BILL ANALYSIS Ó
AB 2476
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CONCURRENCE IN SENATE AMENDMENTS
AB
2476 (Daly)
As Amended August 15, 2016
Majority vote
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|ASSEMBLY: | 71-4 |(June 2, 2016) |SENATE: | 36-0 |(August 17, |
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Original Committee Reference: L. GOV.
SUMMARY: Requires local agencies to provide specified notice of
a new parcel tax to non-resident property owners.
The Senate amendments make changes to the timing of the
notification to non-resident property owners to require a local
agency to provide notice of a new parcel tax instead of
notification of a proposed parcel tax measure.
EXISTING LAW:
1)Authorizes cities, counties, and special districts to impose a
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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.
AS PASSED BY THE ASSEMBLY, this bill:
1)Required a local agency, within 30 days following a
legislative body's vote, to place a proposed parcel tax on the
ballot to provide specified notice to property owners affected
by the tax that do not reside within the jurisdictional
boundaries of the taxing entity.
2)Defined 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
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annual property tax bill."
3)Required 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)Required the notice to be mailed to non-resident property
owners, who are affected by the new parcel tax, and whose
names and addresses appear on the last equalized county
assessment roll or the State Board of Equalization assessment
roll.
5)Required the notice to be accomplished through mailing,
postage prepaid in the United States mail and to be deemed
given when deposited.
6)Required the notice to be in at least 10-point type, and to be
in one of the following forms:
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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)Authorized 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)Provided 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.
9)Required, 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.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
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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
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.
Only 45% of the 396 parcel tax measures placed on the ballot
from 2002 through November 2013 were approved.
2)Bill Summary. This bill requires a local agency, city,
county, special district, or school district to provide
specified notice of a new parcel tax to non-resident parcel
owners. 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, "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
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$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
substantially similar 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.
5)Policy Considerations. The Legislature may wish to consider
the following:
a) 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.
Additionally, existing law authorizes any person to request that
a legislative body mail a copy of an agenda and all documents in
an agenda packet. This provision applies to cities, counties,
districts, and other public agencies and authorizes the local
agencies to charge a fee to provide agendas. The Legislature
may wish to consider the accessibility of information that a
non-resident property owner may access even prior to the passage
of a parcel tax measure.
b) Funding notification instead of services? The
Legislature may wish to consider if parcel tax revenue
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should be used to fund the services or facilities for which
the voters supported instead of a notice to non-resident
property owners.
6)Arguments in Support. The California Association of Realtors
argues that this bill "authorizes a low-cost postcard
notification and requires that cost for the notice not to
exceed the reasonable costs of preparing and mailing the
notice. The measure also directs that the very small cost for
the notice come from the proceeds of the new parcel tax."
7)Arguments in Opposition. The California State Association of
Counties and the California Special Districts Association
argue "We believe this measure does little but incur costs to
local agencies and reduce the efficacy of voter-approved
parcel taxes that are intended to provide funding for local
infrastructure or critical services."
Analysis Prepared by:
Misa Lennox / L. GOV. / (916) 319-3958 FN:
0004245