Amended in Assembly January 6, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 677

Introduced by Assembly Member Fox

February 21, 2013

An act to amend Section begin delete 6093 end delete begin insert 97.70 end insert of the Revenue and Taxation Code, relating to begin delete taxation end delete begin insert local government finance end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 677, as amended, Fox. begin delete Sales and use taxes. end delete begin insert Local government finance: property tax revenue allocation: vehicle license fee adjustments. end insert

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Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally provides that each jurisdiction shall be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined.

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Existing property tax law also requires that, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.

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Beginning with the 2004-05 fiscal year and for each fiscal year thereafter, existing law requires that each city, county, and city and county receive additional property tax revenues in the form of a vehicle license fee adjustment amount, as defined, from a vehicle license fee property tax compensation fund that exists in each county treasury. Existing law requires that these additional allocations be funded from ad valorem property tax revenues otherwise required to be allocated to educational entities.

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This bill would modify these reduction and transfer provisions, for the 2013-14 fiscal year and for each fiscal year thereafter, by providing for a vehicle license fee adjustment amount calculated on the basis of changes in assessed valuation. This bill would also modify these reduction and transfer provisions, for the 2013-14 fiscal year and for each fiscal year thereafter, by providing for a vehicle license fee adjustment amount for certain cities incorporating after a specified date, as provided.

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By imposing additional duties upon local tax officials with respect to the allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

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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.

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This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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The Sales and Use Tax Law presumes that all gross receipts are subject to tax until the contrary is established. This law relieves a seller from liability for sales tax if the seller in good faith takes a resale certificate from a purchaser holding a seller’s permit, and the resale certificate is signed and completed as specified.

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This bill would make nonsubstantive, technical changes to this provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . 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:

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begin insert SECTION 1. end insert   

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begin insert Section 97.70 of the end insert begin insert Revenue and Taxation Code end insert begin insert ,
as amended by Chapter 393 of the Statutes of 2013, is amended
to read: end insert

97.70.  

Notwithstanding any other law, for the 2004-05 fiscal
year and for each fiscal year thereafter, all of the following apply:

(a) (1) (A) The auditor shall reduce the total amount of ad
valorem property tax revenue that is otherwise required to be
allocated to a county’s Educational Revenue Augmentation Fund
by the countywide vehicle license fee adjustment amount.

(B) If, for the fiscal year, after complying with Section 97.68
there is not enough ad valorem property tax revenue that is
otherwise required to be allocated to a county Educational Revenue
Augmentation Fund for the auditor to complete the allocation
reduction required by subparagraph (A), the auditor shall
additionally reduce the total amount of ad valorem property tax
revenue that is otherwise required to be allocated to all school
districts and community college districts in the county for that
fiscal year by an amount equal to the difference between the
countywide vehicle license fee adjustment amount and the amount
of ad valorem property tax revenue that is otherwise required to
be allocated to the county Educational Revenue Augmentation
Fund for that fiscal year. This reduction for each school district
and community college district in the county shall be the percentage
share of the total reduction that is equal to the proportion that the
total amount of ad valorem property tax revenue that is otherwise
required to be allocated to the school district or community college
district bears to the total amount of ad valorem property tax revenue
that is otherwise required to be allocated to all school districts and
community college districts in a county. For purposes of this
subparagraph, “school districts” and “community college districts”
do not include any districts that are excess tax school entities, as
defined in Section 95.

(2) The countywide vehicle license fee adjustment amount shall
be allocated to the Vehicle License Fee Property Tax Compensation
Fund that shall be established in the treasury of each county.

(b) (1) The auditor shall allocate moneys in the Vehicle License
Fee Property Tax Compensation Fund according to the following:

(A) Each city in the county shall receive its vehicle license fee
adjustment amount.

(B) Each county and city and county shall receive its vehicle
license fee adjustment amount.

(2) The auditor shall allocate one-half of the amount specified
in paragraph (1) on or before January 31 of each fiscal year, and
the other one-half on or before May 31 of each fiscal year.

(c) For purposes of this section, all of the following apply:

(1) “Vehicle license fee adjustment amount” for a particular
city, county, or a city and county means, subject to an adjustment
under paragraph (2) and Section 97.71, all of the following:

(A) For the 2004-05 fiscal year, an amount equal to the
difference between the following two amounts:

(i) The estimated total amount of revenue that would have been
deposited to the credit of the Motor Vehicle License Fee Account
in the Transportation Tax Fund, including any amounts that would
have been certified to the Controller by the auditor of the County
of Ventura under subdivision (j) of Section 98.02, as that section
read on January 1, 2004, for distribution under the law as it read
on January 1, 2004, to the county, city and county, or city for the
2004-05 fiscal year if the fee otherwise due under the Vehicle
License Fee Law (Pt. 5 (commencing with Section 10701) of Div.
2) was 2 percent of the market value of a vehicle, as specified in
begin delete Section end delete begin insert Sections end insert 10752 and 10752.1 as those sections read on
January 1, 2004.

(ii) The estimated total amount of revenue that is required to be
distributed from the Motor Vehicle License Fee Account in the
Transportation Tax Fund to the county, city and county, and each
city in the county for the 2004-05 fiscal year under Section 11005,
as that section read on the operative date of the act that amended
this clause.

(B) (i) Subject to an adjustment under clause (ii), for the
2005-06 fiscal year, the sum of the following two amounts:

(I) The difference between the following two amounts:

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(Ia)

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begin insert (ia) end insert  The actual total amount of revenue that would have been
deposited to the credit of the Motor Vehicle License Fee Account
in the Transportation Tax Fund, including any amounts that would
have been certified to the Controller by the auditor of the County
of Ventura under subdivision (j) of Section 98.02, as that section
read on January 1, 2004, for distribution under the law as it read
on January 1, 2004, to the county, city and county, or city for the
2004-05 fiscal year if the fee otherwise due under the Vehicle
License Fee Law (Part 5 (commencing with Section 10701) of
Division 2) was 2 percent of the market value of a vehicle, as
specified in Sections 10752 and 10752.1 as those sections read on
January 1, 2004.

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(Ib)

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begin insert (ib) end insert  The actual total amount of revenue that was distributed
from the Motor Vehicle License Fee Account in the Transportation
Tax Fund to the county, city and county, and each city in the county
for the 2004-05 fiscal year under Section 11005, as that section
read on the operative date of the act that amended this
begin delete sub-subclause end delete begin insert subsubclause end insert .

(II) The product of the following two amounts:

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(IIa)

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begin insert (ia) end insert  The amount described in subclause (I).

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(IIb)

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begin insert (ib) end insert  The percentage change from the prior fiscal year to the
current fiscal year in gross taxable assessed valuation within the
jurisdiction of the entity, as reflected in the equalized assessment
roll for those fiscal years. For the first fiscal year for which a
change in a city’s jurisdictional boundaries first applies, the
percentage change in gross taxable assessed valuation from the
prior fiscal year to the current fiscal year shall be calculated solely
on the basis of the city’s previous jurisdictional boundaries, without
regard to the change in that city’s jurisdictional boundaries. For
each following fiscal year, the percentage change in gross taxable
assessed valuation from the prior fiscal year to the current fiscal
year shall be calculated on the basis of the city’s current
jurisdictional boundaries.

(ii) The amount described in clause (i) shall be adjusted as
follows:

(I) If the amount described in subclause (I) of clause (i) for a
particular city, county, or city and county is greater than the amount
described in subparagraph (A) for that city, county, or city and
county, the amount described in clause (i) shall be increased by
an amount equal to this difference.

(II) If the amount described in subclause (I) of clause (i) for a
particular city, county, or city and county is less than the amount
described in subparagraph (A) for that city, county, or city and
county, the amount described in clause (i) shall be decreased by
an amount equal to this difference.

(C) For the 2006-07 fiscal begin delete year and for each fiscal year
thereafter, end delete begin insert year, to the 2012-13 fiscal year, inclusive, end insert the sum of
the following two amounts:

(i) The vehicle license fee adjustment amount for the prior fiscal
year, if Section 97.71 and clause (ii) of subparagraph (B) did not
apply for that fiscal year, for that city, county, and city and county.

(ii) The product of the following two amounts:

(I) The amount described in clause (i).

(II) The percentage change from the prior fiscal year to the
current fiscal year in gross taxable assessed valuation within the
jurisdiction of the entity, as reflected in the equalized assessment
roll for those fiscal years. For the first fiscal year for which a
change in a city’s jurisdictional boundaries first applies, the
percentage change in gross taxable assessed valuation from the
prior fiscal year to the current fiscal year shall be calculated solely
on the basis of the city’s previous jurisdictional boundaries, without
regard to the change in that city’s jurisdictional boundaries. For
each following fiscal year, the percentage change in gross taxable
assessed valuation from the prior fiscal year to the current fiscal
year shall be calculated on the basis of the city’s current
jurisdictional boundaries.

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(D) For the 2013-14 fiscal year, the vehicle license fee
adjustment amount shall be equal to the sum of the following two
amounts:

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(i) The amount described in clause (i) of subparagraph (B) if
Section 97.71 and clause (ii) of subparagraph (B) did not apply
for that fiscal year, for that city, county, and city and county.

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(ii) The product of the following two amounts:

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(I) The amount described in clause (i).

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(II) The percentage change from the 2004-05 fiscal year to the
2013-14 fiscal year, inclusive, in gross taxable assessed valuation
within the jurisdiction of the entity, as reflected in the equalized
assessment roll for those fiscal years.

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(E) For the 2014-15 fiscal year and each fiscal year thereafter,
the sum of the following two amounts:

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(i) The vehicle license fee adjustment amount for the prior fiscal
year.

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(ii) The product of the following two amounts:

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(I) The amount described in clause (i).

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(II) The percentage change from the immediately preceding
fiscal year to the current fiscal year in gross taxable assessed
valuation within the jurisdiction of the entity, as reflected in the
equalized assessment roll for those fiscal years.

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(F) Notwithstanding subparagraphs (D) and (E), “vehicle
license fee adjustment amount,” for the 2013-14 fiscal year and
each fiscal year thereafter for a city incorporating after January
1, 2004, means the following:

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(i) For the 2013-14 fiscal year, or the first year of incorporation
of the city, whichever is later, the quotient derived from the
following fraction:

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(I) The numerator is the product of the following two amounts:

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(ia) The sum of the most recent vehicle license fee adjustment
amounts determined for all cities in the county incorporated prior
to 2005.

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(ib) The population of the incorporating city.

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(II) The denominator is the sum of the populations of all cities
in the county.

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(ii) For each fiscal year thereafter, the sum of the following two
amounts:

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(I) The vehicle license fee adjustment amount for the prior fiscal
year.

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(II) The product of the following two amounts:

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(ia) The amount described in subclause (I).

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(ib) The percentage change from the prior fiscal year to the
current fiscal year in gross taxable assessed valuation within the
jurisdiction of the entity, as reflected in the equalized assessment
roll for those fiscal years.

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(2) For the 2013-14 fiscal year, the vehicle license fee
adjustment amount that is determined under subparagraph begin delete (C) end delete begin insert (D) end insert
of paragraph (1) for the County of Orange shall be increased by
fifty-three million dollars ($53,000,000). For the 2014-15 fiscal
year and each fiscal year thereafter, the calculation of the vehicle
license fee adjustment amount for the County of Orange under
subparagraph begin delete (C) end delete begin insert (E) end insert of paragraph (1) shall be based on a prior
fiscal year amount that reflects the full amount of this one-time
increase of fifty-three million dollars ($53,000,000).

(3) “Countywide vehicle license fee adjustment amount” means,
for any fiscal year, the total sum of the amounts described in
paragraphs (1) and (2) for a county or city and county, and each
city in the county.

(4) On or before June 30 of each fiscal year, the auditor shall
report to the Controller the vehicle license fee adjustment amount
for the county and each city in the county for that fiscal year.

(d) For the 2005-06 fiscal year and each fiscal year thereafter,
the amounts determined under subdivision (a) of Section 96.1, or
any successor to that provision, shall not reflect, for a preceding
fiscal year, any portion of any allocation required by this section.

(e) For purposes of Section 15 of Article XI of the California
Constitution, the allocations from a Vehicle License Fee Property
Tax Compensation Fund constitute successor taxes that are
otherwise required to be allocated to counties and cities, and as
successor taxes, the obligation to make those transfers as required
by this section shall not be extinguished nor disregarded in any
manner that adversely affects the security of, or the ability of, a
county or city to pay the principal and interest on any debts or
obligations that were funded or secured by that city’s or county’s
allocated share of motor vehicle license fee revenues.

(f) This section shall not be construed to do any of the following:

(1) Reduce any allocations of excess, additional, or remaining
funds that would otherwise have been allocated to county
superintendents of schools, cities, counties, and cities and counties
pursuant to clause (i) of subparagraph (B) of paragraph (4) of
subdivision (d) of Sections 97.2 and 97.3 or Article 4 (commencing
with Section 98) had this section not been enacted. The allocations
required by this section shall be adjusted to comply with this
paragraph.

(2) Require an increased ad valorem property tax revenue
allocation or increased tax increment allocation to a community
redevelopment agency.

(3) Alter the manner in which ad valorem property tax revenue
growth from fiscal year to fiscal year is otherwise determined or
allocated in a county.

(4) Reduce ad valorem property tax revenue allocations required
under Article 4 (commencing with Section 98).

(g) Tax exchange or revenue sharing agreements, entered into
prior to the operative date of this section, between local agencies
or between local agencies and nonlocal agencies are deemed to be
modified to account for the reduced vehicle license fee revenues
resulting from the act that added this section. These agreements
are modified in that these reduced revenues are, in kind and in lieu
thereof, replaced with ad valorem property tax revenue from a
Vehicle License Fee Property Tax Compensation Fund or an
Educational Revenue Augmentation Fund.

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begin insert SEC. 2. end insert   

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If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

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SECTION 1.  

Section 6093 of the Revenue and Taxation Code
is amended to read:

6093.  

The certificate shall be signed by and bear the name and
address of the purchaser, indicate the number of the permit issued
to the purchaser, and indicate the general character of the tangible
personal property sold by the purchaser in the regular course of
business. The certificate shall be substantially in such form as the
board may prescribe.

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