Some California bills are deemed a “tax levy” by the Office of Legislative Counsel. Readers of California legislation will see a section at the end of a bill that reads as follows:
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
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.”
This begs the question of what is a “tax levy”? Unfortunately, the term is not defined in either the state Constitution or in statute. According to the Office of Legislative Counsel, for California bills, a “tax levy” means any bill that changes the rate, base, or burden of a tax. For example, a bill that imposes, repeals, or materially alters a state tax will be deemed a “tax levy.”
The Office of Legislative Counsel indicates in the Title and Digest of the bill whether the bill is a tax levy. 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.” In addition, 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.”
However, the tax levy statement used in California bills does not have any explanation with it, as shown above in the standardized language used. While there is not any requirement for an explanation, there are other instances where these types of statements found in “plus sections” of bills actually do contain an explanation justifying its declaration.
The following is an example of reimbursable mandate language that contains an explanation of this designation, obviously following the word “because”:
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
This raises the question in my mind whether other declaratory statements, such as the tax levy designation, should also contain an explanation of why a bill has been deemed a tax levy, especially because a tax levy is not defined in the law. The following is an example of my explanatory version of a tax levy statement:
This act provides for a tax levy within the meaning of subdivision (c)(3) of Section 8 of Article IV of the California Constitution because it would change the rate of tax for personal income taxpayers, and shall go into immediate effect. [This version cites the specific section of the state Constitution and describes why it is deemed a tax levy.]
Perhaps at the very least, a statement explaining the tax levy designation could be included in legislative bill analyses.
- More on Underground Regulations in California - November 30, 2023
- Frequently Asked Questions about California Bond Measures - November 29, 2023
- Key Considerations in California Emergency Rulemaking - November 28, 2023