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SB-15 Property tax revenue allocations: Local-State Sustainable Investment Program.(2019-2020)

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Date Published: 04/24/2019 09:00 PM
SB15:v96#DOCUMENT

Amended  IN  Senate  April 24, 2019
Amended  IN  Senate  April 08, 2019
Amended  IN  Senate  March 20, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 15

Introduced by Senator Portantino

December 03, 2018

An act to add Part 3.5 (commencing with Section 55850) to Division 2 of Title 5 of the Government Code, and to add Section 97.82 to the Revenue and Taxation Code, relating to local government finance.


LEGISLATIVE COUNSEL'S DIGEST


SB 15, as amended, Portantino. Property tax revenue allocations: Local-State Sustainable Investment Program.
Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally provides that each jurisdiction shall 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 property tax law also reduces the amount of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992–93 and 1993–94 fiscal years, that the amount of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. Existing property tax law requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund (ERAF) in that county for allocation to school districts, community college districts, and the county office of education.
This bill would establish the Local-State Sustainable Investment Program, which would be administered by the Department of Finance. The bill would authorize a city, a county, or a specified joint powers agency that meets specified eligibility criteria to apply to the Department of Finance for funding for projects that further certain purposes, including increasing the availability of affordable housing. The bill would require that funding under the program be provided by an allocation of ad valorem property tax revenues, as provided, and would limit the amount of funding approved under the program to $200,000,000 per fiscal year and $1,000,000,000 total.
The bill, for each fiscal year in which funding for a project within a county is approved under the program, would require the county auditor to decrease the amount of ad valorem property tax revenue that is otherwise required to be allocated to the county ERAF by the countywide local-state sustainable investment amount and to allocate a commensurate amount to the county’s Local-State Investment Fund, which is created by this bill in the treasury of each county. The bill would require the county treasurer to transfer from the county’s Local-State Sustainable Investment Fund an amount approved by the Department of Finance under the program into a separate account for use by a city, a county, or a specified joint powers agency for an approved project, applicant, as provided. The bill would require, upon approval of funding for a project under the program, the Department of Finance to issue an order directing the county auditor of the county in which the project is approved to make the above-described reduction in property tax revenue allocations to the county’s ERAF.
By imposing new duties upon local officials, this 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 the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Part 3.5 (commencing with Section 55850) is added to Division 2 of Title 5 of the Government Code, to read:

PART 3.5. Local-State Sustainable Investment Program

55850.
 For purposes of this part:
(a) “Applicant” means a city, a county, or a joint powers agency formed pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 that includes a city or county.
(b) “Countywide local-state sustainable investment amount” means the total amount of funding approved by the Department of Finance pursuant to this section for projects within a county for a fiscal year.
(c) “Program” means the Local-State Sustainable Investment Program.

55850.55851.
 (a) There is hereby established the Local-State Sustainable Investment Program.
(b) An applicant may submit an application to the Department of Finance for funding for projects that further the purposes described in subdivision (c) of Section 97.82 of the Revenue and Taxation Code.
(c) The Department of Finance shall review, and approve, modify, or deny, applications for funding for projects described in subdivision (b). The Consistent with the requirements of Section 55852, the Department of Finance shall decide whether to approve, modify, or deny these applications based on whether the project furthers the purposes described in subdivision (c) of Section 97.82 of the Revenue and Taxation Code. Funding for approved projects shall be provided by an allocation of ad valorem property tax revenue pursuant to Section 97.82 of the Revenue and Taxation Code.
(d) (1) The Department of Finance shall approve no more than two hundred million dollars ($200,000,000) in funding for projects approved under the program per fiscal year. The total amount of funding approved pursuant to this section shall not exceed one billion dollars ($1,000,000,000).
(2) At least 20 percent of the projects approved each fiscal year shall be in counties with populations of less than 200,000.
(3) The Department of Finance may approve funding for a project over multiple fiscal years but shall not approve funding for a project for more than 10 years. If a project receives funding over multiple fiscal years, only the amount approved for a given fiscal year shall be applied towards the funding limit described in paragraph (1).
(4) Upon approval of funding for a project under the program, the Department of Finance shall issue an order directing the county auditor of the county in which the project is approved to reduce the amount of ad valorem property tax revenue otherwise required to be allocated to the county’s Educational Revenue Augmentation Fund by the county’s countywide local-state sustainable investment amount pursuant to Section 97.82 of the Revenue and Taxation Code.

(e)For purposes of this section, the following definitions shall apply:

(1)“Applicant” means a city, a county, or a joint powers agency formed pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 that includes a city or county.

(2)“Countywide local-state sustainable investment amount” means the total amount of funding approved by the Department of Finance pursuant to this section for projects within a county for a fiscal year.

(3)“Program” means the Local-State Sustainable Investment Program.

55852.
 (a) In order to be eligible for funding under the program, an applicant shall meet both of the following requirements:
(1) (A) Except as otherwise provided in subparagraph (B), the applicant will provide matching resources, including, but not limited to, financial, in-kind land dedication, or public-private funds, for the funds allocated under the program.
(B) Subparagraph (A) shall not apply in the case of an applicant located in a rural area of the state.
(2) If applicable, the applicant has not been found to have violated the Housing Accountability Act (Section 65589.5) or the Density Bonus Law (Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7) within the following time periods:
(A) Before January 1, 2023, the applicant has not been found to have violated the provisions specified in this paragraph on or after January 1, 2018.
(B) On and after January 1, 2023, the applicant has not been found to have violated the provisions specified in this paragraph within the five years preceding the date of the submission of the applicant’s plan pursuant to this part.
(b) In approving funding under the program, the Department of Finance shall prioritize awarding funds to applicants that have enacted local measures to reduce development costs, including, but not limited to, accelerating housing approvals, reducing the average time for issuing a conditional use or other development permit to less than one year, reducing fees imposed in connection with the approval of accessory dwelling units, and increasing density near transit.

SEC. 2.

 Section 97.82 is added to the Revenue and Taxation Code, to read:

97.82.
 (a) Notwithstanding any other provision of law, if a project is approved in a county under the Local-State Sustainable Investment Program established by Section 55850 55851 of the Government Code, for each fiscal year in which funding for the project has been approved, the county auditor shall do both of the following:
(1) Decrease the total amount of ad valorem property tax revenue that is otherwise required to be allocated to a county’s Educational Revenue Augmentation Fund by the countywide local-state sustainable investment amount.
(2) Allocate funds in the amount of the reduction described in paragraph (1) to the county’s Local-State Sustainable Investment Fund, which shall be established in the treasury of each county.
(b) The county treasurer shall transfer from the county’s Local-State Sustainable Investment Fund an amount approved pursuant to Section 55850 55851 of the Government Code into a separate account for use by an approved applicant for the purposes described in subdivision (c).
(c) An (1) Subject to paragraph (2), an applicant shall use the funds transferred by the county treasurer pursuant to this section for the following purposes: as follows:

(1)To increase

(A) At least 50 percent of the funds shall be used to increase the availability of affordable housing, meaning the predevelopment, development, acquisition, rehabilitation, and preservation of units that are affordable to households making 120 percent of area median income.
(B) Any funds not used for the purpose described in this paragraph shall be used for any of the following purposes:

(2)

(i) To increase the availability of high-quality jobs though the rehabilitation, construction, and maintenance of housing infrastructure.

(3)

(ii) To promote strong neighborhoods by supporting local community planning and engagement efforts to revitalize and restore neighborhoods, including by repairing parks and aging infrastructure.

(4)

(iii) To build public safety facilities, which shall not include correctional facilities.
(2) Notwithstanding any other provision of this section, an applicant that has taken any action, whether by the legislative body of the applicant or the electorate exercising its local initiative or referendum power, that has any of the following effects, shall use 100 percent of the funds transferred to it for housing and infrastructure that supports housing:
(A) Established or implemented any provision that:
(i) Limits the number of land use approvals or permits necessary for the approval and construction of housing that will be issued or allocated within all or a portion of the applicant.
(ii) Acts as a cap on the number of housing units that can be approved or constructed either annually or for some other time period.
(iii) Limits the population of the applicant.
(B) Imposes a moratorium or enforces an existing moratorium on housing development, including mixed-use development, within all or a portion of the jurisdiction of the applicant, except pursuant to a zoning ordinance that complies with the requirements of Section 65858.
(C) Requires voter approval of any updates to the applicant’s housing element to comply with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code, or any rezoning of sites or general plan amendment to comply with an updated housing element or Section 65863.
(D) Changes the zoning of a parcel or parcels of property to a less intensive use or reduces the intensity of land use within an existing zoning district below what was allowed under the general plan land use designation and zoning ordinances of the applicant in effect on January 1, 2018. For purposes of this subparagraph, “less intensive use” includes, but is not limited to, reductions to height, density, floor area ratio, or new or increased open space or lot size requirements, for property zoned for residential use in the applicant’s general plan or other planning document.
(E) If applicable, results in a determination by the Department of Housing and Community Development pursuant to Section 65585 of the Government Code that the applicant’s housing element is not in substantial compliance with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(F) Violates the terms of any state housing program, including, but not limited to, those programs specified in Part 2 (commencing with Section 50400) of Division 31 of the Health and Safety Code, in which the applicant is participating.
(d) Any ad valorem property tax revenue that would have otherwise been allocated to schools had this section not been enacted shall be backfilled with moneys from the General Fund. This subdivision does not constitute a change in, but is declaratory of existing law.
(e) This section shall not be construed to do any of the following:
(1) Reduce any allocations of excess, additional, or remaining funds that would otherwise have been allocated to county superintendents of schools, cities, counties, and cities and counties pursuant to clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing with Section 98) had this section not been enacted. The allocations otherwise required by this section shall be adjusted to comply with this paragraph.
(2) Require an increased ad valorem property tax revenue allocation or increased tax increment allocation to a community redevelopment agency.
(3) Alter the manner in which ad valorem property tax revenue growth from fiscal year to fiscal year is otherwise determined or allocated in a county.
(4) Reduce ad valorem property tax revenue allocations required under Article 4 (commencing with Section 98).
(5) If, for the fiscal year, after complying with Section 97.68 and subparagraph (B) of paragraph (1) of subdivision (a) of Section 97.70, there is not enough ad valorem property tax revenue that is otherwise required to be allocated to a county Educational Revenue Augmentation Fund for the auditor to complete the allocation reduction required by subdivision (a), the auditor shall additionally reduce the total amount of ad valorem property tax revenue that is otherwise required to be allocated to all school districts and community college districts in the county for that fiscal year by an amount equal to the difference between the countywide local-state sustainable investment amount and the amount of ad valorem property tax revenue that is otherwise required to be allocated to the county Educational Revenue Augmentation Fund for that fiscal year. This reduction for each school district and community college district in the county shall be the percentage share of the total reduction that is equal to the proportion that the total amount of ad valorem property tax revenue that is otherwise required to be allocated to the school district or community college district bears to the total amount of ad valorem property tax revenue that is otherwise required to be allocated to all school districts and community college districts in a county. For purposes of this subdivision, “school districts” and “community college districts” do not include any districts that are excess tax school entities, as defined in Section 95.
(6) Any reduction in the amount of ad valorem property tax revenues deposited in the county’s Educational Revenue Augmentation Fund as a result of subdivision (a) shall be applied exclusively to reduce the amounts that are allocated from that fund to school districts and county offices of education, and shall not be applied to reduce the amounts of ad valorem property tax revenues that are otherwise required to be allocated from that fund to community college districts.
(f) The revenue allocation modifications made pursuant to subdivision (a) shall not be considered in determining, for purposes of Section 96.1, the amount of property tax revenue allocated to a jurisdiction in the prior fiscal year.
(g) For purposes of this section, the following definitions shall apply:
(1) “Applicant” means a city, a county, or a joint powers agency formed pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code that includes a city or county.
(2) “Countywide local-state sustainable investment amount” means the total amount of funding approved by the Department of Finance pursuant to Section 55850 55851 of the Government Code for projects within a county for a fiscal year.

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.