BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1450|
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THIRD READING
Bill No: AB 1450
Author: Garcia (D)
Amended: 8/27/14 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 8/6/14
AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu
NOES: Knight, Walters
SENATE APPROPRIATIONS COMMITTEE : 6-0, 8/28/14
AYES: De Le�n, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Local government: redevelopment: revenues from
property tax
override rates
SOURCE : Author
DIGEST : This bill, for the 2014-15 fiscal year and following
years, prohibits a county auditor from allocating revenues from
an extraordinary property tax rate approved by voters to pay for
pension programs to a Redevelopment Property Tax Trust Fund
(RPTTF). This bill requires a county auditor to pay those
revenues into the fund of the city or county whose voters
approved the tax.
ANALYSIS : Existing law dissolved redevelopment agencies and
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community development agencies as of February 1, 2012, and
provides for the designation of successor agencies to wind down
the affairs of the dissolved redevelopment agencies. Existing
law requires revenues equivalent to those that would have been
allocated to each redevelopment agency, had the agency not been
dissolved, to be allocated to the Redevelopment Property Tax
Trust Fund of each successor agency for making payments on the
principal of and interest on loans, and moneys advanced to or
indebtedness incurred by the dissolved redevelopment agencies.
Existing law requires, from February 1, 2012, to July 1, 2012,
inclusive, and for each fiscal year thereafter, the county
auditor-controller, after deducting administrative costs, to
allocate property tax revenues in each Redevelopment Property
Tax Trust Fund in a specified manner.
This bill, for the 2014-15 fiscal year and following years,
prohibits a county auditor from allocating revenues from an
extraordinary property tax rate approved by voters to pay for
pension programs to RPTTF. This bill requires a county auditor
to pay those revenues into the fund of the city or county whose
voters approved the tax.
As an exception to this requirement, this bill allows the city
or county whose voters approved the tax, in response to a
successor agency's written request, to allow the successor
agency to use the revenues from the city or county's fund to pay
any enforceable obligation on an approved Recognized Obligation
Payment Schedule, as specified in state law. If a city or
county grants a successor agency's written request, the bill
requires a county auditor to allocate revenues from an
extraordinary property tax rate approved by voters to pay for
pension programs to the successor agency, but only after all
other moneys deposited in the successor agency's RPTTF have been
exhausted.
This bill:
1.For the 2014-15 fiscal year and each year thereafter,
prohibits a county auditor from allocating revenues from an
extraordinary property tax rate approved by voters to pay for
pension programs to an RPTTF, except as specified. Instead,
the county auditor must pay those revenues into the fund of
the city or county whose voters approved the tax.
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2.As an exception to this requirement, allows the city or county
whose voters approved the tax to request that an oversight
board prohibit revenues derived from a pension tax rate from
being deposited into an RPTTF. Based on substantial evidence
that a former redevelopment agencies (RDA) made a pledge of
revenues that specifically included revenues derived from a
pension tax rate, an oversight board may deny such a request
in an amount not to exceed the amount of revenues pledged by
the former RDA.
3.Requires that, notwithstanding any other law, allocations of
revenues from an extraordinary property tax rate approved by
voters to pay for pension programs made by county auditors
before July 1, 2014 must be deemed correct and not affected by
the bill's provisions. This bill prohibits a city, county,
city or county, county auditor-controller, successor agency,
or affected taxing entity from being subject to any claim for
money, damages, or reallocated revenues based on any
allocation of such revenues before July 1, 2014.
4.Directs that no inference shall be drawn from the bill's
enactment with respect to a county auditor's use,
distribution, or allocation, before July 1, 2014, of revenues
from an extraordinary property tax rate approved by voters to
pay for pension programs.
5.Declares that the Legislature is aware of pending litigation
between the City of San Jose and Santa Clara County, and
expresses legislative intent that no party in that litigation
be in any way prejudiced by the passage of this act.
Therefore, the provisions of this bill shall not apply to the
City of San Jose Successor Agency, except that revenues
derived from a pension tax rate that were allocated to the
RPTTF shall be allocated to the city or county that levied
that tax rate.
6.Makes additional technical and conforming changes to state
law.
Comments
This bill clarifies the disposition of revenues attributable to
extraordinary property tax rates for pensions under the statutes
governing RDA dissolution. Under current law, incremental
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extraordinary property tax rate revenues that had been available
for paying some communities' pension costs before RDAs were
dissolved are no longer available for that purpose. The
dissolution laws also appear to allow some of those revenues to
flow to taxing entities that are not authorized to impose the
extraordinary property tax rate and which would otherwise not
have received those revenues. Because voters anticipated at the
time that they approved these extraordinary property tax rates
that the revenues would be used to pay for the costs of local
government employees' pensions, this bill establishes this use
of the funds as a priority.
Related Legislation
SB 663 (Lara, 2014) is nearly identical to this bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, unknown
General Fund costs, likely exceeding $10 million annually
beginning in 2014-15, due to the diversion of revenues from
pension tax rates from the RPTTF to the city or county that
imposed the pension tax rate.
An estimated $40 million in pension property tax revenues was
deposited into RPTTFs in 2012-13 following the dissolution of
RDAs. These revenues are currently distributed to local taxing
entities pursuant to dissolution statutes, after paying
enforceable obligations of the former RDA. This bill instead
allocates revenues derived from pension tax rates to the cities
and counties that imposed the supplemental rate, except for
specific amounts pledged by the former RDA to pay obligations,
as determined by an oversight board. This diversion is likely
to result in over $10 million in reductions of property tax
allocations to schools. Any amounts diverted away from schools
would typically result in corresponding General Fund
expenditures to meet the minimum funding guarantees of
Proposition 98.
SUPPORT : (Verified 8/28/14)
AFSCME, AFL-CIO
AFSCME, District Council 36
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City of Huntington Park
City of Inglewood
County of Los Angeles
Independent Cities Association
League of California Cities
Los Angeles County Police Chiefs Association
OPPOSITION : (Verified 8/28/14)
City of San Jose
AB:nl 8/29/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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