Government Finance and Operations 05/03/2013
AB 561 (Ting) – Support
As Amended on April 30, 2013
AB 561, by Assembly Member Phil Ting, would clarify aspects of the Documentary Transfer Tax Act, which allows county boards of supervisors to impose a tax at a specified rate on deeds and instruments by which realty is sold.
Property can change ownership in several different ways. When an individual buys a home or when a small business buys a building, the transaction triggers a requirement to record the change in ownership with the county recorder and pay the associated tax. However, for more complicated transactions, the law does not require those specific documents to be filed, but the tax still applies. AB 561 would clarify that the term “realty sold” includes any transfer of ownership interests that constitutes a change in ownership, as already defined in law.
AB 561 also clarifies language within the Act to ensure that partnerships are not exempt from the same transfer tax levied on homeowners and all other legal entities when they sell their property. This bill would eliminate confusion about when transfer tax is due and streamline transfer tax collection at the local level.
The Assembly Local Government Committee will consider AB 561 at its hearing next Wednesday, May 8.
AB 1077 (Muratsuchi) – Oppose Unless Amended
As Amended on April 2, 2013
AB 1077, by Assembly Member Al Muratsuchi, would provide various tax exemptions for new alternative fuel motor vehicles, including an exemption from sales and use taxes and the vehicle license fee. AB 1077 does not reimburse local agencies for the resulting revenue loss.
Counties receive as much as 3.3125 cents, or almost 45 percent, of the revenue the sales tax generates, depending on where the sale takes place. Importantly, this includes 1.0625 cents for 2011 Realignment.
The Vehicle License Fee is also a critical funding component of 2011 Realignment and 1991 Realignment, with essentially all of the revenue funding county programs that the state requires.
If favoring these purchases is an issue of statewide concern, as passing this bill would indicate, then the state should use statewide revenues to reimburse counties and other local agencies for their losses, as provided by statute. Alternatively, the bill can exempt the local portions of the tax from the special treatment the bill would implement. This is especially true where the funds pay for programs the state requires counties to perform.
The Assembly Revenue and Taxation Committee will consider AB 1077 at its hearing next Monday, May 6.
SB 19 (Knight) – Oppose Unless Amended
As Amended on April 18, 2013
SB 19, by Senator Steve Knight, would exempt equipment and materials related to commercial space launch sites from sales and use taxes. SB 19 does not reimburse local agencies for the resulting revenue loss.
The Senate Governance and Finance Committee will consider SB 19 at its hearing next Wednesday, May 8.
SB 636 (Hill) – Support
As Introduced on February 22, 2013
As previously reported in the Bulletin, SB 636, by Senator Jerry Hill, would modify a provision included in the last year’s redevelopment budget trailer bill relating to the allocation of property tax revenues from the Redevelopment Property Tax Trust Fund.
The Senate Appropriations Committee had planned to hear the bill on April 15, but now plans to consider the measure next Monday, May 6.
AB 436 (Jones-Sawyer) – Support
As Introduced on February 15, 2013
AB 436, by Assembly Member Reginald Jones-Sawyer, would apply the principle of comparative fault to inverse condemnation cases where the defendant is a government agency. It would also apply normal tort standards relating to post-offer costs.
The state of the law on the issue of comparative fault has been uncertain for years. Because of the uncertainty, public agencies in inverse condemnation cases are at risk of being found liable for the full cost of a property, even when the agency only had a small part of the fault. AB 436 would settle this area of law reasonably and fairly.
The other provision of the bill would encourage property owners in inverse condemnation cases to accept reasonable settlement offers from the public agency. Under current law, if the property owner recovers anything, they are entitled to their full attorney fees and costs. This is only true for inverse condemnation cases. AB 436 would instead specify that if the plaintiff rejects an offer and fails to obtain a more favorable judgment, the plaintiff cannot recover costs incurred after the time of the offer. These new provisions are not only fairer, but also help to ease the burden on the courts.
The Assembly Judiciary Committee has scheduled the bill for hearing next Tuesday, May 7.
SB 519 (Emmerson) – Support
As Amended on April 1, 2013
SB 519, by Senator Bill Emmerson, would change statute to say that the state shall pay the costs of special elections the Governor calls to fill state and federal vacancies, restricted to expenses counties incur in 2012 and 2013. The bill does not make an appropriation.
A statute to this effect was in effect for many years up through the end of 2008. Since the beginning of 2009, counties have tens of millions of dollars to fill well over a dozen vacancies. This bill only applies to expenses incurred in 2012 and 2013. Counties have already conducted four primary and general elections to fill vacancies since the beginning of 2012, and anticipate holding four more, with a total estimated cost of between $5 million and $10 million.
Every other level of government, except schools, pays their share of election costs, but counties are required to pick up the state’s share. The costs of state and federal vacancies come to counties unexpectedly, after their budgets have passed, and put additional load on already strained county general funds.
The Senate Elections and Constitutional Amendments Committee passed SB 519 unanimously at its hearing last Tuesday, April 30. The bill now moves to the Senate Appropriations Committee, which has scheduled it for May 13.