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Barbara A. McNeill
Keller Williams, Beach Cities
1601 P.C.H. Ste. 265
Hermosa Beach, CA 90254
Phone: 310-908-4869
Fax: 310-376-4603
Email: BarbaraAMcNeill@aol.com


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Sunday, January 2, 2011

What are Mello Roos?

Mello-Roos

From Wikipedia, the free encyclopedia

Community Facilities District Act (more commonly known as Mello-Roos) was a law enacted by the California State Legislature in 1982.[1] The name Mello-Roos comes from its co-authors, Senator Henry Mello (of the Monterey area) and Assemblyman Mike Roos (of Los Angeles). The Act enabled “Community Facilities Districts” (CFDs) to be established by local government agencies as a means of obtaining community funding.

History

When California Proposition 13 passed in 1978, it restricted the ability of local governments to raise property taxes by no more than an inflation factor. The budget for services and for the construction of public facilities therefore could not continue unabated. As a result, new ways to fund public improvements in respective locales were considered.[1]

Districts and taxes

A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services.[2] These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds.
Mello-Roos is deductible in some cases but not in others.[3]

New communities

Many communities requiring new schools and infrastructures such as public parks and roads impose Mello-Roos. While property tax is assessed as a percentage of the value of the home, Mello-Roos is independent and could rise or lower and is not subject to Proposition 13

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