BILL ANALYSIS Ó
AB 1086
Page 1
ASSEMBLY THIRD READING
AB 1086 (Wieckowski)
As Amended May 19, 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 of no more than 0.5% 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 County of Alameda 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 the voters
voting on the ordinance in accordance with Article XIII C
of the California Constitution; and,
c) The transactions and use tax conforms to the Transaction
and Use Tax Law, as specified.
2)Provides, if the ordinance proposing the transactions and use
tax is not approved at the November 6, 2012 general election,
that the provisions of the bill shall be repealed as of
January 1, 2014.
AB 1086
Page 2
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 would only be applicable for Alameda
County and only if voters voting in the November 6, 2012,
election agree, and only if the transactions and use tax
conforms to Transactions and Use Tax Law and does not exceed a
rate of more than 0.5%. If the ordinance proposing the
transactions and use tax is not approved by voters at the
November 2012 election, the provisions of the bill would be
repealed as of January 1, 2014.
AB 1086
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Prior to 2003, cities lacked the ability to place transactions
and use taxes before their voters without first obtaining
approval by 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.
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: 0000694