SECTIONS 2305-2309 - California Statutes

REVENUE AND TAXATION CODE

SECTION 2305-2309

2305. As used in this article "functional consolidation" means the
transfer, from one local agency to another, of both of the following:
(1) the responsibility for providing a program or a service to an
area within the jurisdiction of the transferring agency and (2) the
responsibility for levying a property tax rate within such area to
pay the cost of such service or program. Functional consolidation
does not refer to any transfer of responsibility for providing a
program or a service when such transfer occurs as a result of a
"governmental reorganization" as such term is defined in Section
2295; in such event, the maximum property tax rates for any affected
local agency shall be determined solely as provided in Article 7
(commencing with Section 2295) of this chapter.

2306. Whenever a functional consolidation occurs, the maximum
property tax rate for any local agency affected by such functional
consolidation shall be determined as provided in this article.

2307. The local agency which transfers a program or service shall
reduce its maximum property tax rate as provided in this section.
Such reduction shall be effective beginning with the fiscal year
after the transfer has occurred.
(a) The local agency shall determine the actual cost of providing
the transferred program or service during the last full fiscal year
in which such function or service was provided.
(b) The local agency shall determine the amount of the costs
determined pursuant to subdivision (a) which are attributable to
expenses for general administration and capital outlay and which
cannot be transferred to the agency assuming the responsibility for
providing the program or service; provided that such amount shall not
exceed 10 percent of the amount determined pursuant to subdivision
(a).
(c) The local agency shall subtract the amount determined pursuant
to subdivision (b) from the amount determined pursuant to
subdivision (a).
(d) The local agency shall determine the property tax rate which
would have been required to produce the amount determined pursuant to
subdivision (c) during the last full fiscal year in which the
transferred program or service was provided and shall reduce its
maximum property tax rate thereby.

2308. The maximum property tax rate for a local agency assuming the
responsibility for providing a program or service and for levying a
tax to pay the cost thereof, as a result of a functional
consolidation, shall be the maximum property tax rate for such agency
established prior to the functional consolidation plus such
additional rate as may be necessary to pay the actual costs of
providing such program or service.
The Controller may audit any rate imposed under this section and
if he determines that the rate exceeds a rate which would be
necessary to pay the actual costs incurred as a result of functional
consolidation, he shall immediately notify the local agency of such
determination and the local agency shall reduce its property tax rate
by an appropriate amount for the next succeeding fiscal year. In the
event that a local agency fails to make such a reduction in its
property tax rate, the Controller shall request the Attorney General
to bring an action under Chapter 2 (commencing with Section 1084) of
Title 1 of Part 3 of the Code of Civil Procedure to force a reduction
in the rate.

2309. Any adjustment in the maximum property tax rate of a local
agency made pursuant to Section 2308 shall only be made in the first
full fiscal year after the functional consolidation has occurred.