BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 210| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 210 Author: Wieckowski (D), et al. Amended: 4/23/13 in Assembly Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 6/5/13 AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu NOES: Knight, Emmerson ASSEMBLY FLOOR : 46-23, 5/9/13 - See last page for vote SUBJECT : Transactions and use taxes: County of Alameda and the County of Contra Costa SOURCE : Alameda County Transportation Commission DIGEST : This bill extends the current authority for Alameda County to adopt an ordinance imposing a transactions and use tax from January 1, 2014, to December 31, 2020, and allows Contra Costa County to adopt an ordinance imposing a transactions and use tax in the same manner as Alameda County. ANALYSIS : 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, 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 CONTINUED AB 210 Page 2 Improvement Authority; 0.50% tax for the Alameda County Transportation Improvement Authority; and a 0.50% County Essential Healthcare Services tax. Because the County exceeds the 2% cap, it can no longer impose sales and use taxes. Existing law AB 1086 (Wieckowski, Chapter 327, Statutes of 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 ordinance failed with a vote of 66.5% in November, 2012. This bill: 1. Extends the date for Alameda County to adopt an ordinance imposing a transactions and use tax, that exceeds the combined statutory limit of 2%, for the support of countywide transportation programs from January 1, 2014 to December 31, 2020, and removes the requirement that the tax be placed on the November 6, 2012 General Election ballot. 2. 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. 3. Requires counties to meet the following criteria before imposing the tax: A. The ordinance proposing the transactions and use tax must be adopted in accordance with the applicable voting approval requirement. B. The ordinance must be submitted to the electorate and be approved by the voters pursuant to the California Constitution, Article XIIIC. C. The proposed tax must conform to existing law. 4. 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. CONTINUED AB 210 Page 3 Comments 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% to 1%. The combined state, local and district tax rates range from 7.625% to 9.50%, with the exception of the cities of La Mirada, Pico Rivera, and South Gate (10%) in Los Angeles County. AB 2321 (Feuer, Chapter 302, Statutes of 2008) expanded the cap for Los Angeles County. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 6/6/13) Alameda County Transportation Commission (source) Alameda - Contra Costa Transit District California Nevada Cement Association Contra Costa County Transportation Authority East Bay Regional Park District Livermore Amador Valley Transit Authority Metropolitan Transportation Commission OPPOSITION : (Verified 6/6/13) California Taxpayers Association Howard Jarvis Taxpayers Association ARGUMENTS IN SUPPORT : Proponents state this bill allows Alameda and Contra Costa County to exceed the current 2% combined county rate, it abides by all local voting requirements, and only takes effect if voters approve the new transactions and use tax at an election prior to December 31, 2020. ARGUMENTS IN OPPOSITION : Opponents argue that this bill will further distort the intention and design of California local sales tax by promoting inconsistent rates amongst the counties. CONTINUED AB 210 Page 4 Additionally, excessive tax rates put the state at a competitive disadvantage and forestall an economic recovery. ASSEMBLY FLOOR : 46-23, 5/9/13 AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong, Frazier, Garcia, Gatto, Gomez, Gordon, Roger Hernández, Jones-Sawyer, Levine, Lowenthal, Medina, Mitchell, Mullin, Nazarian, Pan, Perea, Quirk, Rendon, Skinner, Stone, Ting, Torres, Weber, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Fox, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones, Linder, Maienschein, Mansoor, Morrell, Nestande, Olsen, Salas, Wagner, Wilk NO VOTE RECORDED: Gray, Hall, Holden, Logue, Melendez, Muratsuchi, Patterson, V. Manuel Pérez, Quirk-Silva, Waldron, Vacancy AB:d 6/6/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED