Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

Revenue and Taxation Code

Property Taxation

Part 4. Levy of Tax

Chapter 3. Reimbursement for Costs Mandated by the State

Article 5. Additional Property Tax Rates* †

Section 2271

2271. Additional rates for costs mandated by the federal government or the courts. A local agency may levy, or have levied on its behalf, a rate in addition to the maximum property tax rate established pursuant to this chapter (commencing with Section 2201) to pay costs mandated by the federal government or costs mandated by the courts or costs mandated by initiative enactment, which are not funded by federal or state government.

The Controller may audit any rate imposed under this section and any data related to the establishment thereof. If the Controller determines that such rate exceeds a rate which would be necessary to meet the federally mandated, initiative-mandated or court-mandated costs, or if the Controller determines that such rate has been levied to pay any cost mandated by a court which has resulted from litigation entered into in order to avoid the property tax rate limits established by this chapter, or if the Controller determines that a local agency has erroneously concluded that it is subject to costs mandated by the courts or costs mandated by the federal government, he shall immediately notify the local agency of such determination, and the local agency shall reduce its property tax rate by an appropriate amount for the next succeeding fiscal year. In the event that a local agency fails to make such a reduction in its property tax rate, the Controller shall request the Attorney General to bring an action under Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure to force a reduction in the rate.

History.—Stats. 1975, Ch. 486, p. 1004, in effect September 2, 1975, added "or costs mandated by initiative enactment," after "courts" in the first sentence of the first paragraph; added ", initiative-mandated" after "federally mandated", and substituted the balance of the second sentence of the second paragraph after "chapter," for "he shall request the Attorney General to bring an action under Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure to force a reduction in the rate"; and added the third sentence of the second paragraph. Stats. 1977, Ch. 309, in effect July 8, 1977 added "for the next succeeding fiscal year" in the second paragraph.

Construction.—In determining whether a program is federally mandated so as to exempt its cost from a local government's statutory taxation limit and so as to exclude any appropriation required to comply with the mandate from the Article XIII B, Section 9(b) constitutional spending limit of the affected entity, the court must consider the nature and purpose of the federal program; whether its design suggests an intent to coerce; when state and or local participation began; the penalties, if any, assessed for withdrawal or refusal to participate or comply; and any other legal and practical consequences of nonparticipation, noncompliance, or withdrawal. The courts and the Commission on State Mandates must respect the governing principle of Article VIII B, Section 9(b): Neither state nor local agencies may escape their spending limits when their participation in federal programs is truly voluntary. City of Sacramento v. State of California, 50 Cal.3d 51.

* Article 5 shall not apply to property tax rates for the 1978–79 fiscal year.

† Section 60 of Stats. 1979, Ch. 282, in effect July 24, 1979, provided that Article 5 shall not apply to property tax rates for the 1979–80 fiscal year.