Amended in Assembly May 13, 2015

Amended in Assembly April 14, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 755

Introduced by Assembly Member Ridley-Thomas

February 25, 2015

An act to add begin insert and repeal end insert Section 6362 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 755, as amended, Ridley-Thomas. Sales and use taxes: exemption: small businesses: Los Angeles County transit projects.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from the taxes imposed by those laws.

begin insert

Existing law creates the Los Angeles County Metropolitan Transportation Authority (LACMTA) with specified powers and duties relative to transportation planning, programming, and operations in the County Los Angeles.

end insert

This bill would partially exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, tangible personal property sold by, or purchased from, a retailer that is a small business, as defined, and whose property line abuts or faces the rail corridor or a designated construction staging or construction storage area of the Crenshaw/LAX Transit Corridor Light Rail Line, the Regional Connector Transit Corridor Light Rail Line, or the Westside Subway Extension Light Rail Line, as specified. begin insert The bill would require a small business to provide a written certification to the Board of Equalization that it has suffered a negative financial impact during construction of those rail lines in order to receive the partial exemption, as provided. end insert The bill would also make begin insert related end insert findings and begin delete declarations in this regard. end delete begin insert declarations. end insert

begin insert

This bill would require the LACMTA to notify the board of the date construction ends for each project. To the extent the bill would require the LACMTA to report to the board regarding the completion of construction, the bill would impose a state-mandated local program.

end insert

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms generally to the Sales and Use Tax Law. Exemptions from state sales and use taxes are incorporated into these laws.

This bill would specify that this exemption does not apply to local sales and use taxes and transactions and use taxes.

begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert

This bill would take effect immediately as a tax levy. However, the provisions of this act shall become operative on January 1, 2016.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The Los Angeles County Metropolitan Transportation
Authority is currently engaged in the largest public transit
expansion in the country.

(b) This expansion will fundamentally transform the County of
Los Angeles and will have significant long-term economic benefits.

(c) The Los Angeles County Metropolitan Transportation
Authority is currently constructing three future rail transit lines
known as the Crenshaw/LAX Transit Corridor Light Rail Line,
the Regional Connector, and the Westside Subway Extension.

(d) The Los Angeles County Metropolitan Transportation
Authority has adopted a Locally Preferred Alternative for these
projects, which describe the route alignment of the projects,
including station locations.

(e) While these projects will create long-term economic benefits
for the local communities and the County of Los Angeles as a
whole, there will be temporary impacts to the local communities
from the construction of these projects.

(f) It is incumbent upon the state to partner with the Los Angeles
County Metropolitan Transportation Authority and assist it in
mitigating these short term impacts by providing tax relief to small
businesses affected by the construction of these light rail lines.

SEC. 2.  

Section 6362 is added to the Revenue and Taxation
Code, to read:

6362.  

(a)  begin insert (1) end insert begin insert   end insert During the period in which each project is under
construction, there are exempted from the taxes imposed by this
part, the gross receipts from the sale of, and the storage, use, or
other consumption in this state of, tangible personal property sold
by, or purchased from, a retailer that is a small business and whose
property line abuts or faces the rail corridor or a designated
construction staging or construction storage area, including a small
business located in a mall or strip-mall that is similarly situated,
of the Crenshaw/LAX Transit Corridor Light Rail Line, the
Regional Connector Transit Corridor Light Rail Line, or the
Westside Subway Extension Light Rail Line selected as the Locally
Preferred Alternative, as described in the Final Environmental
Impact Statement/Environmental Impact Report for each project,
and as approved by the Los Angeles County Metropolitan
Transportation Authority.

begin insert

(2) The Los Angeles County Metropolitan Transportation
Authority shall notify the board of the date construction ends for
each project and shall notify the board of the date construction
ends for the last project.

end insert

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

(1) “Project” means the Crenshaw/LAX Transit Corridor Light
Rail Line, the Regional Connector Transit Corridor Light Rail
Line, and the Westside Subway Extension Light Rail Line as
described in this section.

(2) “Small business” shall mean a retailer that remitted to the
board less than two hundred thousand dollars ($200,000) in tax
for the previous four calendar quarters.

(3) “Small business” also means a retailer that has been in
operation for less than four calendar quarters and remitted less
than an average of fifty thousand dollars ($50,000) in tax for each
calendar quarter of operation.

begin insert

(c) (1) An exemption shall not be allowed under this section
unless a small business demonstrates that it has suffered a negative
financial impact as a result of a project that abuts or faces the rail
corridor or a designated construction staging or construction
storage area of that small business during the period the project
is under construction.

end insert begin insert

(2) A small business shall provide to the board a written
certification, along with evidence in support of that certification,
that it has suffered a negative financial impact by a project.
Evidence of a negative financial impact shall include, but not be
limited to, financial records that show a loss of business revenue
during the period a project is under construction.

end insert begin delete

(c)

end delete

begin insert (d) end insert  (1) Notwithstanding any provision of the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
with Section 7200)) or the Transactions and Use Tax Law (Part
1.6 (commencing with Section 7251)), the exemption established
by this section does not apply with respect to any tax levied by a
county, city, or district pursuant to, or in accordance with, either
of those laws.

(2) Notwithstanding subdivision (a), the exemption established
by this section shall not apply with respect to any tax levied
pursuant to Section 6051.2, 6051.5, 6201.2, or 6201.5, pursuant
to Section 35 and begin delete Subdivision end delete begin insert subdivision end insert (f) of Section 36 of
Article XIII of the California Constitution, or any tax levied
pursuant to Section 6051 or 6201 that is deposited in the State
Treasury to the credit of the Local Revenue Fund 2011 pursuant
to Section 6051.15 or 6201.15.

begin insert

(e) This section shall cease to be operative on the last day of
the calendar month following, or 14 days after, the date
construction ends for the last project, pursuant to the notification
in paragraph (2) of subdivision (a), whichever is later.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district are the result of a program for which legislative authority
was requested by that local agency or school district, within the
meaning of Section 17556 of the Government Code and Section 6
of Article XIII B of the California Constitution.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
However, the provisions of this act shall become operative on
January 1, 2016.