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CITY OF PALM DESERT
COMMUNITY SERVICES DEPARTMENT
STAFF REPORT
CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE ACTION
ON AB 150 (SMYTH) AT ITS MEETING OF FEBRUARY 24, 2009
DATE: March 12, 2009
CONTENTS: AB 150 Language
RECOMMENDATION:
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of February 24, 2009, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to AB 150 (Smyth) relative to taxation.
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. If passed, AB 150 would exempt energy
projects from sales tax, including specified layaway agreements.
Because the City of Palm Desert opposes any legislation that would remove local control from
the manner in which it conducts its day to day business, including the collection of sales tax, the
Legislative Review Committee recommends that the City Council oppose AB 150 and direct staff
to prepare a letter stating that position to appropriate legislators and committees for the Mayor's
signat e.
PATRICIA SCULLY, CFEE
SENIOR MANAGEMENT ANA ST
SHEILA R. GILL
ACM/COMMUNITY SERIES
Qa.P
PAUL GIBSON
DIRECTOR OF FINANCE/CITY TREASURER
M.°WOHLMUTH
MANAGER
CITY COUNCILICTION
APPROVE!)
RECEIVED
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State Net Bill Text
Page 1 of 2
In bill text the following has special meaning
underline denotes added text
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2009 CA A 150
AUTHOR: Smyth
VERSION: Introduced
VERSION DATE: 01/22/2009
ASSEMBLY BILL No. 150
INTRODUCED BY Assembly Member Smyth
JANUARY 22, 2009
An act to add Section 6398 to the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 150, as introduced, Smyth. Sales and use taxes: exemption: energy efficient products.
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. That law provides various
exemptions from that tax.
This bill would also exempt from that tax during a qualified period, which would be defined as April
24 of each year beginning in 2010, energy efficient products, as defined, including specified layaway
agreements.
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.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local program: yes.
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State Net Bill Text Page 2 of 2
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6398 is added to the Revenue and Taxation Code, to read:
6398. (a) During a qualified period, there are exempted from the taxes imposed by this part the gross
receipts from the sale in this state of, and the storage, use, or other consumption in this state of, energy
efficient products.
(b) For purposes of this section, all of the following apply:
(1) "Energy efficient products" means a product that meets or exceeds the applicable ENERGY STAR
efficiency requirements developed by the United States Environmental Protection Agency and the
United States Department of Energy.
(2) "Qualified period" means the period beginning at 12:00 a.m. on each April 24 and ending at 11:59
p.m. on each April 24, which date annually occurs during the week of Earth Day. The first qualified
period begins on April 24, 2010.
(c) The exemption provided for by this section also includes any of the following sales:
(1) Layaway agreements entered into during the qualified period specified in paragraph (2) of
subdivision (b) for which the purchaser has made a deposit of at least 10 percent of the sale price of the
energy efficient product.
(2) The sale of an energy efficient product pursuant to an order placed by the purchaser and paid for
in full during the qualified period specified in paragraph (2) of subdivision (b), notwithstanding the fact
that delivery of the energy efficient product is made subsequent to the period of the exemption.
SEC. 2. Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made
by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it
under this act.
SEC. 3. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall
go into immediate effect.
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