AB 701 Assembly Bill

BILL NUMBER: AB 701	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 4, 2013
	AMENDED IN SENATE  JUNE 3, 2013

INTRODUCED BY   Assembly Member  John A. Pщrez  
Quirk-Silva 
    (   Coauthors:   Assembly Members 
 Allen,   Daly,   Hagman,   Harkey,
  Mansoor,   and Wagner   ) 
   (   Coauthors:   Senators   Correa,
  Huff,   Walters,   and Wyland 
 ) 

                        FEBRUARY 21, 2013

    An act to amend Section 63021.5 of, and to add Section
63024.2 to, the Government Code, relating to economic development.
  An act to amend Section 97.70 of, and to repeal
Section 97.80 of, the Revenue and Taxation Code, relating to local
government finance. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 701, as amended,  John A. Pщrez  
Quirk-Silva  .  California Infrastructure and Economic
Development Bank.   General Subject: Local government
finance: property tax revenue allocation: vehicle license fee
adjustments: County of Orange.  
   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 requires that, for purposes of
determining property tax revenue allocations in each county for the
1992-93 and 1993-94 fiscal years, 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 in that county for
allocation to school districts, community college districts, and the
county office of education.  
   For the 2004-05 fiscal year and each fiscal year thereafter,
existing law requires that each city, county, and city and county
receive additional property tax revenues in the form of a vehicle
license fee adjustment amount, as defined, from a Vehicle License Fee
Property Tax Compensation Fund that exists in each county treasury.
Existing law requires that these additional allocations be funded
from ad valorem property tax revenues otherwise required to be
allocated to each county's Educational Revenue Augmentation Fund for
the benefit of educational entities.  
   This bill would modify these reduction and transfer provisions by
increasing the vehicle license fee adjustment amount for the County
of Orange by $53,000,000 for the 2013-14 fiscal year and requiring
that amount to be included in the calculation of the vehicle license
fee adjustment amount for that county for each fiscal year
thereafter.  
   This bill would direct the Department of Finance and the
Chancellor of the California Community Colleges to work with the
County of Orange, the county auditor-controller for the County of
Orange, and intervenors in obtaining a judgment that is a final and
complete resolution to a specified case in which all parties agree
not to seek appellate review. The bill would include findings and
declarations that an appropriate resolution would be for the County
of Orange to repay specified amounts over a specified period.

   By changing the manner in which property tax revenues are
allocated by the county officials in the County of Orange, this bill
would impose a state-mandated local program.  
   Existing law, for the 2009-10 fiscal year and for each fiscal year
thereafter, requires the auditor of a qualified county, as defined,
to increase the total amount of ad valorem property tax revenue
otherwise required to be allocated to that county by the county
equity amount, as defined, and to commensurately reduce the total
amount of ad valorem property tax revenue otherwise required to be
allocated to the Educational Revenue Augmentation Fund in the county,
as specified.  
   This bill would repeal these provisions.  
   This bill would make legislative findings and declarations as to
the necessity of a special statute for the County of Orange. 

   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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   Existing law establishes the California Infrastructure and
Economic Development Bank in the Business, Transportation and Housing
Agency. Existing law establishes that the board of directors of the
bank consists of 5 members, as specified.  
   This bill would add a Member of the Assembly, or a designee of the
member, and a Member of the Senate, or a designee of the member, as
advisory members of the board. This bill would require the bank to
serve as the primary state agency for purposes of developing an
application for, and applying to, any federal infrastructure bank or
financing authority.  
   This bill also would incorporate additional changes made by the
Governor's Reorganization Plan No. 2 of 2012. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 97.70 of the   Revenue
and Taxation Code   is amended to read: 
   97.70.  Notwithstanding any other  provision of 
law, for the 2004-05 fiscal year and for each fiscal year thereafter,
all of the following apply:
   (a) (1) (A) The auditor shall reduce the total amount of ad
valorem property tax revenue that is otherwise required to be
allocated to a county's Educational Revenue Augmentation Fund by the
countywide vehicle license fee adjustment amount.
   (B) If, for the fiscal year, after complying with Section 97.68
there is not enough ad valorem property tax revenue that is otherwise
required to be allocated to a county Educational Revenue
Augmentation Fund for the auditor to complete the allocation
reduction required by subparagraph (A), the auditor shall
additionally reduce the total amount of ad valorem property tax
revenue that is otherwise required to be allocated to all school
districts and community college districts in the county for that
fiscal year by an amount equal to the difference between the
countywide vehicle license fee adjustment amount and the amount of ad
valorem property tax revenue that is otherwise required to be
allocated to the county Educational Revenue Augmentation Fund for
that fiscal year. This reduction for each school district and
community college district in the county shall be the percentage
share of the total reduction that is equal to the proportion that the
total amount of ad valorem property tax revenue that is otherwise
required to be allocated to the school district or community college
district bears to the total amount of ad valorem property tax revenue
that is otherwise required to be allocated to all school districts
and community college districts in a county. For purposes of this
subparagraph, "school districts" and "community college districts" do
not include any districts that are excess tax school entities, as
defined in Section 95.
   (2) The countywide vehicle license fee adjustment amount shall be
allocated to the Vehicle License Fee Property Tax Compensation Fund
that shall be established in the treasury of each county.
   (b) (1) The auditor shall allocate moneys in the Vehicle License
Fee Property Tax Compensation Fund according to the following:
   (A) Each city in the county shall receive its vehicle license fee
adjustment amount.
   (B) Each county and city and county shall receive its vehicle
license fee adjustment amount.
   (2) The auditor shall allocate one-half of the amount specified in
paragraph (1) on or before January 31 of each fiscal year, and the
other one-half on or before May 31 of each fiscal year.
   (c) For purposes of this section, all of the following apply:
   (1) "Vehicle license fee adjustment amount" for a particular city,
county, or a city and county means, subject to an adjustment under
paragraph (2) and Section 97.71, all of the following:
   (A) For the 2004-05 fiscal year, an amount equal to the difference
between the following two amounts:
   (i) The estimated total amount of revenue that would have been
deposited to the credit of the Motor Vehicle License Fee Account in
the Transportation Tax Fund, including any amounts that would have
been certified to the Controller by the auditor of the County of
Ventura under subdivision (j) of Section 98.02, as that section read
on January 1, 2004, for distribution under the law as it read on
January 1, 2004, to the county, city and county, or city for the
2004-05 fiscal year if the fee otherwise due under the Vehicle
License Fee Law (Pt. 5 (commencing with Section 10701) of Div. 2) was
2 percent of the market value of a vehicle, as specified in Section
10752 and 10752.1 as those sections read on January 1, 2004.
   (ii) The estimated total amount of revenue that is required to be
distributed from the Motor Vehicle License Fee Account in the
Transportation Tax Fund to the county, city and county, and each city
in the county for the 2004-05 fiscal year under Section 11005, as
that section read on the operative date of the act that amended this
clause.
   (B) (i) Subject to an adjustment under clause (ii), for the
2005-06 fiscal year, the sum of the following two amounts:
   (I) The difference between the following two amounts:
   (Ia) The actual total amount of revenue that would have been
deposited to the credit of the Motor Vehicle License Fee Account in
the Transportation Tax Fund, including any amounts that would have
been certified to the Controller by the auditor of the County of
Ventura under subdivision (j) of Section 98.02, as that section read
on January 1, 2004, for distribution under the law as it read on
January 1, 2004, to the county, city and county, or city for the
2004-05 fiscal year if the fee otherwise due under the Vehicle
License Fee Law (Part 5 (commencing with Section 10701) of Division
2) was 2 percent of the market value of a vehicle, as specified in
Sections 10752 and 10752.1 as those sections read on January 1, 2004.

   (Ib) The actual total amount of revenue that was distributed from
the Motor Vehicle License Fee Account in the Transportation Tax Fund
to the county, city and county, and each city in the county for the
2004-05 fiscal year under Section 11005, as that section read on the
operative date of the act that amended this sub-subclause.
   (II) The product of the following two amounts:
   (IIa) The amount described in subclause (I).
   (IIb) The percentage change from the prior fiscal year to the
current fiscal year in gross taxable assessed valuation within the
jurisdiction of the entity, as reflected in the equalized assessment
roll for those fiscal years. For the first fiscal year for which a
change in a city's jurisdictional boundaries first applies, the
percentage change in gross taxable assessed valuation from the prior
fiscal year to the current fiscal year shall be calculated solely on
the basis of the city's previous jurisdictional boundaries, without
regard to the change in that city's jurisdictional boundaries. For
each following fiscal year, the percentage change in gross taxable
assessed valuation from the prior fiscal year to the current fiscal
year shall be calculated on the basis of the city's current
jurisdictional boundaries.
   (ii) The amount described in clause (i) shall be adjusted as
follows:
   (I) If the amount described in subclause (I) of clause (i) for a
particular city, county, or city and county is greater than the
amount described in subparagraph (A) for that city, county, or city
and county, the amount described in clause (i) shall be increased by
an amount equal to this difference.
   (II) If the amount described in subclause (I) of clause (i) for a
particular city, county, or city and county is less than the amount
described in subparagraph (A) for that city, county, or city and
county, the amount described in clause (i) shall be decreased by an
amount equal to this difference.
   (C) For the 2006-07 fiscal year and for each fiscal year
thereafter, the sum of the following two amounts:
   (i) The vehicle license fee adjustment amount for the prior fiscal
year, if Section 97.71 and clause (ii) of subparagraph (B) did not
apply for that fiscal year, for that city, county, and city and
county.
   (ii) The product of the following two amounts:
   (I) The amount described in clause (i).
   (II) The percentage change from the prior fiscal year to the
current fiscal year in gross taxable assessed valuation within the
jurisdiction of the entity, as reflected in the equalized assessment
roll for those fiscal years. For the first fiscal year for which a
change in a city's jurisdictional boundaries first applies, the
percentage change in gross taxable assessed valuation from the prior
fiscal year to the current fiscal year shall be calculated solely on
the basis of the city's previous jurisdictional boundaries, without
regard to the change in that city's jurisdictional boundaries. For
each following fiscal year, the percentage change in gross taxable
assessed valuation from the prior fiscal year to the current fiscal
year shall be calculated on the basis of the city's current
jurisdictional boundaries. 
   (2) For the 2013-14 fiscal year, the vehicle license fee
adjustment amount that is determined under subparagraph (C) of
paragraph (1) for the County of Orange shall be increased by
fifty-three million dollars ($53,000,000). For the 2014-15 fiscal
year and each fiscal year thereafter, the calculation of the vehicle
license fee adjustment amount for the County of Orange under
subparagraph (C) of paragraph (1) shall be based on a prior fiscal
year amount that reflects the full amount of this one-time increase
of fifty-three million dollars ($53,000,000).  
   (2) 
    (3)  "Countywide vehicle license fee adjustment amount"
means, for any fiscal year, the total sum of the amounts described in
 paragraph   paragraphs  (1)  and (2)
 for a county or city and county, and each city in the county.

   (3)
    (4)  On or before June 30 of each fiscal year, the
auditor shall report to the Controller the vehicle license fee
adjustment amount for the county and each city in the county for that
fiscal year.
   (d) For the 2005-06 fiscal year and each fiscal year thereafter,
the amounts determined under subdivision (a) of Section 96.1, or any
successor to that provision, shall not reflect, for a preceding
fiscal year, any portion of any allocation required by this section.
   (e) For purposes of Section 15 of Article XI of the California
Constitution, the allocations from a Vehicle License Fee Property Tax
Compensation Fund constitute successor taxes that are otherwise
required to be allocated to counties and cities, and as successor
taxes, the obligation to make those transfers as required by this
section shall not be extinguished nor disregarded in any manner that
adversely affects the security of, or the ability of, a county or
city to pay the principal and interest on any debts or obligations
that were funded or secured by that city's or county's allocated
share of motor vehicle license fee revenues.
   (f) This section shall not be construed to do any of the
following:
   (1) Reduce any allocations of excess, additional, or remaining
funds that would otherwise have been allocated to county
superintendents of schools, cities, counties, and cities and counties
pursuant to clause (i) of subparagraph (B) of paragraph (4) of
subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing
with Section 98) had this section not been enacted. The allocations
required by this section shall be adjusted to comply with this
paragraph.
   (2) Require an increased ad valorem property tax revenue
allocation or increased tax increment allocation to a community
redevelopment agency.
   (3) Alter the manner in which ad valorem property tax revenue
growth from fiscal year to fiscal year is otherwise determined or
allocated in a county.
   (4) Reduce ad valorem property tax revenue allocations required
under Article 4 (commencing with Section 98).
   (g) Tax exchange or revenue sharing agreements, entered into prior
to the operative date of this section, between local agencies or
between local agencies and nonlocal agencies are deemed to be
modified to account for the reduced vehicle license fee revenues
resulting from the act that added this section. These agreements are
modified in that these reduced revenues are, in kind and in lieu
thereof, replaced with ad valorem property tax revenue from a Vehicle
License Fee Property Tax Compensation Fund or an Educational Revenue
Augmentation Fund.
   SEC. 2.    Section 97.80 of the   Revenue
and Taxation Code   is repealed.  
   97.80.  (a) Notwithstanding any other provision of law, for the
2009-10 fiscal year and for each fiscal year thereafter, the auditor
of a qualified county shall do both of the following:
   (1) Increase the total amount of ad valorem property tax revenue
that is otherwise required to be allocated to that county by the
county equity amount.
   (2) (A) Decrease the total amount of ad valorem property tax
revenue that is otherwise required to be allocated to the county
Educational Revenue Augmentation Fund by the county equity amount.
   (B) If, for any fiscal year, there is not enough ad valorem
property tax revenue that is otherwise required to be allocated to a
county Educational Revenue Augmentation Fund for the auditor to
complete the allocation reduction required by subparagraph (A), the
auditor shall additionally reduce the total amount of ad valorem
property tax revenue that is otherwise required to be allocated to
all school districts in the county for that fiscal year by an amount
equal to the difference between the county equity amount and the
amount of ad valorem property tax revenue that is otherwise required
to be allocated to the county Educational Revenue Augmentation Fund
for that fiscal year. This reduction for each school district in the
county shall be the percentage share of the total reduction that is
equal to the proportion that the total amount of ad valorem property
tax revenue that is otherwise required to be allocated to the school
district bears to the total amount of ad valorem property tax revenue
that is otherwise required to be allocated to all school districts
in a county. For purposes of this subparagraph, "school districts" do
not include any districts that are excess tax school entities, as
defined in Section 95.
   (C) Any reduction in the amount of ad valorem property tax
revenues deposited in the county's Educational Revenue Augmentation
Fund as a result of subparagraph (A) shall be applied exclusively to
reduce the amounts that are allocated from that fund to school
districts and county offices of education, and shall not be applied
to reduce the amounts of ad valorem property tax revenues that are
otherwise required to be allocated from that fund to community
college districts.
   (b) For purposes of this section:
   (1) "Qualified county" means the county that, of all the counties
in the state, was allocated the lowest percentage of countywide ad
valorem property tax revenue for the 2006-07 fiscal year.
   (2) "County equity amount" means thirty-five million dollars
($35,000,000) for each of the 2009-10 and 2010-11 fiscal years, and
fifty million dollars ($50,000,000) for the 2011-12 fiscal year and
each fiscal year thereafter.
   (c) For the 2009-10 fiscal year and for each fiscal year
thereafter, ad valorem property tax revenue allocations made pursuant
to Sections 96.1 and 96.5 shall not incorporate the allocation
adjustments made by this section. 
   SEC. 3.    (a)     The Legislature
hereby directs the Department of Finance and the Chancellor of the
California Community Colleges to work with the County of Orange, the
county auditor-controller for the County of Orange, and the
intervenors in obtaining a judgment that is a final and complete
resolution to Department of Finance v. Grimes (Superior Court of
California, Orange County Case No. 30-2012-005595920-CU-WM-CJC) in
which all parties agree not to seek appellate review.  
   (b) The Legislature finds and declares that an appropriate
resolution would be for the County of Orange to repay the amounts
owed pursuant to the Department of Finance v. Grimes as follows:
 
   (1) Five million dollars ($5,000,000) in fiscal year 2014-15.
 
   (2) Fifteen million dollars ($15,000,000) in fiscal year 2015-16.
 
   (3) Twenty-five million dollars ($25,000,000) in fiscal year
2016-17.  
   (4) Fifty million dollars ($50,000,000) in fiscal year 2017-18.
 
   (5) Fifty-five million dollars ($55,000,000) in fiscal year
2018-19. 
   SEC. 4.    The Legislature finds and declares that a
special law is necessary and that a general law cannot be made
applicable within the meaning of Section 16 of Article IV of the
California Constitution because of the unique fiscal pressures being
encountered by the County of Orange due to the decrease in the county'
s allocation of Vehicle License Fee revenues as a result of Chapter
35 of the Statutes of 2011. 
   SEC. 5.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.  
  SECTION 1.    Section 63021.5 of the Government
Code is amended to read:
   63021.5.  (a) The bank shall be governed and its corporate power
exercised by a board of directors that shall consist of the following
persons:
   (1) The Director of Finance or his or her designee.
   (2) The Treasurer or his or her designee.
   (3) The Director of the Governor's Office of Economic and Business
Development or his or her designee, who shall serve as chair of the
board.
   (4) An appointee of the Governor.
   (5) The Secretary of Transportation or his or her designee.
   (6) A Member of the Assembly appointed by the Speaker of the
Assembly and a Member of the Senate appointed by the Senate Committee
on Rules. The Members of the Legislature shall be nonvoting and
shall meet with and, except as otherwise provided by the California
Constitution, advise the board, to the extent that their advisory
participation is not incompatible with their duties as Members of the
Legislature. A Member of the Legislature appointed under this
paragraph may select a designee to serve in his or her place.
   (b) Any designated director shall serve at the pleasure of the
designating power.
   (c) Three of the members shall constitute a quorum and the
affirmative vote of three board members shall be necessary for any
action to be taken by the board.
   (d) A member of the board shall not participate in any bank action
or attempt to influence any decision or recommendation by any
employee of, or consultant to, the bank that involves a sponsor of
which he or she is a representative or in which the member or a
member of his or her immediate family has a personal financial
interest within the meaning of Section 87100. For purposes of this
section, "immediate family" means the spouse, children, and parents
of the member.
   (e) Except as provided in this subdivision, the members of the
board shall serve without compensation, but shall be reimbursed for
actual and necessary expenses incurred in the performance of their
duties to the extent that reimbursement for these expenses is not
otherwise provided or payable by another public agency, and shall
receive one hundred dollars ($100) for each full day of attending
meetings of the authority.  
  SEC. 2.    Section 63024.2 is added to the
Government Code, to read:
   63024.2.  The bank shall serve as the primary state agency for the
purposes of developing an application for, and applying to, any
federal infrastructure bank or financing authority. 
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CORRECTIONS  Digest--Page 2.
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