BILL ANALYSIS Ó
AB 2476
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
AB 2476
(Daly) - As Introduced February 19, 2016
SUBJECT: Local governments: parcel taxes: notice.
SUMMARY: Requires local agencies to provide specified notice 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
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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:
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,
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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 notice to be in at least 10-point type, and to be
in one of the following forms:
a) An envelope or mailing, which includes the name of the
local agency and the return address of the sender on the
cover; or,
b) A postcard, which includes the name of the local agency
and the return address of the sender on the front, and
includes information in a prescribed format, as specified.
7)Authorizes the local agency to recover the reasonable costs of
the notice from the proceeds
of the parcel tax. Prohibits the recovered costs from exceeding
the reasonable costs of preparing and mailing the notice.
8)Provides that no reimbursement is required by this bill,
pursuant to the California Constitution, because a local
agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the
program or level of service mandated by this bill, pursuant to
current law governing state-mandated local costs.
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9)Requires, if a parcel tax is not approved by the voters and
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 be made,
pursuant to current laws governing state-mandated local costs.
EXISTING LAW:
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: This bill is keyed fiscal.
COMMENTS:
1)Parcel Taxes. California Constitution Article XIII, Section
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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
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: a) issue a statement indicating the specific
purpose of the tax and a requirement that the proceeds be used
only for that purpose; b) create an account in which to
deposit proceeds; and, c) 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.
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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 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 notice to each
affected parcel owner. Local agencies would be required to
provide the notification in one of two forms defined in the
bill. This bill outlines the specific information about the
parcel tax to be included in the notice and 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 Realtors
Association.
3)Author's Statement. According to the author, "Currently,
property owners are required to pay parcel taxes approved by
the voters of a local jurisdiction. If a property owner is a
resident of the local jurisdiction that is seeking to enact a
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parcel tax, that property owner will receive a voter pamphlet
prior to the election. Non-resident property owners - who own
a parcel or parcels within a local jurisdiction but reside
elsewhere - receive no notice of a pending parcel tax vote.
AB 2476 seeks to provide a measure of fairness by establishing
a process for notifying the non-resident property owners.
"While the parcel tax on any one single-family residential
parcel may be relatively little, the same tax applied to a
multi-family building can be extremely costly. One East Bay
city has a parcel tax of $96 for single-family residential
parcels and $72 per multi-family residential parcel. If a
building has, for example, 100 multi-family units that
translates to a parcel tax
of over seven thousand dollars. Property owners deserve to
know whether they may be facing such a tax."
4)Previous Legislation. The author has introduced several
parcel tax measures. AB 237 (Daly) of 2015, which was held on
suspense in the Assembly Appropriations Committee, was nearly
identical to this bill. 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.
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5)Policy Considerations. The Committee may wish to consider the
following:
a) 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.
b) 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.
c) 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. Opposition argues
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.
d) 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,
special districts, and school districts. The Committee may
wish to consider if this bill goes against the trend of
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attempting to make it easier for local agencies to impose a
parcel tax. Only 45% of the 396 measures placed on the
ballot from 2002 through November 2013 were approved.
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)Arguments in Support. The California Association of Realtors
argue, "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. [This bill] will alert property owners as to any
upcoming parcel tax ballot election and put them on notice as
to the amount of any parcel tax that they may have to pay."
7)Arguments in Opposition. The California Special Districts
Association argues, "AB 2476 would impose additional burdens
and expense on local agencies contemplating a parcel tax,
while providing very limited additional benefit to their
constituents." The California School Boards Association
argues, "Governing board decisions regarding parcel taxes are
already required to take place in open and publicly-noticed
meeting in which interested parties may participate. This
bill would divert resources away from the core mission of
local agencies - in our case, the education of children - to
provide a duplicative notice of questionable value."
REGISTERED SUPPORT / OPPOSITION:
Support
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California Association of Realtors [SPONSOR]
California Apartment Association
California Chamber of Commerce
California Manufacturers & Technology Association
California Taxpayers Association
Howard Jarvis Taxpayers Association
Western Manufactured Housing Communities Association
Opposition
California Central Valley Flood Control Association
California School Boards Association
California Special Districts Association
Analysis Prepared by:Misa Lennox / L. GOV. / (916) 319-3958
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