Amended in Senate June 12, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 92


Introduced by Committee on Budget (Blumenfield (Chair), Bloom, Bonilla,begin insert Campos,end insert Chesbro, Daly, Dickinson, Gordon, Jones-Sawyer, Mitchell, Mullin, Muratsuchi, Nazarian,begin delete Rendonend deletebegin insert Skinnerend insert, Stone, and Ting)

January 10, 2013


begin deleteAn act relating to the Budget Act of 2013. end deletebegin insertAn act to add Sections 53545.15 and 53565 to the Health and Safety Code, to amend Section 97.68 of, and to add Sections 18032 and 24953 to, the Revenue and Taxation Code, and to amend Section 2 of Chapter 777 of the Statutes of 2012, relating to state government, and making an appropriation therefor, to take effect immediately, bill related to the budget.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 92, as amended, Committee on Budget. begin deleteBudget Act of 2013. end deletebegin insert State government.end insert

begin insert

(1) Existing law provides that there is the Transit-Oriented Development Implementation Fund from which the Department of Housing and Community Development shall provide grants and loans to cities, counties, cities and counties, transit agencies, and developers for the purpose of developing or facilitating the development of higher density uses within close proximity to transit stations that will increase public transit riderships. Existing law appropriates various sums to this fund for use by the department for liquidation of encumbrances for limited periods of time, as specified.

end insert
begin insert

This bill instead would extend the period of time during which the appropriated funds shall be available for liquidation of encumbrances until June 30, 2017, subject to performance-based milestones to be established by the department.

end insert
begin insert

Existing law provides that there is the Regional Planning, Housing, and Infill Incentive Account in the Housing and Emergency Shelter Trust Fund of 2006 from which funds shall be available, upon appropriation by the Legislature, and subject to other conditions and criteria as the Legislature may provide in statute, for infill incentive grants for capital outlay related to infill housing development and other related infill development, and for brownfield cleanup that promotes infill housing development and other related infill development consistent with regional and local plans. Existing law appropriates various sums to this fund for use by the department for liquidation of encumbrances for limited periods of time, as specified.

end insert
begin insert

This bill instead would extend the period of time during which the appropriated funds shall be available for liquidation of encumbrances until June 30, 2017, subject to performance-based milestones to be established by the department.

end insert
begin insert

Because this bill would extend the period of time during which various appropriations are available for use by the department for particular purposes, this bill would make an appropriation.

end insert
begin insert

(2) Existing law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing property tax law also reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the counties, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the counties, cities, and special districts be reduced in accordance with certain formulas. Existing law requires that the revenues not allocated to the counties, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.

end insert
begin insert

Existing law requires the county auditor to decrease, for the fiscal adjustment period, as defined, the amount of ad valorem property tax revenue allocated to a county’s Educational Revenue Augmentation Fund by the countywide adjustment amount, as defined, and requires the auditor to instead allocate this amount to the Sales and Use Tax Compensation Fund in the county. Existing law requires, during this same period, the county auditor to allocate moneys from the Sales and Use Tax Compensation Fund to cities and counties to reimburse these entities for local tax revenue losses resulting from a specified statute, as provided. Existing law defines the “fiscal adjustment period” as the period beginning with the 2004-05 fiscal year and continuing through the fiscal year in which the Director of Finance provides a notification to the State Board of Equalization, as provided. Existing law specifies the manner in which the countywide adjustment amount is required to be calculated and to be allocated after the end of the fiscal adjustment period.

end insert
begin insert

This bill would redefine the “fiscal adjustment period” to instead mean the fiscal year in which the Director of Finance provides a specified notification to the State Board of Equalization or the fiscal year in which an additional countywide adjustment amount is determined by the Director of Finance, whichever is later. This bill would require the Director of Finance to estimate when the notification to the State Board of Equalization is likely to occur, and to determine the month of that notification, as provided.

end insert
begin insert

This bill would require the Director of Finance, in the calendar year quarter when the director determines that the notification to the State Board of Equalization will occur within either the current or subsequent quarter, to revise the countywide adjustment amount, as specified. This bill would require the Director of Finance, after the end of the revenue exchange period, to provide a schedule to the Controller and the auditor of each county and a copy to the Joint Legislative Budget Committee, of amounts required to be transferred from the Fiscal Recovery Fund to the Sales and Use Tax Compensation Fund in each county, as specified. This bill would require the Controller to transfer the amounts specified in the schedule from the Fiscal Recovery Fund to the Sales and Use Tax Compensation Fund in each county for allocation by the auditor of each county to the county and each city in the county, as provided, thereby making an appropriation.

end insert
begin insert

(3) The Personal Income Tax Law and the Corporation Tax Law exclude the recognition of any gain or loss on the exchange of property held for productive use in a trade or business or for investment, if that property is exchanged solely for property of a like kind that is to be held either for productive use in a trade or business or for investment. Existing law authorizes the Franchise Tax Board to propose an assessment upon a failure to file a return, as provided.

end insert
begin insert

This bill would, for exchanges that occur in taxable years beginning on or after January 1, 2014, require taxpayers to file an informational return with the Franchise Tax Board if the property acquired in the exchange is located out of state. The bill would authorize the Franchise Tax Board to make an estimate of the net income, from any available information, and to propose to assess the amount of tax, interest, and penalties due in a specified manner if the taxpayer fails to file the information return, and fails to file a tax return, as provided.

end insert
begin insert

(4) Existing law, the Housing and Emergency Shelter Trust Fund Act of 2006, authorizes the issuance of bonds in the amount of $2,850,000,000 pursuant to the State General Obligation Bond Law. Proceeds from the sale of these bonds are used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, housing-related parks, and transit-oriented development administered by the Department of Housing and Community Development. Existing law appropriates $50,000,000, and additional moneys, as specified, of bond revenues to the Department of Housing and Community Development. From that amount, existing law allocates $25,000,000, and additional moneys, as specified, from the Regional Planning, Housing, and Infill Incentive Account for infill incentive grants, and $25,000,000, and additional moneys, from the Transit-Oriented Development Implementation Fund for transit-oriented grants and loans, including any moneys allocated and appropriated that become disencumbered and redeposited in the Transit-Oriented Development Account during the 2012-13 fiscal year, for the purpose of funding transit-oriented grants and loans, as specified.

end insert
begin insert

This bill would additionally allocate any moneys allocated and appropriated that become disencumbered and redeposited in the Transit-Oriented Development Account during the 2013-14 fiscal year for the purpose of funding transit-oriented grants and loans, as specified, thereby making an appropriation.

end insert
begin insert

(5) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert
begin delete

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2013.

end delete

Vote: majority. Appropriation: begin deleteno end deletebegin insertyesend insert. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P5    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 53545.15 is added to the end insertbegin insertHealth and
2Safety Code
end insert
begin insert, to read:end insert

begin insert
3

begin insert53545.15.end insert  

(a) Notwithstanding any other law, funds
4appropriated for deposit into the Transit-Oriented Development
5Implementation Fund by Item 2240-101-9736 of the Budget Act
6of 2007, as reappropriated by Item 2240-492 of the Budget Act of
72010; Item 2240-101-9736 of the Budget Act of 2008, as
8reappropriated by Section 129 of the Budget Act of 2009, as
9reappropriated by Item 2240-492 of the Budget Act of 2010; Item
102240-101-9736 of the Budget Act of 2009, as reappropriated by
11Item 2240-492 of the Budget Act of 2010; and subdivision (b) of
12Section 1 of Chapter 39 of the Statutes of 2008, as reappropriated
13by Item 2240-492 of the Budget Act of 2010; shall be made
14available for liquidation of encumbrances until June 30, 2017,
15subject to performance-based milestones to be established by the
16department.

17(b) The department shall amend the guidelines with revised
18performance-based milestones to approve disbursement extensions.

19(c) The department shall evaluate the revised performance-based
20milestones on a project by project basis to determine which projects
21should be granted time extensions within the timeframe specified.

end insert
22begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 53565 is added to the end insertbegin insertHealth and Safety Codeend insertbegin insert,
23to read:end insert

begin insert
24

begin insert53565.end insert  

(a) Notwithstanding any other law, funds appropriated
25for deposit into the Regional Planning, Housing, and Infill
26Incentive Account in the Housing and Emergency Shelter Trust
27Fund of 2006 by Item 2240-101-6069 of the Budget Act of 2007,
28as reappropriated by Item 2240-492 of the Budget Act of 2010;
29Item 2240-101-6069 of the Budget Act of 2008, as reappropriated
30by Section 129 of the Budget Act of 2009, as reappropriated by
31Item 2240-492 of the Budget Act of 2010; Item 2240-101-6069 of
32the Budget Act of 2009, as reappropriated by Item 2240-492 of
33the Budget Act of 2010; and subdivision (a) of Section 1 of Chapter
3439 of the Statutes of 2008, as reappropriated by Item 2240-492 of
35the Budget Act of 2010; shall be made available for liquidation of
P6    1encumbrances until June 30, 2017, subject to performance-based
2 milestones to be established by the department.

3(b) The department shall amend the guidelines with revised
4performance-based milestones to approve disbursement extensions.

5(c) The department shall evaluate the revised performance-based
6milestones on a project by project basis to determine which projects
7should be granted time extensions within the timeframe specified.

end insert
8begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 97.68 of the end insertbegin insertRevenue and Taxation Codeend insertbegin insert is
9amended to read:end insert

10

97.68.  

Notwithstanding any other provision of law, in allocating
11ad valorem property tax revenue allocations for each fiscal year
12during the fiscal adjustment period, all of the following apply:

13(a) (1) The total amount of ad valorem property tax revenue
14otherwise required to be allocated to a county’s Educational
15Revenue Augmentation Fund shall be reduced by the countywide
16adjustment amount.

17(2) The countywide adjustment amount shall be deposited in a
18Sales and Use Tax Compensation Fund that shall be established
19in the treasury of each county.

20(b) For purposes of this section, the following definitions apply:

21(1) “Fiscal adjustment period” means the period beginning with
22the 2004-05 fiscal year and continuing through thebegin delete fiscal year in
23which the Director of Finance notifies the State Board of
24Equalization pursuant to subdivision (b) of Section 99006 of the
25Government Code.end delete
begin insert later of either of the following:end insert

begin insert

26(A) The fiscal year in which the Director of Finance notifies the
27State Board of Equalization pursuant to subdivision (b) of Section
2899006 of the Government Code.

end insert
begin insert

29(B) The fiscal year in which an additional countywide
30adjustment amount, as described in subparagraph (B) of paragraph
31(3) of subdivision (d), is determined.

end insert

32(2) Except as otherwise provided in subdivision (d), the
33“countywide adjustment amount” means the combined total
34revenue loss of the county and each city in the county that is
35annually estimated by the Director of Finance, based upon the
36actual amount of sales and use tax revenues transmitted under
37Section 7204 in that county in the prior fiscal year and any
38projected growth on that amount for the current fiscal year as
39determined by the State Board of Equalization and reported to the
40director on or before August 15 of each fiscal year during the fiscal
P7    1adjustment period, to result for each of those fiscal years from the
20.25 percent reduction in local sales and use rate tax authority
3applied by Section 7203.1. The director shall adjust the estimates
4described in this paragraph if the board reports to him or her any
5changes in the projected growth in local sales and use tax revenues
6for the current fiscal year.

7(3) “In lieu local sales and use tax revenues” means those
8revenues that are transferred under this section to a county or a
9city from a Sales and Use Tax Compensation Fund or an
10Educational Revenue Augmentation Fund.

11(c) Except as otherwise provided in subdivision (d), for each
12fiscal year during the fiscal adjustment period, in lieu sales and
13use tax revenues in the Sales and Use Tax Compensation Fund
14shall be allocated among the county and the cities in the county,
15and those allocations shall be subsequently adjusted, as follows:

16(1) The Director of Finance shall, on or before September 1 of
17each fiscal year during the fiscal adjustment period, notify each
18county auditor of that portion of the countywide adjustment amount
19for that fiscal year that is attributable to the county and to each
20city within that county.

21(2) The county auditor shall allocate revenues in the Sales and
22Use Tax Compensation Fund among the county and cities in the
23county in the amounts described in paragraph (1). The auditor shall
24allocate one-half of the amount described in paragraph (1) in each
25January during the fiscal adjustment period and shall allocate the
26balance of that amount in each May during the fiscal adjustment
27period.

28(3) After the end of each fiscal year during the fiscal adjustment
29period, other than a fiscal year subject to subdivision (d), the
30Director of Finance shall, based on the actual amount of sales and
31use tax revenues that were not transmitted for the prior fiscal year,
32recalculate each amount estimated under paragraph (1) and notify
33the county auditor of the recalculated amount.

34(4) If the amount recalculated under paragraph (3) for the county
35or any city in the county is greater than the amount allocated to
36that local agency under paragraph (2), the county auditor shall, in
37the fiscal year next following the fiscal year for which the
38allocation was made, transfer an amount of ad valorem property
39tax revenue equal to this difference from the Sales and Use Tax
40Compensation Fund to that local agency.

P8    1(5) If the amount recalculated under paragraph (3) for the county
2or any city in the county is less than the amount allocated to that
3local agency under paragraph (2), the county auditor shall, in the
4fiscal year next following the fiscal year for which the allocation
5was made, reduce the total amount of ad valorem property tax
6revenue otherwise allocated to that city or county from the Sales
7and Use Tax Compensation Fund by an amount equal to this
8difference and instead allocate this difference to the county
9Educational Revenue Augmentation Fund.

10(6) If there is an insufficient amount of moneys in a county’s
11Sales and Use Tax Compensation Fund to make the transfers
12required by paragraph (4), the county auditor shall transfer from
13the county Educational Revenue Augmentation Fund an amount
14sufficient to make the full amount of these transfers.

begin delete

15(d) Notwithstanding any other provision of this section, when
16Section 7203.1 ceases to be operative , all of the following apply:

17(1) If Section 7203.1 ceases to be operative on an October 1 of
18a fiscal year during the fiscal adjustment period, all of the following
19apply:

20(A) The “countywide adjustment amount” for that fiscal year
21means an amount equal to sum of the following two amounts:

22(i) The combined total revenue loss of the county and each city
23in the county that is estimated by the director, based upon actual
24sales and use tax revenues transmitted under Section 7204 for the
25first quarter of the prior fiscal year as determined by the State
26Board of Equalization and reported to the director on or before
27that August 15, to result for the first quarter of the current fiscal
28year from the 0.25 percent reduction in local sales and use tax rate
29authority applied by Section 7203.1.

30(ii) The difference between the following two amounts:

31(I) The total amount that was allocated to the county and each
32city in the county under subdivision (c) for the prior fiscal year.

33(II) The actual total amount of local sales and use tax revenue
34that was not transmitted the county or city and county and each
35city in the county for the prior fiscal year as a result of the 0.25
36percent suspension of local sales and use tax authority applied by
37Section 7203.1.

38(B) On or before January 31 of that fiscal year, the auditor shall
39allocate to the county and each city in the county that portion of
P9    1the countywide adjustment amount for that fiscal year that is
2attributable to the county and each city in the county.

3(C) On or before May 1 of that fiscal year, the State Board of
4Equalization shall report to the director the actual total amount of
5local sales and use tax revenue that was not transmitted to the
6county and each city in the county in that fiscal year as a result of
7the 0.25 percent suspension of local sales and use tax authority
8applied by Section 7203.1. On or before May 1 of that fiscal year,
9the director shall do both of the following:

10(i) Determine the difference between the following two amounts:

11(I) The amount specified in clause (i) of subparagraph (A) that
12was allocated to the county and each city in the county for that
13fiscal year under subparagraph (B).

14(II) The actual total amount of local sales and use tax revenue
15that was not transmitted to the county and each city in the county
16for that fiscal year as a result of the 0.25 percent suspension of
17local sales and use tax authority applied by Section 7203.1.

18(ii) Notify the auditor of each county of the amounts determined
19under clause (i) for his or her county and all of the cities in that
20county.

21(D) (i) If, for any county or city, the amount described in
22subclause (I) of clause (i) of subparagraph (C) is greater than the
23amount described in subclause (II) of clause (i) of subparagraph
24(C), the county auditor shall, on or before May 31 of that fiscal
25year, reallocate from the entity to the county Educational Revenue
26Augmentation Fund the difference between those amounts.

27(ii) If, for any county or city, the amount described in subclause
28(I) of clause (i) of subparagraph (C) is less than the amount
29described in subclause (II) of clause (i) of subparagraph (C), the
30county auditor shall, on or before May 31 of that fiscal year,
31reallocate from the county Educational Revenue Augmentation
32Fund to that entity the difference between those amounts.

33(2) If Section 7203.1 ceases to be operative on a January 1 of
34a fiscal year during the fiscal adjustment period, all of the following
35apply:

36(A) The “countywide adjustment amount” for that fiscal year
37means an amount equal to the sum of the following two amounts:

38(i) The combined total revenue loss of the county and each city
39in the county that is estimated by the director, based upon actual
40sales and use tax revenues transmitted under Section 7204 for the
P10   1first and second quarters of the prior fiscal year as determined by
2the State Board of Equalization and reported to the director on or
3before that August 15, to result for the first and second quarters
4of that fiscal year from the 0.25 percent reduction in local sales
5and use tax rate authority applied by Section 7203.1.

6(ii) The difference between the following two amounts:

7(I) The total amount that was allocated to the county and each
8city in the county under subdivision (c) for the prior fiscal year.

9(II) The actual total amount of local sales and use tax revenue
10that was not transmitted the county or city and county and each
11city in the county for the prior fiscal year as a result of the 0.25
12percent suspension of local sales and use tax authority applied by
13Section 7203.1.

14(B) The auditor shall allocate to the county and each city in the
15county that portion of the countywide adjustment amount for that
16fiscal year that is attributable to the county and each city in the
17county. One-half of this amount shall be allocated on or before
18January 31 of that fiscal year and the other one-half of that amount
19shall be allocated on or before May 31 of that fiscal year.

20(C) On or before June 30 of that fiscal year, the State Board of
21Equalization shall report to the director the actual total amount of
22local sales and use tax revenue that was not transmitted to the
23county and each city in the county for that fiscal year as a result
24of the 0.25 percent suspension of local sales and use tax authority
25applied by Section 7203.1. On or before June 30 of that fiscal year,
26the director shall do both of the following:

27(i) Determine the difference between the following two amounts:

28(I) The amount specified in clause (i) of subparagraph (A) that
29was allocated to the county and each city in the county for that
30fiscal year under subparagraph (B).

31(II) The actual total amount of local sales and use tax revenue
32that was not transmitted to the county and each city in the county
33for that fiscal year as a result of the 0.25 percent suspension of
34local sales and use tax authority applied by Section 7203.1.

35(ii) Notify the auditor of each county of the amounts determined
36under clause (i) for his or her county and all of the cities in that
37county.

38(D) (i) If, for any county or city, the amount described in
39subclause (I) of clause (i) of subparagraph (C) is greater than the
40amount described in subclause (II) of clause (i) of subparagraph
P11   1(C), the county auditor shall, on or before January 31 of the
2following fiscal year, reallocate from the entity to the county
3Educational Revenue Augmentation Fund the difference between
4those amounts.

5(ii) If, for any county or city, the amount described in subclause
6(I) of clause (i) of subparagraph (C) is less than the amount
7described in subclause (II) of clause (i) of subparagraph (C), the
8county auditor shall, on or before January 31 of the following fiscal
9year, reallocate from the county Educational Revenue
10Augmentation Fund to that entity the difference between those
11amounts.

12(3) If Section 7203.1 ceases to be operative on an April 1 of a
13fiscal year during the fiscal adjustment period, all of the following
14apply:

15(A) On or before May 1 of that fiscal year, the director shall
16determine and report to the auditor of each county that portion of
17 the countywide adjustment amount that is attributable to the
18estimated sales and use tax revenue losses, resulting from the rate
19suspension applied by Section 7203.1, for the fourth quarter of
20that fiscal year for the county and each city in the county.

21(B) The auditor shall reduce the total amount that is otherwise
22required to be allocated in May of that fiscal year from the county
23Sales and Use Tax Compensation Fund to the county and each city
24in the county by the amount reported by the director with respect
25to that entity under subparagraph (A). After the May allocations
26have been made, the auditor shall transfer any moneys remaining
27in the county Sales and Use Tax Compensation Fund to the county
28Educational Revenue Augmentation Fund.

29(C) On or before January 1 of the next fiscal year, the State
30Board of Equalization shall report to the director the actual total
31amount of local sales and use tax revenue that was not transmitted
32to the county and each city in the county for the prior fiscal year
33as a result of the 0.25 percent suspension of local sales and use tax
34authority applied by Section 7203.1. On or before January 1 of
35that fiscal year, the director shall do both of the following:

36(i) Determine the difference between the following two amounts:

37(I) The total amount that was allocated to the county and each
38city in the county for the prior fiscal year under subdivision (c),
39as adjusted under subparagraph (B).

P12   1(II) The actual total amount of local sales and use tax revenue
2that was not transmitted to the county and each city in the county
3for the prior fiscal year as a result of the 0.25 percent suspension
4of local sales and use tax authority applied by Section 7203.1.

5(ii) Notify the auditor of each county of the amounts determined
6under clause (i) for his or her county and all of the cities in that
7county.

8(D) (i) If, for any county or city, the amount described in
9subclause (I) of clause (i) of subparagraph (C) is greater than the
10amount described in subclause (II) of clause (i) of subparagraph
11(C), the county auditor shall, on or before January 31 of that fiscal
12year, reallocate from the entity to the county Educational Revenue
13Augmentation Fund the difference between those amounts.

14(ii) If, for any county or city, the amount described in subclause
15(I) of clause (i) of subparagraph (C) is less than the amount
16described in subclause (II) of clause (i) of subparagraph (C), the
17county auditor shall, on or before January 31 of the following fiscal
18year, reallocate from the county Educational Revenue
19Augmentation Fund to that entity the difference between those
20amounts.

21(4) If Section 7203.1 ceases to be operative on a July 1, all of
22the following apply:

23(A) On or before January 1 of that fiscal year, the State Board
24of Equalization shall notify the Director of Finance of the actual
25total amount of local sales and use tax revenue that was not
26transmitted to each county and city for the prior fiscal year as a
27result of the 0.25 percent suspension of local sales and use tax
28authority applied by Section 7203.1.

29(B) On or before January 31 of that fiscal year, the director shall
30do both of the following:

31(i) Determine for each city, county, and city and county, the
32difference between the following two amounts:

33(I) The total amount that was allocated to that entity under
34subdivision (c) for the prior fiscal year.

35(II) The actual total amount of local sales and use tax revenue
36that was not transmitted to the entity for the prior fiscal year as a
37result of the 0.25 percent suspension of local sales and use tax
38authority applied by Section 7203.1.

P13   1(ii) Notify the auditor of each county of the amounts determined
2under clause (i) for his or her county and all of the cities in that
3county.

4(C) (i) If, for any county or city, the amount described in
5subclause (I) of clause (i) of subparagraph (B) is greater than the
6amount described in subclause (II) of clause (i) of subparagraph
7(B), the county auditor shall, on or before January 31 of that fiscal
8year, reallocate from the entity to the county Educational Revenue
9Augmentation Fund the difference between those amounts.

10(ii) If, for any county or city, the amount described in subclause
11(I) of clause (i) of subparagraph (B) is less than the amount
12described in subclause (II) of clause (i) of subparagraph (B), the
13county auditor shall, on or before January 31 of the following fiscal
14year, reallocate from the county Educational Revenue
15Augmentation Fund to that entity the difference between those
16amounts.

end delete
begin insert

17(d) (1) At such time as the Director of Finance estimates that
18the notification described in subparagraph (A) of paragraph (1)
19of subdivision (b) is likely to occur within the subsequent 12
20months, the director shall, at the beginning of each subsequent
21calendar year quarter, determine the month in which the
22notification will occur.

end insert
begin insert

23(2) (A) In the calendar year quarter in which the Director of
24Finance determines that the notification described in subparagraph
25(A) of paragraph (1) of subdivision (b) will occur within either the
26current or subsequent quarter, the director shall revise the
27countywide adjustment amount described in subdivision (c) for
28the current fiscal year such that the countywide adjustment amount
29is calculated only through the quarter in which the director gives
30notification pursuant to subparagraph (A) of paragraph (1) of
31subdivision (b). The director, when appropriate, may revise the
32countywide adjustment amount described in subdivision (c) for
33the subsequent fiscal year such that the countywide adjustment
34 amount described in subdivision (c) is calculated only through the
35quarter in which the director gives notification pursuant to
36subparagraph (A) of paragraph (1) of subdivision (b).

end insert
begin insert

37(B) If the determination regarding the notification described in
38subparagraph (A) is revised, the countywide adjustment amount
39calculated in subparagraph (A) for either the current or the
40subsequent fiscal year shall be recalculated such that the
P14   1countywide adjustment amount described in subdivision (c) is
2calculated only through the quarter in which the Director of
3Finance gives notification pursuant to subparagraph (A) of
4paragraph (1) of subdivision (b).

end insert
begin insert

5(3) (A) After the end of the revenue exchange period, the
6Director of Finance shall do both of the following:

end insert
begin insert

7(i) Provide to the Controller, with a copy to the Joint Legislative
8Budget Committee, a schedule providing for a transfer from the
9Fiscal Recovery Fund, established pursuant to Section 99008 of
10the Government Code, to the Sales and Use Tax Compensation
11Fund of either of the following amounts:

end insert
begin insert

12(I) An amount equal to the local sales and use tax revenue not
13received by the county and each city in the county during the
14revenue exchange period as a result of the 0.25-percent reduction
15in local sales and use tax authority applied by Section 7203.1
16minus the sum of all countywide adjustment amounts deposited
17during the revenue exchange period, as determined by the director.
18This amount shall be summed over all counties.

end insert
begin insert

19(II) If the amount summed over all counties in subclause (I) is
20greater than the difference between the balance in the Fiscal
21Recovery Fund and an amount sufficient to cover the estimated
22costs associated with closing the Fiscal Recovery Fund, then a
23proportion shall be calculated equal to the proportion between
24the amount in subclause (I) summed over all counties and an
25amount equal to the difference between the balance in the Fiscal
26Recovery Fund and an amount sufficient to cover the estimated
27costs associated with closing the Fiscal Recovery Fund. The
28amount calculated under this subclause is equal to the product of
29the amount calculated in subclause (I) and the proportion
30calculated in this subclause.

end insert
begin insert

31(ii) Provide a schedule to the auditor of each county of the
32amounts calculated under clause (i).

end insert
begin insert

33(B) If the amount provided for in the schedule required pursuant
34to clause (i) of subparagraph (A) is the amount that is described
35in subclause (II) of clause (i) of subparagraph (A), an amount
36equal to the difference between the amount that is described in
37subclause (I) of clause (i) of subparagraph (A) and the amount
38that is described in subclause (II) of clause (i) of subparagraph
39(A) shall constitute an additional countywide adjustment amount
P15   1to be applied in the manner prescribed in subdivision (a) for either
2the current or subsequent fiscal year, as determined by the director.

end insert
begin insert

3(4) The Controller shall transfer, from the Fiscal Recovery Fund
4to the Sales and Use Tax Compensation Fund for each county, the
5amount specified for that county in the schedule provided by the
6Director of Finance pursuant to clause (i) of subparagraph (A) of
7paragraph (3).

end insert
begin insert

8(5) Within 60 days of the transfer by the Controller of revenues
9from the Fiscal Recovery Fund to the Sales and Use Tax
10Compensation Fund for each county, each county auditor shall
11allocate revenue to the county and each city in the county per the
12schedule provided by the Director of Finance pursuant to clause
13(ii) of subparagraph (A) of paragraph (3).

end insert
begin insert

14(6) For purposes of this subdivision, “revenue exchange period”
15has the same meaning as defined in subdivision (b) of Section
167203.1

end insert

17(e) For the 2005-06 fiscal year and each fiscal year thereafter,
18the amounts determined under subdivision (a) of Section 96.1, or
19any successor to that provision, may not reflect any portion of any
20property tax revenue allocation required by this section for a
21preceding fiscal year.

22(f) This section may not be construed to do any of the following:

23(1) Reduce any allocations of excess, additional, or remaining
24funds that would otherwise have been allocated to cities, counties,
25cities and counties, or special districts pursuant to clause (i) of
26subparagraph (B) of paragraph (4) of subdivision (d) of Section
2797.2, clause (i) of subparagraph (B) of paragraph (4) of subdivision
28(d) of Section 97.3, or Article 4 (commencing with Section 98),
29had this section not been enacted. The allocation made pursuant
30to subdivisions (a) and (c) shall be adjusted to comply with this
31paragraph.

32(2) Require an increased ad valorem property tax revenue
33allocation to a community redevelopment agency.

34(3) Alter the manner in which ad valorem property tax revenue
35growth from fiscal year to fiscal year is determined or allocated
36in a county.

37(g) Existing tax exchange or revenue sharing agreements,
38entered into prior to the operative date of this section, between
39local agencies or between local agencies and nonlocal agencies
40shall be deemed to be temporarily modified to account for the
P16   1reduced sales and use tax revenues, resulting from the temporary
2reduction in the local sales and use tax rate, with those reduced
3revenues to be replaced in kind by property tax revenue from a
4Sales and Use Tax Compensation Fund or an Educational Revenue
5Augmentation Fund, on a temporary basis, as provided by this
6 section.

7begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 18032 is added to the end insertbegin insertRevenue and Taxation
8Code
end insert
begin insert, to read:end insert

begin insert
9

begin insert18032.end insert  

(a) If gain or loss from the exchange of property in
10this state of a taxpayer is not recognized under this part because
11of Section 1031 of the Internal Revenue Code, relating to exchange
12of property held for productive use or investment, for a taxable
13year and the property acquired in that exchange is located outside
14of this state, the taxpayer shall file an information return with the
15Franchise Tax Board for the taxable year of the exchange and for
16each subsequent taxable year in which the gain or loss from that
17exchange has not been recognized, in the form and manner
18prescribed by the Franchise Tax Board.

19(b) If a taxpayer fails to file an information return required
20pursuant to subdivision (a), and fails to file a return required under
21 Part 10.2 (commencing with Section 18401), the Franchise Tax
22Board may make an estimate of the net income, from any available
23information, including the amount of gain described in subdivision
24(a), and may propose to assess the amount of tax, interest, and
25penalties due in the same manner as Section 19087.

26(c) Chapter 3.5 (commencing with Section 11340) of Part 1 of
27Division 3 of Title 2 of the Government Code shall not apply to
28any standard, criterion, procedure, determination, rule, notice, or
29guideline established or issued by the Franchise Tax Board
30pursuant to this section.

31(d) This section shall apply to exchanges of property that occur
32in taxable years beginning on or after January 1, 2014.

end insert
33begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 24953 is added to the end insertbegin insertRevenue and Taxation
34Code
end insert
begin insert, to read:end insert

begin insert
35

begin insert24953.end insert  

(a) If gain or loss from the exchange of property in
36this state of a taxpayer is not recognized under this part because
37of Section 1031 of the Internal Revenue Code, relating to exchange
38of property held for productive use or investment, for a taxable
39year and the property acquired in that exchange is located outside
40of this state, the taxpayer shall file an information return with the
P17   1Franchise Tax Board for the taxable year of the exchange and for
2each subsequent taxable year in which the gain or loss from that
3exchange has not been recognized, in the form and manner
4prescribed by the Franchise Tax Board.

5(b) If a taxpayer fails to file an information return required
6pursuant to subdivision (a), and fails to file a return required under
7 Part 10.2 (commencing with Section 18401), the Franchise Tax
8Board may make an estimate of the net income, from any available
9information, including the amount of gain described in subdivision
10(a), and may propose to assess the amount of tax, interest, and
11penalties due in the same manner as Section 19087.

12(c) Chapter 3.5 (commencing with Section 11340) of Part 1 of
13Division 3 of Title 2 of the Government Code shall not apply to
14any standard, criterion, procedure, determination, rule, notice, or
15guideline established or issued by the Franchise Tax Board
16pursuant to this section.

17(d) This section shall apply to exchanges of property that occur
18in taxable years beginning on or after January 1, 2014.

end insert
19begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 2 of Chapter 777 of the Statutes of 2012 is
20amended to read:end insert

21

Sec. 2.  

The sum of fifty million dollars ($50,000,000), and the
22amount of moneys specified in subdivision (c), is hereby
23appropriated to the Department of Housing and Community
24Development as follows:

25(a) Twenty-five million dollars ($25,000,000) from the Regional
26Planning, Housing, and Infill Incentive Account established
27pursuant to subdivision (b) of Section 53545 of the Health and
28Safety Code, for the purpose of funding infill incentive grants
29pursuant to Section 53545.13 of the Health and Safety Code.

30(b) Twenty-five million dollars ($25,000,000) from the
31Transit-Oriented Development Implementation Fund established
32pursuant to subdivision (c) of Section 53545 of the Health and
33Safety Code, for the purpose of funding transit-oriented grants and
34loans pursuant to Part 13 (commencing with Section 53560) of
35Division 31 of the Health and Safety Code.

36(c) (1) Any moneys allocated and appropriated pursuant to
37subdivision (b) of Section 53545 of the Health and Safety Code
38that become disencumbered and redeposited in the Regional
39Planning, Housing, and Infill Incentive Account during the
402012-13 and 2013-14 fiscal years, for the purpose of funding infill
P18   1incentive grants pursuant to Section 53545.13 of the Health and
2Safety Code.

3(2) Any moneys allocated and appropriated pursuant to
4subdivision (c) of Section 53545 of the Health and Safety Code
5that become disencumbered and redeposited in the Transit-Oriented
6Development Account during the 2012-13begin insert and 2013-14end insert fiscal
7begin delete yearend deletebegin insert yearsend insert, for the purpose of funding transit-oriented grants and
8loans pursuant to Part 13 (commencing with Section 53560) of
9Division 31 of the Health and Safety Code.

10begin insert

begin insertSEC. 7.end insert  

end insert
begin insert

This act is a bill providing for appropriations related
11to the Budget Bill within the meaning of subdivision (e) of Section
1212 of Article IV of the California Constitution, has been identified
13as related to the budget in the Budget Bill, and shall take effect
14immediately.

end insert
begin delete
15

SECTION 1.  

It is the intent of the Legislature to enact statutory
16changes relating to the Budget Act of 2013.

end delete


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