BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1086
                                                                  Page  1

          Date of Hearing:  May 2, 2011

                     ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
                                Henry T. Perea, Chair

                  AB 1086 (Wieckowski) - As Amended:  April 4, 2011

          Majority vote.

           SUBJECT  :  Transactions and use taxes:  County of Alameda

           SUMMARY  :  Authorizes the County of Alameda to adopt an ordinance 
          imposing a transactions and use tax (TUT) for the support of 
          countrywide transportation programs that would, in combination 
          with other taxes, exceed the statutory limit of 2%.  
          Specifically,  this bill  :  

          1)Allows the County of Alameda to adopt an ordinance imposing a 
            TUT for the support of countrywide transportation programs 
            that would, in combination with other taxes, exceed the 
            statutory limit of 2% if all of the following requirements are 
            met:

             a)   The local government entity adopts an ordinance 
               proposing the TUT by any applicable voting requirements;

             b)   The ordinance proposing the TUT is submitted to the 
               electorate on the November 6, 2012, general election ballot 
               and is approved by two-thirds of the voters voting on the 
               ordinance; and,

             c)   The TUT conforms to the TUT Law, as specified.

          2)Provides that the authority for the County of Alameda to adopt 
            an ordinance to impose TUT that exceeds the combined statutory 
            rate of 2% shall only remain in effect until January 1, 2013, 
            and as of January 1, 2014 is repealed. 

          3)States that the Legislature finds and declares that a special 
            law is necessary because of the unique fiscal pressures 
            experienced in the County of Alameda in providing essential 
            transportation programs.

           EXISTING LAW  : 









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          1)Authorizes local governments to impose, increase, or extend 
            TUTs (also known as district taxes), under specified 
            conditions.  ÝRevenue and Taxation Code (R&TC) Part 1.6 
            (commencing with Section 7251) (TUT Law), and R&TC Part 1.7 
            (commencing with Section 7285) (Additional Local Tax Law)].  

          2)Authorizes a county to impose a district tax for special 
            purposes at a rate of 0.25%, or multiple thereof, if the 
            ordinance proposing the tax is approved by a two-thirds vote 
            of the board of supervisors and a two-thirds vote of the 
            qualified voters in the county.  (R&TC Section 7285.5).   

          3)Provides that the combined rate of all district taxes imposed 
            in any county may not exceed 2%.

          4)Requires cities and counties to contract with the State Board 
            of Equalization (BOE) to perform all functions in the 
            administration and operations of the ordinances imposing the 
            Bradley-Burns local taxes and district taxes. 
                              
           FISCAL EFFECT  :   The BOE estimates this bill would generate the 
          following revenue for Alameda County:

          1)For the operative date April 1, 2013 to December 31, 2013, the 
            imposition of a TUT tax at 0.5% is estimated to generate $100 
            million.

          2)For the calendar year 2014, the imposition of a TUT tax at 
            0.5% is estimated to generate $141 million.

           COMMENTS :   

          1)The author has provided the following statement: 

          "Alameda County has a long history of being a self-help county, 
            willing to raise revenue on its own to fund key local 
            transportation projects that are vital to its economy.  These 
            projects are developed after considerable public community 
            meetings and input from all parts of the county.  This 
            extensive collaboration with the public resulted in the last 
            ballot measure being approved with 81.5 percent of the 
            public's support.  Now, the Alameda County Transportation 
            Commission is updating its Countywide Transportation Plan and 
            is in the developmental stages of a new Transportation 
            Expenditure Plan.  








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            "In Alameda County, the cities of San Leandro and Union City 
            recently enacted local sales taxes, occupying remaining local 
            sales tax capacity.  AB 1086 would allow a countywide 
            transportation sales tax to be enacted if it is approved by 
            2/3 of the voters at the November 2012 election.  The region's 
            overall ability to offer a variety of transportation options 
            to meet the needs of a diverse population of local businesses, 
            workers, students, and residents is crucial to its future 
            success."

          2)Committee staff notes all of the following:

             a)   AB 1086 does not specify the proposed rate of tax 
               increase expected to be placed on the November 6, 2012 
               ballot.  As the Assembly Committee on Local Government 
               noted in their April 5, 2011 analysis, the County is 
               limited by the required two-thirds vote threshold contained 
               in this bill.  Although voter approval may limit the amount 
               of the proposed tax, past bills such as SB 314 (Murray), 
               Chapter 785, Statutes of 2003, SB 264 (Alquist), Chapter 
               430, Statutes of 2007, and AB 2321 (Feuer) Chapter 302, 
               Statutes of 2008, all specified the amount of the proposed 
               TUT in the statute.  SB 314 authorized the Los Angeles 
               County Metropolitan Transportation Authority to impose a 
               TUT at the rate of 0.5%, notwithstanding the 2% ceiling 
               imposed on all district taxes.  The author may wish to 
               amend this bill to specify the rate of TUT tax. 

             b)   This bill may affect local commerce in a negative 
               manner.  The additional tax, which will be higher than many 
               of the surrounding counties, may incentivize consumers to 
               purchase goods outside of Alameda County.

             c)   This bill was double-referred to the Assembly Committee 
               on Local Government, which passed out on a 6-3 vote on 
               April, 6, 2011.  For additional discussion of AB 1086, 
               please refer to that committee's analysis of this bill.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file









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           Opposition 
           
          None on file
           
          Analysis Prepared by  :  Myriam Bouaziz and Oksana Jaffe / REV. & 
          TAX. / (916) 319-2098