CA Legislative Explainer: Tax Levy Bills

CA Legislative Explainer: Tax Levy Bills By Chris Micheli

Under Article IV, Section 8(c)(3) of the California Constitution, “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.” In addition, a tax levy is not subject to a referendum.

So, what is a “tax levy”? Unfortunately, it is not defined in either the state Constitution or in statute.

Nonetheless, a common misconception is that a “tax levy” is a tax increase bill. However, that is not always the case. While a tax levy is usually a collection tool used by the government, for California bills, a “tax levy” is any bill that imposes, repeals, or materially alters a state tax. It is often described as a bill that changes the base, rate, or burden of a state tax.

The Office of Legislative Counsel indicates in the Title and Digest of the bill whether the bill is a tax levy. Specifically, the Digest will contain the following statement, generally at the end of the Digest: “This bill would take effect immediately as a tax levy.”

A bill reader will see the following language in the text of a tax levy California bill:


This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

As a result, a tax levy takes effect immediately and it is not subject to a referendum.

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 have been introduced at all? The bases for just over 1/3 of the vetoes by the Governor included these categories: ·          18% were deemed unnecessary ·         
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 contains an appropriation related to the budget bill and is listed as a “trailer bill” in the Budget Bill. What is a Su
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 guidance in the Constitution, nor in any California Code, regarding what a “statute calling an election” looks like o
Read more