HomeMy WebLinkAbout26-City Administrator
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson, City Administrator Subject: Resolution in opposition to AB
680 (Steinberg) regarding the redistribution
Dept: City Administrator's Office oflocal sales tax revenues
Date: February 13, 2002 0 F1 : ~: .' : : i 't L
Synopsis of Previous Council Action:
4/4/02 - Recommended for approval by LRC
Recommended motion:
Adopt resolution
Contact person:
Fred Wilson! Lori Sassoon
Phone: 384-5122
Supporting data attached: Staff report, resolution
Ward: All
FUNDING REQUIREMENTS: Amount:
Source: -(Ace!. No.)
(Ace!. Description)
Finance:
Council Notes:
\lL~ .J,\ PW)-\ \ "\
Agenda Item No. :J.lc
~ I IS/O;r
,
STAFF REPORT
Subiect:
Resolution in opposition to AB 680 (Steinberg) concerning the redistribution of local
sales tax revenues
Back2rouud:
In recent years, a number of bills have been introduced in California Legislature that
would modify the method by which sales tax revenues are distributed in the state. Under
the current formula, local sales taxes are distributed on a situs basis, with cities receiving
1% of the sales tax on retail sales that take place within their boundaries ($1 for every
$100 in sales). This is known as the Bradley-Burns sales tax revenue.
AB 680 (Steinberg) proposes to create a new sales tax distribution mechanism for the
Sacramento region that would distribute all growth in sales tax over a baseline amount
according to the following formula:
. 1/3 on a situs basis (the current formula)
. 1/3 on a per capita basis
. 1/3 apportioned according to the first two methods, among those jurisdictions
meeting "housing eligibility" criteria. These criteria are defined as promoting low-
and very low-income housing, homeless services, and infill development. If the city
does not meet these criteria, its share reverts to a pool to be used for regional
projects.
The bill's author and other supporters have stated that the intention of this program is to
serve as a model for sales tax redistribution in other areas of the state. However, these
proposals would hurt cities like San Bernardino that have made significant efforts to
grow their sales tax bases, and are dependant upon those revenues to provide services to
the community. Such cities also bear the costs associated with having major retail
developments, including increased police and fire calls for service, traffic, wear and tear
on streets and roads, and other impacts.
AB 680 passed in the Assembly and will be taken up by a Senate committee in the near
future. The League of California Cities has taken a position in opposition to the bill.
Locally, the City is working with Chuck Bader and other area cities to educate our
legislators and ask for their help in opposing this bill. At our request, Mr. Bader has
arranged a series of meetings with area city managers from Ontario, Rancho Cucamonga,
and Montclair to develop a coordinated approach to the bill. As a result of these
meetings, the city of Ontario is working with a consultant to analyze the bill's potential
fiscal impact on the larger cities in the region. We will also be working with these cities
to coordinate our attendance at the future Senate committee meeting.
Fiscal Impact:
None from this resolution; if AB 680 would have a significant fiscal impact that has yet
to be determined.
Recommendation:
It is recommended that the Mayor and Common Council adopt the resolution in
opposition to AB 680.
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
.
.
(~~, ~'DV
ii, "',' \ '-
o '0' lr~
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO OPPOSING AB 680 (STEINBERG) CONCERNING THE
REDISTRIBUTION OF LOCAL SALES TAX REVENUES
WHEREAS, recent declines in federal and state aid to cities and major reductions in
property tax revenues have substantially undermined the stability oflocal revenues; and
WHEREAS, sllch declines have led to service and program reductions in cities across
the State of California; and
WHEREAS, in light of uncertain funding from intergovernmental sources, as well as
uncertain property tax revenues, cities have become increasingly reliant on local sales tax
revenues to fund essential services; and
WHEREAS, AB 680 (Steinberg) would create a new sales tax distribution mechanism
for the Sacramento region that would distribute all growth in local sales tax over a baseline
amount according to a new fornmla that would serve as a pilot program for the state; and
WHEREAS, implementation of the sales tax distribution formula proposed in AB 680
would have significant negative impacts upon the City of San Bernardino and its ability to
provide essential services to the community;
NOW, THEREFORE, IT IS RESOLVED by the Mayor and Common Council of the
City of San Bernardino, California, as follows:
1. The City of San Bernardino opposes AB 680, and asks its legislative
representatives to join in opposition to the bill.
III
III
III
1(0' Z(p
If /(0/rJ
.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
.
.'
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO OPPOSING AB 680 (STEINBERG) CONCERNING THE
REDISTRIBUTION OF LOCAL SALES TAX REVENUES
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof, held on the
_ day of
, 2002, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN ABSENT
ESTRADA
LIEN
MCGINNIS
DERRY
SUAREZ
ANDERSON
MCCAMMACK
City Clerk
2002.
The foregoing resolution is hereby approved this
day of
Approved as to
Form and legal content:
Judith Valles, Mayor
City of San Bernardino
JAMES F. PENMAN,
City Attorney
By:
_ 7 fc
.
.
.
AMENDED IN ASSEMBLY JANUARY 29, 2002
AMENDED IN ASSEMBLY JANUARY 14,2002
AMENDED IN ASSEMBLY MAY 24, 2001
AMENDED IN ASSEMBLY MAY 14,2001
AMENDED IN ASSEMBLY APRIL 30, 2001
C ALlFORNIA LEGISLATURE-200 1-02 REGULAR SESSION
ASSEMBLY BILL
No. 680
Introduced by Assembly Member Steinberg
(Coauthor: Assembly Member Kehoe)
February 22, 200 I
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 tax and property
tax revenue allocation.
The Bradley-Bums 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-Bums
Uniform Local Sales and Use Tax Law to contract with the State Board
94
r-
.
.
.
AB 680
-2-
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 tax revenue, derived from the
application of a I % tax rate by a qualified or electing county or city in
the greater Sacramento region, Is t!IJliftg among those same counties
and cities ill tkllt regisft on the basis of (I) the amount of sales tax
revenue that those counties and cities received in the 2002 calendar
year, 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. This bill would provide that up to 1/3 of the
sales 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 ofregional products. This
bill would also establish the Sacramento Regional Smart Growth Fund
Allocation Program to provide funding incentives for responsible
regional growth policies, as specified. By imposing allocation duties
upon SACOG, this bill would create a state-mandated local program.
Existing law, until January I, 2005, prohibits a city or county from
providing financial assistance to an automobile dealership or big box
retailer, or to a business entity that sells or leases land to an automobile
dealership or big box retailer that is relocating from the territorial
jurisdiction of one city or county to the territorial jurisdiction of another
city or county, but within the same market area, unless the receiving city
or county offers the other city or county a contract that apportions sales
tax generated by the dealership or retailer between the 2 cities or
counties, as specified, and the city or county holds a public hearing and
adopts a resolution making specified findings relating to whether or not
a contract has been approved.
This bill would provide that any contracts executed pursuant to these
provisions prior to the effective date of the bill would remain in effect
as provided in the contract. This bill would also provide that, on and
after the operative date of the bill, these provisions requiring contracts
to share sales tax revenue do not apply to counties and cities in the
greater Sacramento region.
94
I
.
.
.
-3-
AB 680
This bill would also state the intent of the Legislature to create the
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 Offiee 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 2002 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.
State-mandated local program: yes.
The people of the State of California do enact asfollows:
I SECTION I. Article 10 (commencing with Section 65500) is
2 added to Chapter 3 of Division 1 of Title 7 of the Government
3 Code, to read:
4
94
I
,-----
.
.
.
AB 680
-4-
I Article 10. Sacramento Regional Smart Growth Act of2002
2
3 65500. For purposes of this article, the following definitions
4 apply:
5 (a) "Greater Sacramento region" means the region
6 encompassing the total combined area of the County of EI Dorado,
7 the County of Placer, the County of Sacramento, the County of
8 Sutter, the County of Yolo, and the County of Yuba. but does not
9 include the City of South Lake Tahoe.
10 (b) "Regional project" includes, but is not limited to, the
II following:
12 (I) Regional transportation projects.
13 (2) Transit-oriented development.
14 (3) lnfill development.
15 (4) Development to provide a balance between jobs and
16 housing.
17 (5) Mixed use development.
18 (6) Quality oflife projects, including, but not limited to, theater
19 and the arts.
20 (7) Open-space acquisition.
21 (8) Other regional land use projects as determined to be
22 necessary by the Sacramento Area Council of Governments.
23 65501. Those moneys apportioned to the Sacramento Area
24 Council of Governments pursuant to subparagraph (C) of
25 paragraph (2) of subdivision (b) of Section 7215.1 of the Revenue
26 aRB TaxatiaR Case 3kall Be alleeateB fef the fl1::llf383e af IDHa.iflg
27 regi6Ral13rajeetj, B:) aeHRea. ia Seeti8H 65599. and Taxation Code
28 shall be allocated among qualified cities and qualified counties,
29 as dejined in Section 7215.1 of the Revenue and Taxation Code. to
30 jimd regional projects, as dejined in Section 65500.
31 65502. (a) It is the intent of the Legislature to enact a
32 program to establish the Greater Sacramento Regional Open
33 Space Recreation Conservancy for the purpose of acquiring
34 open-space land, as dejined in Section 65560.
35 (b) It is the jimher intent of the Legislature that the Greater
36 Sacramento Regional Open Space Recreation Conservancy be
37 funded with revenue from the following sources:
38 (1) Upon an appropriation by the Legislature, revenue derived
39 jivm bonds issued pursuant to Chapter 875 of the Statutes of2001.
40 (2) Regional impact fees. as described in subdivision (c).
94
r-
.
.
.
-5-
AB 680
1 (c) It is thefitrther intent of the Legislature to enact a program
2 by which regional impact fees are imposed upon developers of
3 residential and commercial development in the greater
4 Sacramento region, except residential infill developments and
5 residential housing developments for persons of low and moderate
6 income. The amount of these fees may not exceed the benefits
7 derived by the developers upon which the fees are imposed, and
8 shall be based upon the following considerations:
9 (/) The proximity of the development to urban population
10 centers.
II (2) The proximity of the development to various types of
12 farmland, including, but not limited to, prime farmland, farmland
13 of statewide significance, unique farmland, farmland of local
14 importance, or other categories of farmland as defined by the
15 Farmland Conservancy Program as administered by the
16 Department of Conservation.
17 (3) Existing development fees that are imposed by local
18 governments in the greater Sacramento region that have the same
19 jimdamental purpose as the fees contemplated by this section. In
20 the case of a local fee so imposed, those fees shall offiet the fees
21 contemplated by this section by up to two-thirds, but in no event
22 shall a developer pay less than one-third of the regional impact fee
23 contemplated by this section.
24 (4) The complexity of existing development fee structures in the
25 greater Sacramento region.
26 SEe. 2. Chapter 1.5 (commencing with Section 7215) is
27 added to Part 1.5 of Division 2 of the Revenue and Taxation Code,
28 to read:
29
30
31
32
33
34
35
36
37
38
39
CHAPTER 1.5. GREATER SACRAMENTO REGION PER CAPITA
REVENUE ALLOCATIONS
7215. The Legislature hereby finds and declares all of the
following:
(a) The situs-based allocation of local sales tax revenue has
caused serious fiscal problems and public service inefficiencies, as
well as a fiscalization of governmental land use decisions that
focuses upon maximizing sales and use tax revenue from retail
establishments, rather than upon land use needs in the community.
94
r-
.
.
.
AB 680
-6-
I (b) Among other things, the situs-based allocation of local sales
2 tax revenue has led to unhealthy competition among local
3 jurisdictions for retail development, and to local government
4 revenue streams that do not correspond to the level of public
5 services supported by those revenue streams.
6 (c) The adverse results of the situs-based allocation of local
7 sales tax revenue has impacted each county and city imposing a
8 sales tax, and has not been remedied by either existing law or by
9 local actions or agreements. Instead, existing law and the
10 dynamics of local government finance have maintained or even
II exacerbated the adverse fiscal, governmental, and public service
12 consequences of a situs-based allocation of local sales tax revenue.
13 (d) The greater Sacramento region provides a unique and
14 instructive perspective on the issue of local sales tax revenue
15 allocation, inasmuch as the greater Sacramento region continues
16 to be subject to both extremely rapid development and new
17 incorporations of jurisdictions with authority, under current law,
18 to impose a local sales tax. These dynamics establish the greater
19 Sacramento region as a region that is uniquely suited for the trial
20 and implementation of a proposed regional local sales tax revenue
21 allocation program aimed at eliminating the adverse fiscal,
22 political, and public service consequences of the situs-based
23 allocation oflocal sales tax revenue.
24 (e) It is the intent of the Legislature, in enacting this act, to
25 implement a pilot program of local sales tax allocation in the
26 unique circumstances currently presented by the greater
27 Sacramento region, that will allow state and local governments to
28 jointly establish, test, and refine an alternative system oflocal sales
29 tax revenue allocation. It is the further intent of the Legislature that
30 this pilot program not be implemented statewide until after the
31 report described in Section 3 of the act adding this section is
32 submitted to the Legislature.
33 7215.1. Notwithstanding any other provision of this part, all
34 of the following apply:
35 (a) The board shall segregate into a separate account that
36 amount of sales tax revenue, net of refunds, that is collected
37 pursuant to this part in the greater Sacramento region as a result of
38 the application of a I percent sales tax rate imposed pursuant to this
39 part by either a qualified county or a qualified cio: or by a county
40 or city making an election under subdivision (f).
94
~
.
.
.
-7-
AB 680
I (b) For the first calendar quarter of ~ 2004 and each
2 calendar quarter thereafter, the board shall apportion the revenue
3 segregated pursuant to subdivision (a) as follows:
4 (I) Each qualified county or qualified city shall be apportioned
5 its base quarter revenue amount.
6 (2) The remaining revenues segregated pursuant to subdivision
7 (a) shall be allocated as follows:
8 (A) One-third of the revenues shall be apportioned, in two or
9 more installments, among qualified counties and qualified cities
10 iR aeseraaflee w;itk ea6ft fltulliHea 8StlRty'3 al~a eaeft Cltialitied
11 eity'a f'r6IH~pti6f1.ate 3ftare eftke 8fl18tlftt3 Jegregatea ptlf31::l8ftt t6
12 slIBeivisieR (a). in the manner required by Section 7204.
13 (B) One-third of the revenues shall be apportioned, in two or
14 more installments, among qualified counties and qualified cities
15 in shares determined by multiplying that portion of the revenues
16 by the most recent jurisdictional share determined for each
17 qualiJying county and qualiJying city pursuant to Section 7215.2.
18 (C) One-third of the revenues shall also be apportioned in
19 shares detennined in the same manner as required by I'!lf!lplll'fl (2)
20 subparagraph (A), except that any share that is so calculated with
21 respect to a qualified county or qualified city that is not housing
22 eligible for that calendar year shall instead be apportioned to the
23 Sacramento Area Council of Governments for apportionment as
24 provided in Section 6550 I of the Government Code.
25 (c) For purposes of this chapter, all of the following apply:
26 (I)" Base quarter revenue amount" means an amount of sales
27 tax revenue that is equal to the amount of sales tax revenue for each
28 jurisdiction that a qualified county or qualified city in the greater
29 Sacramento region received in the corresponding calendar quarter
30 in the year~ 2003, except that for newly incorporated cities the
31 "base quarter revenue amount" is the corresponding calendar
32 quarter in the year prior to incorporation.
33 (2) "Greater Sacramento region" means the region
34 encompassing the total combined area of the County of EI Dorado,
35 the County of Placer, the County of Sacramento, the County of
36 Sutter, the County of Yolo, and the County of Yuba, but does not
37 include the City of South Lake Tahoe.
38 (3) "Qualified city" means a city in the greater Sacramento
39 region that imposes a sales tax pursuant to this part, that has a
40 population growth rate of more than one-half of one percent, and
94
~
.
.
.
AB 680
-8-
I that has not met the requirements o/Sectioll 7215.3. but does not
2 include the City a/South Lake Tahoe.
3 (4) "Qualified county" means a county in the greater
4 Sacramento region that imposes a sales tax pursuant to this part,
5 that has a population growth rate of more than one-half of one
6 percent, and that has not met the requirements o/Sectioll 7215.3.
7 (5) A "qualified city" or "qualified county" is "housing
8 eligible" for a calendar year if the city or county meets all of the
9 following criteria:
10 (A) The governing body of the city or county has done either
11 of the following:
12 (i) Caused to be issued residential building permits for new
13 construction in the jurisdiction that, by regulatory agreement
14 recorded against the property, is affordable to, and occupied by,
15 low or very low income households (as defined annually for the
16 region by the United States Department of Housing and Urban
17 Development), at least one-half of which shall be affordable to
18 very low income households, or the jurisdiction has caused to be
19 issued permits for substantial rehabilitation (over seven thousand
20 five hundred dollars ($7,500) per unit construction contract value)
21 of existing residential units that are, by regulatory agreement
22 affordable to, and occupied by, low-income and very low income
23 households, that in the aggregate are equal to 5 percent or more of
24 their building permits for residential units built within the last year,
25 or averaging 5 percent over a three-year period.
26 (ii) Adopted a mixed-income housing ordinance that assures
27 construction of units affordable to a minimum of 5 percent very
28 low and 5 percent low-income households (total minimum of 10
29 percent) in any new residential development of more than 10 units.
30 (iii) A qualified city or a qualified county with a population of
31 I e,eee 15,000 people or less, is exempt from the requirements of
32 this subparagraph.
33 (B) The city or county provides domestic violence shelters and
34 shelter or year-round services for the homeless population in the
35 city or county, as determined on the basis of the minimum of 15
36 percent of the nationally recognized Urban Institute homeless
37 population estimation formula (I percent of the population within
38 a given jurisdiction). A qualified city or qualified county with a
39 population of 10,f)()0 15.000 people or less is exempt from the
40 requirements of this subparagraph.
94
r
.
.
.
-9-
AB 680
I (C) The city or county filed an inventory of potential infill
2 development or open-space acquisition sites in its jurisdiction, and
3 an action plan for proceeding on those opportunities, in the form
4 and manner approved by the Sacramento Area Council of
5 Government Board of Directors. In each year thereafter, the Board
6 of Directors of the Sacramento Area Council of Government shall
7 certify both the receipt of the action plan, and that the city or
8 county has made substantial progress toward meeting the action
9 plan.
10 (6) "Smart growth principles" include, but are not limited to,
I I programs designed to end the fiscalization of land use, including
12 regional equity in tax income; the provision of social services;
13 enhancing open-space and agricultural land acquisition; transit
14 oriented development; and infill development.
15 (d) Any agreement executed pursuant to Section 53084 of the
16 Government Code prior to the operation of this act shall be
17 operative as specified in the agreement. However, on and after the
18 operative date of this act, Section 53084 of the Government Code
19 does not apply to any qualified city or qualified county in the
20 greater Sacramento region.
21 (e) A city or county in the greater Sacramento region, that
22 imposes a sales tax pursuant to this part but is not a qualified city
23 or a qualified county. shall be allocated sales tax revenue as
24 otherwise required by this part in the absence of this section.
25 (f) Notwithstanding any other provision of this section, a city or
26 a county in the greater Sacramento region that imposes a sales tax
27 pursuant to this part and that has a population growth rate of less
28 than one-half of 1 percent may elect, by a resolution enacted by a
29 majority of its governing body, to participate in the allocation of
30 sales tax revenue according to this section.
31 7215.2. (a) No later than March I of-i!0032004andeachyear
32 thereafter, and within 30 days of determining new population
33 estimates pursuant to subparagraph (B) of paragraph (2) of
34 subdivision (c), the board shall calculate the jurisdictional shares,
35 determined pursuant to subdivision (b), for those counties and
36 cities imposing a sales tax pursuant to this part in the greater
37 Sacramento region.
38 (b) The board shall, for each county or city imposing a sales tax
39 pursuant to this part in the greater Sacramento region, determine
40 a jurisdictional share in accordance with the following formula:
94
r-
.
.
.
AB 680
-10-
I (1) Detennine the total population of the greater Sacramento
2 region.
3 (2) Detennine the total population of the relevant county or
4 city. In the case of a county, total population means the total
5 population of only the unincorporated area of that county.
6 (3) Divide the amount detennined pursuant to paragraph (2) by
7 the amount detennined pursuant to paragraph (I).
8 (c) (I) Except as otherwise provided in paragraph (2), the
9 population detenninations described in subdivision (b) shall be
10 made upon the basis of annual population estimates that are made
I I by the population research unit in the Department of Finance for
12 purposes of this section, and are transmitted to the board not later
13 than February I in each year.
14 (2) (A) For the 2003 calendar year, the population
15 detenninations described in subdivision (b) shall be made on the
16 basis of the later of the following:
17 (i) The most recent population estimates for counties and cities
18 in the greater Sacramento region, as otherwise required or
19 authorized by law, that have been made by the population research
20 unit in the Department of Finance.
21 (ii) The most recent census validated by the population
22 research unit in the Department of Finance.
23 (B) The population research unit in the Department of Finance
24 shall newly estimate the population of the affected city, and any
25 other affected city or county in the greater Sacramento region, and
26 provide those new estimates to the board within 30 days after any
27 of the following occur:
28 (i) A newly incorporated city in the greater Sacramento region
29 imposes a sales tax pursuant to this part.
30 (ii) A city in the greater Sacramento region that imposes a sales
31 tax pursuant to this part completes the annexation of additional
32 territory.
33 (iii) A consolidation of one city in the greater Sacramento
34 region with another city in that region results in a consolidated city
35 that imposes a sales tax pursuant to this part.
36 7215.3. A county in the greater Sacramento region, as defined
37 in Section 7215.1, is not a qualified county for purposes of that
38 section if all of the following conditions are met:
94
~
.
.
.
-11-
AB 680
I (a) That county meets the requirements set forth in
2 subparagraph (B) of paragraph (5) of subdivision (c) of Section
3 7215.1.
4 (b) That county enacts ordinances and substantially complies
5 with these ordinances requiring all of the following:
6 (1) That a fair share of the greater Sacramento region s
7 residential housing needs for persons of low and moderate income
8 will be located in that county.
9 (2) That all new residential and commercial development occur
10 within the existing boundaries of a city within that county.
II (3) That for every acre of new residential and commercial
12 development in the county, one acre be set aside in that city as
13 open-space land, as defined in Section 65560 of the Government
14 Code.
15 (c) The county and two or more of the cities in that county have
16 entered into a revenue sharing agreement, pursuant to Article 1
17 (commencing with Section 55700) of Chapter 5 of Part 2 of
18 Division 2 of Title 5 of the Government Code.
19 (d) For purposes of this section, "new" residential and
20 commercial development is development that occurs on or afier
21 January 1, 2004.
22 (e) Notwithstanding any other provision of this section, a
23 qualified city, within a county that meets the criteria of
24 subdivisions (a) to (c), inclusive, may elect, bya resolution enacted
25 by a majority of its governing body, to participate in the allocation
26 of sales tax revenue pursuant to Section 7215.1.
27 SEe. 3. On or before January I, 2010, the Legislative
28 Analyst's Office, in conjunction with the State Board of
29 Equalization shall report to the Legislature regarding the
30 reallocation oflocal sales tax revenue pursuant to this act. To the
31 extent possible, the Legislative Analyst's Office shall incorporate
32 comments from the Sacramento Area Council of Governments
33 regarding tbe impact oftbis act on affected local jurisdictions. The
34 report shall include, but not be limited to, the following:
35 (a) Estimates of the fiscal impact of this act on local
36 governments in the greater Sacramento region.
37 (b) To the extent that data are available, representative case
38 studies documenting whether land use decisions made by local
39 jurisdictions in the greater Sacramento region were affected by this
40 act.
94
r-
.
.
.
-13-
AB 680
I discretionary portion of the State Transportation Improvement
2 Program.
3 (c) Any multicounty region in California that adopts regional
4 tax-sharing agreements or multicounty smart growth principles, as
5 defined in Section 7215.1, shall be entitled to both of the
6 following:
7 (I) Beginning in the 2008-09 fiscal year and upon
8 appropriation by the Legislature, I percent of the funds allocated
9 to the Transportation Investment Fund pursuant to Assembly
10 Constitutional Amendment 4 of the 200 I -02 Regular Session.
I I (2) Ten points awarded for applications to the State Department
12 of Housing and Community Development for the Jobs-Housing
13 Balance Program, the Cal Home Program, and the Multi-Family
14 Housing Assistance Program.
15 SEC. 5. The Legislature finds and declares that a special law
16 is necessary and that a general law cannot be made applicable
17 within the meaning of Section 16 of Article IV of the California
18 Constitution because the unique fiscal, jurisdictional, and public
19 service dynamics in the greater Sacramento region provide a
20 unique opportunity to implement and refine possible solutions to
21 the fiscal, planning, and public service problems resulting from the
22 imposition of multiple local sales taxes.
23 SEC. 6. The Legislature finds and declares that requiring the
24 allocation of local sales tax revenue in the greater Sacramento
25 region on a per capita basis serves a public purpose of each county
26 or city imposing a sales tax in that region by reducing the unhealthy
27 competition that currently exists between these entities for new
28 retail establishments, helping to equate revenue streams with
29 public service requirements, and allowing land use decisions to be
30 made solely on the basis ofland use planning considerations.
31 SEC. 7. Notwithstanding Section 17610 of the Government
32 Code, if the Commission on State Mandates determines that this
33 act contains costs mandated by the state, reimbursement to local
34 agencies and school districts for those costs shall be made pursuant
35 to Part 7 (conunencing with Section 17500) of Division 4 of Title
36 2 of the Government Code. If the statewide cost of the claim for
37 reimbursement does not exceed one million dollars ($1,000,000),
38 reimbursement shall be made from the State Mandates Claims
39 Fund.
94
I
.
.
.
AB 680
-14-
I SEe. 8. (a) This act shall not become operative if, during any
2 legislative session commencing with the 2001-02 Regular Session
3 to the 2009-10 Regular Session, inclusive. or any extraordinary
4 session that runs concurrently with those regular sessions. either
5 of the following occur:
6 (I) A bill is chaptered that decreases the amount of ad valorem
7 property tax revenue that otherwise would have been allocated to
8 a city or county within the greater Sacramento region, as defined
9 in Section 7215.1 of the Revenue and Taxation Code. under the law
10 in effect on January 1. 2002, for the purpose of increasing the
II amount of ad valorem property tax revenue that is allocated to an
12 Educational Revenue Augmentation Fund.
13 (2) A bill is chaptered that decreases the amount of vehicle
14 license fee revenue that otherwise would have been received by a
15 city or a county within the greater Sacramento region, as defined
16 in Section 7215.1 of the Revenue and Taxation Code. under the
17 statutes in effect on January 1, 2002, or decreases the amount of
18 General Fund moneys that would have been received by a city or
19 county within the greater Sacramento region. as defined in Section
20 7215.1 of the Revenue and Taxation Code. under Section 11000 of
21 the Revenue and Taxation Code as that section read on January 1.
22 2002.
23 (b) If this actfails to become operative as a result of subdivision
24 (a). this act shall become operative on the date that one or more
25 bills are chaptered that remove the applicable condition or
26 conditions described in subdivision (a) by doing the applicable of
27 the following:
28 (I) Increases the amount of ad valorem property tax revenue
29 othenvise allocated to a city or county within the greater
30 Sacramento region. as defined in Section 7215.1 of the Revenue
31 and Taxation Code, to the amount that would have been allocated
32 to that city or county under the statutes in effect on January I.
33 2002.
34 (2) Increases the amount of vehicle licensefee revenue received
35 by a city or a county within the greater Sacramento region. as
36 defined in Section 7215.1 of the Revenue and Taxation Code, to
37 that amount of vehicle license fee revenues that would have been
38 received by that city or county under the statutes in effect on
39 JanuOlY 1.2002; or increases the amount of General Fund moneys
40 received by a city or county under Section II 000 of the Revenue
94
I
.
.
.
-15-
AB 680
1 and Taxation Code to that amount that would have been received
2 by those cities or counties under that section as it read on January
3 1, 2002.
4 SEe. 9. This act shall become inoperative on the operative
5 date of a tax revenue-sharing agreement, entered into according
6 to state law, between all of the cities and all of the counties in the
7 greater Sacramento region, as defined in Section 7215.1 of the
8 Revenue and Taxation Code.
o
94
I
AB 680 Assembly Bill - Bill Analysis
Page I of9
e
AB 680
Page 1
ASSEMBLY THIRD READING
AB 680 (Steinberg)
As Amended January 29, 2002
Majority vote
LOCAL GOVERNMENT
6-3
REVENUE AND TAXATION
6-2
-----------------------------------------------------------------
IAyes: IWiggins, Salinas, Correa, IAyes: ICorbett, Alquist, Wesson,
1 1 Diaz, Lowenthal, 1 I Cedillo, Koretz, Matthew
I 1 Longville I 1
I I 1 I 1
1-----+--------------------------+-----+--------------____________1
1 Nays: 1 Cogdill, Daucher, Harman I Nays: 1 Harman, Wyland 1
I I 1 1 1
-----------------------------------------------------------------
APPROPRIATIONS 12-6
-----------------------------------------------------------------
e
IAyes: IMigden, Alquist, Aroner,
1 ICedi11o, Goldberg, Papan,
I lpavley, Simitian,
1 1 Thomson, Steinberg,
I IWiggins, Wright
1 1 1 1 1
1-----+--------------------------+-----+--------------____________1
INays: IBates, Ashburn, Daucher, 1 I 1
1 1 Robert Pacheco, Runner, 1 I I
1 IWy1and 1 1 1
-----------------------------------------------------------------
SUMMARY Reallocates Bradley-Burns sales tax revenue growth
within the greater Sacramento region on the basis of one-third
to the situs where the tax was generated, one-third on a per
capita basis, and one-third based on housing eligibility, as
defined, and creates the Sacramento Regional Smart Growth Fund
Allocation Program (CAPSMART) and the Sacramento Regional Open
Space and Recreation Conservancy (Conservancy). Specifically,
this bill
l)Defines the "greater Sacramento region" (Region) as
encompassing the Counties of El Dorado, Placer, Sacramento,
Sutter, Yolo, and Yuba.
2)Defines "regional project" as including, but not being limited
eiJ
http://www.lira.netlbiIltexts/ea/OI02/asm/ab 680 efa 20020130 165830 asm tlnnrhtml
mil ,noo?
.
.
.
1'\B 680 Assembly Bill - Bill Analysis
Page 2 of9
AB 680
Page 2
to, regional transportation projects, transit-oriented
development, inti 11 development, development providing balance
between jobs and housing, mixed-use development, quality of
life projects (including, but not limited to, theater and the
arts), open space acquisition, and other projects deemed
necessary by the Sacramento Area Council of Governments
(SACOG) .
3)Makes the following findings and declarations:
a) Situs-based sales tax allocation has caused serious
fiscal problems, public service inefficiencies, and has
fiscalized land use decisions so that they focus on sales
tax generation instead of community land use needs;
b) Situs-based sales tax allocation has led to unhealthy
competition between local jurisdictions for
revenue-generating retail development and to revenue
streams that do not correspond to the level of public
service supported by those streams;
c) Existing law and the dynamics of local government
finance have maintained or even exacerbated the adverse
consequences of situs-based sales tax allocation;
d) The Region provides a unique and instructive perspective
on this issue due to its rapid growth and the incorporation
of new cities with authority to levy sales tax, which makes
the Region uniquely suited to the trial and implementation
of a regional local sales tax revenue allocation program
aimed at eliminating the adverse effects of situs-based
sales tax allocation; and,
e) The Legislature intends this program to be a pilot
program, and that it not be implemented statewide until the
Legislative Analyst's Office (LAO) reports to the
Legislature, as required by this bill, on or before January
1, 2010.
4)Requires the state Board of Equalization (BOE) to segregate
Bradley-Burns sales tax revenue collected in the Region.
5)Requires BOE to apportion the segregated revenue as follows:
a) Each qualified county or qualified city shall receive
[
AB 680
Page 3
its IIbase quarter revenue amount." "Base quarter revenue
http://www.lira.netlbilltexts/ca/0I02/asm/ab 6RO efa 20020110 1 "''i~10 ..m Annr html
()')/11/')()()')
AB 680 Assembly Bill - Bill Analysis
Page 3 of9
.
amount" means an amount of sales tax revenue that is equal
to the amount of sales tax revenue for each jurisdiction
that a qualified county or qualified city in the Region
received in the corresponding calendar quarter in the year
2002, except that for newly incorporated cities the "base
quarter revenue amount" is the corresponding calendar
quarter in the year prior to incorporation;
bl
The remaining revenues, constituting the growth in
revenues over the 2002 base amount, shall be allocated as
follows:
i} One-third to qualified cities and counties based on
each jurisdiction's share of sales tax-generating
transactions;
ii)
each
and,
One-third to qualifying cities and counties based on
jurisdiction's share of the Region's population;
iii) One-third apportioned according to the above
mechanisms, except that any such share of revenues
calculated fo~ a jurisdiction that is not Ilhousing
eligible" for the calendar year instead accrues to SACOG
for use in paying for regional projects, as defined.
6)Defines "qualified city'! as any city within the Region that
imposes a sales tax and has a population growth rate of at
least .5%.
.
7)Defines "qualified county" as any county within the Region
that imposes a sales tax and has a population growth rate of
at least .5%.
8)Designates a jurisdiction as Ilhousing eligible" for a calendar
year if it meets all the following criteria:
a) The governing body has either:
i) Issued building permits or permits for substantial
rehabilitation for housing for low- or very-low income
households equal to 5% or more of the permits issued for
units built in the last year or averaging 5% over a
three-year period; or,
IJ
AB 680
Page 4
.
ii) Adopted a mixed-income housing ordinance that
assures that any new residential development of more than
10 units will include 5% units for low-income households
and 5% housing for very-low income households.
http://www.lira.net/billtexts/calOlO2/asm/ab 680 cfa 20020130 165830 a~m floor.hlml
mll,nOO?
AB 680 Assembly Bill - Bill Analysis
Page 4 of9
.
b) The city or county provides shelter or year-round
services for its homeless population, determined to be 1%
of the local population; and,
c) The city or county files an inventory of potential
infill development or open-space acquisition sites and an
action plan for proceeding with those opportunities with
SACOG. In subsequent years SACOG is to certify receipt of
the plan and that the jurisdiction is making substantial
progress towards implementing the plan.
91States that any agreement entered into by qualified cities and
counties within the Region pursuant to Government Code Section
53084 concerning the relocation of automobile dealerships and
big box retailers prior to the enactment of this bill shall be
operative, but that this section shall not apply to qualified
cities and counties within the Region subsequent to this
bill's enactment.
10lRequires BOE, no later than March 1, 2003, and each year
thereafter, and within 30 days
of determining new population estimates, to calculate
jurisdictional shares for cities and counties imposing a sales
tax within the Region.
.
lllRequires BOE to calculate jurisdictional shares by first
determining the total population of the Region and the total
population of each city or county (in the case of counties,
total population refers only to residents of unincorporated
areas) imposing a sales tax within the Region, and then
dividing the second of these numbers by the first.
12)Requires that these population determinations be based on the
annual population estimates made by the population research
unit of the Department of Finance (DOF) , except that for
calendar year 2003 the determination shall be based on either
DOFls annual estimate or the most recent census, whichever is
later.
o
AB 680
Page 5
.
131Requires DOF to re-estimate the population of any affected
city or county within the Region and report the estimate to
BOE within 30 days if a newly incorporated city imposes a
sales tax, a city in the Region annexes additional territory,
or two or more cities in the Region consolidate into one city.
14)Requires LAO, in conjunction with BOE, to report to the
Legislature no later than January 1, 2010, on the reallocation
of sales tax revenues within the Region, incorporating to the
http://www.lira.netlbilltexts/caJOI02/asmlab 680 efa 20020110 l/iSR10 ~<m flonr html
(),,)/11/,)()()")
.
.
.
AB 680 Assembly Bill - Bill Analysis Page 50f9
extent possible comments from SACOG on local impacts. The
report is to include the following:
a)
Estimates of local fiscal impacts;
b) Representative case studies showing whether land use
decisions have been affected by the provisions of this
bill;
c) Recommendations whether to continue the program and, if
so, suggestions for amendments to better promote smart
growth land use policy; and,
d) An analysis of the number of permits issued for low- and
very-low income housing, shelter and services for the
homeless, infill development projects, open-space
acquisition, and regional projects by local governments.
l5)States the Legislature's intent to enact a program to
encourage cities and counties within the Region to participate
in responsible regional growth by rewarding jurisdictions that
meet specified criteria.
16)Creates CAPS MART in order to provide smart growth incentive
funding for transportation projects supporting smart growth
strategies and identified as priority transportation funding
projects by SACOG.
17)Authorizes the Department of Transportation (Caltrans) to
designate Interregional Transportation Program funds for the
purposes of CAPSMART, to be allocated to projeccs that have
been evaluated subject to specified criteria and recommended
by SACOG to Caltrans, which may then include the projects in
the state discretionary portion of the State Transportation
Improvement Program (STIP).
AS 680
Page 6
18)Provides that any multi-county region in California that
adopts regional tax-sharing agreements or smart growth
principles shall be entitled to both 1% of the funds allocated
to the Transportation Investment Fund (beginning in fiscal
year (FY) 2008-09), and 10 points awarded for applications to
the Department of Housing and Community Development for the
Jobs-Housing Balance Program, the Cal Horne Program, and the
Multi-Family Housing Assistance Program.
19)Creates the Conservancy to be funded by current and future
statewide park bond funds and a regional impact fee to be
assessed on commercial and residential developmept, subject to
specified criteria.
http://www.lira.net/billtexts/ea/0I02/asm/ab680efa20020130165830asmfloor.html
02/11/700?
.
.
.
.AB 680 Assembly Bill- Bill Analysis
Page 6 of9
20)Permits a county to exempt itself from the tax-sharing
provisions of this bill if the county has:
a) Enacted a revenue sharing agreement with two or more of
its cities;
b) Enacted an open space and agricultural land preservation
policy that preserves one acre for every acre of land
developed;
c) Established a policy to limit development to within
existing city boundaries and has substantially adhered to
it;
d) Provided a "fair share" of the Region's affordable
housing; and,
e) Adopted this bill's homeless shelter provision and has
additionally provided for domestic violence shelters.
21)Permits a city within a county that has opted out of the
tax-sharing plan to choose to participate in the tax-sharing
plan.
22)Provides that, if the Region develops an alternative to the
revenue-sharing provisions set forth in this bill, that
alternative shall supercede this bill's revenue-sharing
provisions.
23)Delays implementation of this bill's provisions until January
1, 2004, in order to provide adequate time for the local
c
AB 680
Page 7
governments within the Region to develop an alternative if
they so choose.
24) Allows
of less
sharing
out
of the tax sharing program will still be eligible for
project funding and to participate in the regional
conservancy.
qualified cities and counties with a
than .5% to choose to participate in
program, and provides that a city or
population growth
the sales tax
county that opts
regional
25)Provides that, if the state reduces the amount of money going
to local governments as backfill for reductions in the Vehicle
License Fund, or increases the amount of property tax revenue
going to the Educational Revenue Augmentation Fund (ERAF) , for
FY 2002-2003, the tax revenue-sharing provisions of this bill
are void.
http://www.lira.net/billtexts/ea/OI02/asm/ab_680efa20020130165830asmfloor.html
02/13/2002
.
.
.
-AB 680 Assembly Bill- Bill Analysis
Page 70f9
26)Declares that a special law is necessary due to the unique
fiscal, jurisdictional, and public service dynamics of the
Region.
EXISTING LAW
l)Authorizes, under the Bradley-Burns Uniform Local Sales Tax
and Use Tax Law, a county
to impose a local sales and use tax of 1.25% and similarly
authorizes a city located within
a county imposing such a tax to impose a local sales tax of 1%
that is credited against the county rate.
2)Requires any city, county, or city and county imposing such a
sales and use tax to contract with BGE to administer the tax,
and requires BGE to transmit sales and use tax revenues to the
city, county, or city and county in which the tax was
collected at least twice pet calendar quarter.
FISCAL EFFECT
Unknown
COMMENTS The last 25 years have seen a profound change in the
way local governments in California finance themselves.
Starting with Proposition 13, and drastically accelerating after
the imposition of the ERAF shift in the early 1990s, property
tax revenues collected from home and business properties have
become a significantly smaller percentage of the local
AS 680
Page 8
government fiscal mix. As a result, sales tax revenue from
retail transactions has assumed that much greater importance.
Under Bradley-Burns, local governments are allocated 1% of the
sales tax assessed for every retail purchase that takes place
within their boundaries. This is commonly referred to as
"situs-based" sales tax allocation. Given the current inflated
importance of sales tax revenue to local governments' total
fiscal mix, this has led to competition among local
jurisdictions to bring more retail sales tax generators into
their jurisdictions. In this scramble for retail sales tax,
other priorities, including transportation, adequate housing
supply, loss of open space and agricultural lands, and
sustainable long-term land use planning, have suffered at a time
when increasing population is placing new strains on already
overburdened infrastructure and services. This phenomenon is
commonly referred to as the fiscalization of land use.
According to the author, the Sacramento region faces the
prospect of one million new residents within the next 20 years.
The impacts of the fiscalization of land use are already being
felt throughout the region and will only get worse as the
projected growth occurs.
http://www.lira.netJbilltexts/ea/0102/asm/ab 680 efa 20020130 165830 asm floor.html
02/13/2002
.
.
.
- AB 680 Assembly Bill - BilI Analysis
Page 8 of9
While many cities and counties have expressed frustration at
being forced to enter into bidding wars for sales tax-generating
retail development at the expense of housing or other property
tax-generating development, other cities have consciously chosen
to be primarily commercial or primarily residential. It can be
argued that a sales tax reallocation program that is seen as a
godsend by one city could be seen as state-imposed coercion by
another. This underscores the need for all the potentially
affected jurisdictions within the Region to enter into serious
negotiations over these issues.
Amendments taken by the author in the Assembly Appropriations
Committee provide an
opt-out mechanism for cities and counties within the Region, and
also provide time for the constituent jurisdictions to corne
forward with an alternative to the revenue-sharing provisions
of this bill. The amendments delay the implementation date of
this bill's provisions until
January 1, 2004. If the local governments within the Region are
able to develop an alternative proposal before that time, then
the revenue-sharing provisions of this bill will be void.
'-'
AB 680
Page 9
Analysis Prepared by
319-3958
J. Stacey Sullivan I L. GOV. I (9,6)
FN: 0004167
http://WV.iW.lira.netlbilltexts/ealOI02/asm/ab680efa20020130165830a~mfloor.htm!
0?/111?OO?
-.
~,~
,
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted):
Vote: Ayes }- YJ
,--/-/j-o;}-
Item # /J. l/
-er
Abstain
Nays
Change to motion to amend original documents:
Reso. # On Attachments:
/
\
Contract term: ~
Note on Resolution of Attachment stored separately: =-
Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY
Date Sent to Mayor: 4- -I w - Od
Date of Mayor's Signature: 4-\0~
Date of ClerklCDC Signature: it -\ 1-0::;;-
Date MemolLetter Sent for Signature:
60 Day Reminder Letter Sent on 30th day:
90 Day Reminder Letter Sent on 45th day:
See Attached:
See Attached:
See Attached:
\
\
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Copies Distributed to:
j
Dev. Services
Code Compliance
City Attorney
Parks & Rec.
Police Public Services
Water
Notes:
Resolution #
er-
.:LOO,;2 -IIC)
Absent &-
N ull/V oid After:
By: -
Reso. Log Updated: v'
Seal Impressed: V
Date Returned: -
YesL No By_
Yes No By_
Yes N01 By_
Yes No By_
Yes No By_
EDA
Finance
IIDnwJ
MIS
./
Others:
BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE
YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.)
Ready to File: ~
Date: 4-\ Q--o;1-
Revised 01112/0 I