SB 11

Bill Subjects

Abstract

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. 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.