Amended in Senate March 29, 2016

Amended in Senate March 10, 2016

Senate Bill No. 975

Introduced by Committee on Governance and Finance (Senators Hertzberg (Chair), Beall, Hernandez, Lara, Moorlach, Nguyen, and Pavley)

February 8, 2016

An act to begin insert amend Sections 53369.30, 53396, 53398.30, 53398.75, and 62005 of, and to end insert add Article 18.5 (commencing with Section 53993) to Chapter 4 of Part 1 of Division 2 of Title 5 begin delete of end delete begin insert of, end insert the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

SB 975, as amended, Committee on Governance and Finance. Tax increment: property tax override rates.

Existing law establishes procedures for the formation of infrastructure financing districts, enhanced infrastructure financing districts, infrastructure and revitalization financing districts, and community revitalization and investment authorities, as specified, to undertake various economic development projects, including financing public facilities and infrastructure, affordable housing, and economic revitalization. Existing law authorizes an infrastructure financing plan or a community revitalization and investment plan to provide for the division of taxes levied upon taxable property, if any, between the affected taxing entities, as defined, and the district or authority.

This bill, for the purpose of any law authorizing the division of taxes, would prohibit the division of revenues derived from a property tax rate approved by the voters pursuant begin delete to, end delete begin insert to end insert specified provisions of the California Constitution and levied in addition to the general property tax rate limited by the California Constitution. The bill would specify that this limitation does not apply to the allocation of property taxes pursuant to provisions relating to the wind down of the affairs of redevelopment agencies and the activities of successor agencies. begin insert The bill would also make various conforming changes. end insert

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 53369.30 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

53369.30.  

Any infrastructure financing plan may contain a
provision that taxes, if any, levied upon taxable property in the
area included within the infrastructure revitalization financing
district each year by or for the benefit of the State of California,
or any affected taxing entity after the effective date of the ordinance
adopted pursuant to Section 53369.23 to create the district, shall
be begin delete divided end delete begin insert divided, subject to the provisions of Section 53993, end insert as
follows:

(a) That portion of the taxes which would be produced by the
rate upon which the tax is levied each year by or for each of the
affected taxing entities upon the total sum of the assessed value
of the taxable property in the district as shown upon the assessment
roll used in connection with the taxation of the property by the
affected taxing entity, last equalized prior to the effective date of
the ordinance adopted pursuant to Section 53369.23 to create the
district, shall be allocated to, and when collected shall be paid to,
the respective affected taxing entities as taxes by or for the affected
taxing entities on all other property are paid.

(b) That portion of the levied taxes each year specified in the
adopted infrastructure financing plan for the city and each affected
taxing entity which has agreed to participate pursuant to Section
53369.19 in excess of the amount specified in subdivision (a) shall
be allocated to, and when collected shall be paid into a special
fund of, the district for all lawful purposes of the district. Unless
and until the total assessed valuation of the taxable property in a
district exceeds the total assessed value of the taxable property in
the district as shown by the last equalized assessment roll referred
to in subdivision (a), all of the taxes levied and collected upon the
taxable property in the district shall be paid to the respective
affected taxing entities. When the district ceases to exist pursuant
to the adopted infrastructure financing plan, all moneys thereafter
received from taxes upon the taxable property in the district shall
be paid to the respective affected taxing entities as taxes on all
other property are paid.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 53396 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

53396.  

Any infrastructure financing plan may contain a
provision that taxes, if any, levied upon taxable property in the
area included within the infrastructure financing district each year
by or for the benefit of the State of California, or any affected
taxing entity after the effective date of the ordinance adopted
pursuant to Section 53395.23 to create the district, shall be begin delete divided end delete
begin insert divided, subject to the provisions of Section 53993, end insert as follows:

(a) That portion of the taxes which would be produced by the
rate upon which the tax is levied each year by or for each of the
affected taxing entities upon the total sum of the assessed value
of the taxable property in the district as shown upon the assessment
roll used in connection with the taxation of the property by the
affected taxing entity, last equalized prior to the effective date of
the ordinance adopted pursuant to Section 53395.23 to create the
district, shall be allocated to, and when collected shall be paid to,
the respective affected taxing entities as taxes by or for the affected
taxing entities on all other property are paid.

(b) That portion of the levied taxes each year specified in the
adopted infrastructure financing plan for the city or county and
each affected taxing entity which has agreed to participate pursuant
to Section 53395.19 in excess of the amount specified in
subdivision (a) shall be allocated to, and when collected shall be
paid into a special fund of, the district for all lawful purposes of
the district. Unless and until the total assessed valuation of the
taxable property in a district exceeds the total assessed value of
the taxable property in the district as shown by the last equalized
assessment roll referred to in subdivision (a), all of the taxes levied
and collected upon the taxable property in the district shall be paid
to the respective affected taxing entities. When the district ceases
to exist pursuant to the adopted infrastructure financing plan, all
moneys thereafter received from taxes upon the taxable property
in the district shall be paid to the respective affected taxing entities
as taxes on all other property are paid.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 53398.30 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

53398.30.  

Any infrastructure financing plan may contain a
provision that taxes, if any, levied upon taxable property in the
area included within the infrastructure financing district each year
by or for the benefit of the State of California, or any affected
taxing entity after the effective date of the ordinance adopted
pursuant to Section 53398.20 to create the district, shall be begin delete divided end delete
begin insert divided, subject to the provisions of Section 53993, end insert as follows:

(a) That portion of the taxes that would be produced by the rate
upon which the tax is levied each year by or for each of the affected
taxing entities upon the total sum of the assessed value of the
taxable property in the district as shown upon the assessment roll
used in connection with the taxation of the property by the affected
taxing entity, last equalized prior to the effective date of the
ordinance adopted pursuant to Section 53398.20 to create the
district, shall be allocated to, and when collected shall be paid to,
the respective affected taxing entities as taxes by or for the affected
taxing entities on all other property are paid.

(b) That portion of the levied taxes each year specified in the
adopted infrastructure financing plan for the city and each affected
taxing entity that has agreed to participate pursuant to Section
53398.19 in excess of the amount specified in subdivision (a) shall
be allocated to, and when collected shall be paid into a special
fund of, the district for all lawful purposes of the district. Unless
and until the total assessed valuation of the taxable property in a
district exceeds the total assessed value of the taxable property in
the district as shown by the last equalized assessment roll referred
to in subdivision (a), all of the taxes levied and collected upon the
taxable property in the district shall be paid to the respective
affected taxing entities. When the district ceases to exist pursuant
to the adopted infrastructure financing plan, all moneys thereafter
received from taxes upon the taxable property in the district shall
be paid to the respective affected taxing entities as taxes on all
other property are paid.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 53398.75 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

53398.75.  

(a) Any infrastructure financing plan may contain
a provision that taxes, if any, levied upon taxable property in the
area included within the enhanced infrastructure financing district
each year by or for the benefit of the State of California, or any
affected taxing entity after the effective date of the ordinance
adopted pursuant to Section 53398.69 to create the district, shall
be begin delete divided end delete begin insert divided, subject to the provisions of Section 53993, end insert as
follows:

(1) That portion of the taxes that would be produced by the rate
upon which the tax is levied each year by or for each of the affected
taxing entities upon the total sum of the assessed value of the
taxable property in the district as shown upon the assessment roll
used in connection with the taxation of the property by the affected
taxing entity, last equalized prior to the effective date of the
ordinance adopted pursuant to Section 53398.69 to create the
district, shall be allocated to, and when collected shall be paid to,
the respective affected taxing entities as taxes by or for the affected
taxing entities on all other property are paid.

(2) That portion of the levied taxes each year specified in the
adopted infrastructure financing plan for the city or county and
each affected taxing entity that has agreed to participate pursuant
to Section 53398.68 in excess of the amount specified in paragraph
(1) shall be allocated to, and when collected shall be paid into a
special fund of, the district for all lawful purposes of the district.
Unless and until the total assessed valuation of the taxable property
in a district exceeds the total assessed value of the taxable property
in the district as shown by the last equalized assessment roll
referred to in paragraph (1), all of the taxes levied and collected
upon the taxable property in the district shall be paid to the
respective affected taxing entities. When the district ceases to exist
pursuant to the adopted infrastructure financing plan, all moneys
thereafter received from taxes upon the taxable property in the
district shall be paid to the respective affected taxing entities as
taxes on all other property are paid.

(b) Notwithstanding subdivision (a), where any district
boundaries overlap with the boundaries of any former
redevelopment project area, any debt or obligation of a district
shall be subordinate to any and all enforceable obligations of the
former redevelopment agency, as approved by the Oversight Board
and the Department of Finance. For the purposes of this chapter,
the division of taxes allocated to the district pursuant to subdivision
(a) of this section or of subdivision (b) of Section 53396 shall not
include any taxes required to be deposited by the county
auditor-controller into the Redevelopment Property Tax Trust Fund
created pursuant to subdivision (b) of Section 34170.5 of the Health
and Safety Code.

(c) The legislative body of the city or county forming the district
may choose to dedicate any portion of its net available revenue to
the district through the financing plan described in Section
53398.63.

(d) For the purposes of this section, “net available revenue”
means periodic distributions to the city or county from the
Redevelopment Property Tax Trust Fund, created pursuant to
Section 34170.5 of the Health and Safety Code, that are available
to the city or county after all preexisting legal commitments and
statutory obligations funded from that revenue are made pursuant
to Part 1.85 (commencing with Section 34170) of Division 24 of
the Health and Safety Code. “Net available revenue” shall not
include any funds deposited by the county auditor-controller into
the Redevelopment Property Tax Trust Fund or funds remaining
in the Redevelopment Property Tax Trust Fund prior to distribution.
Net available revenues shall not include any moneys payable to a
school district that maintains kindergarten and grades 1 to 12,
inclusive, community college districts, county office of education,
or to the Educational Revenue Augmentation Fund, pursuant to
paragraph (4) of subdivision (a) of Section 34183 of the Health
and Safety Code.

(e) (1) That portion of any ad valorem property tax revenue
annually allocated to a city or county pursuant to Section 97.70 of
the Revenue and Taxation Code that is specified in the adopted
infrastructure financing plan for the city or county that has agreed
to participate pursuant to Section 53398.68, and that corresponds
to the increase in the assessed valuation of taxable property shall
be allocated to, and, when collected, shall be apportioned to, a
special fund of the district for all lawful purposes of the district.

(2) When the district ceases to exist pursuant to the adopted
infrastructure financing plan, the revenues described in this
subdivision shall be allocated to, and, when collected, shall be
apportioned to, the respective city or county.

(f) This section shall not be construed to prevent a district from
utilizing revenues from any of the following sources to support its
activities provided that the applicable voter approval has been
obtained, and the infrastructure financing plan has been approved
pursuant to Section 53398.69:

(1) The Improvement Act of 1911 (Division 7 (commencing
with Section 5000) of the Streets and Highways Code).

(2) The Municipal Improvement Act of 1913 (Division 12
(commencing with Section 10000) of the Streets and Highways
Code).

(3) The Improvement Bond Act of 1915 (Division 10
(commencing with Section 8500) of the Streets and Highways
Code).

(4) The Landscaping and Lighting Act of 1972 (Part 2
(commencing with Section 22500) of Division 15 of the Streets
and Highways Code).

(5) The Vehicle Parking District Law of 1943 (Part 1
(commencing with Section 31500) of Division 18 of the Streets
and Highways Code).

(6) The Parking District Law of 1951 (Part 4 (commencing with
Section 35100) of Division 18 of the Streets and Highways Code).

(7) The Park and Playground Act of 1909 (Chapter 7
(commencing with Section 38000) of Part 2 of Division 3 of Title
4 of this code).

(8) The Mello-Roos Community Facilities Act of 1982 (Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of
this title).

(9) The Benefit Assessment Act of 1982 (Chapter 6.4
(commencing with Section 54703) of Part 1 of Division 2 of this
title).

(10) The so-called facilities benefit assessment levied by the
charter city of San Diego or any substantially similar assessment
levied for the same purpose by any other charter city pursuant to
any ordinance or charter provision.

begin delete SECTION 1. end delete

begin insert SEC. 5. end insert   

Article 18.5 (commencing with Section 53993) is added
to Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
Code, to read:

 

Article 18.5.  Division of Property Taxes

 

53993.  

(a) Notwithstanding any other law, except as provided
in subdivision (b), for the purpose of any law authorizing the
division of taxes levied upon taxable property, including, but not
limited to, Sections 53369.30, 53396, 53398.30, 53398.75, and
62005, no revenues derived from the imposition of a property tax
begin delete rate, end delete begin insert rate end insert approved by the voters pursuant to subdivision (b) of
Section 1 of Article XIII A of the California Constitution and levied
in addition to the property tax rate limited by subdivision (a) of
Section 1 of Article XIII A of the California begin delete Constitution, end delete
begin insert Constitution end insert shall be divided.

(b) Subdivision (a) shall not apply to the allocation of property
taxes pursuant to Part 1.85 (commencing with Section 34170) of
Division 24 of the Health and Safety Code.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 62005 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

62005.  

(a) (1) The plan adopted pursuant to Section 62004
may include a provision that taxes levied and collected upon
taxable property in the area included within the territory each year
by or for the benefit the taxing agencies that have adopted a
resolution pursuant to subdivision (d), shall be begin delete divided end delete begin insert divided,
subject to the provisions of Section 53993, end insert as follows:

(A) That portion of the taxes that would have been produced
by the rate upon which the tax is levied each year by or for each
of the consenting local agencies upon the total sum of the assessed
value of the taxable property in the territory as shown upon the
assessment roll used in connection with the taxation of the property
by the consenting local agency, last equalized prior to the effective
date of the certification of completion, and that portion of taxes
by or for each school entity, shall be allocated to, and when
collected shall be paid to, the respective consenting local agencies
and school entities as taxes by or for the consenting local agencies
and school entities on all property are paid.

(B) That portion of the levied taxes each year specified in the
community revitalization plan adopted pursuant to Section 62004
for each consenting local agency that has agreed to participate
pursuant a resolution adopted pursuant to subdivision (d), in excess
of the amount specified in subparagraph (A), shall be allocated to,
and when collected shall be paid into a special fund of the authority
to finance the improvements specified in the community
revitalization plan.

(2) A consenting local agency may advance funds to the
authority. The authority shall use those advanced funds solely for
the purposes specified in the community revitalization plan and
shall repay the consenting local agency with revenue from the
taxes received pursuant to this subdivision.

(b) For purposes of this section, the following definitions apply:

(1) “Taxing agency” means a local agency as defined by
subdivision (a) of Section 95 of the Revenue and Taxation Code,
and does not include any school entity as defined in subdivision
(f) of Section 95 of the Revenue and Taxation Code.

(2) “Consenting local agency” means a local agency that has
adopted a resolution of its governing body consenting to the
community revitalization and investment plan.

(3) “Territory” means the land that is contained within the
community revitalization plan.

(c) The provision for the receipt of tax increment funds shall
become effective in the tax year that begins after the December 1
first following the adoption of the plan.

(d) At any time prior to or after adoption of the plan, any city,
county, or special district, other than a school entity as defined in
subdivision (n) of Section 95 of the Revenue and Taxation Code
or a successor agency as defined in subdivision (j) of Section
34171, that receives ad valorem property taxes from property
located within an area may adopt a resolution directing the county
auditor-controller to allocate its share of tax increment funds within
the area covered by the plan according to subdivision (a) to the
authority. The resolution adopted pursuant to this subdivision may
direct the county auditor-controller to allocate less than the full
amount of the tax increment, establish a maximum amount of time
in years that the allocation takes place, or limit the use of the funds
by the authority for specific purposes or programs, provided that
25 percent of the amount of tax increment designated shall be
allocated for affordable housing pursuant to Section 62100. A
resolution adopted pursuant to this subdivision may be repealed
and be of no further effect by giving the county auditor-controller
60 days’ notice; provided, however, that the county
auditor-controller shall continue to allocate to the authority the
taxing entity’s share of ad valorem property taxes that have been
pledged to the repayment of debt issued by the authority until the
debt has been fully repaid. Prior to adopting a resolution pursuant
to this subdivision, a city, county, or special district shall approve
a memorandum of understanding with the authority governing the
authority’s use of tax increment funds for administrative and
overhead expenses pursuant to subdivision (g) of Section 62001.

(e) Upon adoption of a plan that includes a provision for the
receipt of tax increment funds according to subdivision (a), the
county auditor-controller shall allocate tax increment revenue to
the authority as follows:

(1) If the authority was formed pursuant to subparagraph (A)
of paragraph (1) of subdivision (b) of Section 62001, the authority
shall be allocated each year specified in the plan that portion of
the taxes levied for each city, county, city and county, and special
district that has adopted a resolution pursuant to subdivision (d),
in excess of the amount specified in paragraph (1) of subdivision
(a).

(2) If the authority was formed pursuant to subparagraph (B)
of paragraph (1) of subdivision (b) of Section 62001, the authority
shall be allocated each year specified in the plan that portion of
the taxes levied for each jurisdiction as provided in the joint powers
agreement in excess of the amount specified in paragraph (1) of
subdivision (a).

(f) If an area includes, in whole or in part, land formerly or
currently designated as a part of a redevelopment project area, as
defined in Section 33320.1 of the Health and Safety Code, any
plan adopted pursuant to this part that includes a provision for the
receipt of tax increment revenues according to subdivision (a) shall
include a provision that tax increment amounts payable to an
authority are subject and subordinate to any preexisting enforceable
obligation as that term is defined by Section 34171 of the Health
and Safety Code.