BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2476|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 2476
Author: Daly (D), et al.
Amended: 8/15/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/29/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 71-4, 6/2/16 - See last page for vote
SUBJECT: Local governments: parcel taxes: notice
SOURCE: California Association of Realtors
DIGEST: This bill requires local agencies imposing parcel taxes
to send a notice with specified contents regarding the tax to
nonresident landowners.
Senate Floor Amendments of 8/15/16 make technical and conforming
changes.
ANALYSIS:
Existing law:
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1)Allows school and community college districts to impose
qualified special taxes that apply uniformly to all taxpayers
or real property within the district, and permits districts to
exempt persons over the age of 65 from the tax (AB 1440,
Hannigan, Chapter 100, Statutes of 1987).
2)Authorizes 15 types of local agencies to impose similar taxes,
but without a similar exemption (SB 158, Committee on Local
Government, Chapter 70, Statutes of 1991).
3)Permits school districts to also exempt persons receiving
Supplemental Security Income regardless of age (AB 385,
Lieber, Chapter 41, Statutes of 2006), and then
income-eligible persons receiving Social Security Disability
Insurance (SB 874, Hancock, Chapter 791, Statutes of 2012).
4)Requires a local agency seeking to impose a qualified special
tax to first adopt a resolution in a public meeting with 72
hours advance notice, which includes the type of tax and rate
to be levied, the method of collection, and the date of the
election.
5)Requires, additionally, local agencies seeking to impose a
qualified special tax to (SB 165, Alarcón, Chapter 535,
Statutes of 2000):
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) Publish 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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6)Requires that an election to impose a parcel tax 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.
This bill:
1)Requires a public agency to provide a notice of a new parcel
tax to the owner of the parcel if that owner does not reside
within the jurisdiction of the public agency seeking to impose
the tax.
2)Provides that the notice must include, but is not limited to,
the following information:
a) The amount or rate of the 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 parcel tax,
and the duration of time the parcel tax will be imposed;
c) The telephone number and address of an individual,
office, or organization that interested persons may contact
to receive additional information about the parcel tax.
1)Requires that the notice must be accomplished through prepaid
postage mailing in United States Mail, which is deemed given
when so deposited.
2)States that the public agency must send the notice to the name
and address which appears on the last equalized county or
Board of Equalization assessment roll, and that the notice to
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be in at least 10-point type, either with an envelope or
postcard which includes the name and return address of the
sender and to include the specified information listed above.
3)Allows the agency levying the tax to recover its costs, not to
exceed the reasonable cost of preparing and mailing the
notice, from the proceeds of the parcel tax.
4)Defines "local agency" and "parcel tax," as specified.
Background
Thus far, all qualified special taxes imposed by local agencies
have been parcel taxes, which are not assessed based on the
value of a property like ad valorem property taxes. Instead,
parcel taxes are generally measured a flat rate assessed per
parcel or per square foot of the parcel or its improvements,
regardless of its size. Some include inflation adjustments.
Districts can use revenues in any way that serves local needs,
such as ongoing expenses, programs, or buildings. Property tax
law generally guides parcel tax collection, where counties
collect parcel taxes with property taxes, and then remit funds
to the agency imposing the tax.
A parcel tax measure levied by a local agency requires approval
by two-thirds of the qualified electors, which Courts have
interpreted to mean the registered voters voting in the
election concerning the proposed tax in Neilson v. City of
California City (2005), 133 Cal. App.4th 1296, 1312. As such,
non-resident property owners who are not registered voters are
not included among the voters voting on a proposed parcel tax.
However, renters and tenants who do not own real property, and
therefore do not directly pay the tax, can vote on the ballot
measure.
Between 1983 and November 2012, voters approved 322 parcel taxes
in 584 elections. In response, the Legislature required
entities imposing parcel taxes to report specified information
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to the State Controller, who must add this information in her
local government financial transaction reports (AB 2109, Daly,
Chapter 781, Statutes of 2014). For many years, little
aggregate information existed regarding parcel taxes, but a
recent report from the Public Policy Institute of California
(PPIC) collected a great deal of revealing data regarding the
way in which local agencies use parcel taxes. Cities placed 124
parcel tax measures before voters between 2003 and 2012, with 54
receiving the required 2/3 vote, with almost all taxes imposed
by cities in the San Francisco Bay Area and Los Angeles County.
School districts placed 329 parcel tax measures before voters
during the same period, with 60% passing, mostly concentrated in
the Bay Area. The report argues that the higher frequency of
parcel taxes in the Bay Area is partly explained by higher
income levels. Special districts asked voters to enact parcel
taxes 238 times from 2003 to 2012, with three out of four
winning. PPIC argues that the use of the parcel tax is growing,
and that it has many advantages over other taxes: it has no
deadweight loss, and assigns taxes in line with benefits.
However, PPIC cautions that the tax has a major shortcoming in
that many large parcels have little value, and are limited in
their capacity to support a parcel tax.
Local agencies, including school districts, enact parcel taxes
by first enacting an ordinance in a public meeting where the
agenda must be published 72 hours before the meeting, and then
submitting the ordinance to voters for approval. However,
nonresident landowners may not be paying attention to local
agency governing board hearings or elections, and can be
surprised when a new parcel tax appears on their property tax
bill. AB 2476 enacts a specific process for local agencies to
notify these potentially affected taxpayers, which while
providing potentially useful information, would subject parcel
taxes to a higher standard than other local agency actions.
This bill only applies to parcel taxes, but not to other local
agency actions with potentially significant consequences, such
as a fire district changing fire response procedures or
defensible space requirements, or a school district seeking to
issue a facilities construction bond. Determining who must
receive notice, and then printing and mailing them to taxpayers
who may be out of the state or the country, will be costly to
these agencies.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified8/15/16)
California Association of Realtors (source)
California Apartment Association
California Chamber of Commerce
California Manufacturers and Technology Association
California Taxpayers Association
Howard Jarvis Taxpayers Association
KernTax
Western Manufactured Housing Communities Association
OPPOSITION: (Verified8/15/16)
Association of California Water Agencies
California State Association of Counties
California Special Districts Association
San Bernardino County District Advocates for Better Schools
San Francisco Unified School District
ARGUMENTS IN SUPPORT: According to the author, "Currently,
property owners are required to pay parcel taxes approved by
voters on a local ballot. If a property owner is a resident of
the local jurisdiction that is seeking to enact a parcel tax,
they learn of that parcel tax when they receive their ballot
pamphlets before an election. In contrast, non-resident
property owners - who own parcels in the given community but
reside elsewhere - receive absolutely no notice of a parcel tax.
AB 2476 seeks to provide a measure of fairness and transparency
by establishing a process for notifying non-resident property
owners. Specifically, this bill would require a local agency to
inform property owners about the amount of the parcel tax, and
the period of time for which the tax would be collected. AB
2476 also provides that the local agency may recover the
reasonable costs of the notice from the proceeds of the parcel
tax, including the costs of preparation and postage."
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ARGUMENTS IN OPPOSITION: According to the California Special
Districts Association "AB 2476 requires local agencies to send a
notice to property owners who are not eligible to vote in that
election - out-of-state property owners and others living
outside the jurisdiction of the local agency. The non-resident
notification comes at a cost to local agencies and their
taxpayers during a time when they can least afford it. Parcel
taxes are a funding tool for local governments to help address
the service needs of the community. All registered voters in
the jurisdiction are eligible to vote on the parcel tax, which
requires 2/3 voter approval. Special districts utilize parcel
taxes to help fund essential local services to benefit the local
residents and provide community-wide benefits, such as
libraries, public safety, and parks and recreation. It is often
the special districts with the most financial needs that vote to
place a parcel tax on the ballot in order to raise the funds to
provide their local services. The bill places additional
requirements on these local service providers."
ASSEMBLY FLOOR: 71-4, 6/2/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Baker, Bigelow,
Bloom, Brough, Brown, Burke, Calderon, Campos, Chau, Chávez,
Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,
Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia,
Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley,
Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Wagner, Waldron, Weber, Wilk,
Williams, Wood, Rendon
NOES: Chiu, Dahle, Mark Stone, Ting
NO VOTE RECORDED: Atkins, Bonilla, Bonta, Chang, Thurmond
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
8/16/16 17:55:14
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