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SENATE BILL 1317 (TORLAKSON – 2006)
CHAPTER 872, STATUTES OF 2006, SB 1317
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Revenue and Taxation Code section 100 was amended, and section 100.95 was added to the Revenue and Taxation Code following legislative approval of Senate Bill 1317 of 2006. (See Exhibit A, #1a through #1e) Senator Tom Torlakson introduced this measure relating to property tax allocations and public utilities on February 16, 2006 on behalf of Southern California Edison. (See Exhibit A, #1a; #9, page 4; and #13, page 1)
Senate Bill 1317 was assigned to both the Senate and Assembly Committees on Local Government where policy issues raised by the bill were considered. (See Exhibit A, #3 and #9) The fiscal ramifications of the bill were considered by the Senate Committee on Appropriations and the Assembly Committee on Appropriations. (See Exhibit A, #5 and #11) Three amendments were made to Senate Bill 1317. (See Exhibit A, #1b through #1d and #2) Subsequent to legislative approval, Governor Arnold Schwarzenegger signed Senate Bill 1317 on September 30, 2006 and it was recorded by the Secretary of State on that day as Chapter 872 of the Statutes of 2006. (See Exhibit A, #1e)
The Office of Senate Floor Analyses prepared an Unfinished Business analysis that summarized Senate Bill 1317, as last amended on August 21, 2006, as follows:
This bill provides a new formula for allocating property tax revenue for state-assessed public utility property constructed after January 1, 2007.
(See Exhibit A, #13, page 2)
The sponsor of Senate Bill 1317, Southern California Edison, submitted a letter to the Chair of the Assembly Local Government Committee on June 21, 2006, in which it underscored some of the benefits of the measure:
Under current law, investor-owned utility property is assessed under the unitary tax method, whereby tax revenue from that property is allocated by a statutory formula throughout the county in which the property is located. This method provides a fair means of revenue distribution for existing utility property. Unfortunately, when new projects are located, the affected jurisdiction receives only a severely diluted share of the tax revenue resulting from that project. For example, under current law, if a $125 million electrical substation that paid $1.25 million annually in property taxes were located in City X, that city may receive only an additional $3,700 in revenue annually.
SB 1317 would provide a more equitable means by which to allocate tax revenue for new electric infrastructure projects by concentrating a higher proportion of tax revenue in the affected jurisdiction….Using the above example, if SB 1317 were to take affect, the same City X could receive approximately $375,000 in additional revenue annually, rather than $3,700. Similarly, the water district serving the project will receive a substantially larger share of tax revenue under the unitary method.
(See Exhibit A, #10, document AP-15)