BILL ANALYSIS
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UNFINISHED BUSINESS
Bill No: SB 6X
Author: Ducheny (D)
Amended: 12/18/08
Vote: 21
SENATE FLOOR : Not relevant
ASSEMBLY FLOOR : Not available
SUBJECT : Budget Act of 2008
SOURCE : Author
DIGEST : As it left the Senate, this bill expressed the
intent of the Legislature to enact the statutory changes to
the Budget Act of 2008.
Assembly Amendments provide local governments with the
authority to generate additional revenue for transportation
purposes in order to address the fiscal emergency outlined
in the Governor's proclamation in the First Extraordinary
Special Session of December 1, 2008.
ANALYSIS : The existing state and local sales and use tax
rate of 7.25% is comprised of the following components:
1.5% state sales tax dedicated to the General Fund.
2..25% state sales tax dedicated to repayment of the
Economic Recovery Bonds.
CONTINUED
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3..5% state sales tax, dedicated to local governments to
fund health and welfare programs.
4..5 % state sales tax, dedicated to local governments to
fund public safety services.
5.1 % Bradley-Burns local sales tax (.75% dedicated to city
and county general operations and .25% dedicated to
county transportation purposes.
Existing law also authorizes cities and counties to impose
transactions and use taxes, otherwise known as district
taxes, as specified. The combined rate of all district
taxes imposed in any county cannot exceed 2%. Existing law
requires cities and counties to contract with the Board of
Equalization (BOE) to administer the Bradley-Burns local
taxes and district taxes.
This bill authorizes a county or a city and county to
impose an additional .25% local sales and use tax for
transportation purposes, pursuant to the Transportation
Development Act of 1971 (TDA), and subject to all
applicable constitutional voter-approval requirements.
This bill is intended to provide local governments with the
authority to increase revenues for local transportation
purposes. The value of the existing .25% sales and use tax
imposed pursuant to the TDA has declined significantly
since 1971, and state actions in recent years have further
reduced transportation funding available to local
governments.
If all counties successfully elected to increase their
sales and use tax rate by .25%, it is estimated that this
bill would generate approximately $1.5 billion in local
revenues. BOE would incur unknown one-time administrative
costs (General Fund).
This bill is identical to AB 2873 (Wolk), which was
introduced in 2006, but was not enacted.
This bill will not be enacted unless ABX1 2 is also
enacted.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
DLW:cm 12/18/08 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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