BILL ANALYSIS Ó
AB 1086
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ASSEMBLY THIRD READING
AB 1086 (Wieckowski)
As Amended April 4, 2011
Majority vote
LOCAL GOVERNMENT 6-3 REVENUE & TAXATION 6-3
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|Ayes:|Alejo, Bradford, Campos, |Ayes:|Perea, Beall, Charles |
| |Davis, Gordon, Hueso | |Calderon, Cedillo, Alejo, |
| | | |Gordon |
|-----+--------------------------+-----+--------------------------|
|Nays:|Smyth, Knight, Norby |Nays:|Donnelly, Harkey, |
| | | |Nestande |
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SUMMARY : Allows Alameda County to adopt an ordinance to impose a
transactions and use tax for specified purposes that would, in
combination with other taxes, exceed the statutory limit of 2%.
Specifically, this bill :
1)Allows Alameda County to adopt an ordinance imposing a
transactions and use tax for the support of countywide
transportation programs at a rate that would, in combination with
all other transaction and use taxes, exceed the 2% limit
established in existing law, if all the following conditions are
met:
a) The local government entity adopts an ordinance proposing
the transactions and use tax by any applicable voting
requirements;
b) The ordinance proposing the transactions and use tax 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 transactions and use tax conforms to the Transaction and
Use Tax Law, as specified.
2)Provides that the authority for Alameda County to adopt an
ordinance to impose a transactions and use tax 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January 1, 2013, and as of January 1, 2014, is repealed.
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3)States that the Legislature finds and declares that a special law
is necessary because of the unique fiscal pressures experienced in
Alameda County in providing essential transportation programs.
EXISTING LAW :
1)Authorizes cities and counties to impose a local sales and use
tax.
2)Authorizes cities and counties to impose a transactions and use
taxes.
3)Prohibits, in any county, the combined rate of all taxes imposed
in accordance with Transactions and Use Tax Law from exceeding 2%.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, the Alameda County
Transportation Commission (Alameda CTC) is currently updating their
countywide Transportation Plan and is in the developmental stages of
a new Transportation Expenditure Plan (TEP) that could be placed on
the ballot in November of 2012. While the development of the TEP is
underway, the Alameda CTC has not yet determined if it will consider
an extension of the existing sales tax or an augmentation. If the
Alameda CTC decides to proceed with an increase, the existing 2%
local sales tax limit will prevent the enactment of the sales tax if
it is approved by the voters. This bill is needed because two
cities in Alameda County,
San Leandro and Union City, recently enacted local sales taxes,
which have occupied the remaining local sales tax capacity under the
2% combined rate.
This bill allows a one-time exemption from the 2% transactions and
use tax combined rate cap that is currently in statute. This
one-time exemption is only applicable for Alameda County and only if
two-thirds of voters, voting in the November 6, 2012, election
agree, and only if the transactions and use tax conforms to
Transactions and Use Tax Law.
Prior to 2003, cities lacked the ability to place transactions and
use taxes before their voters without first obtaining approval by
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the Legislature to bring an ordinance before the city council, and,
if approved at the council level, to the voters. This was remedied
by SB 566 (Scott), Chapter 709, Statutes of 2003. SB 566 (Scott)
also contained provisions to increase a county's transactions and
use tax cap because of the possibility that certain counties were
going to run out of room under their caps if cities within those
counties approved transactions and use taxes.
While this bill allows Alameda County to exceed the 2% combined
rate, the bill is silent on what rate Alameda County might impose
the new tax at. However, it can be argued that because of the
required two-thirds vote threshold contained in the bill, voters may
only be willing to support a slight increase and by leaving the rate
silent in the bill, Alameda County will be able to choose the rate
that they think best fits their local conditions and that will be
supported by their voters. The Legislature may wish to ask what
rate is currently being discussed for the proposed transactions and
use tax.
The author amended this bill on April 4, 2011, to address several
technical issues raised by the Board of Equalization. First, the
scope of the bill was narrowed from authorizing "any local
government" in Alameda County to allowing just the County to be
authorized to exceed the 2% cap, matching the intent of the author
and sponsor. Second, because the author and sponsor are asking for
a special statute that is only applicable for the November 2012
election, amendments were taken to repeal the new section of law on
January 1, 2014, since the provisions of the bill will no longer be
applicable beyond January 1, 2013.
Support arguments: While this bill allows Alameda County to exceed
the current 2% combined county rate, it abides by all local voting
requirements, and would only take effect if voters approve the new
transactions and use tax at the November 2012 election.
Opposition arguments: CalTax argues that California's sales and use
tax is already the highest rate in the nation and if Alameda County
were to go beyond the current levels, California would have the
highest combined state and local sales and use tax rates.
Analysis Prepared by : Debbie Michel / L. GOV. / (916) 319-3958
FN: 0000428
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