BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2109 HEARING: 6/18/14
AUTHOR: Daly FISCAL: Yes
VERSION: 5/6/14 TAX LEVY: No
CONSULTANT: Urquiza
CONTROLLER: REPORTS: PARCEL TAXES
Requires the State Controller to report annually on locally
assessed parcel taxes and requires local government to
provide information required by the Controller to complete
the report.
Background and Existing Law
The Constitution allows cities, counties, and special
districts to impose a special tax for specified purposes
with the approval of two-thirds of the voters. Cities,
counties, or special districts can impose parcel taxes,
which are special taxes levied on a flat per-parcel rate or
measured by the square footage of the parcel or its
improvements. A local government or a special district can
specify in the ballot measure how the funds from the parcel
tax will be used. Generally, local parcel taxes provide
secure funding for schools and other local building
projects. Counties collect parcel taxes with property
taxes and then remit the funds back to the taxing entity.
State law requires that a county tax bill includes
information on the billing of any special purpose parcel
tax.
The Legislative Analyst's Office (LAO) reports that parcel
taxes represent a significant and growing source of
revenues for some local governments. Between 2001 and
2012, voters approved about 180 parcel tax measures to fund
cities, counties, and special districts, and about 135
measures to fund K-12 districts. The LAO was unable to
locate any information on the statewide amount of parcel
tax revenue collected by cities, counties, and special
districts.
State law requires the State Controller's Office (SCO) to
compile and publish on its Web site annual reports
AB 2109 -- 5/6/14 -- Page 2
summarizing local agencies' finances, including their
revenue sources. The reports are based on financial data
submitted to the SCO by the counties, cities, and special
districts. The reports detail the aggregate amount of
various taxes collected by each local government or special
district, including the allocation of ad valorem taxes on
real property, voter approved taxes, property assessments,
and special assessments. SCO does not independently verify
the information. Taxpayer advocates want to collect
statewide data on local parcel taxes.
Proposed Law
Assembly Bill 1795 requires the Controller to report
annually on the imposition of each locally assessed parcel
tax, including, but not limited to, the following:
The type and rate of parcel tax imposed;
The number of parcels subject to the parcel tax;
The number of parcels exempt from the parcel tax;
The sunset date of the parcel tax, if any;
The amount of revenue received from the parcel tax;
and,
The manner in which the revenue received from the
parcel tax is being used.
AB 1795 requires each county, city, and special district
that assesses a parcel tax to provide any information
required by the Controller to complete the report.
The bill requires the Controller to adopt regulations to
prescribe the format by which the local agencies shall
report the information.
AB 1795 requires the Controller in implementing the
provisions of the bill to utilize existing funds or
resources.
The bill defines "parcel tax" to mean "a tax levied by a
local agency upon any parcel of property identified using
the assessor's parcel number system or upon any person as
an incident of property ownership pursuant to the
California Constitution (Section 4 of Article XIII A) that
is collected via the annual property tax bill."
State Revenue Impact
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No estimate.
Comments
1. Purpose of the bill . Parcel taxes have grown
increasingly popular among local governments over the past
decade. However, there is a lack of uniform statewide data
on local parcel taxes. A statewide detailed report on
parcel taxes can help inform voters who must decide on
several parcel tax measures throughout the state each
election. It can also help businesses in their decisions
regarding long-term planning, expansion, and relocation.
AB 2109 centralizes statewide parcel tax data to increase
transparency and oversight over locally-imposed parcel
taxes and provide value information to state and local
lawmakers, taxpayers, and businesses.
2. Existing access to information . Taxpayers have access
to a variety of sources to obtain information on parcel
taxes. Taxpayers first have to approve any parcel tax
based on information contained in the ordinance or
resolution presented to them. Current law also requires
information on parcel taxes to be included on each county's
property tax bill. Each county bill lists "direct charges"
which are levied on an individual's parcel and include the
amount charged and the local agency levying the direct
charge. Taxpayers can also call the levying local agency
directly to ask for information on parcel taxes. Given
that property owners already have direct access to parcel
tax information, the committee may wish to consider whether
providing centralized parcel tax information at the state
level would result in greater taxpayer awareness of parcel
taxes.
3. Administrative challenges . AB 2109 allows the
Controller to prescribe the format by which the local
government must report. The bill calls also for very
specific information that may be difficult to attain.
Implementation of AB 2109 may require vast system
modifications and staff time at the local level to
accommodate all the potential measurements and reporting.
The committee may wish to consider whether there is a more
cost-efficient solution to increasing access to parcel tax
information, such as requiring each levying local agency to
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create its own local report.
4. Clarifying parcel tax definition . AB 2109 defines a
"parcel tax" as a tax collected via the annual property tax
bill. However, the property tax bill includes numerous
charges, assessments, and fees. The parcel tax definition
in AB 2109 would also include Mello-Roos special taxes.
The committee may wish to consider amending the bill to
clarify the types of parcel taxes the author intends to be
included in the collection of statewide information for
parcel taxes.
5. Mandate . The California Constitution requires the
state to reimburse local governments for the costs of new
or expanded state mandated local programs. Because AB 2109
imposes new requirements on counties, cities, and special
districts, Legislative Counsel says that it imposes a new
state mandate. AB 2109 requires the state to reimburse
local agencies if the Commission on State Mandates
determines that the bill imposes a reimbursable mandate.
Assembly Actions
Assembly Local Government: 9-0
Assembly Revenue and Taxation: 9-0
Appropriations: 17-0
Assembly Floor: 77-0
Support and Opposition (6/5/14)
Support : California Taxpayers' Association; Acclamation
Insurance Management Services; Air Logistics Corporation;
Air Conditioning Trade Association (ACTA); Allied Managed
Care; Apartment Association of Greater Los Angeles;
Associated Builders and Contractors of California;
Associated Builders and Contractors of California- San
Diego Chapter; Associated General Contractors of America;
Building Owners and Managers Association of California;
California Apartment Association; California Asian Pacific
Chamber of Commerce; California Association of Realtors;
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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 Pool and Spa Association;
California Railroad Industry; California Restaurant
Association; California Retailers Association; California
State Controller; Coalition of Small and Disabled Veteran
Business; Construction Employers' Association; Engineering
Contractors Association; Family Business Association;
Flasher Barricade Association; Howard Jarvis Taxpayers
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 Business
Council; Orange County Taxpayers Association; Plumbing-
Heating-Cooling Contractors Association of California; San
Diego County Apartment Association; Santa Barbara Rental
Property Association; Simi Valley Chamber of Commerce; West
Coast Lumber & Building Material Association; Western
Electrical Contractors Association; Western Manufactured
Housing Communities Association.
Opposition : Unknown.