BILL ANALYSIS Ó
AB 210
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Date of Hearing: May 6, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
AB 210 (Wieckowski) - As Amended: April 23, 2013
Majority vote.
SUBJECT : Transactions and use taxes: County of Alameda and the
County of Contra Costa
SUMMARY : Extends the current authorization for Alameda County
to adopt an ordinance imposing a transactions and use tax (TUT)
for transportation programs and allows Contra Costa County to
adopt a similar ordinance. Specifically, this bill :
1)Extends the sunset date from January 1, 2014 to December 31,
2020, allowing the County of Alameda to adopt an ordinance,
conditioned upon voter approval, to propose the imposition of
a TUT for the support of countywide transaction programs.
2)Allows the County of Contra Costa to adopt an ordinance
proposing the imposition of a TUT for the support of
countywide transportation programs at a rate of no more than
0.5% that, in combination with other specified taxes, exceeds
the 2% statutory limitation.
3)Sets forth the following requirements for counties before
enacting a TUT:
a) The ordinance proposing the TUT must be adopted in
accordance with the applicable voting approval requirement;
b) The ordinance proposing the TUT must be submitted to the
electorate and be approved by the voters pursuant to the
California Constitution, Article XIIIC; and,
c) The proposed TUT must conform to current law, other than
Revenue and Taxation Code Section 7251.
4)Eliminates the current requirement that the ordinance be
placed on the November general election ballot.
5)Finds and declares that a special law is necessary because of
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the unique fiscal pressures experienced in the Counties of
Alameda and Contra Costa in providing essential transportation
programs.
EXISTING LAW :
1)Authorizes cities and counties, under the Bradley-Burns
Uniform Local Sales and Use Tax (SUT) Law, to impose local
SUT. [Revenue & Taxation Code (R&TC), commencing with Section
7200].
2)Imposes a tax for the privilege of selling tangible personal
property at retail upon every retailer in the local
jurisdiction, or purchased outside the jurisdiction for use
within the jurisdiction, at a rate of 1%. Of the 1% tax, 75%
is allocated for city and county operations and 25% is
allocated to the county transportation funds. (R&TC Section
7202).
3)Provides counties and cities, under the TUT Law and the
Additional Local Taxes Law, with the authority to impose
district taxes under specified conditions. (R&TC Section 7251
and 7280).
4)Provides that counties and cities may impose a district tax
for general purposes and special purposes at a rate of 0.125%,
or multiple thereof, if the ordinance imposing the tax is
approved by the required percentage of voters in the city or
county. (R&TC Section 7285).
5)Allows the County of Alameda to adopt an ordinance imposing a
TUT not to exceed 0.5% for the support of countywide
transportation programs at a rate that would, in combination
with all other TUTs, 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 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 must conform to the TUT Law. (R&TC Section
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7291).
6)Provides that the authority for the County of Alameda to adopt
an ordinance to impose a TUT that exceeds the combined
statutory rate of 2% shall only remain in effect until January
1, 2014. (R&TC Section 7292).
7)Provides that the combined rate of all taxes imposed in
accordance with the TUT law in any county may not exceed 2%.
(R&TC Section 7251).
FISCAL EFFECT : Assuming a January 1, 2015 voter-approved
measure in the County of Alameda, this bill would generate $66
million in fiscal year (FY) 2014-15 and $140 million in FY
2015-16. Assuming a January 1, 2015 voter-approved measure in
the County of Contra Costa, this bill would generate $34 million
in FY 2014-15 and $72 million in FY 2015-16.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
This bill allows Alameda County and Contra Costa 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 transactions and
use taxes, exceed the 2% limit in existing law, if a
countywide ballot measure is approved by voters before
December 31, 2020.
The recent passage of two citywide sales tax measures has
occurred remaining local sales tax capacity in Alameda
County. In addition, the Great Recession substantially
reduced sales tax revenue in the county, causing a decrease
in funds available for transportation improvements. The
Governor signed AB 1086 in 2011, allowing Alameda County to
put a transportation measure on the November 2012 ballot.
Measure B1 was supported by an overwhelming majority of
voters, 66.53 percent, but fell .14% short of reaching the
two-thirds threshold. Given that the clear majority of
voters support continued improvements to meet the county's
vast transportation needs, the Alameda County
Transportation Commission is seeking approval to take
another ballot measure before voters prior to 2020.
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More than half of all San Francisco Bay commuters go into
Alameda County every workday. The Port of Oakland is the
nation's fifth-largest container port and two-thirds of
truck trips in the region go through the county. AB 210
will help Alameda County meet the transportation needs of
its residents, businesses, students and commuters.
Contra Costa County is also at the statutory limit of 2
percent. The Contra Costa County Transportation Authority
(CCTA) is developing a 2014 update to its Countywide
Comprehensive Transportation Plan. The work plan was
expanded last October to include a significant public input
component. This transportation plan may provide key
information that could inform a countywide transportation
expenditure plan. Contra Costa is one of 19 self-help
counties working to upgrade its transportation
infrastructure.
2)Proponents of this measure state:
Existing law allowed Alameda County to exceed the existing
2% local sales tax cap if the transportation expenditure
plan was approved on the November 2012 ballot.
Unfortunately, Measure B1 fell 720 votes short of passage
with 66.53% voting in favor. AB 210 would allow Alameda
County to try again.
The Alameda [County Transportation Commission] [Alameda
CTC] has worked tirelessly to update the Countywide
Transportation Plan and the Transportation Expenditure Plan
(TEP) that became Measure B1. With significant support
demonstrated for Measure B1, the Alameda CTC plans to try
again. However, to seek an augmentation, the existing 2%
local sales tax limit will prevent the enactment of the
sales tax if it is approved by the voters. In Alameda
County the cities of San Leandro and Union City enacted
local sales taxes, occupying the remaining local sales tax
capacity. AB 210 would allow a countywide transportation
sales tax to be enacted if it is approved by 2/3 of the
voters.
3)Opponents of this measure state:
While the measure acknowledges the constitutionally
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mandated local voting requirements (as required by
Proposition 13 and 218), we are concerned about the
precedent it sets to begin to allow counties to increase
taxes beyond existing law. Note that California now levies
the highest state sales and use [tax] in the nation and the
local "add ons" only render this highly regressive tax even
more regressive.
The argument that this bill would simply grant more local
control by letting local voters decide the issue is a bit
ironic given that a similar bill by the author (AB 1086,
2011) was signed by Governor Schwarzenegger in order to
ultimately send a sales tax proposal, Measure B1, to the
ballot in 2012. The measure was defeated in November.
Thus it appears that the voters have already spoken. To
resurrect this issue so soon after the election would be a
waste of county resources.
4)Committee Staff Comments:
a) Background : AB 1086 (Wieckowski), Chapter 327, Statutes
of 2011, enacted the authorization statute for Alameda
County to impose a district tax for transportation purposes
that would be excluded from the 2% combined rate
limitation. The one-time exemption from the 2% limitation
was needed for several reasons, primarily because the City
of Union approved an additional 0.5% tax, which became
effective on April 1, 2011. In combination with existing
county district taxes, the County of Alameda had already
reached the 2% limitation. This one-time exemption was
only for Alameda County and should have applied if
two-thirds of voters, voting in the November 6, 2012,
election agreed.
Measure B1 was placed on the November 6, 2012 ballot in
Alameda County. According to the author, Measure B1 was
supported by an overwhelming majority of voters, but fell
0.14% short of the required two-thirds threshold. The
author states that a majority of voters clearly support the
need to fund transportation improvements. AB 210 would
allow the Alameda County Transportation Commission, once
again, to take another similar ballot measure to the
voters.
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b) Back to the Voters : This bill would allow the Counties
of Alameda and Contra Costa to adopt an ordinance proposing
the imposition of a TUT. Opponents claim that AB 210 is
not needed because the public has already spoken, deciding
not to pass Measure B1. However, the voters of Alameda
County may have simply been displeased with the
Transportation Expenditure plan as outlined by the Alameda
County. The enactment of AB 210 would allow the County of
Alameda to modify future transportation plans to better
serve its population and to present a new proposal to the
voters.
c) Contra Costa County : The March 18th amendments added
Contra Costa County to this measure. In November 2012,
voters within the City of Moraga approved an additional 1%
tax effective April 1, 2013. As a result, any new
countywide tax would push Contra Costa County over the 2%
limit and require an exemption.
SB 566 (Scott), Chapter 709, Statutes of 2003, increased
the cap on total allowable TUT rates to 2%. The rationale
for a 2% combined rate limitation is unclear to committee
staff since several large counties are currently exempt
from the limitation. Instead of introducing individual
county legislation, the Legislature may wish to consider
increasing the cap or eliminating it all together.
d) Double-referral : This bill was heard in the Assembly
Committee on Local Government on April 3, 2013, and passed
out of that Committee on a vote of 7 to 2.
REGISTERED SUPPORT / OPPOSITION :
Support
Alameda County Transportation Commission
Contra Costa County Transportation Authority
Metropolitan Transportation Commission
Opposition
California Taxpayers Association
Howard Jarvis Taxpayers Association
AB 210
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Analysis Prepared by : Carlos Anguiano / REV. & TAX. / (916)
319-2098