BILL ANALYSIS �
AB 892
Page 1
Date of Hearing: May 1, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 892 (Daly) - As Amended: April 29, 2013
SUBJECT : Parcel taxes.
SUMMARY : Requires the Board of Equalization to report annually
to the Governor on the imposition of each locally assessed
parcel tax, as specified. Specifically, this bill :
1)Requires the Board of Equalization (BOE) to report annually to
the Governor information relating to the imposition of each
locally assessed parcel tax, including but not limited to, the
following:
a) The type and rate of parcel tax imposed;
b) The number of parcels subject to the parcel tax;
c) The number of parcels exempt from the parcel tax;
d) The sunset date of the parcel tax, if any; and,
e) The amount of revenue received from the parcel tax.
1)Requires BOE in implementing the provisions of the bill to
utilize existing funds or resources.
EXISTING LAW :
1)Authorizes cities, counties, and special districts to impose a
general tax for general governmental purposes with the
approval of a majority of voters.
2)Authorizes cities, counties, and special districts to impose a
special tax for specified purposes with the approval of
two-thirds of the voters.
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 programs,
services, or projects that voters approved.
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5)Requires a county tax bill to include specified information
including the billing of any special purpose parcel tax.
6)Requires BOE to report annually to the Governor a report with
the assessed value of state-assessed and locally assessed real
and personal property in each county and the assessed value of
state-assessed and locally assessed property in each
incorporated city or town and information concerning other
taxes which it administers.
FISCAL EFFECT : Unknown
COMMENTS :
1)Existing law requires BOE to annually report to the Governor
the assessed value of state-assessed and locally assessed real
and personal property in each county and incorporated city or
town. This bill would add to the annual report specified
information on parcel taxes. This bill requires BOE to report
to the Governor the imposition of each locally assessed parcel
tax, including, but not limited to, the parcel tax type and
rate, number of parcels subject to and exempt from the tax,
sunset date, and amount of revenue received from the parcel
tax. This bill is sponsored by the California Taxpayers
Association.
2)Article XIII A of the California Constitution 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
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. The result is that a parcel tax
must be adopted as a special tax.
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With the approval of at least two-thirds of the voters, local
governments can impose a parcel tax on all parcels or a subset
of parcels in their jurisdiction. Parcel taxes can be used to
fund a variety of local government services, even if the
taxpayer who pays a parcel tax does not actually use the
services funded by that tax. However, if services are used by
a taxpayer, the parcel tax must be proportional to their use
by the taxpayer. Parcel tax revenue is also restricted to the
public programs, services, or projects that voters approved
when enacting that parcel tax.
3)According to the Legislative Analyst's report entitled,
Understanding California's Property Taxes , "Recent election
reports and financial data suggest that parcel taxes represent
a significant and growing source of revenue for some local
governments. Specifically, between 2001 and 2012, local
voters approved about 180 parcel tax measures to fund cities,
counties, and special districts, and about 135 measures to
fund K-12 districts. The most recent K-12 financial data
(2009-2010) indicate that schools received about $350 million
from this source. We were not able to locate information on
the statewide amount of parcel tax revenue collected by
cities, counties, and special districts."
An Overview of Local Revenue Measures by Michael Coleman,
author of CaliforniaCityFinance.com California Local
Government Finance Almanac, cites data on parcel taxes from
2001-2009, "Over half of the proposed parcel taxes have been
for public safety or medical services including law
enforcement, gang suppression, fire suppression and
prevention, emergency medical and hospital services, equipment
and facilities. 44% of the 308 parcel tax measures passed.
Nearly half of those that failed achieved over 55 percent
'yes' votes."
4)According to the sponsor, "Each year voters in various
jurisdictions are asked to decide on upwards of thirty or so
local parcel tax measures, but little information is available
on how many past parcel taxes have been levied in their
county, how much revenue has been generated by those taxes, or
what programs have benefited from those revenues. Similarly,
there is no aggregated information to help state and local
lawmakers determine the efficacy of such taxes."
The Committee may wish to consider whether this bill increases
citizen awareness of enacted parcel taxes.
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5)The Committee may wish to note that this bill does not
prescribe how BOE will obtain the required information on
parcel taxes to report to the Governor. While the bill
establishes the responsibility for reporting with BOE, it also
specifies existing resources must be utilized. In the absence
of a clearly defined process for BOE to obtain the necessary
information, it is possible that individual local agencies,
tax collectors, or county auditors may have to collect,
compile, and report this information to BOE.
6)Support arguments : Supporters argue that this bill would
increase transparency and oversight of locally assessed parcel
taxes.
Opposition arguments : Opposition may argue that this bill
could result in additional costs to local agencies for the
purposes of reporting parcel tax information.
REGISTERED SUPPORT / OPPOSITION :
Support
California Taxpayers Association (CalTax) [SPONSOR]
Building Owners and Managers Association of California
California Apartment Association
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Downtown Association
California Manufacturers and Technology Association
Howard Jarvis Taxpayers Association
International Council of Shopping Centers
Los Angeles Unified School District
NAIOP of California, the Commercial Real Estate Development
Association
National Federation of Independent Business
Orange County Business Council
Simi Valley Chamber of Commerce
Western Electrical Contractors Association
Opposition
None on file
AB 892
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Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958