BILL ANALYSIS �
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Date of Hearing: April 23, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2211 (Ting) - As Amended: April 10, 2014
SUBJECT : Counties: database: information regarding general ad
valorem property tax revenues.
SUMMARY : Requires each county to make available to taxpayers on
its internet web site a graph visualization of how general ad
valorem property tax revenues are allocated countywide to each
jurisdiction, including, but not limited to, the county, any
city, and any special district, including school districts.
Specifically, this bill :
1)Requires each county to make available to taxpayers on its
internet web site a graph visualization of how general ad
valorem property tax revenues are allocated countywide to each
jurisdiction, including, but not limited to, the county, any
city, and any special district, including school districts.
2)Requires the internet web site to also do the following:
a) Inform taxpayers that the general ad valorem property
tax revenues remain in the county in which they are
collected and are used to fund a significant number of
local government programs and services, including programs
and services provided by K-12 schools and community
colleges, the county, cities, and special districts;
b) Provide a brief summary of the types of programs and
services funded with general ad valorem property tax
revenues provided by each jurisdiction; and,
c) Include links to other jurisdiction's web sites where
more information about specific information about specific
programs and services funded with general ad valorem
property tax revenues is detailed.
3)Requires each county to update the graph annually and work to
improve the appearance, organization, and clarity of the
information provided.
4)Requires counties, as each county updates its information
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technology systems, to work towards acquiring systems that are
able to provide taxpayers with an interactive, searchable
database that allows taxpayers to input information regarding
their property tax liability and receive a customized,
comprehensive account of all of the services funded with
general ad valorem property tax revenues, including, but not
limited to, services provided by the county, any city, and any
special district, including school districts in the tax rate
area in which the property of the taxpayer is located.
5)Provides that if the Commission on State Mandates determines
that this bill contains costs mandated by the state,
reimbursement to local agencies and school districts for those
costs shall be made pursuant to current law governing state
mandated local costs.
EXISTING LAW :
1)Requires specified information to be included on each county
tax bill, whether mailed or electronically transmitted or
included in a separate statement accompanying the bill,
including the following:
a) Value of locally assessed property;
b) Tax rate of a maximum 1% amount of ad valorem tax
imposed on real property;
c) Rate or dollar amount of taxes levied in excess of the
1% limitation to pay for voter approved indebtedness
incurred before July 1, 1978, or bonded indebtedness for
the acquisition of improvement of real property;
d) Amount of any special taxes and special assessments
levied;
e) Amount of any tax rate reduction;
f) Amount of any exemptions;
g) Total taxes due and payable on the property covered by
the bill; and,
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h) Any special purpose parcel tax.
FISCAL EFFECT : This bill is keyed fiscal.
COMMENTS :
1)Purpose of this bill . This bill requires each county to
include on their web site a graph visualization of how general
ad valorem property tax revenues are allocated countywide to
each jurisdiction, including, but not limited to, the county,
any city, and any special district, including school
districts. Specified information is required to be included
on the website including a brief summary of programs and
services funded by property tax revenue. Under this bill
counties would update the graph annually, and are required to
work toward acquiring an information technology system that
can provide taxpayers with more detailed information. This
bill is author-sponsored.
2)Author's statement . According to the author, "California
property tax bills are complex and often confusing to the
taxpayer. Many taxpayers are unaware that all revenue from
property taxes is kept exclusively at the local level for
vital services such as education, police and fire protection,
parks and recreation, and so much more. For example, a 2013
report commissioned by the Center for California Studies at
Sacramento State found that a majority of taxpayers do not
understand which service responsibilities lie with which
levels of government. Survey respondents were asked the
following question: "Of the following choices, on what does
your city or town spend the largest amount of money: public
safety, food stamps, MediCal, or aid to other California
cities, or are you not sure?" Only 25% of survey respondents
correctly identified that public safety was the largest (and
only) municipal expenditure of those listed, and 41% of survey
respondents answered that they did not know.
"The property tax bill includes payments for the general 1% ad
valorem property tax levied on all properties across the state
pursuant to Proposition 13, voter-approved debt rates such as
payments for school bonds, Mello-Roos taxes, parcel taxes, and
other assessments. Currently, property tax bills identify the
purpose of each payment, except for the general 1% ad valorem
tax, the largest tax on the property tax bill. It is critical
that they are provided a receipt for their payment informing
them of the local government services funded by their payment,
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similar to any other receipt they receive when conducting a
financial transaction."
3)Property tax . When property owners pay property tax bills to
the county treasurer -tax collector, the funds are transferred
to the county auditor for distribution. According to the
Legislative Analyst's report entitled, Understanding
California's Property Taxes , "ad valorem property taxes, the
1% rate and voter-approved debt rates, account for nearly 90%
of the revenue collected from property tax bills in California
- roughly $43 billion in 2010-2011. On a typical property tax
bill, however, the 1% rate is listed at the general tax levy
or countywide rate with no indication as to which local
governments receive the revenue or for what purpose the funds
are used. In general, county auditors allocate revenue from
the 1% rate to a variety of local governments within the
county pursuant to a series of complex state statutes. More
than 4,000 local governments receive revenue from the 1%
rate."
The allocation system defined in current law was established
by AB 8 (Greene), Chapter 282, Statutes of 1979, commonly
referred to as AB 8. Each county is divided into tax rate
areas, geographical areas within a county served by the same
local governments, county, city, schools, and special
districts. The number of tax rate areas vary - some counties
may have thousands of tax rate areas. Auditors allocate
revenue to local governments, as directed by existing law, by
tax rate area.
The author points to a Contra Costa Grand Jury Report which
concludes that property tax bills give inadequate information
and do not inform the taxpayer on how the 1% countywide tax
dollar is spent. As a result of the Grand Jury Report in
2003, Contra Costa developed an online tool that allows
taxpayers to use their tax rate area to see by percentage
where their property taxes are allocated. Other counties like
Santa Clara post a tax rate book online where taxpayers can
see where their money is allocated by each of the 813 tax
rates areas, and San Diego posts a pie chart online of
property tax allocation.
4)Previous legislation . AB 920 (Ting) of 2013 passed out of
this Committee on a 7-0 vote and would have required new
information to be included on each county tax bill that
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provided a comprehensive account of all services funded by
local governments. AB 920 was later amended and would have
established the Property Tax Transparency and Accountability
Program which would have required three participating counties
to include on each county tax bill a comprehensive account of
revenues and services funded by local governments for each tax
rate area. AB 920 failed passage in the Assembly
Appropriations Committee.
5)Policy considerations . This bill is keyed a state mandate,
which means the state could be required to reimburse local
agencies and school districts for implementing the bill's
provisions if the Commission on State Mandates determines that
the bill contains costs mandated by the state. The Committee
may wish to consider how this bill will impact counties that
already comply with the requirements in this bill and if their
current practice may be a reimbursable mandate.
This bill requires that counties "work towards acquiring
systems" that are able to provide taxpayers with specified
information. The Committee may wish to consider how the
standard of "working towards" could be interpreted in
potential litigation. If the author's intent is not to
require the county to purchase or to consider purchasing such
a system, then it may be more appropriate to encourage
counties to make this consideration in non-codified intent
language.
This bill requires that a county internet web site include
links to other jurisdiction's web sites where more information
about specific programs and services funded by property tax is
detailed. The Committee may wish to consider for small local
agencies, like a small special district, whether this
requirement is appropriate, given that these small agencies
may not have websites.
6)Committee amendments . The Committee may wish to ask the
author to only require the county to include links to local
agencies that currently have a website.
7)Arguments in support . Supporters argue that access to this
information will greatly increase taxpayers' understanding of
the roles of property tax revenue and of local government in
providing the services they depend on.
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8)Arguments in opposition . None on file.
REGISTERED SUPPORT / OPPOSITION :
Support
California Professional Firefighters
Jerome E. Horton, Chairman, 4th District, Board of Equalization
Opposition
None on file
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958