HomeMy WebLinkAboutLegislative Review CMTE AB 2533 (Leno)CITY OF PALM DESERT
Community Services Division
Staff Report
&NOW
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE
ACTION ON AB 2533 (LENO) AT ITS MEETING OF APRIL 5, 2006
SUBMITTED BY: Patricia Scully, CFEE, Senior Management Analyst
DATE: April 27, 2006
CONTENTS: AB 2533 Language
RECOMMENDATION:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of April 5, 2006, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to AB 2533 (Leno) relative to tax levies.
EXECUTIVE SUMMARY:
Passage of AB 2533 would exempt from sales tax original works of art which have value
as museum pieces.
BACKGROUND:
The Sales and Use Tax Law imposes a tax on the gross receipts from the sale, storage,
use, or other consumption of tangible personal property and provides various exemptions
from that tax, including an exemption for original works of art, items which have value as
museum pieces, and certain purchases of public art by the State or any local government
entity for display to the public. Passage of AB 2533 would expand the exemption for
original works of art to those leased from one nonprofit organization to another for 35 years
or more and would also expand the exemption to include public art that is leased by the
State or any other local government from another entity for display in public places. The
bill's language also expands the definition of a work of art to include costumes, dresses,
clothing, and other personal adornments.
CITY COUNCIL STAFF REPORT
RE: AB 2533 (LENO)
APRIL 27, 2006
The City of Palm Desert opposes an exemption from the imposition of sales tax on any
special interests. Therefore, the Legislative Review Committee recommends that the City
Council oppose AB 2533 and direct staff to prepare a letter stating that position to
appropriate legislators for the Mayor's signature.
PAT IClA CULLY, CFg'
R MA E NT ANALYST
SHEILA R. G UIGAN I CARLOS L. ORT
ACM/COMMUNITY ICES CITY MANAGEIT
PS:mpg
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CALIFORNIA LEGISLATURE-2005-06 REGULAR SESSION
ASSEMBLY BILL No. 2533
Introduced by Assembly Member Leno
February 23, 2006
An act to amend Section 6365 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2533, as introduced, Leno. Sales and use taxes: exemption:
public art.
The Sales and Use Tax Law imposes a tax on the gross receipts
from the sale in this state of, or the storage, use, or other consumption
in this state of, tangible personal property.
Existing law provides various exemptions from that tax, including
an exemption for original works of art, as specified, items which have
value as museum pieces, as specified, and certain purchases of public
art by the state or any local government entity for display to the public
in public places, as specified.
This bill would expand the exemption for original works of art to
include those leased from one nonprofit organization to another
nonprofit organization for 35 years or more. This bill would also
expand the exemption to include public art that is leased by the state
or any local government from another entity for display in public
places. This bill would also expand the definition of work of art to
include a costume, dress, clothing, or personal adornment.
Counties and cities are authorized to impose local sales and use
taxes in conformity with state sales and use taxes. Exemptions from
state sales and use taxes enacted by the Legislature are incorporated
into the local taxes.
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AB 2533
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Section 2230 of the Revenue and Taxation Code provides that the
state will reimburse counties and cities for revenue losses caused by
the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for sales and use tax revenues lost
by them pursuant to this bill.
This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State -mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 6365 of the Revenue and Taxation
2 Code is amended to read:
3 6365. (a) There are exempted from the taxes imposed by this
4 part the gross receipts from the sale of, and the storage, use or
5 other consumption in this state of, original works of art, which
6 are:
7 (1) Purchased by this state or any city, county, city and county,
8 or other local governmental entity;
9 (2) Purchased by any nonprofit organization operating any
10 public museum for, and pursuant to contract with, any such
11 governmental entity;
12 (3) Purchased by any nonprofit organization which has
13 qualified for exemption pursuant to Section 23701d for one or
14 more museums regularly open to the public not less than 20
15 hours per week for not less than 35 weeks of the calendar year
16 and operated by the purchaser of such art or operated by another
17 nonprofit organization which has qualified for exemption
18 pursuant to Section 23701d; or
19 (4) Purchased for donation and actually donated by delivery
20 by the retailer pursuant to ,the instructions of the buyer to any
21 such governmental entity, or nonprofit organization, and
22 evidenced by a written transfer of title from the buyer to such
23 governmental entity or nonprofit organization.
24 (5) Leased from one nonprofit organization to another
25 nonprofit organization for 35 years or more.
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3 — AB 2533
1 (b) The exemption provided by this section shall apply only to
2 works of art purchased to become part of the permanent
3 collection of any of the following:
4 (1) A museum.
5 (2) A nonprofit corporation which has qualified for exemption
6 pursuant to Section 23701d; regularly loans not less than 85
7 percent of the value of its collection of works of art to one or
8 more museums; and is required by its articles of incorporation to
9 loan its works of art and is otherwise prohibited by its articles
10 from making any private use of its works of art; provided, that
11 the work of art for which the exemption is claimed pursuant to
12 this section shall actually be placed on display at one or more
13 museums in California for not less than 24 months during the
14 three-year period commencing from the date of purchase.
15 (3) Any city, county, city and county, or other local
16 governmental entity and this state which purchases,— a
17 commissions, or leases from another entity public art for display
18 to the public in buildings, parks, plazas, or other public places.
19 These areas shall be open to the public not less than 20 hours per
20 week for not less than 35 weeks of the calendar year.
21 (c) For purposes of this section, "work of art" means a work of
22 visual art, including, but not limited to, a drawing, painting,
23 mural, fresco, sculpture, mosaic, film, or photograph, a work of
24 calligraphy, a work of graphic art (including, but not limited to,
25 an etching, lithograph, offset print, silk screen, or a work of
26 graphic art of like nature), crafts (including, but not limited to,
27 crafts in clay, textile, fiber, wood, metal, plastic, glass, costume,
28 dress, clothing, personal adornment, and like materials), or
29 mixed media (including, but not limited to, a collage,
30 assemblage, or any combination of the foregoing art media).
31 (d) For purposes of this section, a "museum" shall only
32 include:
33 (1) A museum which has a significant portion of its space
34 open to the public without ,h rgc; 31 charge.
35 (2) A museum open to the public without charge for not less
36 than six hours during any month the museum is open to the
37 publie; or public.
38 (3) A museum which is open to a segment of the student or
39 adult population without charge.
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AB 2533 — 4 —
1 (e) Any public entity or nonprofit organization claiming an
2 exemption pursuant to this section shall maintain records, in such
3 forms as prescribed by the board, sufficient to substantiate its
4 claim. Such records shall include, but not be limited to, the date
5 of purchase, the purchase price, the date the property was first
6 brought into this state, and the dates and locations the work of art
7 was on display at a museum.
8 SEC. 2. Notwithstanding Section 2230 of the Revenue and
9 Taxation Code, no appropriation is made by this act and the state
10 shall not reimburse any local agency for any sales and use tax
11 revenues lost by it under this act.
12 SEC. 3. This act provides for a tax levy within the meaning of
13 Article IV of the Constitution and shall go into immediate effect.
14 However, the provisions of this act shall become operative on the
15 first day of the first calendar quarter commencing more than 90
16 days after the effective date of this act.
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