Property tax revenue allocations: Local-State Sustainable Investment Program.

Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally provides that each jurisdiction shall be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction's portion of the annual tax increment, as defined. Existing property tax law also reduces the amount of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992–93 and 1993–94 fiscal years, that the amount of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. Existing property tax law requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund (ERAF) in that county for allocation to school districts, community college districts, and the county office of education. This bill would establish the Local-State Sustainable Investment Program, which would be administered by the Department of Finance. The bill would authorize a city, a county, or a specified joint powers agency that meets specified eligibility criteria to apply to the Department of Finance for funding for projects that further certain purposes, including increasing the availability of affordable housing. The bill would require that funding under the program be provided by an allocation of ad valorem property tax revenues, as provided, and would limit the amount of funding approved under the program to $200,000,000 per fiscal year and $1,000,000,000 total. The bill, for each fiscal year in which funding for a project within a county is approved under the program, would require the county auditor to decrease the amount of ad valorem property tax revenue that is otherwise required to be allocated to the county ERAF by the countywide local-state sustainable investment amount and to allocate a commensurate amount to the county's Local-State Investment Fund, which is created by this bill in the treasury of each county. The bill would require the county treasurer to transfer from the county's Local-State Sustainable Investment Fund an amount approved by the Department of Finance under the program into a separate account for use by a city, a county, or a specified joint powers agency for an approved applicant, as provided. The bill would require, upon approval of funding for a project under the program, the Department of Finance to issue an order directing the county auditor of the county in which the project is approved to make the above-described reduction in property tax revenue allocations to the county's ERAF. By imposing new duties upon local officials, this bill would impose a state-mandated local program. The California Constitution 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.