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TO: BOARD OF SUPERVISORS `- �'.
FROM- JOHN CULLEN, = Costa
County Administrator
CountyCOUPl"f�
DATE: March 11, 2008
SUBJECT: Support Position on AB 1646 (DeSaulnier)— Public Health Sales and
Use Tax
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
SUPPORT Assembly Bill 1646 (DeSaulnier), legislation that would authorize counties to impose a
transaction and use tax for public health purposes if certain conditions are met, as recommended by
the Health Services Department Director.
FISCAL IMPACT:
Unknown. The County would be required to specify in an ordinance the nature of the tax to be
imposed, the tax rate or maximum tax rate, the period during which the tax would be imposed, and
the purposes for which the tax revenues would be used. The sales and use tax (SUT) rate may be in
0.25% increments, but shall not exceed 1%.
BACKGROUND:
According to the author, the purpose of this bill is to allow counties to increase funding for local public
health efforts. The author states that additional funding is needed because local health departments
have a broad mandate for protecting the public, yet they have inadequate and unreliable funding.
According to the Public Policy Institute of California's (PPIC) 2005 report, "The State Budget and
Local Health Services in California: Surveys of Local Health Officials," local health department (LHD)
services are funded from a variety of local, state, and federal sources, with the state providing the
largest share. However, PPIC also found that local health officials reported decreasing levels of state
funding for county health and mental health programs, which they attributed to California's budget
shortfalls. Many officials reported implementing cost-saving measures such as staff reductions,
program reductions, program elimination, and facility closures ue to budget shortfalls.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR REG6MMENDATION OF BOARD COMMITT /
~� APPROVE OTHER
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SIGNATURE(S):
ACTION OF tiUA�cD ON �'i APPROVED AS RECOMMENDED OfERR
vvvVV �
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
J COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF
( ) THE BOARD OF SUPERVISORS ON THE DATE SHOWN.
UNANIMOUS ABSENT
AYES: NOES:
ABSENT: 1, t�
ABSTAIN:
Contact:
L. DeLaney 5-1097
Cc: ATTESTED
L. DeLaney,CAD's Office JOHN CULLEN,CLEI`RK OF THE BOARD OFSUPERVISORS
C. Christian,via CAO's Office �
Dr.William Walker, Health Services Department
BY: �� , DEPUTY
AB 1646—Public Health Sales and Use Tax, p.2
March 11, 2008
AB 1646 authorizes counties to place a measure on the ballot to impose a local sales and use
tax to fund local public health departments.
The sales and use tax shall be in quarter cent increments up to one cent. It must be approved
by the board of supervisors and then placed on the ballot for approval by two-thirds of the
voting electorate. This additional revenue would be used to supplement, and not replace,
existing local revenues being used to fund Local Health Departments. The monies raised shall
be used to carry out the core functions of the LHD, including disease surveillance,
investigation, containment, and prevention.
Specifically, this bill contains legislative findings noting that:
a) LHDs protect communities from communicable diseases, oversee the medical health
response to emergencies and disasters, and monitor and promote the health of Californians;
and,
b) Public health services are dangerously under funded.
It provides that a county may impose an additional SUT, if the tax ordinance is approved by the
board of supervisors and then placed on the ballot for approval by two-thirds of the voting
electorate at a special election called for that purpose.
SB 1646 provides that an approved SUT shall remain in effect for the period of time specified
in the tax ordinance, and.may be continued or reimposed by a tax ordinance approved by the
electors.
The bill also equires the county, in the ordinance, to specify all of the following:
a) The nature of the tax to be imposed;
b) The tax rate or the maximum tax rate;
c) The period during which the tax will be imposed; and,
d) The purposes for which the tax revenues will be used.
As noted in the Fiscal Impact section, AB 1646 specifies that the SUT rate may be in 0.25%
increments, but shall not exceed 1%.
The bill provides that the county shall conduct any special elections pursuant to Public Utilities
Code Section 180201, and that, whenever possible, special elections shall occur with a
regularly scheduled election.
The bill provides that any SUT ordinance adopted pursuant to this bill shall become operative
on the first day of the first calendar quarter beginning more than 110 days after the ordinance's
adoption.
'The bill language states the Legislature's intent that the additional funds counties derive from a
SUT ordinance shall be used to supplement, and not replace, existing local revenues being
used to fund LHDs.
Finally, the bill provides that counties shall allocate the tax revenues raised to carry out the
core functions of the LHD. These functions include disease surveillance, investigation,
containment, and prevention.
Support:
Health Officers Association California
County Health Executives Association of California
Opposition:
Howard Jarvis Taxpayer Association
AMENDED IN ASSEMBLY JANUARY 17, 2008
AMENDED IN ASSEMBLY JANUARY 7, 2008
AMENDED IN ASSEMBLY SEPTEMBER 6, 2007
CALIFORNIA LEGISLATURE-2007—O8 REGULAR SESSION
ASSEMBLY BILL No. 1646
Introduced by Assembly Member DeSaulnier
February 23, 2007
An act to add Chapter 4(commencing with Section 7292)to Part 1.7
of Division 2 of the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1646, as amended, DeSaulnier. Transactions and use taxes:
counties: public health.
The Transactions and Use Tax Law authorizes counties to levy
transactions and use taxes as special taxes in accordance with the
procedures and requirements set forth in that law.
This bill would authorize counties to impose a transactions and use
tax for specified public health purposes if certain conditions are met.
This bill would make legislative findings and declarations regarding
local public health departments.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as folloivv:
1 SECTION 1. The Legislature finds and declares all of the
2 following:
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AB 1646 —2—
I
2-1 (a) Local public health departments (LHDs) function with the
2 unique responsibility for the protection of the overall health and
3 safety of the community within their jurisdiction.
4 (b) LHDs protect communities from communicable diseases,
5 oversee the medical health response to emergencies and disasters,
6 and monitor and promote the health of communities.
7 (c) The global economy, terrorist threats, and increasing
8 incidence of emerging infections has amplified the importance of
9 a quick public health response.
10 (d) The authority to provide this protection resides in the Health
1 l and Safety Code and regulations thereunder. No other medical
12 health provider, private or public, has such responsibility or
13 -authority for entire populations.
14 (e) The protection of the public's health transcends social,
15 economic, political, and geographical boundaries.
16 (f) .Every resident of a community expects and depends on the
17 effective functioning of the local health department to track,
18 identify, contain, and protect against all communicable disease
19 whether acute, endemic, or emerging.
20 (g) Tuberculosis,HIV/AIDS,E. coli,Norovirus,and West Nile
21 Virus are examples of diseases reported to LHDs that require
22 extensive followup and often containment measures.
23 (h) California has more cases of TB than any other state.
24 (i) Early detection and containment of disease saves tens of
25 thousands of lives and billions of dollars.
26 0) The recent worldwide epidemic of SARS was contained from
27 any spread at all through the quick and effective work of the LHDs
28 in California.
29 (k) In a disaster or local health emergency, the LHD has the
30 responsibility for the coordination of. health resources and
31 minimization of morbidity and mortality.
32 (1) Thc. known medical health implications of a disaster or a
33 health emergency such as an earthquake, large fire, flood, or a
34 disease outbreak such as an influenza pandemic, demand that the
35 LHDs function effectively and at full capacity.
36 (m) It is the LHDs that mobilize and prioritize health resources
37 including volunteers and governmental disaster service workers
38 (DSW).
39 (n) Although the mandate for the LHDs is protection of the
40 whole community and provides as crucial a function as other public
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1 safety entities, public health is drastically and dangerously
2 underfunded.
3 (o) Communities may be left vulnerable and the health of the
4 public endangered.
5 (p) While the LHDs receive general funding from the local
6 governing body, there is generally no stability to the funding.
7 Support to the LHDs is generally dependent on local economic
8 health and political will.
9 (q) The protection of the health and safety of communities
10 requires stable and secure funds through a sales tax in the
11 jurisdiction.
12 (r) A public health sales tax will fund specific mandated
13 functions within the LHDs for the purpose of the overall protection
14 of the health and safety of the community being served by a LHD.
15 SEC. 2. Chapter 4 (commencing with Section 7292) is added
16 to Part 1.7 of the Revenue and Taxation Code, to read:
17
18 CHAPTER 4. PUBLIC HEALTH SALES TAX COUNTY
19 AUTHORIZATION
20
21 7292. (a) The Legislature declares its intent that the additional
22 funds derived by counties pursuant to the authorization under this
23 chapter shall.supplement,and not supplant,existing local revenues
24 being used for public health purposes and that counties maintain
25 their existing commitment of local funds for public health purposes.
26 (b) In addition to the tax levied pursuant to Part 1.5
27 (commencing with Section 7200)and any other tax authorized by
28 this part, a retail transactions and use tax ordinance applicable in
29 the incorporated and unincorporated territory of a county may be
30 imposed by the county, if the tax ordinance is approved by the
31 board of supervisors and then placed on the ballot for the approval
32 of-a by two-thirds of the electors voting on the measure, or by any
33 otherwise applicable voter approval requirement, at a special
34 election called for that purpose by the board of supervisors.
35 (c) A retail transactions and use tax approved by the electors
36 shall remain in effect for the period of time specified in the tax
37 ordinance. The tax may be continued in effect, or reimposed, by
38 a tax ordinance approved by the electors.
39 (d) The county, in the ordinance, shall state the nature of the
40 tax to be imposed, shall provide the tax rate or the maximum tax
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AB 1646 —4—
I
4-1 rate,shall specify the period during which the tax will be imposed,
2 and shall specify the purposes for which the revenue derived from
3 the tax will be used. The tax rate may be in '/,-percent increments
4 and shall not exceed a maximum tax rate of 1 percent.
5 (e) The county shall conduct the special election called for by
6 the board of supervisors pursuant to Section 180201 of the Public
7 Utilities Code.
8 (f) The special election shall be called and conducted in the
9 same manner as provided by law for the conduct of special
10 elections by a county.
11 (g) Whenever possible, the special election shall occur with a
12 regularly scheduled election.
13 (h) Any transactions and use tax ordinance adopted pursuant to
14 this chapter shall be operative on the first day of the first calendar
15 quarter commencing more than 1.10 days after adoption of the
16 ordinance.
17 (i) The transactions and use tax imposed pan suant to this chapter
18 .shall conform to Part 1.6(commencing with Section 7251).
19 (1) Notwithstanding Section 7251.1 of Part 1.6 (commencing
20 with Section 7251), the tax rate authorized by this chapter-.shall
21 not be considered for purposes of the combined rate limit
22 established by Section 7251.1.
23 (i)
.24 (k) The revenues from the taxes imposed pursuant to this
25 legislationma .shall be allocated by the county for the purposes
26 of carrying out the core functions of the local health department.
27 These functions consist of all of the following:
28 (1) Disease surveillance, the active and passive tracking of
29 diseases and conditions, as well as disease trends.
30 (2) Disease investigation, the determination of disease
31 characteristics, extent, and risk to the community.
32 (3) Disease containment,the activity required to limit the spread
33 of a disease and minimize the morbidity and mortality associated
34 with that disease.
35 (4) Disease prevention, using all available means to educate
36 and otherwise keep a disease from impacting a community.
37 (5) Data systems support,the maintenance of registries,reporting
38 systems, and analytical capacity.
39 (6) Disaster and emergency preparedness capacity, to maintain
40 the necessary infrastructure including training and exercise for all
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1 naturally occurring and manmade disasters and emergencies of
2 public health import.
3 (7) Chronic conditions.
4 (8) Health status monitoring.
5 (9) Environmental and health impact analysis.
6 (10) Twenty-four hours per day, seven days per week (24/7)
.7 response capacity.
O
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