95.36.

 (a) (1) The Legislature finds and declares all of the following:

(A) There is a significant and compelling state financial interest in the maintenance of an adequately funded system of property tax administration. This financial interest derives from the fact that schools are the greatest beneficiaries of all property tax revenues collected statewide which serve to offset the General Fund obligation to fund K–12 schools, and extends not only to assessment and maintenance of the tax rolls, but also to all aspects of the system which include, but are not limited to, collection, apportionment, allocation, and processing and defending appeals.

(B) The combination of limitations on county revenue authority, increasing county financial obligations, and the shift of county property taxes to schools has created a financial disincentive for counties to adequately fund property tax administration. This disincentive is most clearly evidenced by the fact that counties, on average, receive less than 25 percent of statewide property tax revenues while some counties are obligated to pay more than an average of 70 percent of the costs of administration.

(C) The original State-County Property Tax Loan Program implemented in 1995 was in recognition of the state’s financial interest, and the success of that program and the subsequent State-County Property Tax Administration Grant Program implemented in 2001 has demonstrated the appropriateness of an ongoing commitment of state funds to reduce the burden of property tax administration on county finances.

(D) The respective roles of the county assessor, county auditor-controller, county tax collector, county treasurer, the clerk of the board of supervisors, and the county board of equalization in fulfillment of the responsibilities of the system of property tax assessment are critical to the success of the objectives of this section.

(2) Based upon these findings and declarations, it is the intent of the Legislature to establish a new property tax administration funding program to be known as the State-County Property Assessment and Revenue for Education Funding Program (PARE) that will continue and build upon the success of the prior State-County Property Tax Administration Loan and Grant Programs.

(b) (1) Notwithstanding any other law, for the 2008–09 fiscal year and for each fiscal year thereafter to the 2013–14 fiscal year, inclusive, any county board of supervisors may, upon the recommendation of the assessor, adopt a resolution to participate in the PARE program established by this section. If this resolution is adopted for a fiscal year, a copy of the resolution shall be sent to the department on or before September 15 of the fiscal year in which the county participates in the PARE program. The department shall, upon approval, transmit a copy of the resolution to the county auditor-controller, the county assessor, and the Controller on or before December 15.

(2) Prior to the assessor’s recommendation for participation in the PARE program, the assessor shall consult with the county tax collector, the county auditor-controller, the clerk of the county board of equalization, and any other county agency directly involved in property tax administration, to develop an identifiable plan and performance measures relating to, or resulting from, the assessor’s completion of qualified actions described in subparagraph (B) of paragraph (3) for the use of these funds during the period specified in the resolution by the board of supervisors. During this consultation, the county tax collector, the county auditor-controller, the clerk of the board of supervisors, the assessment appeals board, and any other county agency directly involved in the system of property tax administration may provide to the assessor performance measures and any verifiable information that quantifies the additional operating impacts on these property tax-related departments as a result of the assessor’s proposed plan. These performance measures and verifiable information provided to the assessor, if not included in the assessor’s proposed plan, shall be attached to the plan established during the consultation. Changes or modifications to a county’s PARE program plan after an agreement has already been entered into shall be made in consultation in the manner described in this paragraph. Any participating county agency or department directly involved in property tax administration, other than the county assessor, receiving any portion of PARE funding for property tax administration requires the recommendation of the county assessor and adherence to the performance target goals and plan of the participating county under the PARE program.

(3) The resolution to participate in this program shall include both of the following:

(A) A detailed listing of the proposed uses by the county of the moneys received under this section. Those uses shall include, but are not required to be limited to, the activities described in clauses (i) to (iv), inclusive, of subparagraph (B).

(B) Certified results of the county’s completion of all of the following from the assessment roll from the assessment year that immediately preceded the fiscal year in which the county requests funding, including backlogs from another prior assessment year:

(i) The percentage of change in ownership assessments identified for enrollment that were enrolled.

(ii) The percentage of new construction assessments identified for enrollment that were enrolled.

(iii) The percentage of mandatory audits required under Section 469 that were completed and enrolled.

(iv) The percentage of required assessments determined under subdivision (a) of Section 51 that were enrolled with an increase, a decrease, or no change in assessed value.

(c) For the 2008–09 fiscal year and for each fiscal year thereafter to the 2013–14 fiscal year, inclusive, all of the following apply:

(1) The department shall determine the PARE amount for a participating county for the fiscal year in the following manner:

(A) The department shall determine the product of the following two amounts:

(i) The quotient derived from the following fraction:

(I) The numerator is the total amount of property tax revenue allocated to all K–14 schools and county offices of education in the county, as reported by the State Board of Equalization for the most recent prior fiscal year.

(II) The denominator is the total amount of property tax revenue allocated to all K–14 schools and county offices of education in all counties statewide, as reported by the State Board of Equalization for the most recent prior fiscal year.

(ii) The gross statewide PARE amount appropriated in the Budget Act for that fiscal year.

(B) For the 2008–09 fiscal year and for each fiscal year thereafter to the 2013–14 fiscal year, inclusive, all of the following apply:

(i) If a county completed at least 98 percent of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the county PARE amount for that county for that fiscal year is the amount determined by the department under subparagraph (A).

(ii) If a county completed at least 96 percent, but less than or equal to 97.9 percent, of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the department shall determine the county PARE amount for that county for that fiscal year as 90 percent of the amount determined by the department under subparagraph (A).

(iii) If a county completed at least 94 percent, but less than or equal to 95.9 percent, of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the department shall determine the county PARE amount for that county for that fiscal year as 80 percent of the amount determined by the department under subparagraph (A).

(iv) If a county completed at least 92 percent, but less than or equal to 93.9 percent, of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the department shall determine the county PARE amount for that county for that fiscal year as 70 percent of the amount determined by the department under subparagraph (A).

(v) If a county completed at least 90 percent, but less than or equal to 91.9 percent, of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the department shall determine the county PARE amount for that county for that fiscal year as 60 percent of the amount determined by the department under subparagraph (A).

(vi) If a county completed less than 90 percent of the cumulative total of qualified actions during the assessment year that immediately preceded the fiscal year in which funding is requested in a resolution described in subdivision (b), the department shall determine the county PARE amount for that county for that fiscal year as zero.

(2) (A) The Controller shall allocate the net statewide PARE amount to applicable counties in the amounts determined under paragraph (1) within 30 days of notification by the Director of Finance that PARE funding for that county has been approved.

(3) On or before December 15, the department shall notify the assessor and the board of supervisors of each county for which a county PARE amount was determined under paragraph (1) of the county PARE amount, if any, for that fiscal year.

(4) A county for which funding is reduced under subparagraph (B) of paragraph (1) is not prohibited from receiving full funding under this section in subsequent fiscal years.

(5) Notwithstanding subparagraph (B) of paragraph (1), all of the following apply:

(A) The director may waive the application of the reductions described in subparagraph (B) of paragraph (1) on a county-by-county basis in any fiscal year for good cause presented by the participating county assessor. If the director waives the application of these reductions for a fiscal year, the director shall, on or before December 15 of that fiscal year, notify in writing the county board of supervisors and the county assessor of the applicable county of this waiver.

(B) If a county experiences an increase of more than 10 percent, from the prior assessment year, in the number of change in ownership assessments and new construction assessments required to be enrolled, the county will not have its funding reduced under subparagraph (B) of paragraph (1).

(6) Performance results of qualified actions and the expenditure of PARE funds by a county are subject to independent certification or audit at any time by either the state or the county to ensure that these results are accurate.

(d) (1) Each county receiving moneys under this section shall establish a separate interest bearing fund in the county treasury for the deposit of these moneys. Moneys deposited in this fund and the interest earned thereon shall be used only for the purposes set forth in the county resolution and any prior year property tax administrative cost program agreements, unless those purposes are changed in writing. Changes to the plan regarding the purposes for the use of PARE funding shall be accomplished after the assessor consults with other affected departments as described in paragraph (2) of subdivision (b).

(2) Any moneys received by a county under this section and any moneys in the fund described in paragraph (1) that are not expended within the fiscal year for which they were originally received shall be retained by the county in that fund. These moneys, and all interest earned thereon, shall be used only for the purposes set forth in the county resolution and any prior year property tax administrative cost program agreements. Changes to the plan regarding the purposes for the use of PARE funding shall be accomplished after the assessor consults with other affected departments as described in paragraph (2) of subdivision (b).

(3) The county auditor shall have administrative control of funds provided to a county under this section, but the county assessor shall direct the expenditure of these funds in accordance with the resolution described in subparagraph (A) of paragraph (3) of subdivision (b) and the county’s annual budget for these funds that are approved by the board of supervisors.

(e) Funds provided to a county under this section shall be used to enhance the property tax administration system by providing supplemental resources and shall not be used to supplant the current level of funding. In order to participate in the PARE program set forth in this section, a participating county shall maintain a base staffing, including contract staff, and total funding level in the county assessor’s office, less the staff and funds provided under this section, equal to the levels of the 2004–05 fiscal year in that county’s budget, less amounts received for that fiscal year under Section 95.35. Any other county agency or department directly involved in property tax administration that receives PARE funding shall also maintain these staffing and funding levels for staff directly involved in property tax administration in order to be eligible for use of PARE funding.

(f) In any fiscal year in which the assessor of a county elects not to participate in the PARE program or submits to the board of supervisors a proposal that is less than the county PARE amount determined for the county under subdivision (c), any other department of that county that is responsible for the administration, allocation, or adjudication of property tax, as described in Section 95.3, may submit to the board of supervisors an application for the remainder of that amount. Any proposal submitted pursuant to this subdivision shall include the information specified in paragraph (2) of subdivision (b) and be subject to the performance standard requirements set forth in subparagraph (B) of paragraph (1) of subdivision (c).

(g) At the request of the department, the State Board of Equalization shall assist the Department of Finance in evaluating the use of funding provided under this section.

(h) Notwithstanding Section 95.3, any funds provided to a county under this section shall not result in any reduction of those county property tax administrative costs that are reimbursable pursuant to Section 95.3.

(i) On or before December 31, 2012, the department shall evaluate the effectiveness of the PARE program in assisting counties to complete qualified actions, and shall report its findings to the Legislature.

(j) For purposes of this section, the following terms have the following meanings:

(1) “Assessment year” has the same meaning as specified in Section 118.

(2) “Department” means the Department of Finance.

(3) “Qualified action” means an activity identified for enrollment as described in clauses (i) to (iv), inclusive, of subparagraph (B) of paragraph (3) of subdivision (b).

(4) “Gross statewide PARE amount” means the amount appropriated in the Budget Act for the purposes of this section for a fiscal year.

(5) “Net statewide PARE amount” means the total amount determined by the department under paragraph (1) of subdivision (c) for a fiscal year for allocation to counties.

(k) For the 2009–10 fiscal year and for each fiscal year thereafter to the 2013–14 fiscal year, inclusive, the gross statewide PARE amount for the prior fiscal year may be compounded annually by an inflation factor equal to the annual percentage change, measured from February to February, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations, to the extent funding is provided in the annual Budget Act.

(l) It is the intent of the Legislature that the initiation of participation, or changes to the plan to participate, in the PARE program are not to occur without the recommendation of the county assessor, which requires consultation with the other affected departments, preparation and proposal of changes by the assessor, and approval by the board of supervisors.

(m) This section is repealed on June 30, 2014.