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AB-12 Local government finance: property tax revenue allocations: negative sum counties.(2011-2012)

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CALIFORNIA LEGISLATURE— 2011–2012 1st Ext.

Assembly Bill
No. 12


Introduced  by  Assembly Member Bill Berryhill, Galgiani
(Principal Coauthor(s): Assembly Member Olsen)
(Principal Coauthor(s): Senator Berryhill, Cannella)

February 03, 2011


An act to repeal and add Section 96.11 of the Revenue and Taxation Code, relating to local government finance, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 12, as introduced, Bill Berryhill. Local government finance: property tax revenue allocations: negative sum counties.
Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenues to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing law requires, for purposes of property tax revenue allocations for the 2011–12 and 2012–13 fiscal years, the county auditor for a county for which a negative sum was calculated pursuant to a specified former statute, in reducing the amount of property tax revenue otherwise allocated to the county by an amount attributable to that negative sum, to apply a reduction amount equal to the reduction amount determined for specified fiscal years.
This bill would instead require, for the 2010–11 fiscal year, the county auditor for a county for which a negative sum was calculated as described above, to increase the total amount of ad valorem property tax revenues deemed allocated to the county in the immediately preceding fiscal year by an amount equal to the absolute value of the negative sum calculated for the county, and the proportional share of any growth in assessed valuations of property attributable to that negative sum through the 2009–10 fiscal year. This bill would also require, for the 2011–12 fiscal year and for each fiscal year thereafter, the amount of property tax revenue deemed allocated to a county in the immediately preceding fiscal year include the full amount of any increase implemented by the auditor, as so described, in that fiscal year, and would require that amount to be reduced from the total amount of ad valorem property tax revenue deemed allocated to the county’s Educational Revenue Augmentation Fund.
By imposing new duties in the annual allocation of ad valorem property tax revenues, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. Governor Schwarzenegger issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on December 6, 2010. Governor Brown issued a proclamation on January 20, 2011, declaring and reaffirming that a fiscal emergency exists and stating that his proclamation supersedes the earlier proclamation for purposes of that constitutional provision.
This bill would state that it addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation issued on January 20, 2011, pursuant to the California Constitution.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 96.11 of the Revenue and Taxation Code is repealed.
96.11.

Notwithstanding any other provision of this article, for purposes of property tax revenue allocations, the county auditor of a county for which a negative sum was calculated pursuant to subdivision (a) of former Section 97.75 as that section read on September 19, 1983, shall, in reducing the amount of property tax revenue that otherwise would be allocated to the county by an amount attributable to that negative sum, do all of the following:

(a)For the 2011–12 fiscal year, apply a reduction amount that is equal to the lesser of either of the following:

(1)The reduction amount that was determined for the 2010–11 fiscal year.

(2)The reduction amount that is determined for the 2011–12 fiscal year.

(b)For the 2012–13 fiscal year, apply a reduction amount that is equal to the lesser of either of the following:

(1)The reduction amount that was determined in subdivision (a) for the 2011–12 fiscal year.

(2)The reduction amount that is determined for the 2012–13 fiscal year.

(c)For the 2013–14 fiscal year and each fiscal year thereafter, apply a reduction amount that is determined on the basis of the reduction amount applied for the immediately preceding fiscal year.

SEC. 2.

 Section 96.11 is added to the Revenue and Taxation Code, to read:

96.11.
 (a) Notwithstanding any other provision of this article, for the 2010–11 fiscal year the auditor of a county for which a negative sum was calculated pursuant to subdivision (a) of former Section 97.75, as that section read on September 19, 1983, shall do both of the following:
(1) Increase the total amount of ad valorem property tax revenue deemed allocated to the county in the immediately preceding fiscal year by an amount equal to the absolute value of the negative sum calculated for the county pursuant to subdivision (a) of former Section 97.75 as that section read on September 19, 1983, and the proportional share of any growth in assessed valuations of property attributable to that negative sum through the 2009–10 fiscal year. For purposes of this paragraph, “proportional share of any growth in assessed valuation of property attributable to that negative sum” means that amount that results in a fiscal year from the annual compounding of the absolute value of the previously calculated negative sum amount, from fiscal year to fiscal year, by the application of the relevant proportional share of the county’s amount of annual tax increment as determined in accordance with Section 96.5, or any predecessor to that section.
(2) Reduce the total amount of ad valorem property tax revenue deemed allocated to the county’s Educational Revenue Augmentation Fund by the amount of the increase described in paragraph (1).
(b) For the 2011–12 fiscal year and for each fiscal year thereafter, the amount of the increases and reductions required by subdivision (a) shall be fully reflected in the application of paragraph (1) of subdivision (a) of Section 96.1 and Section 96.5, or any successor to either of those provisions.

SEC. 3.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 4.

 This act addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation on January 20, 2011, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution.

SEC. 5.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to timely provide vital fiscal relief to counties suffering from unusually acute fiscal difficulties, it is necessary that this act take effect immediately.