BILL ANALYSIS Ó
AB 2109
Page 1
Date of Hearing: April 2, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2109 (Daly) - As Amended: March 24, 2014
SUBJECT : Parcel taxes: reports.
SUMMARY : Requires the Board of Equalization to report annually
to the Governor on the imposition of each locally assessed
parcel tax, as specified, and requires the auditor of each
county to provide any information required by the Board in order
to complete the report. Specifically, this bill :
1)Requires the Board of Equalization (BOE) to report annually to
the Governor information relating to the imposition of each
locally assessed parcel tax, including, but not limited to,
the following:
a) The type and rate of parcel tax imposed;
b) The number of parcels subject to the parcel tax;
c) The number of parcels exempt from the parcel tax;
d) The sunset date of the parcel tax, if any; and,
e) The amount of revenue received from the parcel tax.
1)Requires the auditor of each county to provide any information
required by BOE in order to comply with 1), above.
2)Requires that BOE adopt regulations to prescribe the format by
which the auditor shall report the information to BOE.
3)Requires BOE in implementing the provisions of the bill to
utilize existing funds or resources.
4)Provides that if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made pursuant to current law governing state
mandated local costs.
EXISTING LAW :
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1)Authorizes cities, counties, and special districts to impose a
general tax for general governmental purposes with the
approval of a majority of voters.
2)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
3)Authorizes a parcel tax to fund a variety of local government
services subject to approval of two-thirds of the voters.
4)Restricts parcel tax revenue to only fund the programs,
services, or projects that voters approved.
5)Requires a county tax bill to include specified information
including the billing of any special purpose parcel tax.
6)Requires BOE to report annually to the Governor a report with
the assessed value of state-assessed and locally assessed real
and personal property in each county and the assessed value of
state-assessed and locally assessed property in each
incorporated city or town and information concerning other
taxes which it administers.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
1)Purpose of this bill . Existing law requires BOE to annually
report to the Governor the assessed value of state-assessed
and locally assessed real and personal property in each county
and incorporated city or town. This bill would add to the
annual report specified information on the imposition of each
locally assessed parcel tax, including, but not limited to,
the parcel tax type and rate, number of parcels subject to and
exempt from the tax, sunset date, and amount of revenue
received from the parcel tax. Each county auditor would be
required to provide any information to BOE necessary to comply
with the requirements in this bill. The auditors would then
report this information to the Board in a format prescribed by
BOE regulations. This bill is sponsored by the California
Taxpayers Association.
2)Author's statement . According to the author, "This bill seeks
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to provide transparency on parcel taxes especially since over
the past several decades, they have become an increasingly
popular option of local entities, such as cities, school
districts, water and waste districts looking to raise revenue
for various programs."
3)Parcel taxes . Article XIII A of the California Constitution
allows cities, counties, and special districts, by a
two-thirds vote of the qualified electors in that
jurisdiction, to impose special taxes, except ad valorem taxes
on real property or a transaction tax or sales tax on the sale
of real property within that city, county or special district.
A parcel tax is a particular type of excise tax that is based
on either a flat per-parcel rate or a rate that varies
depending upon use, size, and/or number of units on each
parcel. Proposition 13 contained a 1% limit on ad valorem
property tax; therefore, a parcel tax based upon the value of
property would constitute a violation of Proposition 13. The
California Constitution specifies that only two types of taxes
may be imposed upon a parcel of property: first, an ad
valorem property tax imposed pursuant to Article VIII and
Article XIIIA, and second, a special tax receiving two-thirds
voter approval pursuant to Section 4 of Article XIIIA. A
parcel tax must be adopted as a special tax that is not based
on the property's value.
4)Existing information on parcel taxes . According to the
Legislative Analyst's Office report entitled, Understanding
California's Property Taxes , "Recent election reports and
financial data suggest that parcel taxes represent a
significant and growing source of revenue for some local
governments. Specifically, between 2001 and 2012, local
voters approved about 180 parcel tax measures to fund cities,
counties, and special districts, and about 135 measures to
fund K-12 districts. The most recent K-12 financial data
(2009-2010) indicate that schools received about $350 million
from this source. We were not able to locate information on
the statewide amount of parcel tax revenue collected by
cities, counties, and special districts."
An Overview of Local Revenue Measures by Michael Coleman,
author of the online California Local Government Finance
Almanac (CaliforniaCityFinance.com), cites data on parcel
taxes from 2001-2009 and notes that, "Over half of the
proposed parcel taxes have been for public safety or medical
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services including law enforcement, gang suppression, fire
suppression and prevention, emergency medical and hospital
services, equipment and facilities. 44% of the 308 parcel tax
measures passed. Nearly half of those that failed achieved
over 55 percent 'yes' votes."
5)Questions for the Committee . This bill is keyed a state
mandate, which means the state could be required to reimburse
local agencies and school districts for implementing the
bill's provisions if the Commission on State Mandates
determines that the bill contains costs mandated by the state.
Because auditors from all 58 counties do not currently have
all the parcel tax information specified in this bill, the
Committee may wish to consider the additional cost to BOE to
develop regulations and compile the information, to the county
auditors to develop and compile the information from local
agencies, and to specific local agencies that will need to
report more information regarding their parcel taxes.
Current law requires specified information to be included on
each county tax bill, including any special purpose parcel
tax. Each county tax bill lists "direct charges" which are
levied on an individual's parcel including the amount and the
local agency levying the direct charge. This category of
direct charges includes assessments, fees, service charges,
and Mello Roos special taxes. The BOE analysis of this bill
states that a definition of "parcel tax" is needed to provide
clarity to BOE on the scope of the data collection, absent an
explicit definition of "parcel taxes" in current law and the
variety of direct charges. The Committee may wish to ask
about the author's intentions to address this issue and a
number of other suggested amendments made by BOE.
6)Previous legislation . This bill is substantially similar to
AB 892 (Daly) of 2013, which was held in the Assembly
Appropriations Committee. The fiscal analysis for AB 892
estimated costs to BOE of approximately $250,000 for expanding
their existing study. However,
AB 892 did not prescribe how BOE would obtain the required
information on parcel taxes to report to the Governor.
Therefore, the estimated costs did not include the
requirements included in this bill for the auditors to provide
the parcel tax information, or the requirement for BOE to
adopt regulations to specify how that information is provided
to them.
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7)Arguments in support . Supporters argue that in an era where
resources are scarce but demand for public services is high,
this bill will help lawmakers, voters, and business to make
informed decisions, will improve accountability and oversight
of taxpayer funds, and will help ensure that funds are spent
effectively and in the manner approved by the voters.
8)Arguments in opposition . None on file.
9)Double referral . This bill is double-referred to the Revenue
and Taxation Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Taxpayers Association [SPONSOR]
Acclamation Insurance Management Services
Allied Managed Care
Apartment Association of Greater Los Angeles
Building Owners and Managers Association of California
California Apartment Association
California Asian Pacific Chamber of Commerce
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Chapter of American Fence Association
California Fence Contractors' Association
California Grocers Association
California Hotel & Lodging Association
California Manufacturers & Technology Association
California Retailers Association
Coalition of Small and Disabled Veteran Business
Engineering Contractors Association
Flasher Barricade Association
International Council of Shopping Centers
Marin Builders Association
NAIOP of California, the Commercial Real Estate Development
Association
National Federation of Independent Business
Orange County Taxpayers Association
Santa Barbara Rental Property Association
Simi Valley Chamber of Commerce
West Coast Lumber & Building Material Association
Western Manufactured Housing Communities Association
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Concerns
California State Association of Counties
State Association of County Auditors
Opposition
None on file
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958