BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 1053 HEARING: 4/30/14
AUTHOR: Cooley FISCAL: No
VERSION: 4/7/14 TAX LEVY: No
CONSULTANT: Weinberger
SACRAMENTO METROPOLITAN FIRE DISTRICT'S
TAX REFUNDS (URGENCY)
Allows the Sacramento Metropolitan Fire District to return
money improperly collected from some district taxpayers
from 2005 through 2012.
Background and Existing Law
Proposition 218 (1996) established that a tax levied by a
special-purpose district is a special tax requiring 2/3
voter approval. State law allows a district's legislative
body to levy a special tax with 2/3 voter approval (AB
2345, Chappie, 1980).
The Sacramento Metropolitan Fire District is a special
district organized pursuant to the Fire Protection District
Law of 1987 (SB 515, Bergeson, 1987). The District serves
a population of over 640,000 in a 417 square mile service
area within Sacramento County, including the cities of
Citrus Heights and Rancho Cordova and several
unincorporated communities. The District was formed when
the Sacramento County Fire Protection District and the
American River Fire Protection District merged on December
1, 2000.
More than two-thirds of the voters in the Sloughhouse and
Rancho Murieta areas within the American River Fire
Protection District approved Measure Q on the November 7,
2000 general election ballot. That ballot measure
authorized the District to raise revenues for fire
suppression and emergency ambulance services by levying an
annual parcel tax at a rate not to exceed $100 per parcel.
Last year, the Sacramento Metropolitan Fire District
discovered that it was levying the tax on approximately
3,800 parcels of property that should not have been subject
to the tax. The District erroneously began collecting
AB 1053 -- 4/7/14 -- Page 2
taxes from these parcels in the 2005-2006 fiscal year.
State law allows a local government to refund money from
parcel taxes that appear on the property tax bill if those
taxes were erroneously collected, but generally prohibits a
local government from refunding erroneously collected
parcel taxes in response to a claim that is filed more than
four years after the date of the payment that is to be
refunded.
Sacramento Metropolitan Fire District officials have
corrected the District's error on the tax roll and
established a claims procedure to allow taxpayers to claim
refunds of erroneously collected taxes. Although District
officials want to refund money erroneously collected from
taxpayers since 2005, the four-year statute of limitations
in current law only allows refunds for taxes that were paid
within the last four years. District officials want the
Legislature to authorize the District to refund parcel tax
revenues collected more than four years ago.
Proposed Law
Assembly Bill 1053 allows the Sacramento Metropolitan Fire
District, notwithstanding any other law, to return to a
payor any money the District improperly collected from the
payor due to a clerical error in the District's
administration of the Special Fire Tax for the Rancho
Murieta and Sloughhouse area, levied from 2005 to 2012,
inclusive.
AB 1053 specifies that its provisions remain in effect only
until January 1, 2015, and as of that date are repealed,
unless a later enacted statute, that is enacted before
January 1, 2015, deletes or extends that date.
AB 1053 contains legislative findings and declarations that
specify the ways in which the bill serves a public purpose.
State Revenue Impact
No estimate.
AB 1053 -- 4/7/14 -- Page 3
Comments
1. Purpose of the bill . Because state law requires that
refund claims for parcel taxes that appear on the property
tax bill must be presented no more than four years after
the taxes are paid, the Sacramento Metropolitan Fire
District can only reimburse taxpayers for taxes that the
District collected during fiscal years 2009-10 through
2012-13. AB 1053 allows the Sacramento Metropolitan Fire
District to provide full refunds to taxpayers from whom the
District collected money during fiscal years 2005-06
through 2008-09, notwithstanding the four-year statute of
limitations that usually applies to parcel tax refund
claims. The bill specifies that the exemption from the
standard four-year statute of limitations applies only to
the District's Special Fire Tax for the Rancho Murieta and
Sloughhouse area and will be automatically repealed after
this year. This short-lived and narrowly-focused exemption
upholds basic principles of fairness and fosters public
trust in government by allowing the District to return all
of the money that it erroneously collected from taxpayers.
2. Next in line ? Without statutory limitations or
deadlines on filing tax refund claims, local governments
would remain indefinitely exposed to the risk of having to
repay large amounts of money that were collected in error,
no matter how long ago. Statutes of limitations for tax
refund claims make tax revenues sufficiently final and
predictable to allow public officials to manage public
funds and pay for public goods and services. There is no
recent precedent for legislation that allows a local
government to provide refunds to taxpayers for money
collected during years that are not within the statute of
limitations for refund claims. The Sacramento Metropolitan
Fire District is not the first local government in
California to collect money, due to an error, from
taxpayers who shouldn't have been charged. It almost
certainly won't be the last. AB 1053 could invite
additional requests to fully reimburse taxpayers for money
erroneously collected over extended periods of time,
potentially eroding the fiscal certainty provided by
statutes of limitations on tax refund claims.
3. Let's get technical . To clarify AB 1053's provisions,
the Committee may wish to consider amending the bill to
make the following changes:
On page 2, line 10, delete "an assessment" and
AB 1053 -- 4/7/14 -- Page 4
insert "a special tax"
On page 3, line 1, delete "property assessments"
and insert "special taxes"
On page 3, line 11, delete "that certain
assessment" and insert "the special tax"
On page 3, line 12, after "for" insert "the"
On page 3, line 12, delete "Sloughouse" and insert
"Sloughhouse"
On page 3, lines 22 and 23, delete "an assessment"
and insert "a special tax"
On page 3, line 29, delete "assessment" and insert
"special tax"
4. Special legislation . The California Constitution
prohibits special legislation when a general law can apply
(Article IV, �16). AB 1053 contains findings and
declarations explaining the need for legislation that
applies only to the Sacramento Metropolitan Fire District.
5. Urgency . Regular statutes take effect on January 1
following their enactment; bills passed in 2014 take effect
on January 1, 2015. The California Constitution allows
bills with urgency clauses to take effect immediately if
they're needed for the public peace, health, and safety. AB
1053 contains an urgency clause declaring that it is
necessary for its provisions to go into effect immediately
to remedy the mistaken collection of money from taxpayers.
6. Gut-and-amend . As introduced, AB 1053 increased the
amount of premiums that an insured would have to pay to
meet the statutory definition of an "industrial insured."
The Senate Governance & Finance Committee never heard that
version of the bill. The April 7, 2014 amendments deleted
AB 1053's contents and inserted the current language
relating to the Sacramento Metropolitan Fire District's tax
refunds.
Assembly Actions
Not relevant to the April 7, 2014 version of the bill.
Support and Opposition (4/24/14)
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Support : Sacramento Metropolitan Fire District.
Opposition : Unknown.