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AB-680 Land use: sales and use tax and property tax revenue allocation.(2001-2002)

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Amended  IN  Assembly  April 30, 2001
Amended  IN  Assembly  May 14, 2001
Amended  IN  Assembly  May 24, 2001
Amended  IN  Assembly  January 14, 2002
Amended  IN  Assembly  January 29, 2002
Amended  IN  Senate  May 14, 2002
Amended  IN  Senate  June 17, 2002
Amended  IN  Senate  August 21, 2002

CALIFORNIA LEGISLATURE— 2001–2002 REGULAR SESSION

Assembly Bill
No. 680

Introduced  by  Assembly Member Steinberg
 (Coauthor(s): Assembly Member Kehoe)

February 22, 2001

An act to add Article 10 (commencing with Section 65500) to Chapter 3 of Division 1 of Title 7 of the Government Code, and to add Chapter 1.5 (commencing with Section 7215) to Part 1.5 of Division 2 of the Revenue and Taxation Code, relating to land use.


LEGISLATIVE COUNSEL'S DIGEST


AB 680, as amended, Steinberg. Land use: sales and use tax and property tax revenue allocation.
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 and use 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, pursuant to specified definitions and procedures, require the board to distribute sales and use tax revenue, derived from the application of a 1% tax rate by a qualified or electing county or city in the greater Sacramento region, among those same counties and cities on the basis of (1) the amount of sales and use tax revenue that those counties and cities received in the 2003 calendar year, as annually adjusted for inflation, as provided, and (2) the relative populations of those counties and cities, as determined by the board and the population research unit of the Department of Finance. The bill would provide that up to 1/3 of the sales and use tax revenue growth be shifted away from those counties and cities in the region that fail to become housing eligible, as defined, and require those revenues to instead be allocated to the Sacramento Area Council of Governments (SACOG) for the funding of regional projects, as defined, unless certain revenue targets are not met, in which case this bill would provide that all of these revenues be allocated in the manner prescribed by existing law. By imposing allocation duties upon SACOG, this bill would create a state-mandated local program.

This bill would also state the intent of the Legislature to create the Greater Sacramento Regional Open Space and Recreation Conservancy to acquire open-space land.

This bill would make legislative findings and declarations as to the necessity of a special statute, and as to the public purposes served by this bill.
This bill also would require the Legislative Analyst’s office, in conjunction with the State Board of Equalization, to report to the Legislature regarding the impact of the bill, as specified, in the greater Sacramento region.
This bill would also provide that its operation be postponed, as specified, if a statute is enacted in any year from 2002 to 2010 that decreases the amount of certain revenues that would have been received by cities and counties in the greater Sacramento region under the law in effect on January 1, 2002. This bill would also provide that its provisions become inoperative on the operative date of a revenue-sharing agreement, as specified, between all of the cities and counties in the greater Sacramento region. 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: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Article 10 (commencing with Section 65500) is added to Chapter 3 of Division 1 of Title 7 of the Government Code, to read:
Article  10. Sacramento Regional Smart Growth Act of 2002

65500.
 For purposes of this article, the following definitions apply:
(a) “Greater Sacramento region” means the region encompassing the total combined area of the County of El Dorado, the County of Placer, the County of Sacramento, the County of Sutter, the County of Yolo, and the County of Yuba, but does not include the region, as defined in subsection (a) of Article II of Public Law 96-551, governed by the Tahoe Regional Planning Agency, as described in Article III of Public Law 96-551.
(b) “Regional project” includes, but is not limited to, the following:
(1) Regional transportation projects.
(2) Transit-oriented development.
(3) Infill development.
(4) Development to provide a balance between jobs and housing.
(5) Mixed use development.
(6) Quality of life projects, including, but not limited to, theater and the arts.
(7) Open-space acquisition.
(8) Housing developments composed of housing for persons and families at a variety of income levels.
(9) Community redevelopment projects.
(10)  Other regional land use projects as determined to be necessary by the Sacramento Area Council of Governments.

65501.
 Those moneys apportioned to the Sacramento Area Council of Governments pursuant to subparagraph (C) of paragraph (2) of subdivision (b) of Section 7215.1 of the Revenue and Taxation Code shall be allocated among counties and cities that made an election under subdivision (e) of that section and among qualified cities and qualified counties, as defined in Section 7215.1 of the Revenue and Taxation Code, to fund and administer regional projects, as defined in Section 65500, in the greater Sacramento region that are specified on a list adopted by the Sacramento Area Council of Governments.

65502.

It is the intent of the Legislature to enact a program to establish the Greater Sacramento Regional Open Space and Recreation Conservancy for the purpose of acquiring open-space land, as defined in Section 65560.

SEC. 2.

 Chapter 1.5 (commencing with Section 7215) is added to Part 1.5 of Division 2 of the Revenue and Taxation Code, to read:
CHAPTER  1.5. Greater Sacramento Region Per Capita Revenue Allocations

7215.
 (a)It is the intent of the Legislature in enacting this act to implement a program of local sales and use tax allocation in the greater Sacramento region because of the unique circumstances currently presented in that region.

(b)The Legislature may not enact a statewide sales and use tax revenue allocation program that allocates local sales and use tax revenue on a regional per capita basis.

(c)This act may not be used to facilitate the enactment of a local sales and use tax revenue sharing program in any part of the state that is outside the greater Sacramento region.

7215.1.
 Notwithstanding any other provision of this part, all of the following apply:
(a) The board shall segregate into a separate account that amount of sales and use tax revenue, net of refunds, that is collected pursuant to returns filed in accordance with this part in the greater Sacramento region as a result of the application of a 1 percent sales or use tax rate imposed pursuant to this part by either a qualified county or a qualified city, or by a county or city making an election under subdivision (e).
(b) Except as provided in paragraph (3), for the first calendar quarter of 2004 and each calendar quarter thereafter, the board shall apportion the revenue segregated pursuant to subdivision (a) as follows:
(1) Each qualified county or qualified city, qualified city, and each county and city that made an election under subdivision (e) shall be apportioned its base quarter revenue amount.
(2) The remaining revenues segregated pursuant to subdivision (a) shall be allocated as follows:
(A) One-third of the revenues shall be apportioned, in two or more installments, among the qualified counties and qualified cities, qualified cities, and counties and cities that made an election under subdivision (e) in which the taxable sales or uses occurred, in the manner required by Section 7204.
(B) One-third of the revenues shall be apportioned, in two or more installments, among qualified counties and qualified cities, qualified cities, and counties and cities that made an election under subdivision (e) in shares determined by multiplying that portion of the revenues by the most recent jurisdictional share determined for each qualified county and qualified city, qualified city, and each county and city that made an election under subdivision (e) pursuant to Section 7215.2.
(C) One-third of the revenues shall also be apportioned in shares determined in the same manner as required by subparagraph (A), except that any share that is so calculated with respect to a qualified county or qualified city, qualified city, or county or city that made an election under subdivision (e) that is not housing eligible for that calendar year shall instead be apportioned to the Sacramento Area Council of Governments for apportionment as provided in Section 65501 of the Government Code.
(3) (A) If in any calendar quarter commencing on or after January 1, 2005, the board determines that the amount of sales and use tax revenue segregated pursuant to subdivision (a) is less than the amount segregated pursuant to that subdivision in the corresponding calendar quarter in the immediately preceding calendar year, adjusted for inflation as described in subparagraph (B), then sales and use tax revenue in that calendar quarter shall be transmitted in the manner required by Section 7204.
(B) In each calendar quarter commencing on or after January 1, 2005, for purposes of making the determination described in subparagraph (A), the board shall do all of the following:
(i) Determine the amount of sales and use tax revenue segregated pursuant to subdivision (a) in the corresponding calendar quarter in the immediately preceding calendar year.
(ii) Determine the sum of the following amounts:
(I) The amount determined pursuant to clause (i).
(II) The product of the following:
(ia) The amount determined pursuant to clause (i).
(ib) An inflation factor that is the percentage change, rounded to the nearest one-thousandth of 1 percent, from December of the immediately preceding year to December of the current year in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.
(c) For purposes of this chapter, all of the following apply:
(1) (A) “Base quarter revenue amount” means an amount of sales and use tax revenue that is equal to the amount of sales and use tax revenue that a qualified county or qualified city, qualified city, or county or city that made an election under subdivision (e) in the greater Sacramento region received pursuant to returns filed in the corresponding calendar quarter in the year 2003, adjusted for inflation pursuant to subparagraph (B), except that for newly incorporated cities the “base quarter revenue amount” is the amount of sales and use tax revenue collected in the incorporated area in the corresponding calendar quarter in the year immediately preceding incorporation, adjusted for inflation as provided in subparagraph (B). If in any calendar quarter in the year 2003, the sales and use tax revenue received by a qualified county or a qualified city,, qualified city, or a county or city that made an election under subdivision (e) pursuant to returns filed in that quarter, is less than the amount of sales and use tax revenue received by that county or city in the corresponding calendar quarter in the year 2002, pursuant to returns filed in that quarter, the “base quarter revenue amount” of that county or city for that quarter is the arithmetic mean of the amounts of sales and use tax revenue collected in the corresponding calendar quarter during the year 2000, the year 2001, the year 2002, and the year 2003, as adjusted for inflation pursuant to subparagraph (B).
(B) On and after January 1, 2005, the “base quarter revenue amount” for a qualified county or qualified city, qualified city, or a county or city that made an election under subdivision (e) is the sum of the following amounts:
(i) The “base quarter revenue amount” determined for that county or city under subparagraph (A).
(ii) The product of the following:
(I) The “base quarter revenue amount” described in subparagraph (A).
(II) An inflation factor that is the percentage change, rounded to the nearest one-thousandth of 1 percent, from December of the immediately preceding year to December of the current year in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.
(2) “Greater Sacramento region” means the region encompassing the total combined area of the County of El Dorado, the County of Placer, the County of Sacramento, the County of Sutter, the County of Yolo, and the County of Yuba, but does not include the region, as defined in subsection (a) of Article II of Public Law 96-551, governed by the Tahoe Regional Planning Agency, as described in Article III of Public Law 96-551.
(3) “Qualified city” means a city in the greater Sacramento region that imposes a sales and use tax pursuant to this part and that has a population growth rate of more than one-half of 1 percent.
(4) “Qualified county” means a county in the greater Sacramento region that imposes a sales and use tax pursuant to this part, and has a population growth rate of more than one-half of 1 percent.
(5) A “qualified city” or “qualified county” is “housing eligible” for a calendar year if the city or county is in compliance with the housing element contained in its general plan.
(d) A city or county in the greater Sacramento region, that imposes a sales and use tax pursuant to this part but is not a qualified city or a qualified county a qualified county, or a county or city that made an election under subdivision (e), shall be allocated sales and use tax revenue as otherwise required by this part in the absence of this section.
(e) Notwithstanding any other provision of this section, a city or a county in the greater Sacramento region that imposes a sales and use tax pursuant to this part and that has an annual population growth rate of less than one-half of 1 percent may elect, by a resolution enacted by a majority of its governing body, to participate in the allocation of sales and use tax revenue according to this section.

7215.2.
 (a) No later than March 1 of 2004 and each year thereafter, and within 30 days of determining new population estimates pursuant to subparagraph (B) of paragraph (2) of subdivision (c), the board shall calculate the jurisdictional shares, determined pursuant to subdivision (b), for those counties and cities imposing a sales and use tax pursuant to this part in the greater Sacramento region.
(b) The board shall, for each county or city imposing a sales and use tax pursuant to this part in the greater Sacramento region, determine a jurisdictional share in accordance with the following formula:
(1) Determine the total population of the greater Sacramento region.
(2) Determine the total population of the relevant county or city. In the case of a county, total population means the total population of only the unincorporated area of that county.
(3) Divide the amount determined pursuant to paragraph (2) by the amount determined pursuant to paragraph (1), rounded to the nearest one-thousandth of 1 percent.
(c) (1) Except as otherwise provided in paragraph (2), the population determinations described in subdivision (b) shall be made upon the basis of annual population estimates that are made by the population research unit in the Department of Finance for purposes of this section, and are transmitted to the board not later than February 1 in each year.
(2) (A) For the 2003 calendar year, the population determinations described in subdivision (b) shall be made on the basis of the later of the following:
(i) The most recent population estimates for counties and cities in the greater Sacramento region, as otherwise required or authorized by law, that have been made by the population research unit in the Department of Finance.
(ii) The most recent census validated by the population research unit in the Department of Finance.
(B) The population research unit in the Department of Finance shall newly estimate the population of the affected city, and any other affected city or county in the greater Sacramento region, and provide those new estimates to the board within 30 days after any of the following occur:
(i) A newly incorporated city in the greater Sacramento region imposes a sales and use tax pursuant to this part.
(ii) A city in the greater Sacramento region that imposes a sales and use tax pursuant to this part completes the annexation of additional territory.
(iii) A consolidation of one city in the greater Sacramento region with another city in that region results in a consolidated city that imposes a sales and use tax pursuant to this part.

7215.3.

A county in the greater Sacramento region, as defined in Section 7215.1, is not a qualified county for purposes of that section if all of the following conditions are met:

(a)That county enacts ordinances and substantially complies with these ordinances requiring all of the following:

(1)That a fair share of the greater Sacramento region’s residential housing needs for persons of low and moderate income will be located in that county.

(2)That all new residential and commercial development occur within the existing boundaries of a city within that county.

(3)That for every acre of new residential and commercial development in the county, one acre be set aside in that county as open-space land, as defined in Section 65560 of the Government Code.

(b)The county and two or more of the cities in that county have entered into a revenue sharing agreement, pursuant to Article 1 (commencing with Section 55700) of Chapter 5 of Part 2 of Division 2 of Title 5 of the Government Code.

(c)For purposes of this section, “new” residential and commercial development is development that occurs on or after January 1, 2004.

SEC. 3.

 On or before January 1, 2010, the Legislative Analyst’s office, in conjunction with the State Board of Equalization shall report to the Legislature regarding the reallocation of local sales and use tax revenue pursuant to this act. To the extent possible, the Legislative Analyst’s office shall incorporate comments from the Sacramento Area Council of Governments regarding the impact of this act on affected local jurisdictions. The report shall include, but not be limited to, the following:
(a) Estimates of the fiscal impact of this act on local governments in the greater Sacramento region.
(b) To the extent that data are available, representative case studies documenting whether land use decisions made by local jurisdictions in the greater Sacramento region were affected by this act.
(c) An analysis of the number of permits issued for very low, low-, moderate-, and above-moderate income affordable housing and regional projects by local governments in the greater Sacramento region.

SEC. 4.

 The Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because the unique fiscal, jurisdictional, and public service dynamics in the greater Sacramento region provide a unique opportunity to implement and refine possible solutions to the fiscal, planning, and public service problems resulting from the imposition of multiple local sales and use taxes.

SEC. 5.

 The Legislature finds and declares that, due to the unique circumstances in the greater Sacramento region, requiring the allocation of local sales and use tax revenue in the greater Sacramento region on a per capita basis serves a specific public purpose of each county or city imposing a sales and use tax in that region by reducing the unhealthy competition that currently exists between these entities for new retail establishments, helping to equate revenue streams with public service requirements, and allowing land use decisions to be made solely on the basis of land use planning considerations.

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.

 (a) This act shall not become operative if, during any legislative session commencing with the 2001–02 Regular Session to the 2009–10 Regular Session, inclusive, or any extraordinary session that runs concurrently with those regular sessions, either of the following occurs:
(1) A bill is chaptered that decreases the amount of ad valorem property tax revenue that otherwise would have been allocated to a city or county within the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code, under the law in effect on January 1, 2002, for the purpose of increasing the amount of ad valorem property tax revenue that is allocated to an Educational Revenue Augmentation Fund.
(2) A bill is chaptered that decreases the amount of vehicle license fee revenue that otherwise would have been received by a city or a county within the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code, under the statutes in effect on January 1, 2002, or decreases the amount of General Fund moneys that would have been received by a city or county within the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code, under Section 11000 of the Revenue and Taxation Code as that section read on January 1, 2002.
(b) If this act fails to become operative as a result of subdivision (a), this act shall become operative on the date that one or more bills are chaptered that remove the applicable condition or conditions described in subdivision (a) by doing the applicable of the following:
(1) Increases the amount of ad valorem property tax revenue otherwise allocated to a city or county within the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code, to the amount that would have been allocated to that city or county under the statutes in effect on January 1, 2002.
(2) Increases the amount of vehicle license fee revenue received by a city or a county within the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code, to that amount of vehicle license fee revenues that would have been received by that city or county under the statutes in effect on January 1, 2002; or increases the amount of General Fund moneys received by a city or county under Section 11000 of the Revenue and Taxation Code to that amount that would have been received by those cities or counties under that section as it read on January 1, 2002.

SEC. 8.

 This act shall become inoperative on the operative date of a tax revenue-sharing agreement, entered into according to state law, between all of the cities and all of the counties in the greater Sacramento region, as defined in Section 7215.1 of the Revenue and Taxation Code.