BILL ANALYSIS                                                                                                                                                                                                    




          Appropriations Committee Fiscal Summary

                                SB 329  (Peace)

Hearing Date:5/17/99            Amended:4/28/99        
Consultant: Anne Maitland           Policy Vote:Rev&Tax:  
7-0           
____________________________________________________________ 

BILL SUMMARY: 
SB 329 provides that property tax growth on electrical  
generating facilities assessed by the Board of Equalization  
is to be allocated to jurisdictions in which the facility  
is located.

                         Fiscal Impact (in thousands)
  Major Provisions                1999-2000      2000-01       2001-02                  
     Fund  
                                  No estimated revenue impact; however future   
        Local
                                  property tax revenues would be shifted among
                  jurisdictions in counties with these facilities
                                  Unknown increase or reduction in school aid   
         General
 Board of                    Unknown increase in administrative costs,          
     General
 Equalization              probably less than $50k annually

STAFF COMMENTS:  
Currently, the Constitution requires the Board of  
Equalization to assess property owned by companies  
transmitting or selling electricity.  Historically, the  
Board has limited its assessment jurisdiction to companies  
regulated by the Public Utilities Commission.  Property  
owned by other types of firms that sold electricity - e.g.,  
co-generation plants -  have been assessed by county  
assessors.
Property tax revenue on Board-assessed property is  
allocated differently than property tax revenue on  
locally-assessed property.  Revenue from Board-assessed  
property is allocated to local agencies based on their  
property tax share of Board-assessed property in 1987-88.   
Any growth in Board-assessed property is allocated among  
  all  the jurisdictions in the county based on each  
jurisdiction's share of the entire property tax.  By  
contrast, for locally-assessed properties, both the base  










amount of property tax and any growth in property tax  
attributable to a particular property is allocated only to  
those jurisdictions in which the property is located.  For  
example, growth on a state-assessed pipeline that runs  
through Alameda County is shared among all jurisdictions in  
the county, even if the pipeline doesn't go through each of  
those jurisdictions.  Oakland will be entitled to a share  
of the property tax growth from the pipeline even if the  
pipeline doesn't run through Oakland.  But property tax  
growth on an office building in Oakland goes only to  
Oakland, the county, schools and special districts within  
the tax rate area in which the office building is located.   
As a result of electrical deregulation and restructuring,  
the Board is currently examining whether it will continue  
to assess utility companies' property.
SB 329 provides that incremental revenues from an  
electrical generation facility will be allocated as if it  
were a locally-assessed property even if the Board makes  
the property tax assessment.  This means that growth on  
property tax will be allocated only to those jurisdictions  
in which the facility is physically located, not to all  
jurisdictions in the county.