BILL ANALYSIS �
AB 1324
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CONCURRENCE IN SENATE AMENDMENTS
AB 1324 (Skinner)
As Amended August 7, 2014
Majority vote
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|ASSEMBLY: | |(May 16, 2013) |SENATE: |22-12|(August 21, |
| | | | | |2014) |
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(vote not relevant)
Original Committee Reference: TRANS.
SUMMARY : Allows the City of El Cerrito to adopt an ordinance to
impose a transactions and use tax not to exceed 0.5% for general
purposes that would, in combination with other taxes, exceed the
statutory limit of 2%.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Allow the City of El Cerrito to impose a transactions and use
tax for general purposes at a rate of no more than 0.5% that
would, in combination with all other transaction and use
taxes, exceed the 2% limit established in existing law, if all
the following conditions are met:
a) The city adopts an ordinance proposing the transactions
and use tax by any applicable voting requirements;
b) The ordinance proposing the transactions and use tax is
approved by the voters voting on the ordinance in
accordance with California Constitution Article XIII C, and
the election on the ordinance proposing the tax may occur
on or after November 4, 2014;
c) The transactions and use tax is imposed on or after
January 1, 2015; and,
d) The transactions and use tax conforms to the
Transactions and Use Tax Law, as specified.
2)Provide, if the ordinance proposing the transactions and use
tax is not approved, that the provisions of the bill shall be
repealed as of January 1, 2022.
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3)Find and declare that a special law is necessary because of
the unique fiscal and public service pressures experienced in
the City of El Cerrito.
AS PASSED BY THE ASSEMBLY , this bill authorized Alameda County
to increase the fee on vehicle registration to be used to fund
the prevention of vehicle theft crimes.
FISCAL EFFECT : None
COMMENTS :
1)Purpose of this bill. This bill provides an exemption to the
City of El Cerrito from the 2% transactions and use tax
combined rate cap that is currently in statute. This bill
authorizes the City of El Cerrito to each adopt an ordinance
to propose the imposition of a transactions and use tax for
general purposes at a rate of no more than 0.5%, and with the
appropriate voter approval pursuant to the California
Constitution, which requires a majority vote for transaction
and use taxes for general purposes. If the ordinance
proposing the transactions and use tax is not approved by
voters by January 1, 2022, the provisions of the bill would be
repealed as of that same date. This bill is author-sponsored.
2)Author's statement. 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."
3)Background and prior legislation. Prior to 2003, cities
lacked the ability to place transactions and use taxes before
their voters without first obtaining approval by the
Legislature to bring an ordinance before the city council,
and, if approved at the council level, to the voters. This
was remedied by SB 566 (Scott), Chapter 709, Statutes of 2003.
SB 566 also contained provisions to increase a county's
transactions and use tax cap to 2% because of the possibility
that certain counties were going to run out of room under
their caps if cities within those counties approved
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transactions and use taxes.
The Legislature has previously granted exemptions to the 2%
statutory cap for transactions and use taxes to support
countywide transportation programs. AB 1086 (Wieckowski),
Chapter 327, Statutes of 2011, allowed a one-time exemption
for Alameda County from the 2% transactions and use tax
combined rate cap. AB 210 (Wieckowski), Chapter 194, Statutes
of 2013, extended the authority for Alameda County to adopt an
ordinance imposing a transactions and use tax from January 1,
2014, to December 31, 2020, and allowed Contra Costa County to
adopt an ordinance imposing a transactions and use tax in the
same manner as Alameda County.
4)Policy consideration. The Legislature may wish to consider if
the financial difficulties experienced by the City of El
Cerrito are different than those experienced by other cities
in California. In light of that consideration, the
Legislature may wish to discuss if the 2% transactions and use
tax combined rate cap needs to be raised statewide, instead of
having cities and counties come to the Legislature on a case
by case basis.
5)Arguments in support. Supporters argue that this bill gives
the voters the opportunity to decide whether to approve an
additional half percent sales tax in order to maintain city
services and allows the people to choose their own priorities.
6)Arguments in opposition. Opposition argues that the current
2% threshold should be more than sufficient to meet the
revenue needs of a local community and that California already
has the highest sales tax in the nation.
7)Substantially amended. The subject matter of this bill has
not been heard in any Assembly policy committee this
legislative session.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
FN: 0004508
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