Bill Text: CA ABX123 | 2011-2012 | Regular Session | Amended
Bill Title: Local government finance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Enrolled - Dead) 2011-09-12 - Died at Desk. [ABX123 Detail]
Download: California-2011-ABX123-Amended.html
BILL NUMBER: ABX1 23 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 14, 2011
INTRODUCED BY Assembly Member Blumenfield
MAY 19, 2011
An act relating to the Budget Act of 2011
to add Section 41204.4 to the Educatio n Code, and to
amend Sections 97.68 and 7203.1 of the Revenue and Taxation Code,
relating to local government finance, and making an appropriation
therefor, to take effect immediately, bill related to the budget
.
LEGISLATIVE COUNSEL'S DIGEST
AB 23, as amended, Blumenfield. Budget Act of 2011.
Local government finance.
The Bradley-Burns Uniform Local Sales and Use Tax Law
(Bradley-Burns Law) authorizes a county that adopts a specified
ordinance to impose local sales and use taxes at a rate of 1.25%, and
similarly authorizes a city, located within a county imposing those
taxes, to impose local sales and use taxes at a rate of 1% or less,
which is credited against the county taxes. Existing law temporarily
suspends, during the revenue exchange period, the authority for a
county and city to impose local sales and use taxes at the rate of
0.25% under the Bradley-Burns Law by requiring, for that period,
sales and use tax rates of 1% for a county and 0.75% or less for a
city. Existing law defines the "revenue exchange period" as the
period on and after July 1, 2004, and before the first day of the
first calendar quarter commencing more than 90 days following a
specified notification by the Director of Finance to the State Board
of Equalization.
Existing law requires the auditor of each county, during the
fiscal adjustment period, as defined, to decrease the amount of ad
valorem property tax revenue otherwise allocated to a county's
Educational Revenue Augmentation Fund by the countywide adjustment
amount, which is measured by the combined revenue loss of the county,
and the cities therein, resulting from the temporary suspension of
the authority to impose a portion of their sales and use taxes.
Existing law requires the auditor to instead allocate this amount
among the county, and the cities therein, in reimbursement of their
revenue losses resulting from that suspension.
This bill would end the temporary suspension of the authority of a
county and city to impose sales and use taxes at the rate of 0.25%
under the Bradley-Burns Law by redefining the "revenue exchange
period" to a period ending on June 30, 2011. This bill would also
make this provision temporarily suspending that authority during the
revenue exchange period inoperative on July 1, 2011. The bill would
make related and conforming changes.
By imposing new duties upon local officials with respect to the
allocation of ad valorem property tax revenues, this bill would
impose a state-mandated local program.
Existing law prescribes the percentage of General Fund Revenues
appropriated for school districts and community college districts for
purposes of the provisions of the California Constitution requiring
minimum funding for the public schools.
This bill would require the Director of Finance to adjust that
percentage in a specified manner.
This bill would appropriate $1,000 from the General Fund to the
State Board of Equalization for administrative operations.
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.
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.
This bill would express the intent of the Legislature to enact
statutory changes relating to the Budget Act of 2011.
The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. Governor Schwarzenegger issued a proclamation
declaring a fiscal emergency, and calling a special session for this
purpose, on December 6, 2010. Governor Brown issued a proclamation on
January 20, 2011, declaring and reaffirming that a fiscal emergency
exists and stating that his proclamation supersedes the earlier
proclamation for purposes of that constitutional provision.
This bill would state that it addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation issued on
January 20, 2011, pursuant to the California Constitution.
This bill would declare that it is to take effect immediately as a
bill providing for appropriations related to the Budget Bill.
Vote: majority. Appropriation: no yes
. Fiscal committee: no yes .
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 41204.4 is added to the
Education Code , to read:
41204.4. (a) Notwithstanding any other law, the Director of
Finance shall adjust "the percentage of General Fund revenues
appropriated for school districts and community college districts,
respectively, in fiscal year 1986-87" for purposes of making the
calculations required under paragraph (1) of subdivision (b) of
Section 8 of Article XVI of the California Constitution in a manner
that ensures that the shift to school districts and community college
districts of local property tax revenues as a result of Section
97.68 of the Revenue and Taxation Code has no net fiscal impact upon
the combined amount of General Fund proceeds of taxes and allocated
local proceeds of taxes that are otherwise required to be applied by
the state for the support of school districts and community college
districts pursuant to Section 8 of Article XVI of the California
Constitution.
(b) For purposes of Section 8 of Article XVI of the California
Constitution, the property tax revenues transferred to school
districts, county offices of education, and community college
districts as a result of Section 97.68 of the Revenue and Taxation
Code shall constitute "allocated local proceeds of taxes."
SEC. 2. Section 97.68 of the Revenue
and Taxation Code is amended to read:
97.68. Notwithstanding any other provision of
law, in allocating ad valorem property tax revenue allocations for
each fiscal year during the fiscal adjustment period, all of the
following apply:
(a) (1) The total amount of ad valorem property tax revenue
otherwise required to be allocated to a county's Educational Revenue
Augmentation Fund shall be reduced by the countywide adjustment
amount.
(2) The countywide adjustment amount shall be deposited in a Sales
and Use Tax Compensation Fund that shall be established in the
treasury of each county.
(b) For purposes of this section, the following definitions apply:
(1) "Fiscal adjustment period" means the period beginning with the
2004-05 fiscal year and continuing through the fiscal year in which
the Director of Finance notifies the State Board of
Equalization board pursuant to subdivision (b)
of Section 99006 of the Government Code.
(2) Except as otherwise provided in subdivision (d), the
"countywide adjustment amount" means the combined total revenue loss
of the county and each city in the county that is annually estimated
by the Director of Finance, based upon the actual amount of sales and
use tax revenues transmitted under Section 7204 in that county in
the prior fiscal year and any projected growth on that amount for the
current fiscal year as determined by the State Board of
Equalization board and reported to the director
on or before August 15 of each fiscal year during the fiscal
adjustment period, to result for each of those fiscal years from the
0.25 percent reduction in local sales and use rate tax authority
applied by Section 7203.1. The director shall adjust the estimates
described in this paragraph if the board reports to him or her any
changes in the projected growth in local sales and use tax revenues
for the current fiscal year.
(3) "In lieu local sales and use tax revenues" means those
revenues that are transferred under this section to a county or a
city from a Sales and Use Tax Compensation Fund or an Educational
Revenue Augmentation Fund.
(c) Except as otherwise provided in subdivision (d), for each
fiscal year during the fiscal adjustment period, in lieu sales and
use tax revenues in the Sales and Use Tax Compensation Fund shall be
allocated among the county and the cities in the county, and those
allocations shall be subsequently adjusted, as follows:
(1) The Director of Finance shall, on or before September 1 of
each fiscal year during the fiscal adjustment period, notify each
county auditor of that portion of the countywide adjustment amount
for that fiscal year that is attributable to the county and to each
city within that county.
(2) The county auditor shall allocate revenues in the Sales and
Use Tax Compensation Fund among the county and cities in the county
in the amounts described in paragraph (1). The auditor shall allocate
one-half of the amount described in paragraph (1) in each January
during the fiscal adjustment period and shall allocate the balance of
that amount in each May during the fiscal adjustment period.
(3) After the end of each fiscal year during the fiscal adjustment
period, other than a fiscal year subject to subdivision (d), the
Director of Finance shall, based on the actual amount of sales and
use tax revenues that were not transmitted for the prior fiscal year,
recalculate each amount estimated under paragraph (1) and notify the
county auditor of the recalculated amount.
(4) If the amount recalculated under paragraph (3) for the county
or any city in the county is greater than the amount allocated to
that local agency under paragraph (2), the county auditor shall, in
the fiscal year next following the fiscal year for which the
allocation was made, transfer an amount of ad valorem property tax
revenue equal to this difference from the Sales and Use Tax
Compensation Fund to that local agency.
(5) If the amount recalculated under paragraph (3) for the county
or any city in the county is less than the amount allocated to that
local agency under paragraph (2), the county auditor shall, in the
fiscal year next following the fiscal year for which the allocation
was made, reduce the total amount of ad valorem property tax revenue
otherwise allocated to that city or county from the Sales and Use Tax
Compensation Fund by an amount equal to this difference and instead
allocate this difference to the county Educational Revenue
Augmentation Fund.
(6) If there is an insufficient amount of moneys in a county's
Sales and Use Tax Compensation Fund to make the transfers required by
paragraph (4), the county auditor shall transfer from the county
Educational Revenue Augmentation Fund an amount sufficient to make
the full amount of these transfers.
(d) Notwithstanding any other provision of this section, when
Section 7203.1 ceases to be operative ,
operative, all of the following apply:
(1) If Section 7203.1 ceases to be operative on an
or after October 1 and before January 1
of a fiscal year during the fiscal adjustment period, all of
the following apply:
(A) The "countywide adjustment amount" for that fiscal year means
an amount equal to sum of the following two amounts:
(i) The combined total revenue loss of the county and each city in
the county that is estimated by the director, based upon actual
sales and use tax revenues transmitted under Section 7204 for the
first quarter of the prior fiscal year as determined by the
State Board of Equalization board and reported
to the director on or before that August 15, to result for the first
quarter of the current fiscal year from the 0.25 percent reduction in
local sales and use tax rate authority applied by Section 7203.1.
(ii) The difference between the following two amounts:
(I) The total amount that was allocated to the county and each
city in the county under subdivision (c) for the prior fiscal year.
(II) The actual total amount of local sales and use tax revenue
that was not transmitted the county or city and county and each city
in the county for the prior fiscal year as a result of the 0.25
percent suspension of local sales and use tax authority applied by
Section 7203.1.
(B) On or before January 31 of that fiscal year, the auditor shall
allocate to the county and each city in the county that portion of
the countywide adjustment amount for that fiscal year that is
attributable to the county and each city in the county.
(C) On or before May 1 of that fiscal year, the State
Board of Equalization board shall report to the
director the actual total amount of local sales and use tax revenue
that was not transmitted to the county and each city in the county in
that fiscal year as a result of the 0.25 percent suspension of local
sales and use tax authority applied by Section 7203.1. On or before
May 1 of that fiscal year, the director shall do both of the
following:
(i) Determine the difference between the following two amounts:
(I) The amount specified in clause (i) of subparagraph (A) that
was allocated to the county and each city in the county for that
fiscal year under subparagraph (B).
(II) The actual total amount of local sales and use tax revenue
that was not transmitted to the county and each city in the county
for that fiscal year as a result of the 0.25 percent suspension of
local sales and use tax authority applied by Section 7203.1.
(ii) Notify the auditor of each county of the amounts determined
under clause (i) for his or her county and all of the cities in that
county.
(D) (i) If, for any county or city, the amount described in
subclause (I) of clause (i) of subparagraph (C) is greater than the
amount described in subclause (II) of clause (i) of subparagraph (C),
the county auditor shall, on or before May 31 of that fiscal year,
reallocate from the entity to the county Educational Revenue
Augmentation Fund the difference between those amounts.
(ii) If, for any county or city, the amount described in subclause
(I) of clause (i) of subparagraph (C) is less than the amount
described in subclause (II) of clause (i) of subparagraph (C), the
county auditor shall, on or before May 31 of that fiscal year,
reallocate from the county Educational Revenue Augmentation Fund to
that entity the difference between those amounts.
(2) If Section 7203.1 ceases to be operative on a
or after January 1 and before April 1
of a fiscal year during the fiscal adjustment period, all of the
following apply:
(A) The "countywide adjustment amount" for that fiscal year means
an amount equal to the sum of the following two amounts:
(i) The combined total revenue loss of the county and each city in
the county that is estimated by the director, based upon actual
sales and use tax revenues transmitted under Section 7204 for the
first and second quarters of the prior fiscal year as determined by
the State Board of Equalization board
and reported to the director on or before that August 15, to result
for the first and second quarters of that fiscal year from the 0.25
percent reduction in local sales and use tax rate authority applied
by Section 7203.1.
(ii) The difference between the following two amounts:
(I) The total amount that was allocated to the county and each
city in the county under subdivision (c) for the prior fiscal year.
(II) The actual total amount of local sales and use tax revenue
that was not transmitted the county or city and county and each city
in the county for the prior fiscal year as a result of the 0.25
percent suspension of local sales and use tax authority applied by
Section 7203.1.
(B) The auditor shall allocate to the county and each city in the
county that portion of the countywide adjustment amount for that
fiscal year that is attributable to the county and each city in the
county. One-half of this amount shall be allocated on or before
January 31 of that fiscal year and the other one-half of that amount
shall be allocated on or before May 31 of that fiscal year.
(C) On or before June 30 of that fiscal year, the State
Board of Equalization board shall report to the
director the actual total amount of local sales and use tax revenue
that was not transmitted to the county and each city in the county
for that fiscal year as a result of the 0.25 percent suspension of
local sales and use tax authority applied by Section 7203.1. On or
before June 30 of that fiscal year, the director shall do both of the
following:
(i) Determine the difference between the following two amounts:
(I) The amount specified in clause (i) of subparagraph (A) that
was allocated to the county and each city in the county for that
fiscal year under subparagraph (B).
(II) The actual total amount of local sales and use tax revenue
that was not transmitted to the county and each city in the county
for that fiscal year as a result of the 0.25 percent suspension of
local sales and use tax authority applied by Section 7203.1.
(ii) Notify the auditor of each county of the amounts determined
under clause (i) for his or her county and all of the cities in that
county.
(D) (i) If, for any county or city, the amount described in
subclause (I) of clause (i) of subparagraph (C) is greater than the
amount described in subclause (II) of clause (i) of subparagraph (C),
the county auditor shall, on or before January 31 of the following
fiscal year, reallocate from the entity to the county Educational
Revenue Augmentation Fund the difference between those amounts.
(ii) If, for any county or city, the amount described in subclause
(I) of clause (i) of subparagraph (C) is less than the amount
described in subclause (II) of clause (i) of subparagraph (C), the
county auditor shall, on or before January 31 of the following fiscal
year, reallocate from the county Educational Revenue Augmentation
Fund to that entity the difference between those amounts.
(3) If Section 7203.1 ceases to be operative on an
or after April 1 and before July 1 of
a fiscal year during the fiscal adjustment period, all of the
following apply:
(A) On or before May 1 of that fiscal year, the director shall
determine and report to the auditor of each county that portion of
the countywide adjustment amount that is attributable to the
estimated sales and use tax revenue losses, resulting from the rate
suspension applied by Section 7203.1, for the fourth quarter of that
fiscal year for the county and each city in the county.
(B) The auditor shall reduce the total amount that is otherwise
required to be allocated in May of that fiscal year from the county
Sales and Use Tax Compensation Fund to the county and each city in
the county by the amount reported by the director with respect to
that entity under subparagraph (A). After the May allocations have
been made, the auditor shall transfer any moneys remaining in the
county Sales and Use Tax Compensation Fund to the county Educational
Revenue Augmentation Fund.
(C) On or before January 1 of the next fiscal year, the
State Board of Equalization board shall report
to the director the actual total amount of local sales and use tax
revenue that was not transmitted to the county and each city in the
county for the prior fiscal year as a result of the 0.25 percent
suspension of local sales and use tax authority applied by Section
7203.1. On or before January 1 of that fiscal year, the director
shall do both of the following:
(i) Determine the difference between the following two amounts:
(I) The total amount that was allocated to the county and each
city in the county for the prior fiscal year under subdivision (c),
as adjusted under subparagraph (B).
(II) The actual total amount of local sales and use tax revenue
that was not transmitted to the county and each city in the county
for the prior fiscal year as a result of the 0.25 percent suspension
of local sales and use tax authority applied by Section 7203.1.
(ii) Notify the auditor of each county of the amounts determined
under clause (i) for his or her county and all of the cities in that
county.
(D) (i) If, for any county or city, the amount described in
subclause (I) of clause (i) of subparagraph (C) is greater than the
amount described in subclause (II) of clause (i) of subparagraph (C),
the county auditor shall, on or before January 31 of that fiscal
year, reallocate from the entity to the county Educational Revenue
Augmentation Fund the difference between those amounts.
(ii) If, for any county or city, the amount described in subclause
(I) of clause (i) of subparagraph (C) is less than the amount
described in subclause (II) of clause (i) of subparagraph (C), the
county auditor shall, on or before January 31 of the following fiscal
year, reallocate from the county Educational Revenue Augmentation
Fund to that entity the difference between those amounts.
(4) If Section 7203.1 ceases to be operative on a
or after July 1 and before the following
October 1 , all of the following apply:
(A) On or before January 1 of that fiscal year, the State
Board of Equalization board shall notify the
Director of Finance of the actual total amount of local sales and use
tax revenue that was not transmitted to each county and city for the
prior fiscal year as a result of the 0.25 percent suspension of
local sales and use tax authority applied by Section 7203.1.
(B) On or before January 31 of that fiscal year, the director
shall do both of the following:
(i) Determine for each city, county, and city and county, the
difference between the following two amounts:
(I) The total amount that was allocated to that entity under
subdivision (c) for the prior fiscal year.
(II) The actual total amount of local sales and use tax revenue
that was not transmitted to the entity for the prior fiscal year as a
result of the 0.25 percent suspension of local sales and use tax
authority applied by Section 7203.1.
(ii) Notify the auditor of each county of the amounts determined
under clause (i) for his or her county and all of the cities in that
county.
(C) (i) If, for any county or city, the amount described in
subclause (I) of clause (i) of subparagraph (B) is greater than the
amount described in subclause (II) of clause (i) of subparagraph (B),
the county auditor shall, on or before January 31 of that fiscal
year, reallocate from the entity to the county Educational Revenue
Augmentation Fund the difference between those amounts.
(ii) If, for any county or city, the amount described in subclause
(I) of clause (i) of subparagraph (B) is less than the amount
described in subclause (II) of clause (i) of subparagraph (B), the
county auditor shall, on or before January 31 of the following fiscal
year, reallocate from the county Educational Revenue Augmentation
Fund to that entity the difference between those amounts.
(e) 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, may not reflect any portion of any
property tax revenue allocation required by this section for a
preceding fiscal year.
(f) This section may 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 cities, counties,
cities and counties, or special districts pursuant to clause (i) of
subparagraph (B) of paragraph (4) of subdivision (d) of Section 97.2,
clause (i) of subparagraph (B) of paragraph (4) of subdivision (d)
of Section 97.3, or Article 4 (commencing with Section 98), had this
section not been enacted. The allocation made pursuant to
subdivisions (a) and (c) shall be adjusted to comply with this
paragraph.
(2) Require an increased ad valorem property tax revenue
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 determined or allocated in
a county.
(g) Existing 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 shall be
deemed to be temporarily modified to account for the reduced sales
and use tax revenues, resulting from the temporary reduction in the
local sales and use tax rate, with those reduced revenues to be
replaced in kind by property tax revenue from a Sales and Use Tax
Compensation Fund or an Educational Revenue Augmentation Fund, on a
temporary basis, as provided by this section.
SEC. 3. Section 7203.1 of the Revenue
and Taxation Code is amended to read:
7203.1. (a) Notwithstanding any other provision of
law, during the revenue exchange period only, the authority
of a county or a city under this part to impose a tax rate as
specified in an ordinance adopted pursuant to Sections 7202 and 7203
is suspended, and the tax rate to be applied instead during that
period under any ordinance as so adopted is the applicable of the
following:
(1) In the case of a county, 1 percent.
(2) In the case of a city, three-quarters of 1 percent or less.
(b) For purposes of this section, "revenue exchange period" means
the period on and after July 1, 2004, and before the first
day of the first calendar quarter commencing more than 90 days
following a notification to the board by the Director of Finance
pursuant to subdivision (b) of Section 99006 of the Government Code
through and including June 30, 2011 .
(c) Subdivision (a) is a self-executing provision that operates
without regard to any decision or act on the part of any local
government. A change in a local general tax rate resulting from
either the rate limitations applied by subdivision (a) or the end of
the revenue exchange period is not subject to voter approval under
either statute or Article XIII C of the California Constitution.
(d) Existing 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 shall be
deemed to be temporarily modified to account for the reduction in
sales and use tax revenues resulting from this section, with those
reduced revenues to be replaced as may otherwise be provided by law.
(e) This section shall cease to be operative on July 1, 2011.
SEC. 4. The sum of one thousand dollars ($1,000)
is hereby appropriated from the General Fund to the State Board of
Equalization for administrative operations.
SEC. 5. 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.
SEC. 6. This act addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation on January
20, 2011, pursuant to subdivision (f) of Section 10 of Article IV of
the California Constitution.
SEC. 7. This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately.
SECTION 1. It is the intent of the Legislature
to enact statutory changes relating to the Budget Act of 2011.
SEC. 2. This act addresses the fiscal emergency
declared and reaffirmed by the Governor by proclamation on January
20, 2011, pursuant to subdivision (f) of Section 10 of Article IV of
the California Constitution.
