ACA 2

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 measure would extend the existing sales and use tax rate and vehicle license fees until July 1, 2016, and would deposit the revenues derived from the increase in those taxes into the Local Revenue Fund 2011, established by this measure, to be appropriated by the Legislature to fund the provision of public safety services, as described, by local agencies pursuant to the 2011 Realignment Legislation, as defined. This measure would also provide that the assignment of responsibilities to local agencies under the 2011 Realignment Legislation shall not be reimbursable as a new program or higher level of service, but would require reimbursement to local agencies resulting from subsequent state actions under certain circumstances. This measure would further state that local agency costs increased in complying with statutory open meeting requirements shall not be deemed a reimbursable state mandate. This measure would additionally provide, when the rates in the above-described taxes cease to be operative, for the appropriation of state funds in an equivalent amount to fund the provision of Public Safety Services. (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 measure would continue the decrease in the amount allowable as a credit for personal exemption for dependents, the increase in the tax rate applicable to taxable income, and the increase in the alternative minimum tax rate for taxable years beginning before January 1, 2016. This bill would require the Controller to deposit 6.5% of the net personal income tax receipts, as defined, into the Education Protection Account, established by this measure. Funds in the account would be appropriated by the Legislature for the support of school districts and community college districts, and would apply to the state's constitutional minimum funding obligation under Proposition 98.