HomeMy WebLinkAbout4.04 Oppose AB680SmartGrow CITY CLERK
File # 660-40
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: May 7, 2002
SUBJECT: Opposition to Assembly Bill 680 (Steinberg) - Smart Growth Act of
2002
Report Prepared by: Christopher L. Foss
Economic Development Director
ATTACHMENTS: .1. Text of Assembly Bill 680
2. Draft letter opposing Assembly Bill 680
RECOMMENDATION:
~~' Authorize the Mayor to sign and send letter opposing Assembly
1~' . Bill 680.
FINANCIAL STATEMENT: None at this time. If approved, there would be the potential loss of
future sales taxes.
DESCRIPTION: Assembly Bill 680 proposes to create a six-county ( E1 Dorado, Placer, Sacramento,
Sutter, Yolo, and Yuba) pilot program that would allocate all future growth in the local share of sales tax
via a formula based on sims, population, and smart growth principles. The bill, as proposed and approved
by the State Assembly, would allow local governments to keep all of the sales taxes they generate as of
calendar year 2003 (defined as base year). From that point forward, all new sales taxes (growth over the
base year 2003)generated by the local community would be allocated as follows:
1/3 of the growth in sales taxes to cities and counties on a "point of sale" basis
1/3 of the growth would be based on each jurisdiction's share of the region's population
1/3 of the growth would re-allocated to each jurisdiction, on a point of sale basis, for meeting their
fair share of the region's affordable housing and social services. If a community does not meet the
targets, that 1/3 would be turned over to a regional entity for funding regional projects.
The bill also gives residentially "built-out" communities with population increases of less that 0.5% to opt
out of the plan and continue to attract and generate sales taxes on a full point of sale basis. It also
encourages the adoption of regional sales tax sharing agreements or smart growth principles by providing
incentives such as Transportation Investment Funds, extra points in statewide applications for State
housing funds, and access to regional open space and recreation conservancy funds.
COPIES TO:
ITEM NO. 4~
H/cc-forrns/agdastnat. doc.
As written, AB 680 would take effect in the six-county area beginning in calendar year 2003. The
measure would not be implemented on a statewide basis until the Legislative Analyst's Office prepares a
report to the Legislature on or before January 1, 2010. ,,
Staff feels that the adoption of AB 680 would have an adverse effect on the City's sales tax revenues. The
re-distribution proposed by AB 680 would jeopardize the ability of cities to fund the essential City
services for our residents, and would be another attempt by the State of California to threaten another
local government revenue source. The City's sales tax consultant, HdL Companies, has estimated that, if
AB 680 had been in place over the past 10 years, the City of Dublin would have lost between $6.8 and
$15.3 million in sales tax, while smaller, built-out communities in the Bay Area would have benefited due
to the per capita re-distribution.
Assembly Bill 680 is faced with a number of challenges, including the State's Legislative Counsel who
has opined that the re-distribution of sales tax revenues is a gift of public funds and could not be made
with voter approval. AB 680 has passed out of the Assembly, and will be heard by the Senate Revenue
and Taxation Committee (Chair: Torlakson) this month.
RECOMMENDATION: Staff recommends that the City Council authorize the Mayor to sign and
send the attached letter opposing Assembly Bill 680.
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
CALIFORNIA LEGISLATURE--2001-02 REGULAR SESSION
ASSEMBLY BILL No. 680
Introduced by Assembly Member Steinberg
(Coauthor: 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 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 ~se tax pursuant to the Bradley-Bums
Uniform Local Sales and Use'Tax Law to contract with the State Board
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Attachment 1
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 m specified definitiOns and procedures,
require the board to distribute sales 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 in '&at rcg':c,n on the basis of (1) 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 of regional 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 1, 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 s~e 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.
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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 Officc 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 wouM also provide that its operation be postponed, as
specified, ifa 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 as follows:
1 SECTION 1. 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:
AB 680 4
1 Article 10. Sacramento Regional Smart Growth Act of 2002
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 E1 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
11 following:
12 (1) Regional transportation projects.
13 (2) Transit-oriented development.
14 (3) Infill development.
15 (4) Development to provide a balance between jobs and
16 housing.
17 (5) Mixed use development.
18 (6) QUality of life 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
27 _^~..~1 ___: ...... .~_~a :_ o^~.:^_ ~,~n and Taxation Code
28 shall be allocated among, qualified cities and qualified counties,
29 as defined in Section 7215.1 of the Revenue and Taxation Code, to
30 fund regional projects, as defined 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 defined in Section 65560.
35 (b) It is the further 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 from bonds issued pursuant to Chapter 875 of the Statutes of 200!.
40 (2) Regional impact fees, as described in subdivision (c).
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~ AB 680
1 (c) It is the further 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 developmentsforpersons 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 (1). The proximity of the development to urban population
10 centers.
11 (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 fundamental purpose as the fees contemplated by this section. In
20 the case of a local fee so imposed, those fees shall offset 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 SEC. 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 C~APTEP, 1.5. GREATER SACRAMENTO REGION P~.R CAPrrA
31 REVENUE ALLOCATIONS
32
33 7215. The Legislature hereby finds and declares all of the
34 following:
35 (a) The situs-based allocation of local sales tax revenue has
36 caused serious fiscal problems and public service inefficiencies, as
37 well as a fiscalization of governmental land use decisions that
38. focuses upon maximizing sales and use tax revenue from retail
39 establishments, rather than upon land use needs in the community.
AB 680 6
1 (b) Among other things, the sim. s-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 tVmance have maintained or even
11 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 of local 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 of local 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 ora 1 percent sales tax rate imposed pursuant to this
39 part by either a qualified county or a qualified city, or by a county
40 or city making an election under subdivision 09.
7 AB 680
1 (b) For the first calendar quarter of 200~ 2004 and each
2 calendar quarter thereafter, the board shall apportion the revenue
3 segregated pursuant to subdivision (a) as follows:
4 (1) 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
12 o~.~...~"t"~:-':~:^-..o.... ~,.;.t~x 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 qualifying county and qualifying city pursuant to Section 7215.2.
18 (C) One-third of the revenues shall also be apportioned in
19 shares determined in the same manner as required by
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 65501 of the Government Code.
25 (e) For purposes of this chapter, all of the following apply:
26 (1) "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 20~2 2003, except that for newly incorporated cities the
31 "base quarter revenue amount" is the con'esponding 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 E1 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
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AB 680 8
1 that has not met the requirements of Section 7215.3~ but does not
2 include the City of 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 pement, and that has not met the requirements of Section 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 ~ ,~v,,,v,,nan 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 (1 percent of the population within
38 a given jurisdiction). A qualified city or qualified county with a
39 population of~Jr',,,,,,,,,rmr' 15,000 people Or less is exempt from the
40 requirements of this subparagraph.
94
-- 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 oz'
8 county has made substantial progress toward meeting the action
9 plan.
10 (6) "Smart growth principles" include, but are not limited to,
11 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) ~4 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, shah be allocated sales tax revenue as
24 otherwise required by this part in the absence of this section.
25 O~ 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 l 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°
3 ! 7215.2. (a) No later than March 1 of 2002 2004 and each year
32 thereat~er, 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:
AB 680 -- 10 --
1 (1) Determine the total population of the greater Sacramento
2 region.
3 (2) Determine 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 determined pursuant to paragraph (2) by
7 the amount determined pursuant to paragraph (1).
8 (c) (1) Except as otherwise provided in paragraph (2), the
9 population determinations described in subdivision (b) shall be
10 made upon the basis of annual population estimates that are made
11 by the population research unit in the Department of Finance for
12 purposes of this section, and are transmitted tothe board not later
13 than February 1 in each year.
14 (2) (A)For the 2003 calendar year, the population
15 determinations 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 ali of the following conditions are met:
-- 11 -- AB 680
1 (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 needsforpersons 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.
11 (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 after
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, by a 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 SECo 3o On or before January 1, 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 of local 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 the impact of this 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.
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AB 680 m 12 m
1 (c) Recommendations regarding whether to continue the sales
2 tax allocation formulas specified in this act, and, if applicable,
3 suggestions for amending this act to better achieve the
4 Legislature's intent to promote smart growth land use policy.
5 (d) An analysis of the number of permits issued for low- and
6 very low income affordable housing, shelter and services for the
7 homeless, infill development projects, open-space acquisition,
8 and regional projects by local governments in the greater
9 Sacramento region.
10 SEC. 4. (a) It is the intent of the Legislature to enact in this
11 section a program to encourage cities and counties in the greater
12 Sacramento region, as described in this act, to participate in
13 responsible regional growth by rewarding, in accordance with
14 subdivision (b), those jurisdictions within the region that meet the
15 criteria set forth in paragraph (5) of subdivision (c) of Section
16 7215.1 of the Revenue and Taxation Code or that are exempt from
17 the requirements of that paragraph.
18 (b) The Sacramento Regional Smart Growth Fund Allocation
19 Program is hereby established, and shall be known and may be
20 cited as the CAPSMART Program. During the 2004 State
21 Transportation Improvement Program funding cycle, and every
22 two years thereafter, the Department of Transportation may
23 designate Interregional Transportation Improvement Program
24 funds as smart growth incentive funding for eligible projects that
25 support smart growth strategies and are identified as priority
26 transportation spending projects by the Sacramento Area Council
27 of Govemmentso The Sacramento Area Council of Governments
28 shall review requests from individual jurisdictions in a process to
29 be developed by the Sacramento Area Council of Governments
30 using criteria developed by the Department of Transportation, and
31 to be implemented in coordination with existing Sacramento Area
32 Council of Governments RTIP procedures. Allocations and
33 decision guidelines developed by the Sacramento Area Council of
34 Governments, in consultation with cities and counties, shall meet
35 California Transportation Commission Guidelines, and applicable
36 national and state requirements. The Sacramento Area Council of
37 Governments shall forward CAPSMART funding.
38 recommendations to the Department of Transportation which shall
39 make those changes, additions, or deletions as it deems
40 appropriate, and then may include the projects in the state
-- 13 -- AB 680
1 discretionary portion o£:the State Transportation Improvement
2 Program.
3 (c) Any multicounty region in California that adopts regional
4 tax-sharing agreements or multicounty sma~ growth principles, as
5 defined in Section 7215.1, shall be entitled to both of the
6 following:
7 (1) Beginning in the 2008-09 fiscal year and upon
8 appropriation by the Legislature, 1 percent of the funds allocated
9 to the Transportation Investment Fund pursuant to Assembly
10 Constitutional Amendment 4 of the 2001-02 Regular Session.
11 (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 re£me 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 of land 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 (commencing with Section 1.7500) 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.
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AB 680 m 14 --
1 SEC. 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 (1) 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
11 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 L
22 2002.
23 (b) If this act fails 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 (1) Increases the amount of ad valorem property tax revenue
29 otherwise 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 1,
33 2002.
34 (2) Increases the amount of vehicle license fee 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 January 1, 2002; or increases the amount of General Fund moneys
40 received by a city or county under Section 11000 of the Revenue
1~ ~ ~ 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 SEC. 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.
0
May 8, 2002
The Honorable Tom Toflakson
Chairman, Senate Local Government Committee
State Capitol, Room 2068
Sacramento, CA 95814
Re: AB 680 (Steinberg) - Reallocate Sales Tax Revenues & State Funds - Oppose
Dear Senator Toflakson:
I am writing to request your opposition to AB 680 (Steinberg) when it reaches the Senate Local
Government Committee. The Dublin City Council has voted to oppose this legislation. AB 680
will reallocate alt of the growth in a City's 1% share of Sales Tax revenue based on a formula
that is set by the State rather than the provisions of the existing Bradley-Bums Sales Tax Act for
agencies in the Sacramento County region. It also puts cities outside the Sacramento region at a
disadvantage when competing for State transportation and housing funds.
In Dublin, Sales Tax revenue represents our largest remaining revenue source for the General
Fund and it is critical to our ability to respond to the service requests and desires of our residents.
I would hope that as the bill makes its way to the State Senate that cities would be heard and
given an opportunity to comment and discuss this matter. In terms of specific concerns, I would
like you to consider these issues when AB 680 reaches your desk:
· Reallocation of Sales Tax Revenue - With the loss of Property Tax Revenues to the
State through the ERAF process, the City's 1% share of Sales Tax revenues is one of our
largest and most important revenue sources. The City of Dublin's Sales Tax of over $13
million represents a large part of our General Fund revenues. It is vitally important for
the City Council to protect Sales Tax revenue as a fully local and discretionary revenue
source if we are to respond to the requests and interests of Dublin residents.
· AB 680 Does Apply to Cities and Counties Outside the Sacramento Region - Despite
claims to the contrary, AB 680 does affect all cities and counties in the State. We are
troubled by the provisions in the bill that grant "bonuses and priorities" for several State
sources of transportation, infrastructure and library funding to cities and counties in the
Sacramento Region at the expense of cities and counties in other parts of the state -
including the City of Dublin.
· Punishing Smaller Communities - The population formula in AB 680 punishes smaller
communities. A healthy community provides ~a variety of business, commercial, retail
and housing land usage. Yet AB 680 awards fully 1/3 of the growth in future sales tax
revenues solely on the basis of population. This will result in a substantial loss of sales
Attachment 2
tax revenue to smaller communities - even when their pattern of development is both
appropriate and logical.
Broader Application of AB 680 - While the Sales Tax sharing provisions of AB 680
only cover the cities and counties in the Sacramento County region at this time, we are
well aware that there has been discussion in Sacramento about expanding the legislation's
coverage. AB 680 threatens the last major revenue source that funds cities in California
and should be opposed.
Mixed Messages from Sacramento - Just over a year ago State officials were urging
cities to fast track, streamline and approve more office, high tech and commercial
development. Now we're being told that these efforts were "wrong" and we should have
been approving housing developments at that time. I believe that state take over control
of Sales Tax revenues will threaten our most imPortant revenue if it is tied to the ever
changing priorities and whims of the State.
· Cities are "Chasing Costco"? - I must say I'm also troubled by some of the rhetoric and
claims sun'ounding this legislation. The City of Dublin has worked hard over the years to
attract a variety of developments and programs to the City, and we have done so without
incentives. We understand the need to balance housing and commercial growth, and we
are practicing Smart Growth principles with all of our new developments (ex. East
Dublin and West Dublin BART projects). I hope that the State will recognize, not
penalize, cities for these efforts.
· Better Approaches - In our view there are better approaches to achieve the stated goals
of this bill. We feel that the State should stop taking existing City sources of revenue and
instead cap and remm the ERAF portion of City property tax revenue. We need
programs that would recognize the value of housing in a community and would return a
balance to how cities are funded.
For all of these reasons, the City of Dublin strongly opposes AB 680. I urge you to join us in
opposing AB 680 as well as considering the alternatives to the bill that we have suggested.
Sincerely,
Janet Lockhart
Mayor
cc: City Council
City Manager
League of California Cities
Dublin Chamber of Commerce