BILL ANALYSIS Ó
SB 1188
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Date of Hearing: June 28, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
SB
1188 (McGuire) - As Introduced February 18, 2016
SENATE VOTE: 37-0
SUBJECT: Wildlife management areas: payment of taxes and
assessments
SUMMARY: Requires the Department of Fish and Wildlife (DFW),
when income is derived from wildlife management areas, to make
payments in lieu of taxes to the counties in which the state
wildlife management areas are located, subject to appropriation
by the Legislature. Specifically, this bill:
1)Requires, instead of authorizes, the DFW, when income is
derived directly from real property acquired and operated by
the state as a wildlife management area, to pay annually to
the county in which the property is located an amount equal to
the county taxes levied upon the property at the time the
property was transferred to the state.
2)Requires, instead of authorizes, the DFW to also pay
assessments levied upon the property by any irrigation,
drainage, or reclamation district.
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EXISTING LAW:
1)Authorizes the DFW, when income is derived directly from real
property acquired and operated by the state as a wildlife
management area, to pay annually to the county in which the
property is located, an amount equal to the county taxes
levied upon the property at the time the property was
transferred to the state.
2)Authorizes the DFW to also pay assessments levied upon the
property by any irrigation, drainage, or reclamation district.
3)Provides that these in lieu payments shall be made only from
funds that are appropriated to the DFW for these purposes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, ongoing annual cost pressures of $644,000 (General
Fund) for annual obligations to counties for "payments in lieu
of taxes."
COMMENTS: This bill amends the existing law, which currently
authorizes but does not require the state to make payments in
lieu of taxes to counties for loss of property tax revenues that
would otherwise have been received for lands within the county
that are operated by the state as wildlife management areas.
This bill changes the "may" to "shall" but continues the
condition that these payments may only be made from funds
appropriated by the Legislature to the DFW for that purpose.
1)Author's Statement: Prior to last year, the law stated that
when income is derived from real property acquired and
operated by the state as a wildlife management area, the DFW
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shall pay annually to the county in which the property is
located an amount equal to the taxes levied on the property at
the time the title to the property was transferred to the
state. This requirement became optional last year as a result
of language included in SB 83 (Committee on Budget), Chapter
24, Statutes of 2015, which changed the shall to may.
In 1949, California established a process to offset impacts to
county property tax revenues when the state acquires private
property for wildlife management areas. Payments in lieu of
taxes help small and rural counties fund a variety of programs
and services that benefit county residents. The in lieu
program was established with the intention of mitigating the
effects of the state's land acquisition on county revenue
sources. However, the state stopped appropriating funds for
the in lieu payments, and the DFW stopped making the annual
payments, thirteen years ago. According to the author and
sponsor, the non-payment of in lieu payments has been
particularly burdensome on small rural counties. While the
Governor's budget includes funding for the annual in lieu
payment for the upcoming fiscal year, this bill is necessary
to ensure that counties in the future are not left without
recourse due to the now permissive nature of the law.
2)Background: State lands, including wildlife management areas,
are exempt from property taxes under the State Constitution.
Until last year, state law required the state to compensate
counties for lost property taxes and certain assessments
through payments to counties of what are known as "payments in
lieu of taxes". However, the state, from fiscal year
1998-1999 through 2002-2003, only made partial in lieu
payments to counties, and suspended the payments completely
after 2002-2003. According to the Legislative Analyst's
Office, the amount of unpaid in lieu payments in arrears is
close to $8 million. Last year, $644,000 was included in the
2015-16 budget to pay for the current year's in lieu payments.
Budget trailer bill language also made the payments
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permissive. The proposed budget for 2016-17 also includes
$644,000 for the next fiscal year's payment.
The state's failure to pay in lieu payments has been a subject
of contention for several years. It is possible that
continued failure on the part of the state to pay counties the
monies to which they are entitled may create negative
sentiment toward existing and future wildlife management
areas.
Making the statute mandatory rather than permissive may not
totally solve the problem, since payment of the in lieu
payments is still dependent on the Governor and the
Legislature including the annual appropriations for the
payments in the DFW's budget. This is demonstrated by the
fact that even when the payments were mandated by statute, as
they were prior to last year, the state was not making them.
3)Prior and Related Legislation: SB 234 (Wolk) of 2015, would
have appropriated $19,000,000 from the General Fund to the DFW
to make in lieu payments to counties for past due amounts. SB
234 was held in the Senate Appropriations Committee.
SB 1410 (Wolk) of 2014, would have appropriated $19 million to
cover in lieu payments in arrears and would have continuously
appropriated $2 million annually for future payments. SB 1410
was held in the Senate Appropriations Committee.
AB 1452 (Wolk) of 2007, would have appropriated $7.415 million
for in lieu payments in arrears, but was subsequently amended
to address an unrelated issue.
SB 83 (Committee on Budget), Chapter 24, Statutes of 2015,
amended the law to make the payments permissive instead of
required.
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4)Support Arguments: Many of California's rural counties are
home to important state wildlife areas and also have other
federal and state owned lands within their boundaries. In
either case, these lands do not generate property tax
revenues, an important source of funding for local programs
and services for county residents. This bill reverses a
change in statute that was made by the Department of Finance
last year that made the program permissive rather than
required. Many of the counties in support of this bill note
that they are owed significant amounts in arrears for unpaid
in lieu payments. This bill will help ensure that the state
honors its commitment to make in lieu payments to counties in
the future.
5)Opposition Arguments: None received.
REGISTERED SUPPORT / OPPOSITION:
Support
Rural County Representatives of California (Sponsor)
Alpine County Board of Supervisors
California Central Valley Flood Control Association
California State Association of Counties
Colusa County Board of Supervisors
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Del Norte County Board of Supervisors
Glenn County Board of Supervisors
Humboldt County Board of Supervisors
Inyo County Board of Supervisors
Lake County Board of Supervisors
Lassen County Board of Supervisors
Marin County Board of Supervisors
Merced County Board of Supervisors
Modoc County Board of Supervisors
Mono County Board of Supervisors
Monterey County Board of Supervisors
Napa County Board of Supervisors
Nevada County Board of Supervisors
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Northern California Water Association
San Diego County Board of Supervisors
Shasta County Board of Supervisors
Sierra County Board of Supervisors
Sonoma County Board of Supervisors
Sutter County Board of Supervisors
Tehama County Board of Supervisors
Tulare County Board of Supervisors
Yolo County Board of Supervisors
Yuba County Board of Supervisors
Opposition
None on file.
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Analysis Prepared by:Diane Colborn / W., P., & W. / (916)
319-2096