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Consider an oppose position on AB 653 (Ridley-Thomas) relative to property taxation exemption for property owned in fee or held in trust by Indian tribes or charitable nonprofit organizations which was reviewed by the County’s Legislative Committee on August 28, 2017
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Published Notice Required? Yes _______ No ___X__
Public Hearing Required? Yes _______ No ___X__
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors consider an oppose position on AB 653 (Ridley-Thomas) relative to property taxation exemption for property owned in fee or held in trust by Indian tribes or charitable nonprofit organizations which was reviewed by the County’s Legislative Committee on August 28, 2017.
SUMMARY:
On Friday, August 25, 2017, staff became aware of a recently amended bill, AB 653 authored by Assemblymember Sabastian Ridley-Thomas relating to property taxation exemption for property owned in fee or held in trust by Indian tribes or charitable nonprofit organizations. The bill is scheduled to be heard on Wednesday, August 30, 2017 in the Senate Governance and Finance Committee which is an important decision point for this bill. AB 653 was included on the August 28, 2017 Legislative Committee agenda where the Committee recommended the County oppose the bill.
FINANCIAL IMPACT:
The legislative program is designed to result in additional funding and cost avoidance relative to Solano County. The cost of preparing this report and compiling the information is a General Fund cost covered in the County Administrator’s administration budget.
Passage of AB 653 would result in property tax losses for counties who have tribes or charitable nonprofit organizations with tribal land interests who with pending applications to the United States Department of the Interior (DOI) to take property in trust. AB 653 provides that no appropriation is made by the bill and the state shall not reimburse any local agency for any property tax revenues lost. The bill takes effect immediately.
DISCUSSION:
The County’s Legislative Committee Members, Supervisor Erin Hannigan and Supervisor John Vasquez met on August 28, 2017 to discuss both Federal and State issues. Included on the agenda was AB 653 authored by Assemblymember Ridley-Thomas relative to property taxation exemption for property owned in fee or held in trust by Indian tribes or charitable nonprofit organizations.
The California Constitution provides that all property is taxable unless exempted by the California Constitution or by federal law. This bill, beginning with the 2018/19 fiscal year, would exempt from taxation property owned in fee or held in trust by a federally recognized Indian tribe or charitable nonprofit organization if the DOI has issued a notice of decision accepting the land into federal trust and other specified conditions are met. The bill would require the tribe to be liable for tax for the years for which the property was exempted from taxation by the bill if a court of competent jurisdiction overturns the notice of decision approving the trust application, as specified.
The California Constitution also requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
This bill would take effect immediately as a tax levy.
Support
Santa Ynez Band of Chumash Indians.
Opposition
None on record however Napa County submitted a letter dated June 22, 2017 expressing their opposition to the bill. A copy of their letter is attached to the staff report.
ALTERNATIVES:
The Board may consider the following alternatives:
1. Not receive a report at this time; or
2. Postpone action on AB 653.
Legislative positions adopted by the Board are forwarded to the County’s legislative delegation and advocated by staff and the County’s state and federal legislative advocates.
OTHER AGENCY INVOLVEMENT:
The County Administrator’s Office consulted with the County’s state legislative advocate in the preparation of this report.