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Property Tax Refresher Workshop. By: Santa Clara County Controller-Treasurer’s Office. Property Tax Refresher Worksho p. Property Tax Assessments Property Tax Roll Types Role of Different Agencies Apportionments Projections Demystifying California Property Tax Apportionment System.

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property tax refresher workshop

Property Tax Refresher Workshop

By:

Santa Clara County Controller-Treasurer’s Office

property tax refresher worksho p
Property Tax Refresher Workshop
  • Property Tax Assessments
  • Property Tax Roll Types
  • Role of Different Agencies
  • Apportionments
  • Projections
  • Demystifying California Property Tax Apportionment System
proposition 13

PROPOSITION 13

The People's Initiative to Limit Property Taxation was approved by California voters on June 6, 1978.

Article 13A of the Constitution of the State of California

An annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year.

sb 813 supplemental assessments july 1 1983
SB 813 - Supplemental Assessments(July 1, 1983)
  • Allowed reassessment of a base year value for Supplemental event (a) change in ownership, or (b) completion of new construction.
  • A reassessment may be an assessed value increase resulting in a supplemental bill(s), an assessed value decrease resulting in a supplemental refund(s) or retaining the same assessed value (no change).
exempted properties
EXEMPTED PROPERTIES
  • Government properties or properties that are used for non–commercial purposes.
  • Welfare Exemption: hospitals, religious properties, charities, and nonprofit schools and colleges.
  • Homeowner Exemption
  • Veteran Exemption

EXEMPTION

properties assessed @ current market value
PROPERTIES ASSESSED @ CURRENT MARKET VALUE

PERSONAL PROPERTY

  • Property other than land, buildings, and other permanent structures, which are commonly referred to as “real property” such as manufacturing equipment, business computers, and office furniture.
  • Aircraft – personal and commercial
  • Boats
  • When determining the market value of personal property, county assessors take into account the loss in value due to the age and condition of personal property—a concept known as depreciation. Unlike property taxes on real property, which are due in two separate payments, taxes on personal property are due on August 31.
state assessed property
STATE-ASSESSED PROPERTY

The State Board of Equalization is responsible for assessing certain real properties that cross county boundaries, such as

  • Public Utilities :Transmission Lines, Optical Lines, Electric Facilities.
  • Telecommunication: Interexchange and Commercial Mobile
  • Regulated Railway: Railroad tracks and cars.
  • Canals.
inter county properties
Inter-County Properties

The County Assessor is responsible for assessing inter-county pipelines

propositions prop affect the values
PROPOSITIONS (PROP) affect the Values
  • PROP 8: TEMPORARY REDUCTION OF PROP 13 Base Values due to Market declines.
  • PROP 60: allows transfers of base year values within the same county (intracounty). Must be at least 55 years old.
  • PROP 90: allows transfers from one county to another county in California (intercounty) and it is the discretion of each county to authorize such transfers. Must be at least 55 years old.
  • PROP 110: provides property tax relief for severely and permanently disabled claimants when they sell an existing home and buy or build another.
  • PROP 58: Transfers of the principal place of residence between parents and their children (there is no limit on the value of the residence)
a california property tax bill includes a variety of different taxes and charges
A California property tax bill includes a variety of different taxes and charges
  • The 1 percent rate established by Proposition 13 (1978).
  • Tax rates to pay for local voter–approved debt.
  • Property assessments.
  • Mello–Roos taxes.
  • Parcel taxes.
tax roll types
TAX ROLL TYPES
  • SECURED
  • SUPPLEMENTAL
  • UNSECURED
  • UNITARY
role of different agencies
Role of Different Agencies

COUNTY ASSESSOR:

  • Assesses Values of the Properties
  • Certifies the Values to the County Treasurer-Controller
slide13

TAX COLLECTOR

  • Collects the taxes
  • Issues Refunds
  • Prints and Mails tax bills
  • Processes Roll corrections
  • Certifies the Tax Collections to the Treasurer Controller for Apportionment
slide14

TREASURER-CONTROLLER

  • Extends the Annual Tax Rolls
  • Apportions the Tax Collections and Refunds [due to Roll Corrections]
  • Distributes the Funds to Taxing Entities
  • Provides Fiscal Reports
property tax apportionment
Property Tax Apportionment
  • Apportionment
    • Two Apportionment methods:
      • Teeter
      • Non-teeter
santa clara county property tax apportionment1
Santa Clara County Property Tax Apportionment
  • Teeter
    • Author: Mr. Desmond Teeter, the Auditor-Controller for Contra Costa County (1940s)
    • Allows counties to apportion secured, unitary, assessment, supplemental to jurisdictions at 100% of billed amount rather than tax collections
    • County collects delinquent tax payments & penalties
    • R&T § 4701-4722
  • Benefits:
      • Simplified property tax estimation and allocation process
      • Stable and reliable annual property tax revenues
santa clara county property tax apportionment2
Santa Clara County Property Tax Apportionment

Santa Clara County:

  • Teeter: Secured & Supplemental
  • Non-teeter: Unsecured

Non-Teeter Cities:

  • City of Sunnyvale
  • Town of Los Gatos
property tax apportionment1
Property Tax Apportionment

Apportionment Factors

    • To distribute property tax revenue
    • Revenue and Taxation Code
  • AB8 Apportionment factors
    • Allocate Secured, Unsecured and Homeowner Exemption tax revenues [R&T §96.5]
  • Supplemental Apportionment factors
    • Allocate Supplemental tax revenue [R&T §75.6,75.7 & 4653.4]
  • Unitary Apportionment factors
    • Allocate unitary tax revenue [R&T § 100]
property tax apportionment2
Property Tax Apportionment
  • AB8 Apportionment factors
    • The Assembly Bill 8 (“AB8”) 1979
      • Provides procedures for an equitable allocation of property taxes
        • change in proportion with the increase or decrease of assessed values (“AV”)
      • To allocate to each jurisdiction the amount it received in the prior year, plus the change that has occurred in the current year within its boundaries
        • Increment Allocation Factor (IAF) apply on the change of AV
supplemental apportionment factor
Supplemental Apportionment Factor
  • Annual calculation
  • ‘Modified AB8’
    • ADA from the State
    • Basic Aid and Non-County-of-county districts are not eligible
  • Prior year’s factors for prior year’s collections
santa clara county property tax apportionment3
Santa Clara County Property Tax Apportionment
  • Apportionment Schedule
    • Major revenue
      • Secured: 10 times a year
      • Unsecured: 3 times a year
      • Supplemental: 13 times a year
    • Link to Apportionment schedule:

http://www.sccgov.org/sites/fin/Controller-Treasurer%20Department/Property%20Tax%20Apportionment/Pages/PROPERTY-TAX-DISTRIBUTION-SCHEDULE.aspx

revenue projections unsecured
Revenue ProjectionsUnsecured

Current Year’s Projection

revenue projections unsecured1
Revenue ProjectionsUnsecured

Next Fiscal Year’s Projection

revenue projections supplemental
Revenue ProjectionsSupplemental

Current Year’s Projection

revenue projections supplemental1
Revenue ProjectionsSupplemental

Next Fiscal Year’s Projection

revenue projections supplemental2
Revenue ProjectionsSupplemental
  • County Supplemental vs. Transfer Tax
redevelopment successor agency
Redevelopment Successor Agency
  • Current Year Annual Tax Increment Loss
        • Available in August meeting
    • Current Year Pass-through
        • Available in November meeting
        • Same distribution timing as RPTTF [January 2 and June 1]
    • RPTTF Residual Estimate
        • Available on October 1 and April 1
    • RPTTF Residual Distribution
        • January 2 and June 1
redevelopment property tax trust fund rpttf
Redevelopment Property Tax Trust Fund “RPTTF”
  • Trust Fund
      • H&S § 34170.5 (b) The county auditor-controller shall create within the county treasury a Redevelopment Property Tax Trust Fund for the property tax revenues related to each former redevelopment agency, for administration by the county auditor-controller.
  • Distribution [H&S §34183]
    • Timing: Jan 2 & Jun 1
    • What’s distributed
      • Administrative Fees & audit fee to County Auditor-Controller;
      • Pass-through Payment to the affected taxing entities of former RDA;
      • Recognized Obligation Payments to Successor Agency's Recognized Obligation Retirement Fund (RORF);
      • Successor Agency's Administrative Cost Allowance under H&S 34171;
      • SCO Billings under H&S34184(d);
      • Residual Balance of the RPTTF to local agencies and school entities
demystifying the california property tax apportionment
Demystifying the California Property Tax Apportionment
  • Prop 13/ 1978
    • limited the tax rate for each individual piece of property to one percent, exclusive of bonded indebtedness approved by the voters
  • SB154/ three weeks after passage of Prop 13
    • to divide up the one percent property tax rate based on an historical shares methodology to maintain an “as you were” approach
    • Example:
      • City A received 5% prior to passage of AB8, City A would receive 5% of property taxes collected at 1%
demystifying the california property tax apportionment1
Demystifying the California Property Tax Apportionment
  • Problem with SB154
    • Geographical boundaries
    • SB154 Base Year Error
    • State Assistance (Bailout)
  • Long Term Solution: AB8
    • Distribute growth in assessed valuation
    • Redistribute property taxes resulting from changes in jurisdictional boundaries/services
demystifying the california property tax apportionment2
Demystifying the California Property Tax Apportionment
  • TEA
    • Tax Equity Allocation
    • No/low property tax cities
      • 31 cities existed prior to Prop 13 never levied a property tax, no share in the property tax apportionment
    • AB 709 first TEA legislation
      • Required 17 counties to shift some of their property tax to 49 qualifying cities
    • AB1197 amended TEA legislation provide most qualifying cities receive 7 percent of the property tax
    • Santa Clara County TEA cities:
      • Cupertino, Los Altos Hill, Monte Sereno & Saratoga
demystifying the california property tax apportionment3
Demystifying the California Property Tax Apportionment
  • ERAF
    • Educational Revenue Augmentation Fund
    • 1992/93 ERAF I
      • State Budget Shortfall
    • 1993/94 ERAF II
      • State Budget Shortfall
    • 2004/05 and 2005/06 ERAF III (temporary)
slide46

http://www.sccgov.org/sites/fin/Controller-Treasurer%20Department/Property%20Tax%20Apportionment/Pages/Property-Tax-Apportionment.aspxhttp://www.sccgov.org/sites/fin/Controller-Treasurer%20Department/Property%20Tax%20Apportionment/Pages/Property-Tax-Apportionment.aspx