BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2109 (Daly) - Controller: Reports: Parcel Taxes
Amended: May 6, 2014 Policy Vote: G&F 7-0
Urgency: No Mandate: Yes
Hearing Date: August 4, 2014
Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2109 would require (1) the State Controller's
Office (SCO) to report annually on locally assessed parcel taxes
and (2) local governments to provide information required by SCO
to complete the report
Fiscal Impact:
SCO indicates that the bill would result in estimated
first-year General Fund costs of $450,000 and ongoing costs
of up to $200,000 annually to collect, process, analyze and
publish parcel tax data.
Potentially significant reimbursable costs to cities,
counties and special districts (local governments) that
assess parcel taxes to report the specified information to
SCO.
Background: A parcel tax is a special tax on property, and is
generally not computed based on the property's value. Instead,
parcel taxes are often flat fees imposed by a local government
on each "parcel" of real property, both residential and
commercial. Because a parcel may be a small residential plot or
a 100-acre estate, parcel taxes are generally regressive,
meaning owners of small parcels pay a larger percentage of tax
compared with the land owned. Existing law does not impose
limits on the use of special tax proceeds, allowing local
governments to specify a particular use for parcel taxes in the
relevant ballot measure. Generally, local parcel taxes provide
funding for schools and other local building projects. Counties
collect parcel taxes with property taxes, and then remit funds
to the district imposing the tax. Property tax law generally
guides parcel tax collection.
AB 2109 (Daly)
Page 1
Current law requires SCO to compile and publish on its internet
site annual reports summarizing local agencies' finances,
including their revenue sources. The reports are based on
financial data submitted to SCO by local governments; SCO
compiles the data reported by local governments but does not
verify the information. The SCO reports detail the aggregate
amount of various taxes collected by each local governmental
entity, including the allocation of ad valorem taxes on real
property, voter approved taxes, property assessments, and
special assessments.
The Legislative Analyst's Office (LAO) reported in late 2013
that parcel taxes generally represent a significant and growing
source of revenues for local governments. Between 2001 and
2012, voters approved about 180 parcel tax measures to fund
cities, counties, and special districts, and about 135 measures
to fund K-12 districts. As the LAO noted, information on the
statewide amount of parcel tax revenue collected by cities,
counties, and special districts is not available.
Proposed Law: This bill would require SCO to include specified
information regarding parcel taxes in its annual report
summarizing financial data for local governmental entities,
including (1) the type and rate of the tax, (2) the number of
impacted and exempted parcels, (3) the sunset date of the tax,
(4) the revenue generated by the tax, and (5) the manner in
which the revenue is being used. The bill would require each
impacted city, county, and special district to furnish the
pertinent information in the form and manner specified by the
SCO.
Related Legislation: This bill is similar to AB 892 (Daly) of
2013; however, AB 892 placed the parcel tax data collection and
reporting requirements inside the Board of Equalization as
opposed to SCO. AB 892 was held in the Assembly Appropriations
Committee.
Staff Comments: This bill's data requirements would require a
modification to SCO's Local Government Reporting System (LGRS).
SCO anticipates needing additional information technology
resources on a limited term basis to accommodate the new parcel
tax data reported by local governments. SCO would need .5
permanent PY on an ongoing basis thereafter.
AB 2109 (Daly)
Page 2
The California Constitution requires the State to reimburse
local governments for the costs of new or expanded
state-mandated local programs. Because AB 2109 imposes new
requirements on counties, cities, and special districts,
Legislative Counsel says that it imposes a new state mandate.
AB 2109 requires the state to reimburse local agencies if the
Commission on State Mandates determines that the bill imposes a
reimbursable mandate.