AB 18

Bill Subjects

Abstract

(1) Existing law, until July 1, 2011, imposes a state sales and use tax on retailers and on the storage, use, or other consumption of tangible personal property in this state at the rate of 714% of the gross receipts from the retail sale of tangible personal property in this state and of the sales price of tangible personal property purchased from any retailer for storage, use, or other consumption in this state. Existing law reduces the state sales and use tax rate by 1% on July 1, 2011. The Vehicle License Fee Law establishes, until July 1, 2011, in lieu of any ad valorem property tax upon vehicles, an annual license fee for any vehicle subject to registration in this state in the amount of 1.15% of the market value of that vehicle, as provided. Existing law, on and after July 1, 2011, reduces that rate to 0.65%. This bill would extend the existing sales and use tax rate and vehicle license fees until July 1, 2012, and would deposit the revenues derived from that extension into the Local Revenue Fund 2011, established by this bill, to be appropriated by the Legislature to fund the provision of public safety services, as described. This bill would require local county officials to create a County Local Revenue Fund 2011, and would require the money in the County Local Revenue Fund 2011 to be used exclusively to fund the provision of public safety services by local agencies pursuant to the 2011 Realignment Legislation, as defined. By imposing new duties upon local county officials with respect to the creation of the County Local Revenue Fund 2011, this bill would impose a state-mandated local program. This bill would additionally require, when the rates in the above-described taxes cease to be operative, the state to annually provide moneys in at least an equivalent amount to fund the provision of public safety services, and would make an appropriation for this purpose from the General Fund if the Legislature does not appropriate sufficient funds for this purpose and transfer the moneys, as specified. (2) The Personal Income Tax Law imposes taxes based upon taxable income. That law also allows credits for personal exemptions, and imposes an alternative minimum tax, as specified. Existing law, for taxable years beginning on or after January 1, 2009, and before January 1, 2011, decreased the amount allowable as a credit for personal exemption for dependents, increased the tax rate applicable to taxable income, and increased the alternative minimum tax rate, as provided. This bill would continue the decrease in the amount allowable as a credit for personal exemption for dependents for taxable years beginning on or after January 1, 2011, and before January 1, 2013, and would increase the tax rate applicable to taxable income and the alternative minimum tax rate for taxable years beginning on or after January 1, 2012, and before January 1, 2013. This bill would require the additional revenue received from the imposition of these tax rates and from the continuation of the credit amounts to be used exclusively for the support of school districts and community college districts. (3) 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. (4) 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. (5) This bill would declare that it is to take effect immediately as an urgency statute.