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AB-1221 Taxation.(2003-2004)

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AB1221:v96#DOCUMENT

Amended  IN  Assembly  March 25, 2003
Amended  IN  Assembly  April 21, 2003
Amended  IN  Assembly  June 02, 2003

CALIFORNIA LEGISLATURE— 2003–2004 REGULAR SESSION

Assembly Bill No. 1221


Introduced  by  Assembly Member Steinberg, Campbell
(Principal Coauthor(s): Assembly Member Montanez)
(Coauthor(s): Assembly Member Chan, Leno, Lieber, Mullin, Wiggins)

February 21, 2003


An act to amend Section 29530 of, and to add Chapter 6.3 (commencing with Section 30020) to Division 3 of Title 3 of, the Government Code, to amend Sections 6051, 6201, 7202, 7202 and 7203 of, and to add Section 97.68 to, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 1221, as amended, Steinberg. Taxation.
(1) 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. Existing property tax law also reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992–93 and 1993–94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.
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 11/4%, 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.
This bill would, on and after July 1, 2004, of the base fiscal year, as defined, prohibit a city from imposing a sales and use tax under the Bradley-Burns Uniform Local Sales and Use Tax Law at a rate in excess of1/2 of 1% and prohibit a county from imposing sales and use tax under that law at a rate in excess of 3/4 of 1%.
This bill would also, for the 2004–05 base fiscal year, as defined, increase the amount of ad valorem property tax revenue deemed allocated to a county or city in the 2003–04 immediately preceding fiscal year by that county or city’s reimbursement amount, as defined, and correspondingly decrease the amount of ad valorem property tax revenue allocated to a county’s Educational Revenue Augmentation Fund by the countywide adjustment amount, as defined. This bill would also, for the fiscal year immediately following the base fiscal year, increase the amount of ad valorem property tax revenue deemed allocated to a county or city in the base fiscal year by that county or city’s adjusted reimbursement amount, as defined, and correspondingly decrease the amount of ad valorem property tax revenue allocated to a county’s Educational Revenue Augmentation Fund by the adjusted countywide adjustment amount, as defined. This bill would also prohibit these provisions from being construed to require the auditor to allocate additional ad valorem property tax revenues to a redevelopment agency. This bill would also require the board to make certain calculations and to notify county auditors of these calculations. This bill would render inoperative other provisions of the bill if a specified statute is amended in a manner that reduces the amount of ad valorem property tax revenue that is allocated to cities and counties under the bill. This bill would also make conforming changes to corresponding provisions. By imposing new duties upon local tax officials in the annual allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.

(2)The California Constitution requires for each fiscal year that a minimum amount of money, computed under one of 3 formulas, be set aside from all state revenues for the support of school districts and community college districts.

This bill would state the intent of the Legislature that the state maintain its aggregate funding obligations under these provisions.

(3)

(2) The Sales and Use Tax Law provides for the levy of a state sales and use tax upon the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property.

This bill would, on and after July 1, 2004, increase the sales and use tax rate under that law by 12 of 1%.

This bill would result in a change in state taxes for the purpose of increasing revenues within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. (4)property. In addition to the rates imposed pursuant to that law, the California Constitution imposes a sales and use tax at a rate of1/2 of 1% for allocation to qualified counties for public safety purposes, as specified. A proposed amendment to the California Constitution, ACA ___, would impose another additional sales and use tax at a rate1/2 of 1% for allocation to school entities, as specified. That measure would establish the State School Assistance Fund for Education in the State Treasury and a School Assistance Fund for Education (SAFE) in each county to receive revenues derived from the proposed additional sales and use tax, as provided.
This bill would make an appropriation by continuously appropriating moneys in the State SAFE to county SAFEs, as specified. This bill would also require county auditors to allocate moneys from a county SAFE to school districts, county offices of education, community college districts, and, if applicable, county superintendents of schools in the same manner as ad valorem property tax revenues are allocated to these entities from a county Educational Revenue Augmentation Fund. By imposing new duties upon local tax officials in the annual allocation of these revenues, this bill would impose a state-mandated local program.
This bill would become effective only if ACA ___ is approved by voters. (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, 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.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   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 California Balanced Communities Act of 2003.

SEC. 2.

 Section 29530 of the Government Code is amended to read:

29530.
 (a) If the board of supervisors so agrees by contract with the State Board of Equalization, the board of supervisors shall establish a local transportation fund in the county treasury and shall deposit in the fund all revenues transmitted to the county by the State Board of Equalization under Section 7204 of the Revenue and Taxation Code, which are derived from that portion of the taxes imposed by the county at a rate in excess of 1 percent, and on and after July 1, 2004, in excess of one-half of 1 percent, pursuant to Part 1.5 (commencing with Section 7200) of Division 2 of that code, less an allocation of the cost of the services of the State Board of Equalization in administering the sales and use tax ordinance related to the rate in excess of 1 percent, and on and after July 1, 2004, in excess of one-half of 1 percent, and of the Director of Transportation and the Controller in administering the responsibilities assigned to him or her in Chapter 4 (commencing with Section 99200) of Part 11 of Division 10 of the Public Utilities Code.
(b) Any interest or other income earned by investment or otherwise of the local transportation fund shall accrue to and be a part of the fund.

Chapter 6.3 (commencing with Section 30020) is added to Division 3 of Title 3 of the Government Code, to read:
CHAPTER  6.3. School Assistance Fund for Education (SAFE)

30020.
 (a) Notwithstanding Section 13340, moneys in the State School Assistance Fund for Education, established in the State Treasury by Section 36 of Article XIII of the California Constitution, are hereby continuously appropriated, without regard to fiscal years, to the Controller for allocation to the School Assistance Fund for Education in each county. Each county’s School Assistance Fund for Education shall be allocated an amount that is equal to the amount of revenue, less refunds, derived in that county from the taxes imposed pursuant to Section 36 of Article XIII of the California Constitution.
(b) On or before the 27th day of each month, the Controller shall allocate to each county School Assistance Fund for Education the amounts deposited and remaining unexpended and unresolved in the State School Assistance Fund for Education as of the 15th day of each month.
(c) (1) On or before August 20 of the base fiscal year, and on or before the 20th day of each month thereafter, the county auditor shall allocate moneys from a county School Assistance Fund for Education according to this subdivision to school districts and county offices of education, in total, and to community college districts, in total, in the same proportion that property tax revenues were distributed to school districts and county offices of education, in total, and community college districts, in total, during the base fiscal year.
(2) The county auditor shall, based on information provided by the county superintendent of schools pursuant to this paragraph, allocate that proportion of the revenue in the School Assistance Fund for Education to be allocated to school districts and county offices of education only to those school districts and county offices of education within the county that are not excess tax school entities, as defined in subdivision (n) of Section 95. The county superintendent of schools shall determine the amount to be allocated to each school district in inverse proportion to the amounts of property tax revenue per average daily attendance in each school district. For each county office of education, the allocation shall be made based on the historical split of base property tax revenue between the county office of education and school districts within the county. In no event shall any additional money be allocated from the School Assistance Fund for Education to a school district or county office of education upon that district or county office of education becoming an excess tax school entity. If, after determining the amount to be allocated to each school district and county office of education, the county superintendent of schools determines there are still additional funds to be allocated, the county superintendent of schools shall determine the remainder to be allocated in inverse proportion to the amounts of property tax revenue, excluding Educational Revenue Augmentation Fund moneys, per average daily attendance in each remaining school district, and on the basis of the historical split described above for each county office of education that is not an excess tax school entity, until all funds that would not result in a school district or county office of education becoming an excess tax school entity are allocated. The county superintendent of schools may determine the amounts to be allocated between each school district and county office of education to ensure that all funds that would not result in a school district or county office of education becoming an excess tax school entity are allocated.
(3) The county auditor shall, based on information provided by the Chancellor of the California Community Colleges pursuant to this paragraph, allocate that proportion of the revenue in the School Assistance Fund for Education to be allocated to community college districts only to those community college districts within the county that are not excess tax school entities, as defined in subdivision (n) of Section 95. The chancellor shall determine the amount to be allocated to each community college district in inverse proportion to the amounts of property tax revenue per funded full-time equivalent student in each community college district. In no event shall any additional money be allocated from the School Assistance Fund for Education to a community college district upon that district becoming an excess tax school entity.
(4) (A) If, after making the allocation required pursuant to paragraph (2), the auditor determines that there are still additional funds to be allocated, the auditor shall allocate those excess funds pursuant to paragraph (3). If, after making the allocation pursuant to paragraph (3), the auditor determines that there are still additional funds to be allocated, the auditor shall allocate those excess funds pursuant to paragraph (2). If, after determining the amount to be allocated to each community college district, the Chancellor of the California Community Colleges determines that there are still additional funds to be allocated, the Chancellor of the California Community Colleges shall determine the remainder to be allocated to each community college district in inverse proportion to the amounts of property tax revenue, excluding Educational Revenue Augmentation Fund moneys, per funded full-time equivalent student in each remaining community college district that is not an excess tax school entity until all funds that would not result in a community college district becoming an excess tax school entity are allocated.
(B) If, after making the allocations pursuant to paragraphs (2) and (3) and subparagraph (A), the auditor determines that there are still additional funds to be allocated, the auditor shall allocate those excess funds to the county superintendent of schools. Funds allocated pursuant to this paragraph shall be counted as property tax revenues for special education programs in augmentation of the amount calculated pursuant to Section 2572 of the Education Code, to the extent that those property tax revenues offset state aid for county offices of education and school districts within the county pursuant to subdivision (c) of Section 56836.08 of the Education Code.
(d) For purposes of this section, “base fiscal year” means the fiscal year that immediately follows the fiscal year in which Assembly Constitutional Amendment ____ of the 2003–04 Regular Session is approved by the voters.

Section 97.68 is added to the Revenue and Taxation Code, to read:

97.68.
 (a) Notwithstanding any other provision of this chapter, for purposes of annual ad valorem property tax revenue allocations in the 2004–05 base fiscal year, all of the following apply:
(1) The total amount of ad valorem property tax revenue deemed allocated to a county in the 2003–04 immediately preceding fiscal year shall be increased by the county reimbursement amount.
(2) The total amount of ad valorem property tax revenue deemed allocated to a city in the 2003–04 immediately preceding fiscal year shall be increased by that city’s city reimbursement amount.
(3) The total amount of ad valorem property tax revenue deemed allocated to a county’s Educational Revenue Augmentation Fund in the 2003–04 immediately preceding fiscal year shall be reduced by the countywide adjustment amount.

(b)For the 2004–05 fiscal year and each fiscal year thereafter,

(b) Notwithstanding any other provision of this chapter, for purposes of annual ad valorem property tax revenue allocations in the fiscal year immediately following the base fiscal year, all of the following apply:
(1) The total amount of ad valorem property tax revenue deemed allocated to a county in the base fiscal year shall be increased by the adjusted county reimbursement amount.
(2) The total amount of ad valorem property tax revenue deemed allocated to a city in the base fiscal year shall be increased by that city’s adjusted city reimbursement amount.
(3) The total amount of ad valorem property tax revenue deemed allocated to a county’s Educational Revenue Augmentation Fund in the base fiscal year shall be reduced by the adjusted countywide adjustment amount.
(c) (1) For the fiscal year immediately following the base fiscal year and each fiscal year thereafter, ad valorem property tax revenue allocations made pursuant to Section 96.1 shall fully incorporate the allocation adjustments required by this section.

(c)Any reduction resulting from subdivision (a) in the amount

(2) Notwithstanding any other provision of law, in the fiscal year that immediately follows the base fiscal year and each fiscal year thereafter, this section may not be construed to require the county auditor to allocate additional ad valorem property tax revenue to a redevelopment agency.
(d) Any reduction resulting from subdivision (a) or (b) in the amount of ad valorem property tax revenue deposited in a county’s Educational Revenue Augmentation Fund shall be applied exclusively to reduce the amount of revenue allocated from that fund to school districts and county offices of education, and may not be applied to reduce the amount of revenue allocated from that fund to community college districts.

(d)

(e) For purposes of this section:
(1) “City reimbursement amount” means the difference between the following two amounts:
(A) The amount of revenue that a city would have received pursuant to Section 7204 in the 2003–04 fiscal year fiscal year that immediately preceded the base fiscal year if that city had imposed a sales and use tax at a rate of one-half of 1 percent.
(B) The amount of revenue that the city received pursuant to Section 7204 in the 2003–04 fiscal year fiscal year that immediately preceded the base fiscal year.
(2) “County reimbursement amount” means the difference between the following two amounts:
(A) The amount of revenue that the county would have received pursuant to Section 7204 in the 2003–04 fiscal year fiscal year that immediately preceded the base fiscal year if that county had imposed a sales and use tax at a rate of three-quarters of 1 percent.
(B) The amount of revenue that the county received pursuant to Section 7204 in the 2003–04 fiscal year fiscal year that immediately preceded the base fiscal year.
(3) “Countywide adjustment amount” means the combined total amounts determined pursuant to paragraphs (2) and (3) (1) and (2) for the county and each city in that county.
(4) (A) “Adjusted city reimbursement amount” means, with respect to a city, the difference between the following two amounts:
(i) The product, rounded to the nearest cent, of the following two amounts:
(I) 0.5.
(II) The sum of the following two amounts:
(aa) That city’s city reimbursement amount.
(ab) The amount of revenue that that city received in the base fiscal year pursuant to Section 7204.
(ii) That city’s city reimbursement amount.
(B) Notwithstanding subparagraph (A), if a city’s city reimbursement amount equals or exceeds the amount determined in clause (i) of subparagraph (A), that city does not have an adjusted city reimbursement amount.
(5) (A) “Adjusted county reimbursement amount” means, with respect to a county, the difference between the following two amounts:
(i) The product, rounded to the nearest cent, of the following two amounts:
(I) 0.5.
(II) The sum of the following two amounts:
(aa) That county’s county reimbursement amount.
(ab) The amount of revenue that that county received in the base fiscal year pursuant to Section 7204.
(ii) That county’s county reimbursement amount.
(B) Notwithstanding subparagraph (A), if a county’s county reimbursement amount equals or exceeds the amount determined in clause (i) of subparagraph (A), that county does not have an adjusted county reimbursement amount.
(6) “Adjusted countywide adjustment amount” means the combined total amounts, if any, determined pursuant to paragraphs (4) and (5) for the county and each city in that county.
(7) “Base fiscal year” means the fiscal year that immediately follows the fiscal year in which Assembly Constitutional Amendment ___ of the 2003–04 Regular Session is approved by the voters.
(8) The board shall make the calculations specified in paragraphs (1) and (2), and shall notify the auditor of each county of these amounts on or before July 14, 2004.

SEC. 4.Section 6051 of the Revenue and Taxation Code is amended to read:
6051.

For the privilege of selling tangible personal property at retail a tax is hereby imposed upon all retailers at the rate of 212 percent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in this state on or after August 1, 1933, and to and including June 30, 1935, and at the rate of 3 percent thereafter, and at the rate of 212 percent on and after July 1, 1943, and to and including June 30, 1949, and at the rate of 3 percent on and after July 1, 1949, and to and including July 31, 1967, and at the rate of 4 percent on and after August 1, 1967, and to and including June 30, 1972, and at the rate of 334 percent on and after July 1, 1972, and to and including June 30, 1973, and at the rate of 434 percent on and after July 1, 1973, and to and including September 30, 1973, and at the rate of 334 percent on and after October 1, 1973, and to and including March 31, 1974, and at the rate of 434 percent to and including June 30, 2004, and at the rate of 514 percent on and after July 1, 2004.

SEC. 5.Section 6201 of the Revenue and Taxation Code is amended to read:
6201.

An excise tax is hereby imposed on the storage, use, or other consumption in this state of tangible personal property purchased from any retailer on or after July 1, 1935, for storage, use, or other consumption in this state at the rate of 3 percent of the sales price of the property, and at the rate of 212 percent on and after July 1, 1943, and to and including June 30, 1949, and at the rate of 3 percent on and after July 1, 1949, and to and including July 31, 1967, and at the rate of 4 percent on and after August 1, 1967, and to and including June 30, 1972, and at the rate of 334 percent on and after July 1, 1972, and to and including June 30, 1973, and at the rate of 434 percent on and after July 1, 1973, and to and including September 30, 1973, and at the rate of 334 percent on and after October 1, 1973, and to and including March 31, 1974, and at the rate of 434 percent to and including June 30, 2004, and at the rate of 514 percent on and after July 1, 2004.

of these amounts on or before July 14 of the base fiscal year.
(9) The board shall make the calculations specified in paragraphs (4) and (5), and shall notify the auditor of each county of these amounts on or before July 14 of the fiscal year immediately following the base fiscal year.
Section 7202 of the Revenue and Taxation Code is amended to read:

7202.
 (a) 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)

(1) 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, and on and after July 1, 2004 July 1 of the base fiscal year, three-quarters of 1 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)

(2) 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)

(3) 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)

(4) 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. This 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)

(5) 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)

(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.

(g)

(7) 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)

(8) 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) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the city at the rate of 1 percent or less, and on and after July 1, 2004 July 1 of the base fiscal year, one-half of 1 percent or less, 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 of 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)

(B) 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)

(C) 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)

(D) 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)

(E) 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)

(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.

(7)

(G) 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)

(H) 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.

(b) For purposes of this section, “base fiscal year” means the fiscal year that immediately follows the fiscal year in which Assembly Constitutional Amendment ____ of the 2003–04 Regular Session is approved by voters.
Section 7203 of the Revenue and Taxation Code is amended to read:

7203.
 (a) The use tax portion of any sales and use tax ordinance adopted under this part shall impose a complementary tax upon the storage, use or other consumption in the county of tangible personal property purchased from any retailer for storage, use or other consumption in the county. That tax shall be at the rate of 11/4 percent, and on and after July 1, 2004 July 1 of the base fiscal year, three-quarters of 1 percent, of the sales price of the property whose storage, use or other consumption is subject to the tax and shall include:

(a)

(1) Provisions identical to the provisions contained in Part 1 (commencing with Section 6001), other than Section 6201 insofar as those provisions relate to the use tax, except that the name of the county as the taxing agency enacting the ordinance shall be substituted for that of the state (but the name of the county 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).

(b)

(2) A provision that all amendments subsequent to the date of the ordinance to the provisions of the Revenue and Taxation Code relating to the use tax and not inconsistent with this part shall automatically become a part of the ordinance.

(c)

(3) 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.

(d)

(4) 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.

(e)

(5) 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, other than fuel or petroleum products, 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 80 percent of the use tax.

SEC. 8.

It is the intent of the Legislature in enacting this act that the state maintain its aggregate funding obligations under Section 8 of Article XVI of the California Constitution.

SEC. 9.

If Section 97.68 of the Revenue and Taxation Code is amended in a manner that results in a reduction in the amount of ad valorem property tax revenue that is allocated to a city or county pursuant to this act, Sections 2, 3, 4, 5, 6, 7, and 8 of this act shall cease to be operative.

(b) For purposes of this section, “base fiscal year“ means the fiscal year that immediately follows the fiscal year in which Assembly Constitutional Amendment ____ of the 2003–04 Regular Session is approved by the voters.

SEC. 7.

 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. 8.

 This act shall take effect only if Assembly Constitutional Amendment ____ of the 2003–04 Regular Session is approved by voters and, in that event, shall take effect on the date this act would otherwise take effect or on the day after the election in which the voters approve that measure, whichever is later.