Bill Text: CA AB1450 | 2013-2014 | Regular Session | Enrolled
Bill Title: Local government: redevelopment: revenues from property tax override rates.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1450 Detail]
Download: California-2013-AB1450-Enrolled.html
BILL NUMBER: AB 1450 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 29, 2014
PASSED THE ASSEMBLY AUGUST 29, 2014
AMENDED IN SENATE AUGUST 27, 2014
AMENDED IN SENATE AUGUST 21, 2014
AMENDED IN SENATE JULY 1, 2014
INTRODUCED BY Assembly Member Garcia
(Principal coauthor: Senator Lara)
JANUARY 8, 2014
An act to amend Section 34183 of the Health and Safety Code,
relating to local government, and declaring the urgency thereof, to
take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1450, Garcia. Local government: redevelopment: revenues from
property tax override rates.
Existing law dissolved redevelopment agencies and community
development agencies as of February 1, 2012, and provides for the
designation of successor agencies to wind down the affairs of the
dissolved redevelopment agencies. Existing law requires revenues
equivalent to those that would have been allocated to each
redevelopment agency, had the agency not been dissolved, to be
allocated to the Redevelopment Property Tax Trust Fund of each
successor agency for making payments on the principal of and interest
on loans, and moneys advanced to or indebtedness incurred by the
dissolved redevelopment agencies. Existing law requires, from
February 1, 2012, to July 1, 2012, inclusive, and for each fiscal
year thereafter, the county auditor-controller, after deducting
administrative costs, to allocate property tax revenues in each
Redevelopment Property Tax Trust Fund in a specified manner.
This bill would authorize a city or county that levies a property
tax rate, approved by the voters of a city or county to make payments
in support of pension programs and levied in addition to the general
property tax rate, to make a request to an oversight board to
prohibit revenues derived from that property tax rate from being
deposited into a Redevelopment Property Tax Fund. This bill would
authorize an oversight board to deny this request based on
substantial evidence that a former redevelopment agency made a pledge
of revenues that specifically included revenues derived from the
imposition of that property tax rate. This bill, for the 2014-15
fiscal year and each fiscal year thereafter, except to the extent an
oversight board denies a request, would prohibit any revenues derived
from the imposition of that property tax rate from being allocated
to a Redevelopment Property Tax Trust Fund and would, instead,
require these revenues to be allocated to, and when collected to be
paid into, the fund of the city or county whose voters approved the
tax. The bill would require all allocations of revenues derived from
the imposition of that property tax rate made by any county
auditor-controller prior to July 1, 2014, to be deemed correct, and
would prohibit any city, county, county auditor-controller, successor
agency, or affected taxing entity from being subject to any claim,
as specified. This bill would require, to the extent that revenues
derived from the imposition of a property tax rate, approved by the
voters of a city or county to make payments in support of pension
programs and levied in addition to the general property tax rate, are
deposited into a Redevelopment Property Tax Trust Fund, the
county-auditor controller to allocate moneys from each Redevelopment
Property Tax Trust Fund to a city or county that levies a property
tax as so described after certain other allocations have been made.
By adding to the duties of local government 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 these
statutory provisions.
This bill would declare that it is to take effect immediately as
an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares all of the
following:
(1) The California Constitution limits property-based tax levies,
with exceptions to these limits only when a local jurisdiction
obtains the approval of its voting electorate to use additional
property-based tax levies for specific purposes approved by the
voting electorate, in accordance with applicable constitutional and
statutory provisions.
(2) With the enactment of Chapter 5 of the 2011-12 First
Extraordinary Session (Assembly Bill 26), the Legislature intended
that, upon dissolution of redevelopment agencies in the State of
California, property taxes that would have been allocated to
redevelopment agencies are no longer deemed tax increment.
(3) It is the intent of the Legislature in enacting this act to do
all of the following:
(A) If a redevelopment agency had previously pledged revenues
derived from the imposition of a property tax rate, approved by the
voters of a city, county, or city and county to make payments in
support of pension programs and levied in addition to the property
tax rate limited by subdivision (a) of Section 1 of Article XIII A of
the California Constitution, to pay a portion of the debt service
due on indebtedness incurred by the former redevelopment agency on an
approved recognized obligation payment schedule, then the successor
agency shall continue to pledge those revenues, in a commensurate
rate going forward. For example, if revenues derived from a pension
tax rate approved by the voters of a city, county, or city and county
were pledged to pay up to 25 percent of the annual debt service for
the indebtedness approved in a recognized obligation payment
schedule, the successor agency shall continue to pay up to 25 percent
of the annual debt service on the indebtedness until maturity. Any
and all excess pledged revenues derived from the pension property tax
rate that are not necessary to pay the debt service on the
indebtedness shall be allocated and paid to the city, county, or city
and county whose voters approved the pension property tax rate.
(B) Ensure that the use of revenues derived from the imposition of
a property tax rate approved by the voters of a city, county, or
city and county, to make payments in support of pension programs and
levied in addition to the property tax rate limited by subdivision
(a) of Section 1 of Article XIII A of the California Constitution, is
consistent with the use approved by the voters of a city, county, or
city and county, once revenues from such property tax rates are not
needed to pay approved indebtedness of a former redevelopment agency.
(C) Implement the allocation and distribution of voter-approved,
property-based tax revenues for pension programs under the
redevelopment dissolution process in a manner that would have been
consistent with the allocation and distribution of those revenues had
redevelopment agencies not been dissolved, in accordance with
applicable constitutional provisions.
(4) Further, it is the intent of the Legislature that this act not
affect any property tax allocations that occurred prior to July 1,
2014.
SEC. 2. Section 34183 of the Health and Safety Code is amended to
read:
34183. (a) Notwithstanding any other law, from February 1, 2012,
to July 1, 2012, and for each fiscal year thereafter, the county
auditor-controller shall, after deducting administrative costs
allowed under Section 34182 and Section 95.3 of the Revenue and
Taxation Code, allocate moneys in each Redevelopment Property Tax
Trust Fund as follows:
(1) Subject to any prior deductions required by subdivision (b),
first, the county auditor-controller shall remit from the
Redevelopment Property Tax Trust Fund to each local agency and school
entity an amount of property tax revenues in an amount equal to that
which would have been received under Section 33401, 33492.140,
33607, 33607.5, 33607.7, or 33676, as those sections read on January
1, 2011, or pursuant to any passthrough agreement between a
redevelopment agency and a taxing entity that was entered into prior
to January 1, 1994, that would be in force during that fiscal year,
had the redevelopment agency existed at that time. The amount of the
payments made pursuant to this paragraph shall be calculated solely
on the basis of passthrough payment obligations, existing prior to
the effective date of this part and continuing as obligations of
successor entities, shall occur no later than May 16, 2012, and no
later than June 1, 2012, and each January 2 and June 1 thereafter.
Notwithstanding subdivision (e) of Section 33670, that portion of the
taxes in excess of the amount identified in subdivision (a) of
Section 33670, which are attributable to a tax rate levied by a
taxing entity for the purpose of producing revenues in an amount
sufficient to make annual repayments of the principal of, and the
interest on, any bonded indebtedness for the acquisition or
improvement of real property shall be allocated to, and when
collected shall be paid into, the fund of that taxing entity. The
amount of passthrough payments computed pursuant to this section,
including any passthrough agreements, shall be computed as though the
requirement to set aside funds for the Low and Moderate Income
Housing Fund was still in effect.
(2) Second, on June 1, 2012, and each January 2 and June 1
thereafter, to each successor agency for payments listed in its
Recognized Obligation Payment Schedule for the six-month fiscal
period beginning January 1, 2012, and July 1, 2012, and each January
2 and June 1 thereafter, in the following order of priority:
(A) Debt service payments scheduled to be made for tax allocation
bonds.
(B) Payments scheduled to be made on revenue bonds, but only to
the extent the revenues pledged for them are insufficient to make the
payments and only if the agency's tax increment revenues were also
pledged for the repayment of the bonds.
(C) Payments scheduled for other debts and obligations listed in
the Recognized Obligation Payment Schedule that are required to be
paid from former tax increment revenue.
(3) Third, on June 1, 2012, and each January 2 and June 1
thereafter, to each successor agency for the administrative cost
allowance, as defined in Section 34171, for administrative costs set
forth in an approved administrative budget for those payments
required to be paid from former tax increment revenues.
(4) (A) Fourth, on January 2, 2015, and each January 2 and June 1
thereafter, to a city or county that levies a property tax rate,
approved by the voters of a city or county to make payments in
support of pension programs and levied in addition to the property
tax rate limited by subdivision (a) of Section 1 of Article XIII A of
the California Constitution, an amount of property tax revenues
equal to the amount of revenues derived from the imposition of that
tax rate that were allocated to the Redevelopment Property Tax Trust
Fund for that fiscal period.
(B) This paragraph shall not apply to the extent that revenues
derived from the imposition of a property tax rate described in
subparagraph (A) are not deposited into a Redevelopment Property Tax
Trust Fund as provided by subdivision (f).
(5) Fifth, on June 1, 2012, and each January 2 and June 1
thereafter, any moneys remaining in the Redevelopment Property Tax
Trust Fund after the payments and transfers authorized by paragraphs
(1) to (4), inclusive, shall be distributed to local agencies and
school entities in accordance with Section 34188.
(b) If the successor agency reports, no later than April 1, 2012,
and May 1, 2012, and each December 1 and May 1 thereafter, to the
county auditor-controller that the total amount available to the
successor agency from the Redevelopment Property Tax Trust Fund
allocation to that successor agency's Redevelopment Obligation
Retirement Fund, from other funds transferred from each redevelopment
agency, and from funds that have or will become available through
asset sales and all redevelopment operations, are insufficient to
fund the payments required by paragraphs (1) to (3), inclusive, of
subdivision (a) in the next six-month fiscal period, the county
auditor-controller shall notify the Controller and the Department of
Finance no later than 10 days from the date of that notification. The
county auditor-controller shall verify whether the successor agency
will have sufficient funds from which to service debts according to
the Recognized Obligation Payment Schedule and shall report the
findings to the Controller. If the Controller concurs that there are
insufficient funds to pay required debt service, the amount of the
deficiency shall be deducted first from the amount remaining to be
distributed to taxing entities pursuant to paragraphs (4) and (5) of
subdivision (a), and if that amount is exhausted, from amounts
available for distribution for administrative costs in paragraph (3)
of subdivision (a). If an agency, pursuant to the provisions of
Section 33492.15, 33492.72, 33607.5, 33671.5, 33681.15, or 33688 or
as expressly provided in a passthrough agreement entered into
pursuant to Section 33401, made passthrough payment obligations
subordinate to debt service payments required for enforceable
obligations, funds for servicing bond debt may be deducted from the
amounts for passthrough payments under paragraph (1) of subdivision
(a), as provided in those sections, but only to the extent that the
amounts remaining to be distributed to taxing entities pursuant to
paragraphs (4) and (5) of subdivision (a) and the amounts available
for distribution for administrative costs in paragraph (3) of
subdivision (a) have all been exhausted.
(c) The county treasurer may loan any funds from the county
treasury to the Redevelopment Property Tax Trust Fund of the
successor agency for the purpose of paying an item approved on the
Recognized Obligation Payment Schedule at the request of the
Department of Finance that are necessary to ensure prompt payments of
redevelopment agency debts. An enforceable obligation is created for
repayment of those loans.
(d) The Controller may recover the costs of audit and oversight
required under this part from the Redevelopment Property Tax Trust
Fund by presenting an invoice therefor to the county
auditor-controller who shall set aside sufficient funds for and
disburse the claimed amounts prior to making the next distributions
to the taxing entities pursuant to Section 34188. Subject to the
approval of the Director of Finance, the budget of the Controller may
be augmented to reflect the reimbursement, pursuant to Section 28.00
of the Budget Act.
(e) Within 10 days of each distribution of property tax, the
county auditor-controller shall provide a report to the department
regarding the distribution for each successor agency that includes
information on the total available for allocation, the passthrough
amounts and how they were calculated, the amounts distributed to
successor agencies, and the amounts distributed to taxing entities in
a manner and form specified by the department. This reporting
requirement shall also apply to distributions required under
subdivision (b) of Section 34183.5.
(f) (1) A city or county that levies a property tax rate, approved
by the voters of a city or county to make payments in support of
pension programs and levied in addition to the property tax rate
limited by subdivision (a) of Section 1 of Article XIII A of the
California Constitution, may make a request to an oversight board to
prohibit revenues derived from the imposition of that property tax
rate from being deposited into a Redevelopment Property Tax Trust
Fund.
(2) Based on substantial evidence that a former redevelopment
agency made a pledge of revenues that specifically included revenues
derived from the imposition of a property tax rate, approved by the
voters of a city or county to make payments in support of pension
programs and levied in addition to the property tax rate limited by
subdivision (a) of Section 1 of Article XIII A of the California
Constitution, an oversight board may deny a request made pursuant to
paragraph (1) in an amount not to exceed the amount of revenues
pledged by the former redevelopment agency.
(3) Notwithstanding any other law, for the 2014-15 fiscal year and
each fiscal year thereafter, except to the extent an oversight board
denies a request as provided by paragraph (2), any revenues derived
from the imposition of a property tax rate, approved by the voters of
a city or county to make payments in support of pension programs and
levied in addition to the property tax rate limited by subdivision
(a) of Section 1 of Article XIII A of the California Constitution,
shall not be allocated to a Redevelopment Property Tax Trust Fund and
shall instead be allocated to, and when collected shall be paid
into, the fund of the city or county whose voters approved the tax.
(4) Notwithstanding any other law, all allocations of revenues
derived from the imposition of a property tax rate, approved by the
voters of a city or county to make payments in support of pension
programs and levied in addition to the property tax rate limited by
subdivision (a) of Section 1 of Article XIII A of the California
Constitution, made by any county auditor-controller prior to July 1,
2014, shall be deemed correct and shall not be affected by this act.
A city, county, county auditor-controller, successor agency, or
affected taxing entity shall not be subject to any claim for money,
damages, or reallocated revenues based on any allocation of such
revenues prior to July 1, 2014.
SEC. 3. (a) No inference shall be drawn from the enactment of this
act with respect to the use, distribution, or allocation of revenues
derived from the imposition of a property tax rate, approved by the
voters of a city, county, or city and county to make payments in
support of pension programs and levied in addition to the property
tax rate limited by subdivision (a) of Section 1 of Article XIII A of
the California Constitution, made by any county auditor-controller
prior to July 1, 2014.
(b) The Legislature is aware of City of San Jose, etc. v. Sharma
et al., Court of Appeal Case No. C074539, which is pending
litigation. It is the express intent of the Legislature that no party
in that pending litigation be in any way prejudiced by the passage
of this act. Therefore, the provisions of this act, except the
addition of paragraph (4) to subdivision (a) of Section 34183 of the
Health and Safety Code, shall not apply to the City of San Jose
Successor Agency. Furthermore, this act shall not be indicative of
any legislative intent concerning any issues before the courts in
that litigation, and no provision of this act shall be relied upon in
any way regarding the issues pending before the courts in that
litigation.
SEC. 4. 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. 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 avoid underfunded pension programs as a result of
revenues derived from the imposition of a property tax rate, approved
by the voters of a city, county, or city and county to make payments
in support of pension programs and levied in addition to the
property tax rate limited by subdivision (a) of Section 1 of Article
XIII A of the California Constitution, being allocated first to
successor agencies to make payments on the indebtedness incurred by
the dissolved redevelopment agencies, with remaining balances being
allocated in accordance with applicable constitutional and statutory
provisions, instead of being paid entirely into the fund of the city,
county, or city and county whose voters approved the tax, it is
necessary that this act take effect immediately.
