BILL NUMBER: AB 676 CHAPTERED BILL TEXT CHAPTER 94 PASSED THE ASSEMBLY JUNE 28, 1999 PASSED THE SENATE JUNE 24, 1999 AMENDED IN SENATE MAY 27, 1999 AMENDED IN ASSEMBLY APRIL 19, 1999 INTRODUCED BY Assembly Member Brewer FEBRUARY 23, 1999 An act relating to property taxation, and declaring the urgency thereof, to take effect immediately. e law without Governor's signature. Filed with Secretary of State July 13, 1999.) LEGISLATIVE COUNSEL'S DIGEST AB 676, Brewer. Property taxation: Legislative Analyst: study. Under existing law, the revenues from property taxes are apportioned to counties based on a specified formula. This bill would require the Legislative Analyst to prepare a report to the Legislature presenting alternatives for restructuring the property tax allocation system in a manner consistent with specified goals. The 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) California's property owners pay over $20 billion each year in property taxes, making the property tax the third largest nonfederal tax in the state. (b) While most California cities, counties, special districts, redevelopment agencies, and schools are highly reliant upon property taxes, the state's system for allocating these revenues to local governments is seriously flawed. (c) Specifically, California's system for allocating property taxes does not reflect (1) modern needs and preferences of local communities, or (2) the relative need for funding by cities, counties, special districts, redevelopment agencies, and schools to carry out their mandated and discretionary services. (d) In addition, the current system centralizes control over property tax allocation in Sacramento and gives the state full authority to reallocate property taxes to offset state education funding obligations. (e) The Legislature wishes to revamp the current system of property tax allocation to do the following: (1) Increase taxpayer knowledge of the allocation of property taxes. (2) Provide greater local control over property tax allocation. (3) Give cities and counties greater fiscal incentives to approve land developments other than retail developments. (f) To assist the Legislature in this effort, the Legislative Analyst shall prepare a report, by December 31, 1999, presenting at least two alternatives for restructuring the property tax allocation system in a manner consistent with these goals. In developing these alternatives, the Legislative Analyst shall consider the option of establishing a minimum percentage of the property tax to be allocated to each California county. (g) The Legislature recognizes that any effort to restructure the allocation of property taxes would result in some local governments gaining property taxes and some local governments losing property tax revenues. In order to minimize the local fiscal impact of these changes, the Legislature intends to consider allocating an unspecified amount in additional revenues available to cities, counties, and special districts. SEC. 2. 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 obtain needed information to correct inequities in the property tax formula at the earliest possible time, it is necessary for this act to take effect immediately.