MFP: AB 2878

AB 2878, as introduced, Wiggins. Local government finance.

Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction's portion of the annual tax increment, as defined.

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes a county to impose a local sales and use tax at a rate of 1.25%, and similarly authorizes a city, located within a county imposing such a tax rate, to impose a local sales tax rate of 1% that is credited against the county rate. Existing law requires a city, county, or city and county imposing a local sales and use tax pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law to contract with the State Board of Equalization to administer the local sales and use tax. Existing law also requires the board, at least twice during each calendar quarter, to transmit local sales and use tax revenue to the city, county, or city and county in which the revenue was collected.

The Vehicle License Fee (VLF) Law establishes, 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 2% of the market value of that vehicle, as specified, but offsets this amount by 67.5% for vehicle license fees with a final due date on or after July 1, 2001. The California Constitution requires that revenues generated from the annual vehicle license fee be allocated to cities and counties. The VLF law provides that General Fund moneys be transferred, as specified, to cities and counties to compensate for reduced revenues resulting from VLF offsets.

This bill would increase the amount of ad valorem property tax revenue allocated to a city or county in the 2001-02 fiscal year by an amount equal to the amount of General Fund moneys, as specified, received in the 2001-02 fiscal year by that city or county as compensation for revenue losses resulting from VLF offsets. This bill would also decrease the amount of property tax revenue allocated to a school district in the 2001-02 fiscal year by an amount equal to the amount of General Fund moneys, as specified, received in the 2001-02 fiscal year by a city or county, in the same tax rate area as that school district, to compensate for revenue losses resulting from VLF offsets.

This bill would prohibit, on or after July 1, 2002, a city from imposing a sales and use tax rate under the Bradley-Burns Uniform Local Sales and Use Tax Law in excess of 0.85%, unless an additional increase, specified by this bill, in the amount of property tax revenue allocated to that city fails to fully compensate for the revenue loss resulting from this rate restriction. This bill would also increase the amount of ad valorem property tax allocated to a city in the 2001-02 fiscal year by an amount, not to exceed a specified limit, that is otherwise equal to the difference between the amount of sales and use tax revenue received by a city in the 2001-02 fiscal year and the amount that city would have received if that city had imposed a 0.85% rate in that fiscal year. This bill would also commensurately reduce the amount of ad valorem property tax revenue allocated to a county in the 2001-02 fiscal year by an amount equal to these increased allocations to cities.

By requiring local auditors to implement the new revenue allocations required by these provisions, this bill would impose a state-mandated local program.

This bill would also require the Department of Finance, on or before October 1, 2002, to make certain calculations required to implement these revenue allocation increases and reductions.

This bill would also prohibit any allocation to redevelopment agencies of any of the revenues shifted by the bill.

This bill would also prohibit, on and after July 1, 2002, the state from transferring General Fund moneys to cities and counties to fund VLF offsets.

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, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000.

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 take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

SECTION 1. This act shall be known and may be cited as the Fair Allocation of Revenues to Entities Act of 2002.

SEC. 2. Section 96.11 is added to the Revenue and Taxation Code, to read:

96.11. (a) Notwithstanding any other provision of law, the computations and allocations made by each county pursuant to Section 96.1 shall be modified for the 2001-02 fiscal year as follows:

(1) (A) The total amount of ad valorem property tax revenue otherwise allocated to a city or a county shall be increased by an amount equal to the amount of revenue received by that city or county during the 2001-02 fiscal year pursuant to paragraph (1) of subdivision (a) of Section 11000.

(B) The total amount of ad valorem property tax revenue otherwise allocated to a school district in each tax rate area shall be reduced by an amount equal to the amount of additional revenue allocated to a city or a county, pursuant to subparagraph (A), in that tax rate area.

(2) (A) The total amount of ad valorem property tax revenue otherwise allocated to a city shall be increased by an amount that is equal to the reduction in the amount of sales and use tax revenue received by that city in the 2001-02 fiscal year that would have occurred had the city imposed a sales and use tax rate of 0.85 percent during that fiscal year, except that the amount of this increase may not exceed the total amount of ad valorem property tax revenue allocated to the county in those tax rate areas including the county and that city.

(B) The total amount of ad valorem property tax revenue otherwise allocated to the county shall be reduced by an amount equal to the total amount of increases allocated to cities in the county pursuant to subparagraph (A).

(b) The Department of Finance shall make the calculations required by subdivision (a) with respect to Section 11000 and sales and use tax revenues, and shall, on or before October 1, 2002, notify the auditor of each county of the allocations required pursuant to these calculations.

(c) (1) It is the intent of the Legislature that school districts be reimbursed, pursuant to Section 42238 of the Education Code, for any decreases in the amount of ad valorem property tax revenue allocated to school districts as a result of the implementation of subparagraph (B) of paragraph (1) of subdivision (a).

(2) If a school district is no longer an excess school tax entity as a result of subparagraph (B) of paragraph (1) of subdivision (a), that entity shall receive from the state an amount equal to the difference between the following amounts:

(A) The amount of moneys that would otherwise be required to be apportioned to that entity pursuant to Section 42238 of the Education Code.

(B) The school district's allocation reduction pursuant to subparagraph (B) of paragraph (1) of subdivision (a).

(d) Notwithstanding any other provision of law, ad valorem property tax revenue that is reallocated pursuant to subdivision (a) may not be allocated, either directly or indirectly, to a redevelopment agency.

(e) For the 2002-03 fiscal year and each fiscal year thereafter, ad valorem property tax revenue allocations made pursuant to Section 96.1 shall incorporate the allocation adjustments required by this section.

SEC. 3. Section 7202 of the Revenue and Taxation Code is amended to read:

7202. The sales tax portion of any sales and use tax ordinance adopted under this part shall be imposed for the privilege of selling tangible personal property at retail, and shall include provisions in substance as follows:

(a) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the county at the rate of 11/4 percent of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the county.

(b) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales taxes, except that the name of the county as the taxing agency shall be substituted for that of the state and that an additional seller's permit shall not be required if one has been or is issued to the seller under Section 6067.

(c) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales tax and not inconsistent with this part, shall automatically become a part of the sales tax ordinance of the county.

(d) A provision that the county shall contract prior to the effective date of the county sales and use tax ordinances with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the county. Any such contract shall contain a provision that the county agrees to comply with the provisions of Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code.

(e) A provision that the ordinance may be made inoperative not less than 60 days, but not earlier than the first day of the calendar quarter, following the county's lack of compliance with Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code or following an increase by any city within the county of the rate of its sales or use tax above the rate in effect at the time the county ordinance was enacted.

(f) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

(g) A provision that there is exempted from the sales tax 80 percent of the gross receipts from the sale of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(h) A provision that any person subject to a sales and use tax under the county ordinance shall be entitled to credit against the payment of taxes due under that ordinance the amount of sales and use tax due to any city in the county; provided, that the city sales and use tax is levied under an ordinance including provisions in substance as follows:

(1) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the city at the a percentage rate of 1 percent or less , as determined pursuant to Section 7202.1, of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the city and a use tax of 1 percent or less at a percentage rate, determined pursuant to Section 7202.1, of the purchase price upon the storage, use or other consumption of tangible personal property purchased from a retailer for storage, use or consumption in the city.

(2) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales and use taxes, except that the name of the city as the taxing agency shall be substituted for that of the state (but the name of the city shall not be substituted for the word "state" in the phrase "retailer engaged in business in this state" in Section 6203 nor in the definition of that phrase in Section 6203) and that an additional seller's permit shall not be required if one has been or is issued to the seller under Section 6067.

(3) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales and use tax and not inconsistent with this part, shall automatically become a part of the sales and use tax ordinance of the city.

(4) A provision that the city shall contract prior to the effective date of the city sales and use tax ordinance with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the city which shall continue in effect so long as the county within which the city is located has an operative sales and use tax ordinance enacted pursuant to this part.

(5) A provision that the storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with this part by any city and county, county, or city in this state, shall be exempt from the tax due under this ordinance.

(6) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

(7) A provision that there are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(8) A provision that, in addition to the exemptions provided in Sections 6366 and 6366.1, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by the operators directly and exclusively in the use of the aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempt from the use tax.

SEC. 4. Section 7202.1 is added to the Revenue and Taxation Code, to read:

7202.1. (a) Notwithstanding any other provision of law, on and after July 1, 2002, the maximum sales and use tax rate that may be imposed by a city pursuant to paragraph (1) of subdivision (h) of Section 7202 is, except as provided in subdivision (b), 0.85 percent.

(b) Notwithstanding subdivision (a), if the amount of the increase in the total amount of property tax revenue, allocated to a city pursuant to subparagraph (A) of paragraph (2) of subdivision (a) of Section 96.11, is less than the reduction in the amount of sales and use tax revenue that would have been received by that city in the 2001-02 fiscal year pursuant to Section 7204, had the city imposed during that fiscal year a local sales and use tax rate of 0.85 percent, the city may impose a sales and use tax rate that exceeds 0.85 percent to that extent necessary to generate additional revenues in an amount that fully offsets this reduction.

SEC. 5. Section 11000.2 is added to the Revenue and Taxation Code, to read:

11000.2. Notwithstanding any other provision of law, on and after July 1, 2002, the state may not transfer any moneys from the General Fund to fund Vehicle License Fee Law offsets pursuant to Section 11000.

SEC. 6. Notwithstanding Section 17610 of the Government Code, 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. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

SEC. 7. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order for the allocations of revenue to local government to be effective in the 2002-03 fiscal year, which begins on July 1, 2002, it is necessary that this act take immediate effect.



		Bill Number: AB 2878 Introduced BILL TEXT INTRODUCED BY Assembly Member Wiggins FEBRUARY 25, 2002 An act to amend Section 7202 of, and to add Sections 96.11, 7202.1, and 11000.2 to, the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2878, as introduced, Wiggins. Local government finance. Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction's portion of the annual tax increment, as defined. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes a county to impose a local sales and use tax at a rate of 1.25%, and similarly authorizes a city, located within a county imposing such a tax rate, to impose a local sales tax rate of 1% that is credited against the county rate. Existing law requires a city, county, or city and county imposing a local sales and use tax pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law to contract with the State Board of Equalization to administer the local sales and use tax. Existing law also requires the board, at least twice during each calendar quarter, to transmit local sales and use tax revenue to the city, county, or city and county in which the revenue was collected. The Vehicle License Fee (VLF) Law establishes, 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 2% of the market value of that vehicle, as specified, but offsets this amount by 67.5% for vehicle license fees with a final due date on or after July 1, 2001. The California Constitution requires that revenues generated from the annual vehicle license fee be allocated to cities and counties. The VLF law provides that General Fund moneys be transferred, as specified, to cities and counties to compensate for reduced revenues resulting from VLF offsets. This bill would increase the amount of ad valorem property tax revenue allocated to a city or county in the 2001-02 fiscal year by an amount equal to the amount of General Fund moneys, as specified, received in the 2001-02 fiscal year by that city or county as compensation for revenue losses resulting from VLF offsets. This bill would also decrease the amount of property tax revenue allocated to a school district in the 2001-02 fiscal year by an amount equal to the amount of General Fund moneys, as specified, received in the 2001-02 fiscal year by a city or county, in the same tax rate area as that school district, to compensate for revenue losses resulting from VLF offsets. This bill would prohibit, on or after July 1, 2002, a city from imposing a sales and use tax rate under the Bradley-Burns Uniform Local Sales and Use Tax Law in excess of 0.85%, unless an additional increase, specified by this bill, in the amount of property tax revenue allocated to that city fails to fully compensate for the revenue loss resulting from this rate restriction. This bill would also increase the amount of ad valorem property tax allocated to a city in the 2001-02 fiscal year by an amount, not to exceed a specified limit, that is otherwise equal to the difference between the amount of sales and use tax revenue received by a city in the 2001-02 fiscal year and the amount that city would have received if that city had imposed a 0.85% rate in that fiscal year. This bill would also commensurately reduce the amount of ad valorem property tax revenue allocated to a county in the 2001-02 fiscal year by an amount equal to these increased allocations to cities. By requiring local auditors to implement the new revenue allocations required by these provisions, this bill would impose a state-mandated local program. This bill would also require the Department of Finance, on or before October 1, 2002, to make certain calculations required to implement these revenue allocation increases and reductions. This bill would also prohibit any allocation to redevelopment agencies of any of the revenues shifted by the bill. This bill would also prohibit, on and after July 1, 2002, the state from transferring General Fund moneys to cities and counties to fund VLF offsets. 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, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. 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 take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. This act shall be known and may be cited as the Fair Allocation of Revenues to Entities Act of 2002. SEC. 2. Section 96.11 is added to the Revenue and Taxation Code, to read: 96.11. (a) Notwithstanding any other provision of law, the computations and allocations made by each county pursuant to Section 96.1 shall be modified for the 2001-02 fiscal year as follows: (1) (A) The total amount of ad valorem property tax revenue otherwise allocated to a city or a county shall be increased by an amount equal to the amount of revenue received by that city or county during the 2001-02 fiscal year pursuant to paragraph (1) of subdivision (a) of Section 11000. (B) The total amount of ad valorem property tax revenue otherwise allocated to a school district in each tax rate area shall be reduced by an amount equal to the amount of additional revenue allocated to a city or a county, pursuant to subparagraph (A), in that tax rate area. (2) (A) The total amount of ad valorem property tax revenue otherwise allocated to a city shall be increased by an amount that is equal to the reduction in the amount of sales and use tax revenue received by that city in the 2001-02 fiscal year that would have occurred had the city imposed a sales and use tax rate of 0.85 percent during that fiscal year, except that the amount of this increase may not exceed the total amount of ad valorem property tax revenue allocated to the county in those tax rate areas including the county and that city. (B) The total amount of ad valorem property tax revenue otherwise allocated to the county shall be reduced by an amount equal to the total amount of increases allocated to cities in the county pursuant to subparagraph (A). (b) The Department of Finance shall make the calculations required by subdivision (a) with respect to Section 11000 and sales and use tax revenues, and shall, on or before October 1, 2002, notify the auditor of each county of the allocations required pursuant to these calculations. (c) (1) It is the intent of the Legislature that school districts be reimbursed, pursuant to Section 42238 of the Education Code, for any decreases in the amount of ad valorem property tax revenue allocated to school districts as a result of the implementation of subparagraph (B) of paragraph (1) of subdivision (a). (2) If a school district is no longer an excess school tax entity as a result of subparagraph (B) of paragraph (1) of subdivision (a), that entity shall receive from the state an amount equal to the difference between the following amounts: (A) The amount of moneys that would otherwise be required to be apportioned to that entity pursuant to Section 42238 of the Education Code. (B) The school district's allocation reduction pursuant to subparagraph (B) of paragraph (1) of subdivision (a). (d) Notwithstanding any other provision of law, ad valorem property tax revenue that is reallocated pursuant to subdivision (a) may not be allocated, either directly or indirectly, to a redevelopment agency. (e) For the 2002-03 fiscal year and each fiscal year thereafter, ad valorem property tax revenue allocations made pursuant to Section 96.1 shall incorporate the allocation adjustments required by this section. SEC. 3. Section 7202 of the Revenue and Taxation Code is amended to read: 7202. The sales tax portion of any sales and use tax ordinance adopted under this part shall be imposed for the privilege of selling tangible personal property at retail, and shall include provisions in substance as follows: (a) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the county at the rate of 11/4 percent of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the county. (b) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales taxes, except that the name of the county as the taxing agency shall be substituted for that of the state and that an additional seller's permit shall not be required if one has been or is issued to the seller under Section 6067. (c) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales tax and not inconsistent with this part, shall automatically become a part of the sales tax ordinance of the county. (d) A provision that the county shall contract prior to the effective date of the county sales and use tax ordinances with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the county. Any such contract shall contain a provision that the county agrees to comply with the provisions of Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code. (e) A provision that the ordinance may be made inoperative not less than 60 days, but not earlier than the first day of the calendar quarter, following the county's lack of compliance with Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code or following an increase by any city within the county of the rate of its sales or use tax above the rate in effect at the time the county ordinance was enacted. (f) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer. (g) A provision that there is exempted from the sales tax 80 percent of the gross receipts from the sale of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government. (h) A provision that any person subject to a sales and use tax under the county ordinance shall be entitled to credit against the payment of taxes due under that ordinance the amount of sales and use tax due to any city in the county; provided, that the city sales and use tax is levied under an ordinance including provisions in substance as follows: (1) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the city at the a percentage rate of 1 percent or less , as determined pursuant to Section 7202.1, of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the city and a use tax of 1 percent or less at a percentage rate, determined pursuant to Section 7202.1, of the purchase price upon the storage, use or other consumption of tangible personal property purchased from a retailer for storage, use or consumption in the city. (2) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales and use taxes, except that the name of the city as the taxing agency shall be substituted for that of the state (but the name of the city shall not be substituted for the word "state" in the phrase "retailer engaged in business in this state" in Section 6203 nor in the definition of that phrase in Section 6203) and that an additional seller's permit shall not be required if one has been or is issued to the seller under Section 6067. (3) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales and use tax and not inconsistent with this part, shall automatically become a part of the sales and use tax ordinance of the city. (4) A provision that the city shall contract prior to the effective date of the city sales and use tax ordinance with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the city which shall continue in effect so long as the county within which the city is located has an operative sales and use tax ordinance enacted pursuant to this part. (5) A provision that the storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with this part by any city and county, county, or city in this state, shall be exempt from the tax due under this ordinance. (6) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer. (7) A provision that there are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government. (8) A provision that, in addition to the exemptions provided in Sections 6366 and 6366.1, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by the operators directly and exclusively in the use of the aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempt from the use tax. SEC. 4. Section 7202.1 is added to the Revenue and Taxation Code, to read: 7202.1. (a) Notwithstanding any other provision of law, on and after July 1, 2002, the maximum sales and use tax rate that may be imposed by a city pursuant to paragraph (1) of subdivision (h) of Section 7202 is, except as provided in subdivision (b), 0.85 percent. (b) Notwithstanding subdivision (a), if the amount of the increase in the total amount of property tax revenue, allocated to a city pursuant to subparagraph (A) of paragraph (2) of subdivision (a) of Section 96.11, is less than the reduction in the amount of sales and use tax revenue that would have been received by that city in the 2001-02 fiscal year pursuant to Section 7204, had the city imposed during that fiscal year a local sales and use tax rate of 0.85 percent, the city may impose a sales and use tax rate that exceeds 0.85 percent to that extent necessary to generate additional revenues in an amount that fully offsets this reduction. SEC. 5. Section 11000.2 is added to the Revenue and Taxation Code, to read: 11000.2. Notwithstanding any other provision of law, on and after July 1, 2002, the state may not transfer any moneys from the General Fund to fund Vehicle License Fee Law offsets pursuant to Section 11000. SEC. 6. Notwithstanding Section 17610 of the Government Code, 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. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund. SEC. 7. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order for the allocations of revenue to local government to be effective in the 2002-03 fiscal year, which begins on July 1, 2002, it is necessary that this act take immediate effect.
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Bill Number: AB 2878 Introduced