BILL ANALYSIS Ó
AB 237
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Maienschein, Chair
AB
237 (Daly) - As Amended April 6, 2015
SUBJECT: Local governments: parcel taxes: notice.
SUMMARY: Requires local agencies to provide specified
notification to property owners before the adoption of any new
parcel tax. Specifically, this bill:
1)Requires a local agency, within one week following a
legislative body's vote to place a proposed parcel tax on the
ballot, to provide specified notice to all property owners
affected by the tax.
2)Defines the following terms:
a) "Local agency" to mean "a city, county, special
district, or school district authorized to impose a parcel
tax;" and,
b) "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 XII A) that is collected via the
annual property tax bill."
3)Requires the notice to include, but is not limited to, the
following information:
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a) The amount or rate of the proposed parcel tax in
sufficient detail to allow each property owner to calculate
the amount of the tax to be levied against the owner's
property;
b) The method and frequency for collecting the proposed
parcel tax, and the duration of time the parcel tax will be
imposed;
c) The date that the proposed parcel tax will be voted on;
and,
d) The telephone number and address of an individual,
office, or organization that interested persons may contact
to receive additional information about the proposed parcel
tax.
4)Requires the notice to be mailed to all property owners,
proposed to be subject to the new parcel tax, to those persons
whose names and addresses appear on the last equalized county
assessment roll or the State Board of Equalization assessment
roll.
5)Requires the notice to be accomplished through mailing,
postage prepaid in the United States mail and to be deemed
given when deposited.
6)Requires the envelope or cover of the mail to include the name
of the local agency and the return address of the sender.
Requires the notice to be in at least 10-point type.
7)Authorizes the local agency to recover the reasonable costs of
the notice from the proceeds
of the parcel tax.
8)Prohibits the recovered costs from exceeding the reasonable
costs of preparing and mailing the notice.
EXISTING LAW:
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1)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
2)Authorizes school districts to impose qualified special taxes,
in accordance with specified procedures, including the
approval of two-thirds of the voters in the district.
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 specified
purpose and services that voters approved.
FISCAL EFFECT: None
COMMENTS:
1)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.
To place a parcel tax measure on the ballot a local agency
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must adopt a resolution, which includes the type of tax and
rate to be levied, the method of collection, and the date of
the election. To adopt an ordinance, local agencies must
comply with the Ralph M. Brown Act, which includes public
notification and hearing requirements. For example, a local
agency must post an agenda at least 72 hours prior to its
meeting. Additionally, current law requires cities and
counties to publish specific information 15 days after passing
an ordinance. Special taxes, such as parcel taxes, are
subject to additional accountability [SB 165 (Alarcón),
Chapter 535, Statutes of 2000]. Current law requires local
agencies to: (1) issue a statement indicating the specific
purpose of the tax and a requirement that the proceeds be used
only for that purpose; (2) create an account in which to
deposit proceeds; and, (3) issue an annual report that
includes the amount of funds collected and expended, along
with the status of any project required or authorized by the
tax measure.
After the local agency has voted to place a parcel tax measure
on the ballot, the election must be held on "established
election dates," which means in March, April, or November of
an even-numbered year, or March, June, or November in an
odd-numbered year. A parcel tax measure levied by a local
agency requires approval by two-thirds of the qualified
electors. The Court has interpreted the phrase "qualified
electors of such district" to mean the registered voters
voting in the election concerning the proposed tax. [Neilson
v. City of California City (2005) 133 Cal. App.4th 1296,
1312.] Non-resident property owners that are not registered
voters are not included among the voters voting on a proposed
parcel tax. On the other hand, voters who do not own real
property, but are registered within the district's boundaries,
like renters or tenants, are able to vote on a parcel tax even
though they may not be paying the tax except as passed through
in rent.
2)Bill Summary. Under this bill, within one week following a
local agency's vote to place a proposed parcel tax on the
ballot, that city, county, special district, or school
district would be required to provide specified notification
to each affected parcel owner. This bill also requires
specific information about the parcel tax to be included in
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the notice. This bill authorizes the local agency to recover
reasonable costs of the notice from the proceeds of the parcel
tax should it be enacted by the voters.
This bill is sponsored by the California Association of
Realtors.
3)Author's Statement. According to the author, "Currently,
despite the fact that non-resident property owners pay parcel
taxes approved at the local level, they typically do not
receive notice of a pending vote, nor are they entitled to
vote on whether any proposed parcel tax should be adopted.
It's the voters of the local jurisdiction who determine
whether a proposed parcel tax be imposed on property owners.
If a property owner is also a resident of the local
jurisdiction, they will be informed of a pending parcel tax
vote when they receive their ballot pamphlet. However, if a
property owner resides elsewhere, they will not be notified
that a vote on a proposed parcel tax is looming."
4)Previous Legislation. The author has introduced several
parcel tax measures. AB 892 (Daly) of 2013, which was held on
suspense in the Assembly Appropriations Committee, would have
required the Board of Equalization to report annually to the
Governor on the imposition of each locally assessed parcel
tax. Most recently, AB 2109 (Daly), Chapter 781, Statutes of
2014, required the State Controller to report annually on the
imposition of each locally assessed parcel tax, and required
each county, city, and special district to provide any
information required by the Controller in order to complete
the report.
5)Policy Considerations. The Committee may wish to consider the
following:
a) Cost. This bill allows local agencies to recover the
costs of providing the notice from the proceeds of the
parcel tax, assuming the tax measure is approved by voters.
This bill is silent on reimbursement to local agencies
should the measure fail passage. According to the Special
Districts Association, "It is often the special districts
with the most financial needs that vote to place a parcel
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tax on the ballot in order to raise the funds necessary to
provide their local services. This bill would place a new
mandate on local service providers when they can least
afford it, with no guarantee that the parcel tax will
pass." Over half of the proposed parcel taxes placed on
the ballot by cities, counties, and special districts since
2001 have been for public safety or medical services,
including law enforcement, gang suppression, fire
suppression and prevention, emergency medical and hospital
services, equipment and facilities.
b) Favoring Property Owners. This bill only requires
specified notification to be sent to the owner of each
parcel affected by the tax. Opposition argues that this
bill treats qualified voters who are property owners more
favorably by providing them with an informational notice
beyond what non-property owner voters would receive;
therefore, the Committee may wish to consider if tenants
and property owners voting on a parcel tax measure should
be afforded the same notification and information.
c) Existing Public Information. Current law requires the
local agency to go through several public steps before and
after they place a parcel tax on the ballot. The public,
including non-resident property owners, have access to all
of this information. Opposition argues that requiring
additional notice to be given to property owners is
redundant and expensive.
d) Timeframe for Notification. This bill requires a local
agency to provide specified notification to parcel owners
within one week following the local agency's vote to place
the proposed parcel tax on the ballot. According to the
California Special Districts Association, "Providing local
agencies only one week to gather the necessary information
from their county, process it, and mail the notices to all
property owners is an unreasonable timeframe."
e) Other Parcel Tax Bills. Parcel taxes require a
two-thirds vote of registered voters for passage. There
have been several legislative attempts to lower the
two-thirds voter threshold to 55% for counties, cities,
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special districts, and school districts. The Committee may
wish to consider if this bill goes against the trend of
attempting to make it easier for local agencies to impose a
parcel tax. Since this type of tax already requires such a
high voter threshold, the Committee may wish to consider if
the additional requirements in this bill will provide yet
another barrier for cash strapped local agencies to provide
necessary services, and discourage local agencies from
using parcel taxes as a viable financing tool.
6)Committee Amendment. An Overview of Local Revenue Measures in
California by Michael Coleman, author of the online California
Local Government Finance Almanac (CaliforniaCityFinance.com),
tracks data on county, city, and special district parcel tax
measures. Only 45% of the 396 measures placed on the ballot
from 2002 through November, 2013 were approved. Given this
passage rate, the Committee may wish to ask the author to
accept an amendment that will provide reimbursement to a local
agency for the costs associated with the notification required
in this bill, if a parcel tax is not passed by the voters.
This amendment would address the financial barriers this bill
creates for local agencies to place a parcel tax measure on
the ballot, but will maintain the intent of the bill to
provide notification to non-resident landowners.
7)Arguments in Support. The California Association of Realtors
argues, "Property owners may want to mount a campaign in
opposition to the proposed parcel tax, but not receiving
timely notice of a proposed tax precludes any such action on
their part."
8)Arguments in Opposition. The California Special Districts
Association argues that this bill "would impose significant
additional burdens and expense on local agencies contemplating
a parcel tax, while providing very limited additional benefit
to their constituents."
9)Double-Referral. This bill is double-referred to the
Education Committee.
REGISTERED SUPPORT / OPPOSITION:
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Support
California Association of Realtors [SPONSOR]
California Apartment Association
California Farm Bureau Federation
California Taxpayers Association
San Diego County Apartment Association
Opposition
California Special Districts Association
Analysis Prepared
by: Misa Lennox /L. GOV./(916) 319-3958