Amended in Assembly August 28, 2015

Senate BillNo. 25


Introduced by Senator Roth

(Coauthors: Assembly Members Linder and Melendez)

December 1, 2014


An act to amend Section 97.70 of the Revenue and Taxation Code, relating to local government finance.

LEGISLATIVE COUNSEL’S DIGEST

SB 25, as amended, Roth. Local government finance: property tax revenue allocation: 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 a city incorporating after January 1, 2004, and on or before January 1, 2012, for thebegin delete 2014-2015end deletebegin insert 2014-15end insert 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.

begin insert

This bill would incorporate additional changes to Section 97.70 of the Revenue and Taxation Code proposed by AB 448 that would become operative if this bill and AB 448 are both chaptered and this bill is chaptered last.

end insert

Vote: majority. 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
P3    1otherwise required to be allocated to a county Educational Revenue
2Augmentation Fund for the auditor to complete the allocation
3reduction required by subparagraph (A), the auditor shall
4additionally reduce the total amount of ad valorem property tax
5revenue that is otherwise required to be allocated to all school
6districts and community college districts in the county for that
7fiscal year by an amount equal to the difference between the
8countywide vehicle license fee adjustment amount and the amount
9of ad valorem property tax revenue that is otherwise required to
10be allocated to the county Educational Revenue Augmentation
11Fund for that fiscal year. This reduction for each school district
12and community college district in the county shall be the percentage
13share of the total reduction that is equal to the proportion that the
14total amount of ad valorem property tax revenue that is otherwise
15required to be allocated to the school district or community college
16district bears to the total amount of ad valorem property tax revenue
17that is otherwise required to be allocated to all school districts and
18community college districts in a county. For purposes of this
19 subparagraph, “school districts” and “community college districts”
20do not include any districts that are excess tax school entities, as
21defined in Section 95.

22(2) The countywide vehicle license fee adjustment amount shall
23be allocated to the Vehicle License Fee Property Tax Compensation
24Fund that shall be established in the treasury of each county.

25(b) (1) The auditor shall allocate moneys in the Vehicle License
26Fee Property Tax Compensation Fund according to the following:

27(A) Each city in the county shall receive its vehicle license fee
28adjustment amount.

29(B) Each county and city and county shall receive its vehicle
30license fee adjustment amount.

31(2) The auditor shall allocate one-half of the amount specified
32in paragraph (1) on or before January 31 of each fiscal year, and
33the other one-half on or before May 31 of each fiscal year.

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

35(1) “Vehicle license fee adjustment amount” for a particular
36city, county, or a city and county means, subject to an adjustment
37under paragraph (2) and Section 97.71, all of the following:

38(A) For the 2004-05 fiscal year, an amount equal to the
39difference between the following two amounts:

P4    1(i) The estimated total amount of revenue that would have been
2deposited to the credit of the Motor Vehicle License Fee Account
3in the Transportation Tax Fund, including any amounts that would
4have been certified to the Controller by the auditor of the County
5of Ventura under subdivision (j) of Section 98.02, as that section
6read on January 1, 2004, for distribution under the law as it read
7on January 1, 2004, to the county, city and county, or city for the
82004-05 fiscal year if the fee otherwise due under the Vehicle
9License Fee Law (Part 5 (commencing with Section 10701) of
10Division 2) was 2 percent of the market value of a vehicle, as
11specified in Sections 10752 and 10752.1 as those sections read on
12January 1, 2004.

13(ii) The estimated total amount of revenue that is required to be
14distributed from the Motor Vehicle License Fee Account in the
15Transportation Tax Fund to the county, city and county, and each
16city in the county for the 2004-05 fiscal year under Section 11005,
17as that section read on the operative date of the act that amended
18this clause.

19(B) (i) Subject to an adjustment under clause (ii), for the
202005-06 fiscal year, the sum of the following two amounts:

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

22(ia) The actual total amount of revenue that would have been
23deposited to the credit of the Motor Vehicle License Fee Account
24in the Transportation Tax Fund, including any amounts that would
25have been certified to the Controller by the auditor of the County
26of Ventura under subdivision (j) of Section 98.02, as that section
27read on January 1, 2004, for distribution under the law as it read
28on January 1, 2004, to the county, city and county, or city for the
292004-05 fiscal year if the fee otherwise due under the Vehicle
30License Fee Law (Part 5 (commencing with Section 10701) of
31Division 2) was 2 percent of the market value of a vehicle, as
32specified in Sections 10752 and 10752.1 as those sections read on
33 January 1, 2004.

34(ib) 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
39subsubclause.

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

P5    1(ia) The amount described in subclause (I).

2(ib) The percentage change from the prior fiscal year to the
3current fiscal year in gross taxable assessed valuation within the
4jurisdiction of the entity, as reflected in the equalized assessment
5roll for those fiscal years. For the first fiscal year for which a
6change in a city’s jurisdictional boundaries first applies, the
7percentage change in gross taxable assessed valuation from the
8prior fiscal year to the current fiscal year shall be calculated solely
9on the basis of the city’s previous jurisdictional boundaries, without
10regard to the change in that city’s jurisdictional boundaries. For
11each following fiscal year, the percentage change in gross taxable
12assessed valuation from the prior fiscal year to the current fiscal
13year shall be calculated on the basis of the city’s current
14jurisdictional boundaries.

15(ii) The amount described in clause (i) shall be adjusted as
16follows:

17(I) If the amount described in subclause (I) of clause (i) for a
18particular city, county, or city and county is greater than the amount
19described in subparagraph (A) for that city, county, or city and
20county, the amount described in clause (i) shall be increased by
21an amount equal to this difference.

22(II) If the amount described in subclause (I) of clause (i) for a
23particular city, county, or city and county is less than the amount
24described in subparagraph (A) for that city, county, or city and
25county, the amount described in clause (i) shall be decreased by
26an amount equal to this difference.

27(C) For the 2006-07 fiscal year and for each fiscal year
28thereafter, the sum of the following two amounts:

29(i) The vehicle license fee adjustment amount for the prior fiscal
30year, if Section 97.71 and clause (ii) of subparagraph (B) did not
31apply for that fiscal year, for that city, county, and city and county.

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

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

34(II) The percentage change from the prior fiscal year to the
35current fiscal year in gross taxable assessed valuation within the
36jurisdiction of the entity, as reflected in the equalized assessment
37roll for those fiscal years. For the first fiscal year for which a
38change in a city’s jurisdictional boundaries first applies, the
39percentage change in gross taxable assessed valuation from the
40prior fiscal year to the current fiscal year shall be calculated solely
P6    1on the basis of the city’s previous jurisdictional boundaries, without
2regard to the change in that city’s jurisdictional boundaries. For
3each following fiscal year, the percentage change in gross taxable
4assessed valuation from the prior fiscal year to the current fiscal
5year shall be calculated on the basis of the city’s current
6jurisdictional boundaries.

7(2) Notwithstanding paragraph (1), “vehicle license fee
8adjustment amount,” for a city incorporating after January 1, 2004,
9and on or before January 1, 2012, means the following:

10(A) For the 2015-16 fiscal year, the quotient derived from the
11following fraction:

12(i) The numerator is the product of the following two amounts:

13(I) The sum of the most recent vehicle license fee adjustment
14amounts determined for all cities in the county.

15(II) The population of the incorporating city.

16(ii) The denominator is the sum of the populations of all cities
17in the county.

18(B) For the 2016-17 fiscal year, and for each fiscal year
19thereafter, the sum of the following two amounts:

20(i) The vehicle license fee adjustment amount for the prior fiscal
21year.

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

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

24(II) The percentage change from the prior fiscal year to the
25current fiscal year in gross taxable assessed valuation within the
26jurisdiction of the entity, as reflected in the equalized assessment
27roll for those fiscal years.

28(3) For the 2013-14 fiscal year, the vehicle license fee
29adjustment amount that is determined under subparagraph (C) of
30paragraph (1) for the County of Orange shall be increased by
31fifty-three million dollars ($53,000,000). For the 2014-15 fiscal
32year and each fiscal year thereafter, the calculation of the vehicle
33license fee adjustment amount for the County of Orange under
34subparagraph (C) of paragraph (1) shall be based on a prior fiscal
35year amount that reflects the full amount of this one-time increase
36of fifty-three million dollars ($53,000,000).

37(4) “Countywide vehicle license fee adjustment amount” means,
38for any fiscal year, the total sum of the amounts described in
39paragraphs (1), (2), and (3) for a county or city and county, and
40each city in the county.

P7    1(5) On or before June 30 of each fiscal year, the auditor shall
2report to the Controller the vehicle license fee adjustment amount
3for the county and each city in the county for that fiscal year.

4(d) For the 2005-06 fiscal year and each fiscal year thereafter,
5the amounts determined under subdivision (a) of Section 96.1, or
6any successor to that provision, shall not reflect, for a preceding
7fiscal year, any portion of any allocation required by this section.

8(e) For purposes of Section 15 of Article XI of the California
9Constitution, the allocations from a Vehicle License Fee Property
10Tax Compensation Fund constitute successor taxes that are
11otherwise required to be allocated to counties and cities, and as
12successor taxes, the obligation to make those transfers as required
13by this section shall not be extinguished nor disregarded in any
14manner that adversely affects the security of, or the ability of, a
15county or city to pay the principal and interest on any debts or
16obligations that were funded or secured by that city’s or county’s
17allocated share of motor vehicle license fee revenues.

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

19(1) Reduce any allocations of excess, additional, or remaining
20funds that would otherwise have been allocated to county
21superintendents of schools, cities, counties, and cities and counties
22pursuant to clause (i) of subparagraph (B) of paragraph (4) of
23subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing
24with Section 98) had this section not been enacted. The allocations
25required by this section shall be adjusted to comply with this
26paragraph.

27(2) Require an increased ad valorem property tax revenue
28allocation or increased tax increment allocation to a community
29redevelopment agency.

30(3) Alter the manner in which ad valorem property tax revenue
31growth from fiscal year to fiscal year is otherwise determined or
32allocated in a county.

33(4) Reduce ad valorem property tax revenue allocations required
34under Article 4 (commencing with Section 98).

35(g) Tax exchange or revenue sharing agreements, entered into
36prior to the operative date of this section, between local agencies
37or between local agencies and nonlocal agencies are deemed to be
38 modified to account for the reduced vehicle license fee revenues
39resulting from the act that added this section. These agreements
40are modified in that these reduced revenues are, in kind and in lieu
P8    1thereof, replaced with ad valorem property tax revenue from a
2Vehicle License Fee Property Tax Compensation Fund or an
3Educational Revenue Augmentation Fund.

4begin insert

begin insertSEC. 1.5.end insert  

end insert

begin insertSection 97.70 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
5amended to read:end insert

6

97.70.  

Notwithstanding any other law, for the 2004-05 fiscal
7year and for each fiscal year thereafter, all of the following apply:

8(a) (1) (A) The auditor shall reduce the total amount of ad
9valorem property tax revenue that is otherwise required to be
10allocated to a county’s Educational Revenue Augmentation Fund
11by the countywide vehicle license fee adjustment amount.

12(B) If, for the fiscal year, after complying with Section 97.68
13there is not enough ad valorem property tax revenue that is
14otherwise required to be allocated to a county Educational Revenue
15Augmentation Fund for the auditor to complete the allocation
16reduction required by subparagraph (A), the auditor shall
17 additionally reduce the total amount of ad valorem property tax
18revenue that is otherwise required to be allocated to all school
19districts and community college districts in the county for that
20fiscal year by an amount equal to the difference between the
21countywide vehicle license fee adjustment amount and the amount
22of ad valorem property tax revenue that is otherwise required to
23be allocated to the county Educational Revenue Augmentation
24Fund for that fiscal year. This reduction for each school district
25and community college district in the county shall be the percentage
26share of the total reduction that is equal to the proportion that the
27total amount of ad valorem property tax revenue that is otherwise
28required to be allocated to the school district or community college
29district bears to the total amount of ad valorem property tax revenue
30that is otherwise required to be allocated to all school districts and
31community college districts in a county. For purposes of this
32subparagraph, “school districts” and “community college districts”
33do not include any districts that are excess tax school entities, as
34defined in Section 95.

35(2) The countywide vehicle license fee adjustment amount shall
36be allocated to the Vehicle License Fee Property Tax Compensation
37Fund that shall be established in the treasury of each county.

38(b) (1) The auditor shall allocate moneys in the Vehicle License
39Fee Property Tax Compensation Fund according to the following:

P9    1(A) Each city in the county shall receive its vehicle license fee
2adjustment amount.

3(B) Each county and city and county shall receive its vehicle
4license fee adjustment amount.

5(2) The auditor shall allocate one-half of the amount specified
6in paragraph (1) on or before January 31 of each fiscal year, and
7the other one-half on or before May 31 of each fiscal year.

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

9(1) “Vehicle license fee adjustment amount” for a particular
10city, county, or a city and county means, subject to an adjustment
11under paragraph (2) and Section 97.71, all of the following:

12(A) For the 2004-05 fiscal year, an amount equal to the
13difference between the following two amounts:

14(i) The estimated total amount of revenue that would have been
15deposited to the credit of the Motor Vehicle License Fee Account
16in the Transportation Tax Fund, including any amounts that would
17have been certified to the Controller by the auditor of the County
18of Ventura under subdivision (j) of Section 98.02, as that section
19read on January 1, 2004, for distribution under the law as it read
20on January 1, 2004, to the county, city and county, or city for the
212004-05 fiscal year if the fee otherwise due under the Vehicle
22License Fee Lawbegin delete (Pt.end deletebegin insert (Partend insert 5 (commencing with Section 10701)
23ofbegin delete Div.end deletebegin insert Divisionend insert 2) was 2 percent of the market value of a vehicle,
24as specified inbegin delete Sectionend deletebegin insert Sectionsend insert 10752 and 10752.1 as those
25sections read on January 1, 2004.

26(ii) The estimated total amount of revenue that is required to be
27distributed from the Motor Vehicle License Fee Account in the
28Transportation Tax Fund to the county, city and county, and each
29city in the county for the 2004-05 fiscal year under Section 11005,
30as that section read on the operative date of the act that amended
31this clause.

32(B) (i) Subject to an adjustment under clause (ii), for the
332005-06 fiscal year, the sum of the following two amounts:

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

begin delete

35(Ia)

end delete

36begin insert(ia)end insert The actual total amount of revenue that would have been
37deposited to the credit of the Motor Vehicle License Fee Account
38in the Transportation Tax Fund, including any amounts that would
39have been certified to the Controller by the auditor of the County
40of Ventura under subdivision (j) of Section 98.02, as that section
P10   1read on January 1, 2004, for distribution under the law as it read
2on January 1, 2004, to the county, city and county, or city for the
32004-05 fiscal year if the fee otherwise due under the Vehicle
4License Fee Law (Part 5 (commencing with Section 10701) of
5Division 2) was 2 percent of the market value of a vehicle, as
6specified in Sections 10752 and 10752.1 as those sections read on
7 January 1, 2004.

begin delete

8(Ib)

end delete

9begin insert(ib)end insert The actual total amount of revenue that was distributed
10from the Motor Vehicle License Fee Account in the Transportation
11Tax Fund to the county, city and county, and each city in the county
12for the 2004-05 fiscal year under Section 11005, as that section
13read on the operative date of the act that amended this
14begin delete sub-subclause.end deletebegin insert subsubclause.end insert

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

begin delete

16(IIa)

end delete

17begin insert(ia)end insert The amount described in subclause (I).

begin delete

18(IIb)

end delete

19begin insert(ib)end insert The percentage change from the prior fiscal year to the
20current fiscal year in gross taxable assessed valuation within the
21jurisdiction of the entity, as reflected in the equalized assessment
22roll for those fiscal years. For the first fiscal year for which a
23change in a city’s jurisdictional boundaries first applies, the
24percentage change in gross taxable assessed valuation from the
25prior fiscal year to the current fiscal year shall be calculated solely
26on the basis of the city’s previous jurisdictional boundaries, without
27regard to the change in that city’s jurisdictional boundaries. For
28each following fiscal year, the percentage change in gross taxable
29assessed valuation from the prior fiscal year to the current fiscal
30year shall be calculated on the basis of the city’s current
31jurisdictional boundaries.

32(ii) The amount described in clause (i) shall be adjusted as
33follows:

34(I) If the amount described in subclause (I) of clause (i) for a
35particular city, county, or city and county is greater than the amount
36described in subparagraph (A) for that city, county, or city and
37county, the amount described in clause (i) shall be increased by
38an amount equal to this difference.

39(II) If the amount described in subclause (I) of clause (i) for a
40particular city, county, or city and county is less than the amount
P11   1described in subparagraph (A) for that city, county, or city and
2county, the amount described in clause (i) shall be decreased by
3an amount equal to this difference.

4(C) For the 2006-07 fiscalbegin delete year and for each fiscal year
5thereafter,end delete
begin insert year, to the 2014end insertbegin insert-15 fiscal year, inclusive,end insert the sum of
6the following two amounts:

7(i) The vehicle license fee adjustment amount for the prior fiscal
8year, if Section 97.71 and clause (ii) of subparagraph (B) did not
9apply for that fiscal year, for that city, county, and city and county.

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

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

12(II) The percentage change from the prior fiscal year to the
13current fiscal year in gross taxable assessed valuation within the
14jurisdiction of the entity, as reflected in the equalized assessment
15roll for those fiscal years. For the first fiscal year for which a
16change in a city’s jurisdictional boundaries first applies, the
17percentage change in gross taxable assessed valuation from the
18prior fiscal year to the current fiscal year shall be calculated solely
19on the basis of the city’s previous jurisdictional boundaries, without
20regard to the change in that city’s jurisdictional boundaries. For
21each following fiscal year, the percentage change in gross taxable
22assessed valuation from the prior fiscal year to the current fiscal
23year shall be calculated on the basis of the city’s current
24jurisdictional boundaries.

begin insert

25(D) For the 2015-16 fiscal year, the sum of the following two
26amounts:

end insert
begin insert

27(i) The amount described in clause (i) of subparagraph (B) if
28Section 97.71 and clause (ii) of subparagraph (B) did not apply
29for that fiscal year, for that city, county, and city and county.

end insert
begin insert

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

end insert
begin insert

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

end insert
begin insert

32(II) The percentage change from the 2004-05 fiscal year to the
332015-16 fiscal year, inclusive, in gross taxable assessed valuation
34within the jurisdiction of the entity, as reflected in the equalized
35assessment roll for those fiscal years.

end insert
begin insert

36(E) For the 2016-17 fiscal year and each fiscal year thereafter,
37the sum of the following two amounts:

end insert
begin insert

38(i) The vehicle license fee adjustment amount for the prior fiscal
39year.

end insert
begin insert

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

end insert
begin insert

P12   1(I) The amount described in clause (i).

end insert
begin insert

2(II) The percentage change from the immediately preceding
3fiscal year to the current fiscal year in gross taxable assessed
4valuation within the jurisdiction of the entity, as reflected in the
5equalized assessment roll for those fiscal years.

end insert
begin insert

6(2) Notwithstanding paragraph (1), “vehicle license fee
7adjustment amount,” for a city incorporating after January 1,
82004, and on or before January 1, 2012, means the following:

end insert
begin insert

9(A) For the 2015-16 fiscal year, the quotient derived from the
10following fraction:

end insert
begin insert

11(i) The numerator is the product of the following two amounts:

end insert
begin insert

12(I) The sum of the most recent vehicle license fee adjustment
13amounts determined for all cities in the county.

end insert
begin insert

14(II) The population of the incorporating city.

end insert
begin insert

15(ii) The denominator is the sum of the populations of all cities
16in the county.

end insert
begin insert

17(B) For the 2016-17 fiscal year, and for each fiscal year
18thereafter, the sum of the following two amounts:

end insert
begin insert

19(i) The vehicle license fee adjustment amount for the prior fiscal
20year.

end insert
begin insert

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

end insert
begin insert

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

end insert
begin insert

23(II) The percentage change from the prior fiscal year to the
24current fiscal year in gross taxable assessed valuation within the
25jurisdiction of the entity, as reflected in the equalized assessment
26roll for those fiscal years.

end insert
begin delete

27(2)

end delete

28begin insert(3)end insert For the 2013-14 fiscal year, the vehicle license fee
29adjustment amount that is determined under subparagraphbegin delete (C)end deletebegin insert (C),
30(D), or (E), as applicable,end insert
of paragraph (1) for the County of
31Orange shall be increased by fifty-three million dollars
32($53,000,000). For the 2014-15 fiscal year and each fiscal year
33thereafter, the calculation of the vehicle license fee adjustment
34amount for the County of Orange under subparagraph (C) of
35paragraph (1) shall be based on a prior fiscal year amount that
36reflects the full amount of this one-time increase of fifty-three
37million dollars ($53,000,000).

begin delete

38(3)

end delete

39begin insert(4)end insert “Countywide vehicle license fee adjustment amount” means,
40for any fiscal year, the total sum of the amounts described in
P13   1paragraphsbegin delete (1)end deletebegin insert (1), (2),end insert andbegin delete (2)end deletebegin insert (3)end insert for a county or city and county,
2and each city in the county.

begin delete

3(4)

end delete

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

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

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

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

22(1) Reduce any allocations of excess, additional, or remaining
23funds that would otherwise have been allocated to county
24superintendents of schools, cities, counties, and cities and counties
25pursuant to clause (i) of subparagraph (B) of paragraph (4) of
26subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing
27with Section 98) had this section not been enacted. The allocations
28required by this section shall be adjusted to comply with this
29paragraph.

30(2) Require an increased ad valorem property tax revenue
31allocation or increased tax increment allocation to a community
32redevelopment agency.

33(3) Alter the manner in which ad valorem property tax revenue
34growth from fiscal year to fiscal year is otherwise determined or
35allocated in a county.

36(4) Reduce ad valorem property tax revenue allocations required
37under Article 4 (commencing with Section 98).

38(g) Tax exchange or revenue sharing agreements, entered into
39prior to the operative date of this section, between local agencies
40or between local agencies and nonlocal agencies are deemed to be
P14   1 modified to account for the reduced vehicle license fee revenues
2resulting from the act that added this section. These agreements
3are modified in that these reduced revenues are, in kind and in lieu
4thereof, replaced with ad valorem property tax revenue from a
5Vehicle License Fee Property Tax Compensation Fund or an
6Educational Revenue Augmentation Fund.

7begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

Section 1.5 of this bill incorporates amendments to
8Section 97.70 of the Revenue and Taxation Code proposed by this
9bill and Assembly Bill 448. It shall only become operative if (1)
10both bills are enacted and become effective on or before January
111, 2016, (2) each bill amends Section 97.70 of the Revenue and
12Taxation Code, and (3) this bill is enacted after Assembly Bill 448,
13in which case Section 97.70 of the Revenue and Taxation Code,
14as amended by Assembly Bill 448, shall remain operative only
15until the operative date of this bill, at which time Section 1.5 of
16this bill shall become operative, and Section 1 of this bill shall not
17become operative.

end insert
18

begin deleteSEC. 2.end delete
19begin insertSEC. 3.end insert  

If the Commission on State Mandates determines that
20this act contains costs mandated by the state, reimbursement to
21local agencies and school districts for those costs shall be made
22pursuant to Part 7 (commencing with Section 17500) of Division
234 of Title 2 of the Government Code.



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