 469 and
with nonmandatory audits, reappraisal upon new construction or
change in ownership under subdivision (a) of Section 2 of Article
XIII A, and the unsecured roll and supplemental roll.

end insert begin insert

(D) For the 2013-14 fiscal year, multiply the proportionate
share attributable to a school entity or an ERAF by a factor of
0.25. For the 2014-15 fiscal year, multiply the proportionate share
attributable to a school entity or an ERAF by a factor of 0.50. For
the 2015-16 fiscal year and for each fiscal year thereafter to and
including fiscal year 2023-24, no multiplier shall be used to reduce
the proportionate share attributable to a school entity or ERAF.

end insert begin insert

(E) Provide information to the Controller pursuant to
subdivision (c) of Section 12463 of the Government Code that
indicates what percentage of general ad valorem property tax is
allocated to each local government jurisdiction including, but not
limited to, the county, any city, and any special district, including
school districts, and the services provided by the county, any city,
and any special district, including any school district.

end insert

(c) Reductions made pursuant to this section to property tax
revenue allocations shall be made without regard to Section 907
of the Government Code.

(d) Any additional amounts of property tax revenue allocated
to the county pursuant to this section shall be used only to fund
costs incurred by the county in assessing, equalizing, and collecting
property taxes, and in allocating property tax revenues, and shall
constitute charges for those services, not exceeding the actual and
reasonable costs incurred by the county in performing those
services.

(e) It is the intent of the Legislature in enacting this section to
recognize that since the adoption of Article XIII A of the California
Constitution by the voters, county governments have borne an
unfair and disproportionate part of the financial burden of
assessing, collecting, and allocating property tax revenues for other
jurisdictions and for redevelopment agencies. The Legislature finds
and declares that this section is intended to fairly apportion the
burden of collecting property tax revenues and is not a reallocation
of property tax revenue shares or a transfer of any financial or
program responsibility.

(f) Commencing with the 1992-93 fiscal year and each fiscal
year thereafter, this section shall supersede and replace Section
95.2, as authority for a county to recover property tax
administrative costs.

(g) This section shall apply to the entire 1993-94 fiscal year,
regardless of the operative date of the act adding the predecessor
to this section, and to each fiscal year thereafter.

begin delete SECTION 1. end delete
begin insert SEC. 4. end insert   

Section 402.5 of the Revenue and Taxation Code is
amended to read:

402.5.  

When valuing property by comparison with sales of
other properties, in order to be considered comparable, the sales
shall be sufficiently near in time to the valuation date, and the
properties sold shall be located sufficiently near the property being
valued, and shall be sufficiently alike in respect to character, size,
situation, usability, zoning, or other legal restriction as to use unless
rebutted pursuant to Section 402.1, to make it clear that the
properties sold and the properties being valued are comparable in
value and that the cash equivalent price realized for the properties
sold may fairly be considered as shedding light on the value of the
property being valued. “Near in time to the valuation date” does
not include any sale more than 90 days after the valuation date.

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begin insert SEC. 5. end insert   

end insert begin insert

(a) The State Board of Equalization shall annually
conduct a survey of counties, the results of which shall be presented
in a report that is made available to the Legislature and the
Department of Finance, on the operation of the provisions of
Sections 2 and 3 of this act.

end insert begin insert

(b) A report submitted pursuant to this section shall be submitted
in compliance with Section 9795 of the Government Code.

end insert begin insert

(c) Notwithstanding Section 10231.5 of the Government Code,
this section is repealed on July 1, 2024.

end insert