California Legislature—2015–16 Regular Session

Assembly BillNo. 448


Introduced by Assembly Member Brown

(Coauthor: Senator Leyva)

February 23, 2015


An act to amend Section 97.70 of the Revenue and Taxation Code, relating to local government finance, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 448, as introduced, Brown. Local government finance: property tax revenue allocations: vehicle license fee adjustments.

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 provides that each jurisdiction shall 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 also 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.

Beginning with the 2004-05 fiscal year and for 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 educational entities.

This bill would modify these reduction and transfer provisions, for the 2015-16 fiscal year and for each fiscal year thereafter, by providing for a vehicle license fee adjustment amount calculated on the basis of changes in assessed valuation.

By imposing additional duties upon local tax officials with respect to the allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

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.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 97.70 of the Revenue and Taxation Code
2 is amended to read:

3

97.70.  

Notwithstanding any other law, for the 2004-05 fiscal
4year and for each fiscal year thereafter, all of the following apply:

5(a) (1) (A) The auditor shall reduce the total amount of ad
6valorem property tax revenue that is otherwise required to be
7allocated to a county’s Educational Revenue Augmentation Fund
8by the countywide vehicle license fee adjustment amount.

9(B) If, for the fiscal year, after complying with Section 97.68
10there is not enough ad valorem property tax revenue that is
11otherwise required to be allocated to a county Educational Revenue
P3    1Augmentation Fund for the auditor to complete the allocation
2reduction required by subparagraph (A), the auditor shall
3additionally reduce the total amount of ad valorem property tax
4revenue that is otherwise required to be allocated to all school
5districts and community college districts in the county for that
6fiscal year by an amount equal to the difference between the
7countywide vehicle license fee adjustment amount and the amount
8of ad valorem property tax revenue that is otherwise required to
9be allocated to the county Educational Revenue Augmentation
10Fund for that fiscal year. This reduction for each school district
11and community college district in the county shall be the percentage
12share of the total reduction that is equal to the proportion that the
13total amount of ad valorem property tax revenue that is otherwise
14required to be allocated to the school district or community college
15district bears to the total amount of ad valorem property tax revenue
16that is otherwise required to be allocated to all school districts and
17community college districts in a county. For purposes of this
18 subparagraph, “school districts” and “community college districts”
19do not include any districts that are excess tax school entities, as
20defined in Section 95.

21(2) The countywide vehicle license fee adjustment amount shall
22be allocated to the Vehicle License Fee Property Tax Compensation
23Fund that shall be established in the treasury of each county.

24(b) (1) The auditor shall allocate moneys in the Vehicle License
25Fee Property Tax Compensation Fund according to the following:

26(A) Each city in the county shall receive its vehicle license fee
27adjustment amount.

28(B) Each county and city and county shall receive its vehicle
29license fee adjustment amount.

30(2) The auditor shall allocate one-half of the amount specified
31in paragraph (1) on or before January 31 of each fiscal year, and
32the other one-half on or before May 31 of each fiscal year.

33(c) For purposes of this section, all of the following apply:

34(1) “Vehicle license fee adjustment amount” for a particular
35city, county, or a city and county means, subject to an adjustment
36under paragraph (2) and Section 97.71, all of the following:

37(A) For the 2004-05 fiscal year, an amount equal to the
38difference between the following two amounts:

39(i) The estimated total amount of revenue that would have been
40deposited to the credit of the Motor Vehicle License Fee Account
P4    1in the Transportation Tax Fund, including any amounts that would
2have been certified to the Controller by the auditor of the County
3of Ventura under subdivision (j) of Section 98.02, as that section
4read on January 1, 2004, for distribution under the law as it read
5on January 1, 2004, to the county, city and county, or city for the
62004-05 fiscal year if the fee otherwise due under the Vehicle
7License Fee Law (Pt. 5 (commencing with Section 10701) of Div.
82) was 2 percent of the market value of a vehicle, as specified in
9begin delete Sectionend deletebegin insert Sectionsend insert 10752 and 10752.1 as those sections read on
10January 1, 2004.

11(ii) The estimated total amount of revenue that is required to be
12distributed from the Motor Vehicle License Fee Account in the
13Transportation Tax Fund to the county, city and county, and each
14city in the county for the 2004-05 fiscal year under Section 11005,
15as that section read on the operative date of the act that amended
16this clause.

17(B) (i) Subject to an adjustment under clause (ii), for the
182005-06 fiscal year, the sum of the following two amounts:

19(I) The difference between the following two amounts:

begin delete

20(Ia)

end delete

21begin insert(ia)end insert The actual total amount of revenue that would have been
22deposited to the credit of the Motor Vehicle License Fee Account
23in the Transportation Tax Fund, including any amounts that would
24have been certified to the Controller by the auditor of the County
25of Ventura under subdivision (j) of Section 98.02, as that section
26read on January 1, 2004, for distribution under the law as it read
27on January 1, 2004, to the county, city and county, or city for the
282004-05 fiscal year if the fee otherwise due under the Vehicle
29License Fee Law (Part 5 (commencing with Section 10701) of
30Division 2) was 2 percent of the market value of a vehicle, as
31specified in Sections 10752 and 10752.1 as those sections read on
32 January 1, 2004.

begin delete

33(Ib)

end delete

34begin insert(ib)end insert The actual total amount of revenue that was distributed
35from the Motor Vehicle License Fee Account in the Transportation
36Tax Fund to the county, city and county, and each city in the county
37for the 2004-05 fiscal year under Section 11005, as that section
38read on the operative date of the act that amended this
39begin delete sub-subclause.end deletebegin insert subsubclause.end insert

40(II) The product of the following two amounts:

begin delete

P5    1(IIa)

end delete

2begin insert(ia)end insert The amount described in subclause (I).

begin delete

3(IIb)

end delete

4begin insert(ib)end insert The percentage change from the prior fiscal year to the
5current fiscal year in gross taxable assessed valuation within the
6jurisdiction of the entity, as reflected in the equalized assessment
7roll for those fiscal years. For the first fiscal year for which a
8change in a city’s jurisdictional boundaries first applies, the
9percentage change in gross taxable assessed valuation from the
10prior fiscal year to the current fiscal year shall be calculated solely
11on the basis of the city’s previous jurisdictional boundaries, without
12regard to the change in that city’s jurisdictional boundaries. For
13each following fiscal year, the percentage change in gross taxable
14assessed valuation from the prior fiscal year to the current fiscal
15year shall be calculated on the basis of the city’s current
16jurisdictional boundaries.

17(ii) The amount described in clause (i) shall be adjusted as
18follows:

19(I) If the amount described in subclause (I) of clause (i) for a
20particular city, county, or city and county is greater than the amount
21described in subparagraph (A) for that city, county, or city and
22county, the amount described in clause (i) shall be increased by
23an amount equal to this difference.

24(II) If the amount described in subclause (I) of clause (i) for a
25particular city, county, or city and county is less than the amount
26described in subparagraph (A) for that city, county, or city and
27county, the amount described in clause (i) shall be decreased by
28an amount equal to this difference.

29(C) For the 2006-07 fiscalbegin delete year and for eachend deletebegin insert year, to the
302014-15end insert
fiscalbegin delete year thereafter,end deletebegin insert year, inclusive,end insert the sum of the
31following two amounts:

32(i) The vehicle license fee adjustment amount for the prior fiscal
33year, if Section 97.71 and clause (ii) of subparagraph (B) did not
34apply for that fiscal year, for that city, county, and city and county.

35(ii) The product of the following two amounts:

36(I) The amount described in clause (i).

37(II) The percentage change from the prior fiscal year to the
38current fiscal year in gross taxable assessed valuation within the
39jurisdiction of the entity, as reflected in the equalized assessment
40roll for those fiscal years. For the first fiscal year for which a
P6    1change in a city’s jurisdictional boundaries first applies, the
2percentage change in gross taxable assessed valuation from the
3prior fiscal year to the current fiscal year shall be calculated solely
4on the basis of the city’s previous jurisdictional boundaries, without
5regard to the change in that city’s jurisdictional boundaries. For
6each following fiscal year, the percentage change in gross taxable
7assessed valuation from the prior fiscal year to the current fiscal
8year shall be calculated on the basis of the city’s current
9jurisdictional boundaries.

begin insert

10(D) For the 2015-16 fiscal year, the sum of the following two
11amounts:

end insert
begin insert

12(i) The amount described in clause (i) of subparagraph (B) if
13Section 97.71 and clause (ii) of subparagraph (B) did not apply
14for that fiscal year, for that city, county, and city and county.

end insert
begin insert

15(ii) The product of the following two amounts:

end insert
begin insert

16(I) The amount described in clause (i).

end insert
begin insert

17(II) The percentage change from the 2004-05 fiscal year to the
182015-16 fiscal year, inclusive, in gross taxable assessed valuation
19within the jurisdiction of the entity, as reflected in the equalized
20assessment roll for those fiscal years.

end insert
begin insert

21(E) For the 2016-17 fiscal year and each fiscal year thereafter,
22the sum of the following two amounts:

end insert
begin insert

23(i) The vehicle license fee adjustment amount for the prior fiscal
24year.

end insert
begin insert

25(ii) The product of the following two amounts:

end insert
begin insert

26(I) The amount described in clause (i).

end insert
begin insert

27(II) The percentage change from the immediately preceding
28fiscal year to the current fiscal year in gross taxable assessed
29valuation within the jurisdiction of the entity, as reflected in the
30equalized assessment roll for those fiscal years.

end insert

31(2) For the 2013-14 fiscal year, the vehicle license fee
32adjustment amount that is determined under subparagraph (C) of
33paragraph (1) for the County of Orange shall be increased by
34fifty-three million dollars ($53,000,000). For the 2014-15 fiscal
35year and each fiscal year thereafter, the calculation of the vehicle
36license fee adjustment amount for the County of Orange under
37subparagraphbegin delete (C)end deletebegin insert (C), (D), or (E), as applicable,end insert of paragraph (1)
38shall be based on a prior fiscal year amount that reflects the full
39amount of this one-time increase of fifty-three million dollars
40($53,000,000).

P7    1(3) “Countywide vehicle license fee adjustment amount” means,
2for any fiscal year, the total sum of the amounts described in
3paragraphs (1) and (2) for a county or city and county, and each
4city in the county.

5(4) On or before June 30 of each fiscal year, the auditor shall
6report to the Controller the vehicle license fee adjustment amount
7for the county and each city in the county for that fiscal year.

8(d) For the 2005-06 fiscal year and each fiscal year thereafter,
9the amounts determined under subdivision (a) of Section 96.1, or
10any successor to that provision, shall not reflect, for a preceding
11fiscal year, any portion of any allocation required by this section.

12(e) For purposes of Section 15 of Article XI of the California
13Constitution, the allocations from a Vehicle License Fee Property
14Tax Compensation Fund constitute successor taxes that are
15otherwise required to be allocated to counties and cities, and as
16successor taxes, the obligation to make those transfers as required
17by this section shall not be extinguished nor disregarded in any
18manner that adversely affects the security of, or the ability of, a
19county or city to pay the principal and interest on any debts or
20obligations that were funded or secured by that city’s or county’s
21allocated share of motor vehicle license fee revenues.

22(f) This section shall not be construed to do any of the following:

23(1) Reduce any allocations of excess, additional, or remaining
24funds that would otherwise have been allocated to county
25superintendents of schools, cities, counties, and cities and counties
26pursuant to clause (i) of subparagraph (B) of paragraph (4) of
27subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing
28with Section 98) had this section not been enacted. The allocations
29required by this section shall be adjusted to comply with this
30paragraph.

31(2) Require an increased ad valorem property tax revenue
32allocation or increased tax increment allocation to a community
33redevelopment agency.

34(3) Alter the manner in which ad valorem property tax revenue
35growth from fiscal year to fiscal year is otherwise determined or
36allocated in a county.

37(4) Reduce ad valorem property tax revenue allocations required
38under Article 4 (commencing with Section 98).

39(g) Tax exchange or revenue sharing agreements, entered into
40prior to the operative date of this section, between local agencies
P8    1or between local agencies and nonlocal agencies are deemed to be
2modified to account for the reduced vehicle license fee revenues
3resulting from the act that added this section. These agreements
4are modified in that these reduced revenues are, in kind and in lieu
5thereof, replaced with ad valorem property tax revenue from a
6Vehicle License Fee Property Tax Compensation Fund or an
7Educational Revenue Augmentation Fund.

8

SEC. 2.  

If the Commission on State Mandates determines that
9this act contains costs mandated by the state, reimbursement to
10local agencies and school districts for those costs shall be made
11pursuant to Part 7 (commencing with Section 17500) of Division
124 of Title 2 of the Government Code.

13

SEC. 3.  

This act is an urgency statute necessary for the
14immediate preservation of the public peace, health, or safety within
15the meaning of Article IV of the Constitution and shall go into
16immediate effect. The facts constituting the necessity are:

17In order to provide timely fiscal relief to preserve the public
18peace, health, and safety in cities that annexed inhabited areas that
19lost revenue as a result of the passage of Senate Bill 89 of the
202011-12 Regular Session (Chapter 35 of the Statutes of 2011), it
21is necessary that this act take effect immediately.



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