Local taxation: real property transfers., the official text

An act to add Section 37100.6 to the Government Code, relating to local government.

LEGISLATIVE COUNSEL'S DIGEST

Existing statutory law, enacted by Proposition 62, as approved by the voters at the November 4, 1986, statewide general election, prohibits a local government or district from imposing any transaction tax or sales tax on the sale of real property within the city, county, or district, except as provided. The California Constitution authorizes cities organized under a charter to make and enforce all ordinances and regulations in respect to municipal affairs, which supersede inconsistent general laws. Existing law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city, as provided, with respect to specified instruments that transfer specified interests in real property.
This bill would require a legislative body of a city, as specified, before it adopts any transfer tax on the sale of real property, to develop and post on its internet website an analysis that examines, at a minimum, the effect of the proposed transfer tax on, among other things, the production of affordable housing, including affordable housing produced by market-rate housing projects.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The people of the State of California do enact as follows:

SECTION 1.
Section 37100.6 is added to the Government Code, to read:
37100.6.
Before a legislative body, including, but not limited to, the legislative body of a charter city, adopts any transfer tax on the sale of real property, the legislative body shall develop and post on its internet website an analysis that examines, at a minimum, the effect of the proposed transfer tax on all of the following:
(a) The production of affordable housing, including affordable housing produced by market-rate housing projects.
(b) The production of market-rate housing units.
(c) Property tax revenue for the city, county, state, and any relevant special districts.

SEC. 2.
The Legislature finds and declares that (a) property tax receipts are reduced by fewer property sales and a reduction in property tax has a countywide impact, and (b) the provision of adequate housing, in light of the severe shortage of housing at all income levels in this state, are matters of statewide concern and are not municipal affairs as that term is used in Section 5 of Article XI of the California Constitution. Therefore, Section 1 of this act adding Section 37100.6 to the Government Code applies to all cities, including charter cities.