Diamond Bar Revenue Bill Clears Panel : Taxes: State Senate committee OKs letting the new city collect about $1.2 million. But the county is opposed.

The Senate Local Government Committee on Wednesday approved a bill to give the city of Diamond Bar about $1.2 million immediately in property tax revenues.

But minutes after the committee hearing, Los Angeles County announced it objects to the proposal, in part because it would cut the money out of the county’s treasury.

With the county in opposition, the legislation could be in trouble on the Senate floor.

At issue is when a newly incorporated city such as Diamond Bar should be eligible to begin to receive property tax revenues to help pay for city services.

Under existing law, Diamond Bar was required to be incorporated by Jan. 1, 1989, to be eligible to receive roughly $1.2 million in property taxes in the 1989-90 fiscal year, which began last July 1.

The cityhood election--originally scheduled for November, 1988--was delayed until March, 1989. As a result, the city missed the Jan. 1 deadline.

So even though Diamond Bar began providing local services July 1, 1989, it will not start receiving property tax revenues until the new fiscal year begins July 1.

“It’s simply a matter of timing,” said Assemblyman Frank Hill (R-Whittier), who is carrying the legislation for Diamond Bar.

Joe Gonsalves, the city’s lobbyist, said the county is “keeping tax revenues we’re entitled to, and then the city has to pay for services. It’s a double hit.”

Diamond Bar Mayor Phyllis Papen said about half the $1.2 million would be set aside to augment the city’s $3.2-million budget for police protection, provided on a contract basis by the Sheriff’s Department.

Papen said the city sought the legislation after county legal advisers in December refused to exempt Diamond Bar from the state law.

But Clancy Leland, the county’s lobbyist, said the county did not plan for the loss of $1 million in property taxes and would have to take the money out of financially strapped programs.

Further, he said, it would set a poor precedent. “We’re changing the rule for one city. I’ll tell you, once this passes, you might as well repeal the state law because everyone’s going to ask for an exemption” when a new city is established, he said.

But the Senate Local Government Committee analysis of the bill cited a precedent for the Hill legislation: In 1982, the Legislature allowed the newly formed city of La Quinta in Riverside County to receive property tax revenues for half of the year, even though it was incorporated after the deadline.

Leland said he will oppose the measure, which was approved by the committee on a 6-1 vote, when it reaches the Senate floor, possibly next week. Because Hill amended the Diamond Bar provisions into another bill, the legislation still must go back to the Assembly for consideration.