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 2. Basic Revenue Allocations

Section 96.1

96.1. Subsequent fiscal year allocations. (a) Except as otherwise provided in Article 3 (commencing with Section 97), and in Article 4 (commencing with Section 98), for the 1980–81 fiscal year and each fiscal year thereafter, property tax revenues shall be apportioned to each jurisdiction pursuant to this section and Section 96.2 by the county auditor, subject to allocation and payment of funds as provided for in subdivision (b) of Section 33670 of the Health and Safety Code and subparagraph (D) of paragraph (3) of subdivision (g) of Section 53395.8 of the Government Code, to each jurisdiction in the following manner:

(1) For each tax rate area, each jurisdiction shall be allocated an amount of property tax revenue equal to the amount of property tax revenue allocated pursuant to this chapter to each jurisdiction in the prior fiscal year, modified by any adjustments required by Section 99 or 99.02.

(2) The difference between the total amount of property tax revenue and the amounts allocated pursuant to paragraph (1) shall be allocated pursuant to Section 96.5, and shall be known as the "annual tax increment."

(3) For purposes of this section, the amount of property tax revenue referred to in paragraph (1) shall not include amounts generated by the increased assessments under Chapter 3.5 (commencing with Section 75).

(b) Any allocation of property tax revenue that was subjected to a prior completed audit by the Controller, pursuant to the requirements of Section 12468 of the Government Code, where all findings have been resolved, shall be deemed correct.

(c) (1) Guidelines for legislation implementation issued and determined necessary by the State Association of County Auditors, and when adopted as regulations by either the Controller or the Department of Finance pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, shall be considered an authoritative source deemed correct until some future clarification by legislation or court decision.

(2) If a county auditor knowingly does not follow the guidelines referred to in paragraph (1), that county auditor shall inform the Controller of the reason or reasons for not following the guidelines. If the Controller disagrees with the stated reason or reasons for not following the guidelines, the provisions of paragraph (3) do not apply.

(3) If, by audit begun on or after July 1, 2001, or discovery by an entity on or after July 1, 2001, it is determined that an allocation method is required to be adjusted and a reallocation is required for previous fiscal years, the cumulative reallocation or adjustment may not exceed 1 percent of the total amount levied at a 1 percent rate of the current year's original secured tax roll. The reallocation shall be completed in equal increments within the following three fiscal years, or as negotiated with the Controller in the case of reallocation to the Educational Revenue Augmentation Fund or school entities.

(4) If it is determined that an allocation method is required to be adjusted as provided in paragraph (3), the county auditor shall, in the fiscal year following the fiscal year in which this determination is made, correct the allocation method in accordance with statute.

History.—Stats. 2001, Ch. 381 (AB 169), in effect January 1, 2002, designated the first paragraph as subdivision (a) and renumbered former subdivision (a) as new paragraph (1), renumbered former subdivision (b) as new paragraph (2) and substituted "paragraph (1)" for "subdivision (a)" after "pursuant to" therein, renumbered former subdivision (c) as new paragraph (3) and substituted "paragraph (1)" for "subdivision (a)" after "to in" therein; and added subdivisions (b) and (c). Stats. 2003, Ch. 62 (SB 600), in effect January 1, 2004, substituted "99.02" for "99.2" after "Section 99 or" in the first sentence of paragraph (1) of subdivision (a). Amended by Stats. 2010, Ch. 664 (AB 1199), in effect January 1, 2011.

Note.—Section 5 of Stats. 2010, Ch. 664 (AB 1199), provides that the Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances of the City and County of San Francisco. The facts constituting the special circumstances are: areas of San Francisco, including certain portions of the San Francisco waterfront, are characterized by deteriorating conditions that cannot be remedied by private investment alone, and require the use of public financing mechanisms to finance the rectification of deteriorating conditions.

Construction.—Taxes generated as a result of escape assessments are not treated differently than other tax revenue, and are subject to allocation and payment of funds just like any other tax revenue. Community Development Comm. of the City of Oxnard v. County of Ventura, 152 Cal.App.4th 1470.

Enforcement.—A redevelopment agency may seek a writ of mandate under Code of Civil Procedure Section 1085 to compel assessors to correct an improperly computed tax increment and to reallocate improperly misallocated revenue. Under this scenario, a county is not immune from suit under Government Code Section 860.2 because the agency is not seeking money damages but is seeking to enforce a mandatory duty imposed by statute (to correctly calculate and distribute tax revenue), even though the result compels the public official to release money wrongfully detained. City of Dinuba v. County of Tulare, 41 Cal.4th 859.

Decisions Under Former Section 97, Subsequent Fiscal Year Allocations.

Construction.—The Legislature violated no constitutional or statutory provisions in enacting this section. Arcadia Redevelopment Agency v. Ikemoto, 16 Cal.App.4th 444.

Allocations.—In a mandate proceeding by a newly incorporated city against a county to correct alleged errors in the county's allocation of property taxes to the city, the base-year figure used to compute the auditor's ratio (Government Code Section 56842 (c) (1)) had to be adjusted for increases in assessed values realized between the base year and the year in which the city received its first distribution three years later. Although there is no statutory provision for adjustment of the base-year figure, such an adjustment accords with common sense and the overall statutory plan for property tax allocation. Under this section, current tax allocations are determined by starting with the prior year's property tax revenue, and a new city has no prior property tax revenue history to adjust. Thus, Section 56842 creates a computation by which a hypothetical previous year's revenue can be determined. It would be contrary to the overall statutory objective to apply this "prior year" tax calculation to the subsequent year without adjustment. City of Highland v. San Bernardino County, 4 Cal.App.4th 1174.