Frequently Asked Questions about Tax Levies in California Bills

Frequently Asked Questions about Tax Levies in California Bills By Chris Micheli 

There is often confusion regarding whether a bill is a tax levy or not, and what a “tax levy” designation actually means. To make matters worse, a common misconception is that a tax levy is a bill that proposes a tax increase.

 

What is a “tax levy” for California bill purposes? A tax levy is a bill that proposes to change the base, rate, or burden of any tax.

 

Is the definition of a tax levy found in California law? Unfortunately, the term is not defined in either the state Constitution or in statute.

 

Who determines whether a bill is deemed a tax levy? The determination of whether a bill is a tax levy is done by the attorneys in the Office of Legislative Counsel.

 

What will bill readers see in a section at the end of a bill that is a tax levy? The following statement is a plus section in a tax levy bill: “This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.”

 

When do tax levy statutes go into effect? Pursuant to Article IV, Section 8(c)(3) of the California Constitution, “statutes providing for tax levies … shall go into effect immediately upon their enactment.”

 

Is a tax levy bill always a tax increase? That is not always the case. While a tax levy bill can increase taxes, a tax levy bill can also reduce taxes. Basically, a “tax levy” means any bill that imposes, repeals, or materially alters a state tax.

 

Is a tax levy noted in a bill’s Title? Yes, specifically, the Title of the bill will contain, at the end of the Title, the following phrase: “… relating to taxation, to take effect immediately, tax levy.”

 

Is a tax levy noted in a bill’s Legislative Counsel’s Digest? Yes, the Legislative Counsel’s Digest will contain the following statement, generally at the end of the Digest: “This bill would take effect immediately as a tax levy.”

Comments

Post a Comment

Popular posts from this blog

Another Reason to Limit Bill Introductions?

Another Reason to Limit Bill Introductions?  By Chris Micheli             As I did my final review of Governor Newsom’s actions on the 1,046 bills sent to him after the 2023 Legislative Session, I noticed that some of the Governor’s veto messages provide additional rationales for limiting bill introductions.             Out of 156 vetoes from the 2023 Session, the number one reason for the Governor’s veto was budget concerns or cost pressures. In fact, 41% of the vetoes used that basis. That by itself is not a reason to limit bill introductions, but another statistic may provide such a reason…             By my count, just over 1/3 of the bills vetoed by Governor Newsom likely should not have been sent to his Desk and, arguably, should not have made it through the process at all. In fact, perhaps they should not h...
Read more

Frequently Asked Questions about California’s Budget Process

Frequently Asked Questions about California’s Budget Process  By Chris Micheli             What are the main parts of the California state budget? They are the Budget Bill, Budget Bill Junior, Trailer Bills, and Supplemental Reports.             What is the Budget Bill? This bill contains the appropriations and “Budget Bill Language”. Note that only a Budget Bill (or BBJ) can contain multiple appropriations. It requires a majority vote for passage and the bill takes effect immediately. There is just one Budget Bill. What is the “Budget Bill Jr.”? This is the bill that amends the main Budget Bill by making changes to multiple appropriations. There are often multiple BBJs. What is a Trailer Bill? This bill makes the statutory changes needed to implement the budget. It is the same as any other bill, but it takes effect immediately with a majority vote if it contain...
Read more

Can Any Bill Call an Election?

Can Any Bill Call an Election?  By Chris Micheli             In June 2024, we saw two bills that contain a provision to call an election.             Both bills contain a “plus” section at the end of the bill, which is an uncodified statute, stating the following: “this act calls an election within the meaning of Article IV of the California Constitution and shall go into immediate effect.” Such a measure only requires a majority vote, unless some other constitutional provision requires a higher vote threshold (e.g., a tax increase). What is the basis for this statement? Section 8(c)(3) of Article IV of the state Constitution provides: “ Statutes calling elections, statutes providing for tax levies or appropriations for the usual current expenses of the State, and urgency statutes shall go into effect immediately upon their enactment.” However, there is no further gui...
Read more