BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1324|
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THIRD READING
Bill No: AB 1324
Author: Skinner (D), et al.
Amended: 6/30/14 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 6/18/14
AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu
NOES: Knight, Walters
ASSEMBLY FLOOR : Not relevant
SUBJECT : Transactions and use taxes: City of El Cerrito:
County of Contra Costa
SOURCE : City of El Cerrito
Contra Costa County
DIGEST : This bill allows the City of El Cerrito and Contra
Costa County to adopt an ordinance proposing the imposition of a
transactions and use tax that exceeds the 2% statutory
limitation.
Senate Floor Amendments of 6/30/14 are technical, deleting
incorrect cross-references and replacing them with correct
cross-references.
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%.
CONTINUED
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This bill:
1.Allows the City of El Cerrito and Contra Costa County to adopt
an ordinance proposing the imposition of a transactions and
use tax for the support of citywide and countywide programs
and services, respectively, at a rate of no more than 0.50%
that, in combination with other specified taxes, exceeds the
2% statutory limitation.
2.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 on or after November 4, 2014,
and before January 1, 2022; and
C. The proposed tax must conform to current law and is
imposed on or after January 1, 2015.
1.Finds and declares that a special law is necessary because of
the unique fiscal pressures experienced in the City of El
Cerrito and the County of Contra Costa in providing public
services.
Comments
Beginning April 1, 2014, there will be 178 local jurisdictions
(city, county, and special purpose entity) imposing a district
tax for general or specific purposes. Of the 178 jurisdictions,
44 are county-imposed taxes and 134 are city-imposed taxes.
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.
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Prior Legislation
SB 566, (Scott, Chapter 709, Statutes of 2003) imposed the
uniform 2% cap for both cities and counties. AB 2321 (Feuer,
Chapter 302, Statutes of 2008) expanded the cap for Los Angeles,
AB 1086 (Wieckowski, Chapter 327, Statutes of 2011) expanded the
cap for Alameda with a sunset. AB 210 (Wieckowski, Chapter 508,
Statutes of 2012) extended the cap for Alameda and allowed
Contra Costa to adopt a similar ordinance.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 7/1/14)
City of El Cerrito (co-source)
Contra Costa County (co-source)
City of El Cerrito City Manager, Scott Hanin
El Cerrito Fire Department
El Cerrito Police Department
El Cerrito Public Works Department
ARGUMENTS IN SUPPORT : According to the author, "The City of
El Cerrito was hit particularly hard by the recession and the
local economy is still struggling to recover. As a result,
local property values have declined. The sluggish economy,
diminished revenues from reduced property assessments, the loss
of redevelopment, store relocations, and other factors are
forcing the city to reduce services. The County of Contra Costa
faces comparable financial struggles. AB 1324 allows the
citizens of El Cerrito and Contra Costa to separately vote on a
sales tax increase in order to fund the level of service they
desire from their local governments."
AB:e 7/1/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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