BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 210 HEARING: 6/5/13
AUTHOR: Weickowski FISCAL: Yes
VERSION: 4/23/13 TAX LEVY: Yes
CONSULTANT: Miller
TRANSACTIONS & USE TAXES: COUNTY OF ALAMEDA AND THE COUNTY
OF CONTRA COSTA
Extends the transactions & use tax allowance for Alameda
County for transportation programs and allows Contra Costa
County to adopt a similar ordinance.
Background and Existing Law
Sales Tax
The state sales and use tax rate is 7.50% as detailed below
and is general imposed on all tangible personal property
unless specifically exempt. Cities and Counties may
increase the sales and use tax rate up to 2% as a
transactions and use tax for either specific or general
purposes with a vote of the people.
-------------------------------------------------------------
| | | |
| Rate | Jurisdiction | Purpose/Authority |
| | | |
|-------+--------------------+--------------------------------|
| | | |
|3.9375%|State (General |State general purposes |
| |Fund) | |
| | | |
|-------+--------------------+--------------------------------|
| | | |
|1.0625%|Local Revenue Fund |Realignment of local public |
| |2011 |safety services |
| | | |
| | | |
| | | |
|-------+--------------------+--------------------------------|
AB 210 -- 4/13/13 -- Page 2
| | | |
| 0.25% |State (Fiscal |Repayment of the Economic |
| |Recovery Fund) |Recovery Bonds |
| | | |
|-------+--------------------+--------------------------------|
| | | |
| 0.25% |State (Education |Schools and community college |
| |Protection Account) |funding |
| | | |
|-------+--------------------+--------------------------------|
| | | |
| 0.50% |State (Local |Local governments to fund |
| |Revenue Fund) |health and welfare programs |
| | | |
|-------+--------------------+--------------------------------|
| | | |
| 0.50% |State (Local Public |Local governments to fund |
| |Safety Fund) |public safety services |
| | | |
|-------+--------------------+--------------------------------|
| | | |
| 1.00% |Local (City/County) |City and county general |
| | |operations. Dedicated to county |
| | |transportation purposes |
| |0.75% City and | |
| |County | |
| | | |
| |0.25% County | |
|-------+--------------------+--------------------------------|
| | | |
| 7.50% |Total Statewide | |
| |Rate | |
| | | |
-------------------------------------------------------------
Transactions & use tax.
Existing law allows cities and counties to impose
additional sales and use taxes, called transactions and use
taxes, up to a combined 2% rate, with voter approval. The
tax must be imposed in increments of 0.125%. In Alameda
County, for example, the cities of San Leandro imposes a
0.25% tax; Union City imposes a 0.50% tax and Albany
imposes a 0.50% tax. The County also imposes a 0.50% tax
for the Alameda County Transportation Improvement
Authority; 0.50% tax for the Alameda County Transportation
Improvement Authority; and a 0.50% County Essential
AB 210 -- 4/13/13 -- Page 3
Healthcare Services tax. Because the County exceeds the 2%
cap, it can no longer impose sales and use taxes.
Existing law AB 1086 (Wieckowski, 2011) authorized Alameda
County to impose a district tax for transportation programs
at a capped rate of 0.50%, only if the ordinance was
approved by the voters before December 31, 2013. The
measure failed with a vote of 66.5% in November, 2013.
Beginning April 1, 2013, there will be 169 local
jurisdictions (city, county, and special purpose entity)
imposing a district tax for general or specific purposes.
Of the 169 jurisdictions, 43 are county-imposed taxes and
126 are city-imposed taxes. Of the 43 county-imposed
taxes, 28 are imposed for transportation
purposes.
Currently, the district tax rates vary from 0.10 percent to
1 percent. The combined state, local and district tax
rates range from 7.625 to 9.50 percent, with the exception
of the cities of La Mirada, Pico Rivera, and South Gate
(10%) in Los Angeles County. AB 2321 (Feuer, 2008)
expanded the cap for Los Angeles
County.
Proposed Law
Assembly Bill 210 extends the date for the Alameda County
tax from January 1, 2014 to December 31, 2020, and removes
the requirement that the tax be placed on the November
general election ballot. AB 210 also allows Contra Costa
County to adopt an ordinance proposing the imposition of a
transactions and use tax for the support of countywide
transportation programs at a rate of no more than 0.50%
that, in combination with other specified taxes, exceeds
the 2% statutory limitation.
AB 210 requires counties to meet the following criteria
before imposing the tax:
1. The ordinance proposing the transactions and use
tax must be adopted in accordance with the applicable
voting approval requirement;
2. The ordinance must be submitted to the electorate
AB 210 -- 4/13/13 -- Page 4
and be approved by the voters pursuant to the
California Constitution, Article XIIIC; and,
3. The proposed tax must conform to current law.
AB 210 finds and declares that a special law is necessary
because of the unique fiscal pressures experienced in the
Counties of Alameda and Contra Costa in providing essential
transportation programs.
State Revenue Impact
Assuming the voters approve the tax authorized by the
proposed law, this bill would generate the following
additional revenue for Alameda County:
For fiscal year 2014-15, assuming a January 1, 2015
operative date, a 0.5 percent tax increase generates
$66 million ($13.2 billion X 0.5%).
For fiscal year 2015-16, a 0.5 percent tax increase
generates $140 million ($28.0 billion X 0.5%).
Comments
1. Purpose of the bill . The author provides the following
statement: AB 210 is a bill to help both Alameda and Contra
Costa counties seek voter support for new transportation
infrastructure improvements in their counties. This
authority from the Legislature is needed because cities
within these counties have enacted citywide sales tax
measures that would prevent a countywide tax because of the
2% local cap. Improving Alameda and Contra Costa counties'
overall ability to offer a broad range of transportation
options to meet the needs of their local businesses,
workers, residents and students is crucial to their future
economic success.
2. Existing cap . SB 566, (Scott, 2003) imposed the 2% cap
for both cities and counties. Prior to that bill,
individual cities would sponsor at least five bills a year
seeking to impose the tax. SB 566 recognized the need for
local authority with voter approval. AB 2321 (Feuer, 2008)
expanded the cap for Los Angeles and AB 1086 (Wieckowski,
AB 210 -- 4/13/13 -- Page 5
2011) expanded for Alameda with a sunset. The Committee
may wish to consider expanding the overall limit instead of
the piecemeal approach offered in this bill.
AB 210 -- 4/13/13 -- Page 6
Assembly Actions
Assembly Local Government7-2
Assembly Appropriations 5-3
Assembly Floor 46-23
Support and Opposition (5/30/13)
Support : Alameda County Transportation Commission; Contra
Costa County Transportation Authority; Alameda - Contra
Costa Transit District (AC Transit); Metropolitan
Transportation Commission; East Bay Regional Park District;
Livermore Amador Valley Transit Authority; California
Nevada Cement Association.
Opposition : California Taxpayers Association; Howard
Jarvis Taxpayers Association (HJTA).