BILL NUMBER: AB 946AMENDED BILL TEXT AMENDED IN SENATE AUGUST 16, 2011 AMENDED IN SENATE JULY 12, 2011 INTRODUCED BY Assembly Member Butler FEBRUARY 18, 2011 An act to amend Section 95.31 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 946, as amended, Butler. Property tax administration: loan program. Existing property tax law authorized an eligible county, as defined, upon the recommendation of the assessor and by resolution of its board of supervisors, to elect to participate in the State-County Property Tax Administration Loan Program, pursuant to which a participating county received, in specified fiscal years, a loan from the state, as specified, for the purposes of providing supplemental funding for that county's local administration of the ad valorem property tax. This bill would reauthorize the State-County Property Tax Administration Loan Program to alloweligiblecounties, as defined,to elect to participate in the program to receive a loan in each fiscal year from the 2011-12 fiscal year to the 2015-16 fiscal year, inclusive. This bill would also require the California Assessors' Association to report to the Senate Committee on Budget and Fiscal Review and the Assembly Committee on Budget regarding participating counties, as specified. The California Constitution requires the state to apply a minimum amount of funding each fiscal year for the support of school districts and community college districts. The amount of that minimum funding obligation is required to be determined pursuant to one of three tests, depending on specified factors. This bill would require that the repayment of loans made pursuant to the State-County Property Tax Administration Loan Program be made in the next fiscal year in which school districts and community college districts receive funding pursuant to either the 2nd or 3rd of these tests. The bill would require that, for years in which school districts and community college districts receive funding pursuant to the first test, the amount of the loan be carried over to, and repaid in, the next fiscal year in which school districts and community college districts receive funding pursuant to either the 2nd or 3rd of these tests. This bill would declare that it is to take effect immediately as an urgency statute. Vote:majority2/3 . Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 95.31 of the Revenue and Taxation Code is amended to read: 95.31. (a)(1)Notwithstanding any other law, anyeligiblecounty may, upon the recommendation of the county assessor, and by resolution of the board of supervisors of that county adopted not later than February 1 of the fiscal year for which it is to first apply, elect to participate in the State-County Property Tax Administration Loan Program.(2) For the purposes of this section, an eligible county shall mean a county in which additional property tax revenue allocated to school entities would reduce the amount of General Fund moneys apportioned to school entities. However, eligibility shall be terminated when, in combination with resources in the Educational Revenue Augmentation Fund, additional property tax revenues allocated to school entities will not result in a reduction in the General Fund apportionments.(b) (1) In each fiscal year from the 2011-12 fiscal year to the 2015-16 fiscal year, inclusive,an eligiblea county participating in the State-County Property Tax Administration Loan Program may receive a loan for up to the amount listed in paragraph (3). For the period of January 1, 2012, to June 30, 2012, inclusive, a county participating in the State-County Property Tax Administration Loan Program may receive a loan for up to one-half of the amount listed in paragraph (3). The loan shall be repaid by June 30 of the fiscal year following the year in which the loan is made , subject to the provisions specified in clause (ii) of subparagraph (B) of paragraph (2) . However, at the discretion of the Director of Finance, the loan may be renewed once for an additional 12-month period at the request of the participating county board of supervisors. (2) Ifan eligiblea county elects to participate in the State-County Property Tax Administration Loan Program, it shall enter into a contractual agreement with the Department of Finance. At a minimum, the contractual agreement shall include the following: (A) The loan amount, as determined by the Director of Finance. (B) Repayment provisions, including theinterceptionfollowing: (i) Interception of Motor Vehicle License Fee Account moneys apportioned pursuant to Section 11005 to repay the General Fund. (ii) Repayment of the loan shall be made in the next fiscal year in which school districts and community college districts receive funding pursuant to paragraph (2) or (3), as applicable, of subdivision (b) of Section 8 of Article XVI of the California Constitution. For a year in which school districts and community college districts receive funding pursuant to paragraph (1) of subdivision (b) of Section 8 of Article XVI of the California Constitution, the amount of the loan shall be carried over to, and repaid in, the next fiscal year in which school districts and community college districts receive funding pursuant to paragraph (2) or (3), as applicable, of subdivision (b) of Section 8 of Article XVI of the California Constitution. (C) A listing of the proposed use of the additional resources including, but not limited to: (i) Proposed new positions. (ii) Increased automation costs. (D) Commencing in the 2012 fiscal year, an agreement to provide to the Department of Finance, by March 31 of the fiscal year in which the loan is made, a report projecting the impact of the increased funding in the current and subsequent fiscal year. (E) An agreement to provide the Department of Finance an audit report detailing the county's basis for satisfying the terms of the loan agreement. The report shall be provided by October 1 of the fiscal year following the year in which the loan is made. (F) An agreement to use the funds for the purposes stated, and, should any portion of the funds be diverted to a different, unapproved use, to return an amount equal to the diverted funds to the state regardless of whether or not other terms of the agreement are satisfied. (3) Upon request of the Department of Finance, the Controller shall provide a loan to the following counties for up to the amount specified by the Director of Finance, not to exceed the following amounts: Jurisdiction AmountAlameda ..................... $ 3,597,414.49Alameda ..................... $ 2,199,786 Alpine ......................50,1 00 , 0.00 Amador ......................84100 ,884.74000 Butte .......................339,22 07,43 1.56Calaveras ................... 125,711.59Calaveras ................... 100,000 Colusa ......................50,1 00 , 0.00Contra Costa ................ 2,661,514.92Contra Costa ................ 1,627,492 Del Norte ...................50,1 00 , 0.00El Dorado ................... 500,178.71El Dorado ................... 305,855 Fresno ......................1,070,650.34 ,693 Glenn .......................50,1 00 , 0.00 Humboldt ....................200,081 2.72 ,349Imperial .................... 194,085.89Imperial .................... 118,682 Inyo ........................76,218.5500,000Kern ........................ 1,380,856.07Kern ........................ 844,381Kings ....................... 156,128.75Kings ....................... 100,000Lake ........................ 126,266.06Lake ........................ 100,000 Lassen ......................50,1 00 , 0.00 Los Angeles ................. 1 1,94 9, 1 541,022.69Madera ...................... 202,353.21Madera ...................... 123,737Marin ....................... 1,033,995.76Marin ....................... 632,279 Mariposa ....................50,1 00 , 0.00Mendocino ................... 185,211.95Mendocino ................... 113,255Merced ...................... 309,114.75Merced ...................... 189,021 Modoc .......................50,1 00 , 0.00Mono ........................ 108,273.73Mono ........................ 100,000Monterey .................... 911,532.24Monterey .................... 557,393Napa ........................ 495,016.41Napa ........................ 302,698 Nevada ......................3018 7,121.280 2Orange ...................... 7,643,925.87Orange ...................... 4,674,190Placer ...................... 1,042,694.84Placer ...................... 637,598Plumas ...................... 70,809.37Plumas ...................... 100,000Riverside ................... 3,896,893.30Riverside ................... 2,382,914Sacramento .................. 2,308,128.57Sacramento .................. 1,411,399San Benito .................. 111,129.49San Benito .................. 100,000San Bernardino .............. 3,114,103.20San Bernardino .............. 1,904,245San Diego ................... 7,108,480.10San Diego ................... 4,346,770San Francisco ............... 2,735,297.69San Francisco ............... 1,672,609San Joaquin ................. 1,023,588.01San Joaquin ................. 625,915San Luis Obispo ............. 729,247.75San Luis Obispo ............. 445,928San Mateo ................... 2,631,042.86San Mateo ................... 1,608,858Santa Barbara ............... 1,114,551.00Santa Barbara ............... 681,538Santa Clara ................. 5,546,096.80Santa Clara ................. 3,391,387 Santa Cruz ..................609,537 24.84,719Shasta ...................... 285,322.39Shasta ...................... 174,472 Sierra ......................50,1 00 , 0.00 Siskiyou ....................76100 ,546.32000Solano ...................... 754,150.47Solano ...................... 461,156Sonoma ...................... 1,246,693.76Sonoma ...................... 762,342 Stanislaus ..................673,145.0711,622Sutter ...................... 149,209.53Sutter ...................... 100,000 Tehama ......................86,231.9600,000 Trinity .....................50,1 00 , 0.00 Tulare ......................499,3 0 5,1 88.04Tuolumne .................... 120,823.06Tuolumne .................... 100,000Ventura ..................... 1,904,605.02Ventura ..................... 1,164,648 Yolo ........................373,673.22 8 ,49 8 Yuba ........................88100 ,041.8900 (4) The Department of Finance shall consider any or all of the following items in determining the extent to which a county has satisfied the terms and repaid the loan, pursuant to the contract, as offered under this part: (A) County performance as indicated by the State Board of Equalization's sample survey required pursuant to Section 15640 of the Government Code. (B) Performance measures adopted by the California Assessors' Association. (C) Reduction of backlog of assessment appeals and Proposition 8 declines in value. (D) County compliance with mandatory audits required by Section 469. (E) Reduction of backlogs in new construction, changes in ownership, and supplemental roll. (F) Other measures, as determined by the Director of Finance. (5) The Director of Finance shall notify the Controller of any participating county that fails to comply with the terms of the agreement, including the repayment of the loan. When the Controller receives notice from the Director of Finance, the Controller shall make an apportionment to the General Fund on behalf of the participating county in the amount of that required payment for the purpose of making that payment. The Controller shall make that payment only from moneys credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to which the participating county is entitled at that time under Chapter 5 (commencing with Section 11001) of Part 5 of Division 2, and shall thereupon reduce, by the amount of the payment, the subsequent allocation or allocations to which the county would otherwise be entitled under that chapter. (c) (1) Funds appropriated for purposes of this section shall be used to enhance the property tax administration system by providing supplemental resources. Amounts provided to any county as a loan pursuant to this section shall not be used to supplant the current level of funding. In order to participate in the State-County Property Tax Administration Loan Program, a participating county shall maintain a base staffing, including contract staff, and total funding level in the county assessor's office, independent of the loan proceeds provided pursuant to this act, equal to the levels in the 2011-12 fiscal year exclusive of amounts provided to the assessor' s office pursuant to Item 9100-102-001 of the Budget Act of 1994. (2) Prior to the assessor's recommendation for participation in the State-County Property Tax Administration Loan Program, the assessor shall consult with the county tax collector, and any other county agency directly involved in property tax administration, to discuss the needs of the program for the duration of the contractual agreement. (d) A participating county may establish a tracking system whereby a work or function number is assigned to each appraisal or administrative activity. That system should provide statistical data on the number of production units performed by each employee and the positive and negative change in assessed value attributable to the activities performed by each employee. (e) Notwithstanding Section 95.3, no amount of funds provided to an eligible county pursuant to this section shall result in any deduction from those property tax administrative costs that are eligible for reimbursement pursuant to Section 95.3. (f) At the request of the Department of Finance, the board shall assist the Department of Finance in evaluating contracts entered into pursuant to this section. (g) On or before December 1, 2013, the California Assessors' Association shall provide to the Senate Committee on Budget and Fiscal Review and the Assembly Committee on Budget a report summarizing the reports provided by participating counties. SEC. 2. 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 preserve funding for vital programs for education, health, and public safety, it is necessary that this act take effect immediately.