BILL ANALYSIS Ó
AB 2109
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CONCURRENCE IN SENATE AMENDMENTS
AB 2109 (Daly)
As Amended August 21, 2014
Majority vote
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|ASSEMBLY: |77-0 |(May 27, 2014) |SENATE: |33-0 |(August 25, |
| | | | | |2014) |
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Original Committee Reference: L. GOV.
SUMMARY : Requires the State Controller (Controller) to report
annually on the imposition of each locally assessed parcel tax,
as specified, and requires each county, city, and special
district to provide any information required by the Controller
in order to complete the report.
The Senate amendments :
1)Delete the requirement for the Controller to prescribe a
format for the local agencies to report specified parcel tax
information.
2)Make other technical and clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required the Controller to report annually on 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;
e) The amount of revenue received from the parcel tax; and,
f) The manner in which the revenue received from the parcel
tax is being used.
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1)Required each county, city, and special district that assesses
a parcel tax to provide any information required by the
Controller in order to comply with 1) above.
2)Required the Controller to adopt regulations to prescribe the
format by which the local agencies shall report the
information.
3)Required the Controller in implementing the provisions of the
bill to utilize existing funds or resources.
4)Defined "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."
5)Provided 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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, the bill has the following fiscal impact (based on
May 6, 2014 version):
1)Controller indicates that the bill would result in estimated
first-year General Fund costs of $450,000 and ongoing costs of
up to $200,000 annually to collect, process, analyze and
publish parcel tax data.
2)Potentially significant reimbursable costs to cities, counties
and special districts (local governments) that assess parcel
taxes to report the specified information to the Controller.
COMMENTS :
1)Purpose of this bill. Existing law requires the Controller to
compile and publish on its Web site annual reports summarizing
local agencies' finances, including their revenue sources.
These reports are based on the financial data submitted to the
Controller by the counties, cities and special districts, and
provide detail on the aggregate amount of various taxes
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collected by each local agency, including the county
allocation of ad valorem taxes on real property,
voter-approved taxes, property assessments, and special
assessments. 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 local agency would be required to
provide any information to the Controller necessary to comply
with the requirements in this bill. Amendments taken in the
Senate remove the requirement for the Controller to prescribe
a format for the local agencies to report specified
information. This bill is sponsored by the California
Taxpayers Association.
2)Author's statement. According to the author, "This bill seeks
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. California Constitution Article XIII, Section A
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 (1978) 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
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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."
5)Questions for the Legislature. 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 bill will result in a centralized location for
parcel tax information; however, the Legislature may wish to
consider if this will provide more transparency for the
individual taxpayer that already has direct access to
information on the parcel taxes they are paying on their tax
bill.
The Legislature may wish to ask the author why the bill does
not include information on parcel taxes imposed by school
districts.
6)Previous legislation. This bill is similar to AB 892 (Daly)
of 2013, which was held in the Assembly Appropriations
Committee. AB 892 would have required the same information on
parcel taxes to be reported, but only by an annual report from
the Board of Equalization (BOE) to the Governor.
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.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
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