BILL ANALYSIS                                                                                                                                                                                                    

                                                                     SB 6 X1
                                                                     Page  1


         (Without Reference to File)
         
        SENATE THIRD READING
        SB 6 X1 (Ducheny)
        As Amended  December, 18, 2008
        Majority vote 

         SENATE VOTE  :Vote not relevant  
         
         SUMMARY  :  Provides 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.   
        Specifically,  this bill  :

        1)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.

        2)Provides 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.

        3)Would only be enacted if AB 2 X1 is also enacted.

         EXISTING LAW  :
         
         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
        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







                                                                     SB 6 X1
                                                                     Page  2


        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.

         COMMENTS:

         This bill is identical to AB 2873 (Wolk), which was introduced in  
        2006, but was not enacted.  
         
        FISCAL EFFECT :  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).


         Analysis Prepared by  :     Adam Dondro/ BUDGET/ (916) 319-2099FN:  
        0000040