BILL ANALYSIS
AB 308
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Date of Hearing: August 25, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 308 (Cook and Carter) - As Amended: August 19, 2010
SUBJECT : Property tax revenue allocations: state-assessed
property.
SUMMARY : Continues the property tax revenue allocation
methodology for a specified utility property located in the
Inland Valley Development Agency (IVDA) redevelopment project
area in San Bernardino County, despite a recent change in
ownership that triggers a change in allocations.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Provide that if a utility-owned state-assessed unitary
property was constructed by a wholly owned subsidiary of a
utility before January 1, 2007, and placed in service by the
utility on or after January 1, 2007, and the property is
located in a redevelopment project area of a joint powers
authority comprised of cities and a county that adopts a
resolution stating that the property is subject to a
redevelopment plan, and the joint powers authority transmits a
copy of the resolution stating that the property is subject to
a redevelopment plan to the State Board of Equalization (BOE)
and the county auditor before January 1, 2011, then, for the
2010-11 and following fiscal years (FYs), the allocation of
property tax revenues shall be subject to the requirements
enacted by AB 81 (Migden), Chapter 57, Statutes of 2002.
2)Provide that BOE may amend the tax rolls for FY 2010-11 in
order to provide the allocations as required in 1) above.
3)State that the Legislature finds and declares that a special
law is necessary in order to ensure that IVDA receives
sufficient tax increment funding to repay loans, or moneys
advance to, or indebtedness incurred by, the redevelopment
agency to finance or refinance redevelopment projects.
4)State that this act is an urgency statute and shall take
effect immediately.
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5)Add in chaptering out provisions to ensure that this bill does
not conflict with SB 1398 (DeSaulnier).
EXISTING LAW :
1)Requires BOE to assess public utilities for property tax
purposes.
2)Provides for the following allocation formula pursuant to SB
1317 (Torlakson), Chapter 872, Statutes of 2006, for qualified
public utility-owned electrical facilities built after January
1, 2007, and meeting specified conditions:
a) Counties, K-14 schools, and non-enterprise special
districts receive the same percentage of these property tax
revenues as they received in the previous year;
b) The city in which the electrical facility is located
receives 90% of the remaining property tax revenues;
c) The city or water districts that provide water service
to the electrical facilities receive the remaining 10% of
the property tax revenues; and,
d) The other entities that would have previously received a
share of the property tax revenues do not receive any of
the revenues
AS PASSED BY THE ASSEMBLY , this bill required elections
officials to send a special runoff ballot, on which a voter may
rank all the candidates, to every overseas voter for any
election for which there may be a runoff election held within 90
days of that election, and required the elections official to
tally a vote for the highest ranked candidate on a special
runoff ballot if the overseas voter that cast the special runoff
ballot does not return a regular ballot for the runoff election.
FISCAL EFFECT : According to the Senate Appropriations
Committee, this bill would result in approximately $2 million
less property tax revenue for K-14 schools than they would
otherwise receive beginning in FY 2010-11. This bill would also
create a reimbursable state-mandated local program by changing
the manner in which county officials allocate property tax
revenues.
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COMMENTS :
1)This bill continues the property tax revenue allocation
methodology for a specified utility property located in the
IVDA redevelopment project area in San Bernardino County under
specified conditions, despite a recent change in ownership
that triggers a modification in allocation formulas.
2)AB 81 (Migden), Chapter 57, Statutes of 2002, was enacted to
change the revenue allocation of power plants divested by
public utilities and sold to private operators, as well as
those newly constructed by merchant power plant owners, to
provide for situs-based revenue allocation. In 2005, San
Diego Gas and Electric sought and received special revenue
allocations for a proposed new power plant to be constructed
in the City of Escondido [AB 2558 (Plescia), Chapter 640,
Statutes of 2004]. In 2006, the Legislature created an
exception to the countywide unitary tax allocation method for
all newly constructed public-utility-owned large-scale
electrical generation, substation, and transmission
facilities. This exception allocates a greater share of
unitary property tax revenues to the city or county in which a
qualified electrical facility is located [SB 1317 (Torlakson),
Chapter 872, Statutes of 2006].
3)Formed in 1990, the IVDA is a joint powers authority comprised
of the County of San Bernardino and the cities of Colton, Loma
Linda, and San Bernardino. IVDA is responsible for
redeveloping the non-aviation portion of the former Norton Air
Force Base and surrounding properties. Southern California
Edison's (SCE) Mountainview power plant is located in the City
of Redlands within an IVDA redevelopment project area. Until
this year, an unregulated subsidiary of SCE owned the
Mountainview power plant. In March 2010, SCE took ownership
of the plant. Because it is now owned by a regulated utility
company, the plant's property tax revenues will be allocated
using the 2006 Torlakson allocation method rather than under
the 2002 Migden allocation method.
4)The author introduced this bill in order to allow the county
auditor to continue to allocate property tax revenues using
the Migden allocation method; otherwise, the Torlakson
assessment method triggered by the change in ownership will
reduce property tax revenues that IVDA and other local
agencies receive from the Mountainview power plant.
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5)This bill contains an urgency clause so that BOE and the San
Bernardino County Auditor can implement the bill's
requirements for allocating property taxes from the
Mountainview power plant in 2010. This bill requires a
two-thirds vote of each house because it makes changes to the
pro rata shares in which ad valorem property tax revenues are
allocated among agencies in a county.
6)AB 308 contains chaptering out amendments in order to ensure
that there is no conflict with SB 1398 (DeSaulnier). SB 1398
would revise property tax formulas to allocate property tax
revenues from a proposed public utility power plant in Contra
Costa County to benefit the Oakley Redevelopment Agency.
7)Support arguments : Supporters argue that without the bill, a
mere change in ownership of a power plan located within the
area of the IVDA will result in a loss of funds to the agency
and to surrounding cities and school districts. This bill
maintains the status quo, including the required set-aside of
20% of the revenue for the IVDA's low-and-moderate income
housing fund, therefore preserving the existing property tax
allocation methodology.
Opposition arguments : Department of Finance writes that this
bill would result in some K-14 school districts receiving less
property tax revenue than they would receive under current
law, which would increase the state's Proposition 98 General
Fund obligation. Finance also notes that provisions of the
bill could give rise to a claim of state mandate.
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REGISTERED SUPPORT / OPPOSITION :
Support
Inland Valley Development Agency [SPONSOR]
California Rural Legal Assistance Foundation
Colton Joint Unified School District
Hillwood Investment Properties
Mayor Pat Gilbreath, City of Redlands
Mayor Patrick J. Morris, City of San Bernardino
Neighborhood Housing Services of the Inland Empire, Inc
Redlands Unified School District
San Bernardino City Unified School District
San Bernardino Community College District
San Bernardino County Superintendent of Schools
San Bernardino International Airport Authority
Stater Bros. Markets
Supervisor Josie Gonzales, 5th District, County of San
Bernardino
Supervisor Neil Derry, 3rd District, County of San Bernardino
Western Center on Law and Poverty
Opposition
Department of Finance
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958