By:
Santa Clara County Controller-Treasurer’s Office
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Property Tax Assessments
Property Tax Roll Types
Role of Different Agencies
Apportionments
Projections
Demystifying California Property Tax
Apportionment System
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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.
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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).
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Government properties or properties that are
used for non–commercial purposes.
EXEMPTION
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Welfare Exemption: hospitals, religious
properties, charities, and nonprofit schools
and colleges.
Homeowner Exemption
Veteran Exemption
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.
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.
The County Assessor is responsible for
assessing inter-county pipelines
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PROP 8:
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PROP 60:
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PROP 90: allows transfers from one county to another county
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PROP 110: provides property tax relief for severely and
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PROP 58: Transfers of the principal place of residence
TEMPORARY REDUCTION OF PROP 13 Base Values
due to Market declines.
allows transfers of base year values within the same
county (intracounty). Must be at least 55 years old.
in California (intercounty) and it is the discretion of each county
to authorize such transfers. Must be at least 55 years old.
permanently disabled claimants when they sell an existing home
and buy or build another.
between parents and their children (there is no limit on the value
of the residence)
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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.
 SECURED
 SUPPLEMENTAL
 UNSECURED
 UNITARY
COUNTY ASSESSOR:
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Assesses Values of the Properties
Certifies the Values to the County
Treasurer-Controller
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
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
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Apportionment
◦ Two Apportionment methods:
 Teeter
 Non-teeter
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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
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Benefits:
 Simplified property tax estimation and allocation
process
 Stable and reliable annual property tax revenues
Santa Clara County:
 Teeter: Secured & Supplemental
 Non-teeter: Unsecured
Non-Teeter Cities:
 City of Sunnyvale
 Town of Los Gatos
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
4653.4]
[R&T §75.6,75.7 &
 Unitary Apportionment factors
 Allocate unitary tax revenue [R&T § 100]
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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
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Annual calculation
‘Modified AB8’
◦ ADA from the State
◦ Basic Aid and Non-County-of-county districts are
not eligible
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Prior year’s factors for prior year’s collections
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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/ControllerTreasurer%20Department/Property%20Tax%20
Apportionment/Pages/PROPERTY-TAXDISTRIBUTION-SCHEDULE.aspx
FY2013-14 Santa Clara County
Property Tax 1% Distribution (After VLF)
County
City
School Community College
7%
Special District
VLF-County
6%
School K-12
45%
Special District
6%
School Community College
Other
21%
City
9%
County
12%
School K-12
VLF-City
4%
RDA
Successor
Agency
11%
RDA Successor Agency
VLF-County
VLF-City
Others
Roll
Corrections
Assessor’s
Certified Roll
Current Year’s Projection
Estimated
Roll
Corrections
Others
Assessor’s
Monthly Roll
Growth
Next Fiscal Year’s Projection
Current Year’s Projection
Roll
Corrections
Assessor’s
Annual Roll
Collections
Others
Next Fiscal Year’s Projection
Roll
Corrections
Market
Trend/Economy
Historic Data
Others
Current Year’s Projection
Roll
Corrections
Collection
Market
Trend
Historic
Data
Others
Next Fiscal Year’s Projection
Historic Data
Roll
Corrections
Market Trend
Others
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County Supplemental vs. Transfer Tax
35,000,000
30,000,000
25,000,000
20,000,000
Transfer Tax Revenue
15,000,000
Supplemental Revenue
10,000,000
5,000,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Correlation (r)
0.638880558
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Current Year Annual Tax Increment Loss
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Available in August meeting
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Available in November meeting
Same distribution timing as RPTTF [January 2 and June 1]
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Available on October 1 and April 1
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January 2 and June 1
• Current Year Pass-through
• RPTTF Residual Estimate
• RPTTF Residual Distribution
• Trust Fund
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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]
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Timing: Jan 2 & Jun 1
What’s distributed
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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
David G Elledge
May 2006
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Prop 13/ 1978
◦ limited the tax rate for each individual piece of
property to one percent, exclusive of bonded
indebtedness approved by the voters
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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%
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Problem with SB154
◦ Geographical boundaries
◦ SB154 Base Year Error
◦ State Assistance (Bailout)
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Long Term Solution: AB8
◦ Distribute growth in assessed valuation
◦ Redistribute property taxes resulting from
changes in jurisdictional boundaries/services
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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
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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)
http://www.sccgov.org/sites/fin/ControllerTreasurer%20Department/Property%20Tax%20Apportio
nment/Pages/Property-Tax-Apportionment.aspx
Q&A