BILL NUMBER: SB 911 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 9, 2012
AMENDED IN SENATE MAY 10, 2011
AMENDED IN SENATE APRIL 26, 2011
AMENDED IN SENATE APRIL 4, 2011
AMENDED IN SENATE MARCH 22, 2011
INTRODUCED BY Senator De León
(Coauthors: Assembly Members Blumenfield and Portantino)
FEBRUARY 18, 2011
An act to amend Section 53411 of, and to add Section
53411.5 to, the Government Code add Section 10295.7
to the Public Contract Code , relating to local agency
finance public contracts .
LEGISLATIVE COUNSEL'S DIGEST
SB 911, as amended, De León. Local agency bonds: reports.
State contracts: multistate corporations.
Existing law authorizing contracting between state agencies and
private contractors sets forth requirements for the procurement of
goods and services by state agencies.
The Corporation Tax Law imposes taxes measured by income and, in
the case of a business with income derived from or attributable to
sources both within and without this state, apportions the business
income between this state and other states and foreign countries in
accordance with a 4-factor formula based on the property, payroll,
and double-weighted sales within and without this state, except that
in the case of an apportioning trade or business that derives more
than 50% of its gross business receipts from conducting one or more
qualified business activities, as defined, business income is
apportioned in accordance with a specified 3-factor formula. That
law, for taxable years beginning on or after January 1, 2011, allows
a taxpayer to elect to apportion its business income in accordance
with a single sales factor formula, except as provided, pursuant to
an irrevocable annual election, as specified.
This bill would, except as specified, prohibit a state agency from
entering into a contract for goods and services with a person or
entity that apportions its business income in accordance with the
4-factor formula.
Existing law requires the chief fiscal officer of a local agency
issuing bonds to file an annual report with the governing body of the
local agency with respect to the amount of funds collected and
expended generally, and the status of any project required or
authorized to be funded from the proceeds of the bonds.
This bill would, after January 1, 2012, require the chief fiscal
officer of a local agency issuing bonds to file the report with its
governing body no later than 60 days after the close of the agency's
fiscal year. This bill would provide that failure to submit the
report on time shall result in a suspension of bond proceeds until
the report is submitted.
This bill would require an issuing local agency, upon request for
information about any expenditure of bond proceeds in excess of
$5,000, or expenditures that in the aggregate exceed that amount, to
make specified information available with respect to that expenditure
or those expenditures.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature hereby finds and
declares all of the following:
(a) California's statewide unemployment rate is currently 10.7
percent, with nearly 2 million Californians unemployed. Imperial
County has the highest unemployment rate at 28.2 percent, and Los
Angeles County has the highest number of unemployed with 534,200 job
seekers.
(b) Beginning on January 1, 2011, California implemented a revised
methodology for the calculation of corporate taxes that provides
certain multistate corporations that apportion their business income
based on property, payroll, and double-weighted sales formula,
sometimes referred to as the four-factor formula, with the ability to
annually elect the single sales factor apportionment of business
income in the determination of taxes owed to the state.
(c) Letting corporations apportion business income using the
four-factor apportionment formula is a corporate tax loophole that
unfairly rewards corporations that invest the bulk of their payroll
and operations out of state and that puts California-based businesses
at a competitive disadvantage.
(d) The recent change to corporate tax policy in allowing
multistate corporations to pick their tax formula has exacerbated our
ongoing state budget crisis by costing California over $1 billion
annually in corporate tax revenue. The loss of this revenue has
resulted in the need to make devastating budget cuts to education,
health care, and other vital safety net programs.
(e) In addition to taking advantage of this corporate tax
loophole, multistate corporate conglomerates are scheming to expand
that loophole even further by pursuing litigation in California to
allow them to use an equally weighted three-factor formula that gives
them an even greater tax break for not hiring Californians or basing
their product operations here.
(f) In order to facilitate the ongoing recovery of California's
economy from the worst fiscal crisis since the Great Depression, the
state should refrain from entering into contracts with corporations
that refuse to hire Californians or maintain operations in this state
but take full advantage of selling their out-of-state products here.
SEC. 2. Section 10295.7 is added to the
Public Contract Code , to read:
10295.7. (a) A state agency shall not enter into a contract
pursuant to this chapter with a taxpayer that apportions its business
income in accordance with subdivision (a) of Section 25128 of the
Revenue and Taxation Code.
(b) Contracts that are necessary to protect the health, safety,
and welfare of the general public and that can only be fulfilled by a
taxpayer that apportions its business income in accordance with
subdivision (a) of Section 25128 of the Revenue and Taxation Code
shall not be subject to this section.
(c) The Franchise Tax Board shall disclose whether a taxpayer
apportions its business income in accordance with subdivision (a) of
Section 25128 of the Revenue and Taxation Code to a state agency for
purposes of compliance with this section.
SECTION 1. It is the intent of the Legislature
in enacting this measure to provide greater transparency and
accountability in the bond financing process, so the public can
readily review how the proceeds of taxpayer-authorized bonds are
spent.
SEC. 2. Section 53411 of the Government Code is
amended to read:
53411. The chief fiscal officer of the issuing local agency shall
file a report with its governing body no later than January 1, 2002,
and at least once a year thereafter. After January 1, 2012, the
chief fiscal officer of the issuing local agency shall file the
report with its governing body no later than 60 days after the close
of the agency's fiscal year. Failure to file the report by the annual
deadline shall result in a suspension in the expenditure of bond
proceeds until the report is submitted. The annual report shall
contain both of the following:
(a) The amount of funds collected and expended.
(b) The status of any project required or authorized to be funded
as identified in subdivision (a) of Section 53410.
SEC. 3. Section 53411.5 is added to the
Government Code, to read:
53411.5. (a) An issuing local agency, upon request for
information about any expenditure of bond proceeds in excess of five
thousand dollars ($5,000), or expenditures that in the aggregate
exceed that amount, shall make all of the following information
promptly available for each expenditure of bond proceeds in excess of
five thousand dollars ($5,000) that is subject to the request:
(1) The name and principal location of each recipient of funds.
(2) The amount of the expenditure.
(3) The type of transaction.
(4) The identity of the local agency or authorized entity making
the expenditure.
(5) The funding source for the expenditure.
(6) A brief description of any item or service purchased pursuant
to the expenditure.
(b) This section shall not be construed to require the disclosure
of information deemed confidential or otherwise exempt from
disclosure under state or federal law.