Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

Revenue and Taxation Code

Property Taxation

Part 0.5. Implementation of Article XIII A of the California Constitution

Chapter 6. Allocation of Property Tax Revenue

Article 6. Miscellaneous Provisions

Section 100.06

100.06. Property tax revenue allocation — 2009–10 fiscal year. (a) In accordance with the suspension under Section 100.05 of the Revenue and Taxation Code of subparagraph (A) of paragraph (1) of subdivision (a) of Section 25.5 of Article XIII of the California Constitution, the county auditor shall, for the 2009–10 fiscal year, do both of the following:

(1) (A) Except as otherwise provided in subparagraph (B) and subdivision (b), reduce the total amount of ad valorem property tax revenue otherwise required to be apportioned to a city, county, city and county, or a special district by 8 percent of the total amount of ad valorem property tax revenue apportioned to that local agency for the 2008–09 fiscal year.

(B) For purposes of calculating the amount of an 8-percent reduction required by subparagraph (A), any amount required to be paid or allocated to a city, county, or city and county under Section 97.68 or 97.70 for the 2008–09 fiscal year is included in determining the total amount of property tax revenue apportioned to that local agency for that fiscal year. A reduction made pursuant to this paragraph shall not, however, be made from any amount that is to be apportioned to a city, county, or city and county as a result of Section 97.68.

(2) Transfer to the Supplemental Revenue Augmentation Fund, hereby established in the county treasury for administration by the county office of education as provided in subdivision (c), an amount equal in the aggregate to that portion of the total amount of reductions required by paragraph (1). The aggregate amount of transfers required by this paragraph shall be made in two equal shares, with the first share being transferred no later than January 15, 2010, and the second share being transferred after that date but no later than May 1, 2010.

(b) (1) Upon written request by a local agency that is received no later than October 15, 2009, the Director of Finance may, on the basis of extreme hardship, decrease the reduction amount that would otherwise be applied to that local agency under subdivision (a). In evaluating a written request for a decrease, the Director of Finance may consider factors including, but not limited to, all of the following:

(A) Whether the requesting local agency is the subject of a current bankruptcy proceeding, or whether incurring the full reduction amount otherwise required by subdivision (a) would likely cause the local agency to seek bankruptcy protection.

(B) Whether the requesting local agency has any financial reserves, and whether incurring the full reduction amount otherwise required by subdivision (a) would impair the ability of the local agency to provide a basic level of core public services.

(2) (A) If the Director of Finance approves a request made pursuant to paragraph (1), he or she shall, by November 15, 2009, certify to the auditor of the county in which the requesting local agency is located, the amount of a decrease in the reduction otherwise to be incurred by the requesting local agency pursuant to subdivision (a). The amount of that decrease shall be applied in proportionate shares to increase the reduction amounts under subdivision (a) of all other local agencies in the county, so that there is no reduction in the aggregate amount of reductions to be incurred by local agencies located in the county. The Director of Finance may determine that the reduction amount that would otherwise be incurred by the requesting local agency under subdivision (a) should be decreased to zero. The amount of any certified decrease, in whole or in part, of a reduction amount shall be based upon the director's evaluation of the factors considered with respect to the requesting local agency under paragraph (1) and the extent to which those factors indicate that the requesting local agency should be given relief.

(B) The Director of Finance may not grant decreases to local agencies within a single county that, in the aggregate, total more than 10 percent of the combined total of the reduction amounts under subdivision (a) for all local agencies in that county.

(3) (A) Two or more local agencies in a county may agree to reallocate exclusively among themselves all or part of their reduction amounts otherwise required by subdivision (a). Any local agencies entering into an agreement to so reallocate their reduction amounts shall, no later than November 15, 2009, notify the county auditor of that agreement and the reallocations specified in that agreement. The auditor shall thereafter implement subdivision (a) with respect to those local agencies in accordance with that agreement.

(B) A county redevelopment agency that will, on behalf of the county under Section 33681.12 of the Health and Safety Code, pay all or a portion of a reduction amount under subdivision (a) shall so notify the county auditor by December 1, 2009. The auditor shall thereafter decrease the county's reduction amount by the amount of the payment from the county redevelopment agency to the extent that the payment is received prior to a date by which a transfer is required by paragraph (2) of subdivision (a).

(c) (1) Except for those moneys subject to paragraph (3), the moneys in the Supplemental Revenue Augmentation Fund shall be transferred by the county office of education to the Controller, in amounts and for those purposes as directed by the Director of Finance, exclusively to reimburse the state for the costs of providing health care, trial court, correctional, or other state-funded services and costs, until those moneys are exhausted. Moneys in a Supplemental Revenue Augmentation Fund shall be transferred to reimburse only those costs incurred, and the costs of services provided, in the county in which those moneys are collected.

(2) (A) Entities of state government, including the Administrative Office of the Courts, that are responsible for the functions funded with moneys transferred pursuant to paragraph (1) shall keep records, as required by the Department of Finance, of expenditures made in the county pursuant to that paragraph, and shall provide to the Department of Finance any information required by the department with respect to those expenditures.

(B) Moneys transferred pursuant to paragraph (1) for the funding of trial courts shall reimburse transfers from the state General Fund to the Trial Court Trust Fund.

(C) The county office of education shall make a transfer under paragraph (1) within five days of that transfer being directed by the Department of Finance, and shall provide to the Controller, with that transfer, information specifying the purpose of that transfer.

(D) Moneys in the Supplemental Revenue Augmentation Fund that are not transferred in a fiscal year and are not subject to paragraph (3) shall be retained in the fund for transfer pursuant to paragraph (1) in a subsequent fiscal year.

(3) Any moneys in the Supplemental Revenue Augmentation Fund that are determined by the Director of Finance not to be necessary to fund the provision of state-funded services and costs shall be transferred to the county's Educational Revenue Augmentation Fund, no later than June 1, 2010. Funds transferred to the county's Educational Revenue Augmentation Fund pursuant to this paragraph shall not be apportioned to community college districts. This paragraph shall not be construed to increase any allocations of excess, additional, or remaining funds that would otherwise have been allocated to cities, counties, cities and counties, or special districts pursuant to clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2 of, clause (i) of subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.3 of, or Article 4 (commencing with Section 98) of Chapter 6 of Part 0.5 of Division 1 of, the Revenue and Taxation Code had this section not been enacted.

(4) (A) Each county auditor shall report to the Department of Finance the amount of property tax revenue that was transferred from each local agency located in the county to the county's Supplemental Revenue Augmentation Fund. The county auditor first shall report this information on or before January 15, 2010, and then on or before May 15, 2010, and shall provide a copy of each report to each local agency located in the county.

(B) When transferring the amounts required by paragraph (1), each county auditor shall also provide the Department of Finance, the Legislative Analyst's Office, and each local agency located in the county with information detailing how each local agency's reduction amount under subdivision (a) was calculated. This information shall first be reported on or before January 15, 2010, and then on or before May 15, 2010.

(d) For the 2010–11 fiscal year and each fiscal year thereafter, the county auditor shall apply paragraph (1) of subdivision (a) of Section 96.1, or any successor to that provision, without regard to the changes in property tax revenue apportionments required by this section.

(e) (1) In accordance with Section 25.5 of Article XIII of the California Constitution, the state shall, no later than June 30, 2013, fully reimburse the revenue reductions incurred pursuant to subdivision (a) in the following amounts determined by the Controller:

(A) (i) The amount due to the authority that issued bonds pursuant to Section 6590 of the Government Code to purchase Proposition 1A receivables pursuant to Section 6588.6 of the Government Code shall be paid as follows:

(I) The principal amount of the bonds on the date of the maturity or upon call.

(II) Periodic interest as applicable.

(III) The accrued interest on the bonds upon call, on the date of maturity, or a later date, if repayment does not occur prior to the date of maturity.

(ii) In the event the state fully repays the reduction amounts in accordance with paragraph (2) prior to the maturity date of the bonds, the payment amount shall be equal to the amount required, as shown in a report of an independent certified public accountant provided by the authority, to legally defease the bonds.

(B) The amount due to each local agency that does not sell all of its Proposition 1A receivables to an authority described in subparagraph (A) shall be the sum of both of the following:

(i) The unpaid principal amount of the revenue reduction incurred by each local agency pursuant to subdivision (a), less the amount of the revenue reduction that is attributable to Proposition 1A receivables that are sold to an authority described in subparagraph (A).

(ii) Interest on the amount described in clause (i) at a rate, set by the Department of Finance no later than 60 days after the operative date of this section, that is higher than the rate of interest earned by the Pooled Money Investment Account but no greater than 6 percent.

(2) The state may repay the revenue reductions incurred pursuant to subdivision (a) before June 30, 2013, upon the order of the Director of Finance issued no earlier than 30 days after delivery of a written notice of the intent to do so to the Joint Legislative Budget Committee.

(3) The payment of the amounts specified in this subdivision shall take priority over all other obligations of the state, excepting payments to schools under Article XVI of the California Constitution and debt service on general obligation bonds for the 2012–13 fiscal year. The Controller shall take all prudent means within his or her legal discretion to assure that sufficient sums are available to pay these amounts and all other obligations of higher priority.

(4) Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated to the Controller from the General Fund, without regard to fiscal year, those amounts sufficient to pay the amounts specified in this subdivision.

(f) (1) Notwithstanding any other law, if by June 30, 2013, the state has not fully reimbursed each local agency for its revenue reduction incurred pursuant subdivision (a) in the amounts as required by subdivision (e), the issuer of any bonds issued pursuant to subdivision (x) of Section 6588 of the Government Code, or any local agency that did not participate in the sale of Proposition 1A receivables pursuant to paragraph (2) of subdivision (x) of Section 6588 of the Government Code, may seek a writ of mandamus to compel the Controller to fully pay the amounts the state is obligated to pay under subdivision (e). A petition seeking a writ of mandamus pursuant to this subdivision, and any appellate proceedings arising from that action, shall have priority and preference in setting and review in furtherance of the repayment deadline mandated by Section 25.5 of Article XIII of the California Constitution. A petition for a writ of mandamus authorized by this subdivision may also be filed in the California Supreme Court pursuant to that court's original jurisdiction described in Section 10 of Article VI of the California Constitution.

(2) In authorizing an original mandamus petition to the California Supreme Court pursuant to this paragraph, the Legislature finds and declares all of the following:

(A) The Legislature is expressly required by Section 25.5 of Article XIII of the California Constitution to enact a statute mandating the full and timely repayment, as provided by subdivision (e), of any revenue reduction incurred by a local agency pursuant to subdivision (a) and all accrued interest thereon.

(B) Full and timely repayment of any revenue reduction incurred by a local agency pursuant to subdivision (a), with interest, is critical to every local agency from which those funds were diverted.

(C) The Legislature further finds and declares that conclusively determining, no later than the deadline mandated under Section 25.5 of Article XIII of the California Constitution, that the state's obligation under subdivision (e) to fully repay any revenue reduction incurred by a local agency pursuant to subdivision (a) and all accrued interest thereon is a matter of vital and urgent public importance.

History.—Added by Stats. 2009, Ch. 14 of the Fourth Extraordinary Session (AB 15), in effect July 28, 2009. Amended by Stats. 2009, Ch. 634 (SB 67), in effect October 19, 2009.

Note.—Section 11 of Stats. 2009, Ch. 14 of the Fourth Extraordinary Session (AB 15), provided that:

(a) Notwithstanding any other law, a city that has established a reserve for subsidence contingencies may, for the 2009–10 fiscal year only, retain interest earned on that reserve for the previous three calendar years in an amount not to exceed the amount of the revenue reduction incurred by that city pursuant to Section 100.06 of the Revenue and Taxation Code.

(b) The Legislature finds and declares that the amounts retained by a city pursuant to subdivision (a) are in excess of trust needs and are free from the public trust for navigation, commerce, fisheries, and any other trust uses and restrictions.

(c) A city that has retained an amount under subdivision (a) shall repay to the reserve for subsidence contingencies that amount so retained at the time that city is repaid for its revenue reduction pursuant to Section 100.06 of the Revenue and Taxation Code. Those amounts repaid to the reserve for subsidence contingencies are subject to the public trust and shall be used only for the purposes prescribed by law for the reserve.

Section 12 thereof provided that 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.

Section 13 thereof provided that this act addresses the fiscal emergency declared by the Governor by proclamation on July 1, 2009, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution.

Section 14 thereof provided that 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 address the current, severe state fiscal hardships, it is necessary that this act go into effect immediately.

Note.—Section 9 of Stats. 2009, Ch. 634 (SB 67), provided that if a court rules that any portion of the revenues identified in Section 100.06 of the Revenue and Taxation Code may not be loaned to the state, that ruling shall not affect any of the following:

(a) Any remaining revenues.

(b) The implementation of this act or Chapter 14 of the Statutes of the 2009–10 Fourth Extraordinary Session.

Section 10 thereof provided that 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.

Section 11 thereof provided that 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 address the current, severe state fiscal hardships, it is necessary that this act go into effect immediately.