Learn the statuses of 2024 legislation related to business license, cannabis taxation and regulation, lodging tax, property tax, sales and use tax, and utility users tax that HdL is currently tracking.
--- Updated September 19, 2024
The legislature adjourned for the 2023-2024 season on August 31st. Bills that passed were sent to Governor Newsom and must be signed by September 30th. The Governor has the authority to veto any bills passed through the Legislature. Those not passed along will be considered two-year bills. HdL plans to publish a final legislative update in late October to highlight bills which were signed into law. Reminder that “enrollment” means a bill passed both houses and is waiting to be presented to the Governor for action. A bill is “chaptered” by the Secretary of State after it has passed through both houses of the Legislature and has been signed by the Governor or becomes law without the Governor’s signature.
The following includes updates for 2024 statuses on legislation to watch and bills related to sales and use tax, medical and adult use cannabis taxation and regulation, property taxation, and tax/fee administration that HdL is currently tracking.
Download this Legislative Update in PDF format.
LEGISLATION TO WATCH
CALIFORNIA SUPREME COURT RULES CALIFORNIA BUSINESS ROUNDTABLE MEASURE (STATE INITIATIVE NO. 21-0042A1) REMOVED FROM NOVEMBER ELECTION
This initiative (No. 21-0042A1 as amended) was unanimously ruled by the California Supreme Court on June 20th to be a constitutional revision rather than a constitutional amendment, removing it from the November 2024 ballot. It would have limited the ability of voters along with state and local governments to raise revenues for government services by requiring new or increased taxes to be passed by a two-thirds legislative vote in each State chamber and approved by a simple majority of voters. It would have additionally raised the vote requirement for local taxes proposed by local government or citizens to a two-thirds vote of the local electorate, effective retroactively to January 1, 2022.
Status: California Supreme Court ruled this measure cannot be placed on the November ballot, 6/20/24.
ACA 13 (WARD) VOTING THRESHOLDS
The California Constitution provides that a proposed constitutional amendment and a statewide initiative measure each take effect only if approved by a majority of the votes cast on the amendment or measure. This measure further provides that an initiative measure that includes one or more provisions that would amend the Constitution to increase the voter approval requirement to adopt any state or local measure would be approved by the voters only if the proportion of votes cast in favor of the initiative measure is equal to or greater than the highest voter approval requirement that the initiative measure would impose. The measure specifies that this voter approval requirement would apply to statewide initiative measures that appear on the ballot on or after January 1, 2024. The California Constitution also permits initiative and referendum powers to be exercised by the voters of each city or county under procedures provided by the Legislature. This measure authorizes a local governing body to hold an advisory vote concerning any issue of governance for the purpose of allowing voters within the jurisdiction to voice their opinions on the issue. The measure specifies that an advisory question is approved only if a majority of the votes cast on the question are in favor.
Status: Approved and is eligible for the November 2024 statewide general election. Following the California Supreme Court’s ruling on the Roundtable Measure ballot removal noted above, ACA 13 author Assembly member Ward confirmed a statement that ACA 13 would remain on the November ballot.
ACA 1 (AGUIAR-CURRY) EXEMPTION AND CHANGES TO VOTER APPROVAL RATE FOR AD VALORUM TAX RATE ON REAL PROPERTY
The California Constitution prohibits the ad valorem tax rate on real property from exceeding 1% of the full cash value of the property, subject to certain exceptions. This measure creates an additional exception to the 1% limit that would authorize a city, county, city and county, or special district to levy an ad valorem tax to service bonded indebtedness incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure, affordable housing, or permanent supportive housing, or the acquisition or lease of real property for those purposes, with a 55% voter approval instead of the existing 2/3 voter approval currently required.
Status: Approved and is eligible for the November 2024 statewide general election.
ACA 10 (AGUIAR-CURRY) LOCAL GOVERNMENT FINANCING: AFFORDABLE HOUSING AND PUBLIC INFRASTRUCTURE: VOTER APPROVAL
This measure amends the previously approved ACA 1 by removing special taxes from the reduced vote requirement. If ACA 10 is enacted, the 55 percent vote requirement in ACA 1 would apply only to bond measures.
Status: Approved and is eligible for the November 2024 statewide general election.
BUSINESS LICENSE LEGISLATION
AB 2791 (WILSON) ADDITIONAL RESTRICTIONS FOR SIDEWALK VENDORS
Existing law authorizes a local authority, among other restrictions, to prohibit sidewalk vendors in areas located within the immediate vicinity of a permitted certified farmers’ market or a permitted swap meet. This bill would additionally authorize a local authority to prohibit sidewalk vendors in areas located within the immediate vicinity of an annual fair operated by a district agricultural association, county fair, or citrus fruit fair.
Status: Referred to Committee on Local Government, 5/29/24.
AB 98 (CARRILLO) PLANNING AND ZONING: LOGISTICS USE: TRUCK ROUTES
Prohibits cities and counties from approving new or expanded logistics uses unless they meet specified standards, requires cities and counties to update their circulation elements to include truck routes, and imposes study requirements on the South Coast Air Quality Management District.
Status: Enrolled and presented to the governor, 9/12/24.
CANNABIS LEGISLATION
AB 1775 (HANEY) RETAIL PREPARATION PROVISIONS OF NON-CANNABIS FOOD AND BEVERAGE FOR LICENSED CANNABIS RETAILERS
This bill would authorize a local jurisdiction to allow for the preparation or sale of non-cannabis food or beverage products by a licensed retailer or microbusiness in the area where the consumption of cannabis is allowed and sell tickets for live musical or other performances on the premises of a licensed retailer or microbusiness in the area where the consumption of cannabis is allowed. The bill specifies that these provisions do not authorize a licensed retailer or microbusiness to prepare or sell industrial hemp or products containing industrial hemp, as provided.
Status: Enrolled and presented to the Governor, 9/10/24.
PROPERTY TAX LEGISLATION
SB 1164 (NEWMAN) NEW CONSTRUCTION EXCLUSION FOR ACCESSORY DWELLING UNITS
The California Constitution limits ad valorem taxes on real property to 1% of the full cash value of that property. This bill would exclude the construction of an accessory dwelling unit from the classification as “newly constructed” and “new construction” until 15 years have passed since construction on the accessory dwelling unit was completed or there is a subsequent change in ownership of the accessory dwelling unit. Because this bill would require an affidavit by a property owner and a higher level of service from county assessors, it would impose a state-mandated local program.
Status: First hearing canceled at the request of the author, 6/24/24.
SALES AND USE TAX LEGISLATION
AB 2274 (DIXON ) BACK TO SCHOOL SALES AND USE TAX HOLIDAY
This bill proposes, on and after January 1, 2025, a sales tax exemption on any tangible personal property purchased during the first weekend in August, beginning at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday. Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions. This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
Status: Second hearing canceled at the request of the author, 4/1/24.
AB 2400 (RIVAS) CA ALTERNATIVE ENERGY AND ADVANCED TRANSPORTATION FINANCING AUTHORITY ACT
The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2026, the authority to provide financial assistance to a participating party in the form of specified sales and use tax exclusions for projects, including those that promote California-based manufacturing, California-based jobs, advanced manufacturing, reduction of greenhouse gases, or reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 per calendar year. This bill would extend the sales and use tax exclusion to January 1, 2031.
Status: In Committee: Held Under Submission, 5/16/24.
AB 2431 (MATHIS) TRANSACTIONS AND USE TAX LIMIT PERCENTAGE INCREASE
Current law authorizes cities and counties to levy a transactions and use tax for general or specific purposes including a requirement that the combined rate of all taxes that may be imposed in accordance with that law in the county not exceed 2%. This bill would authorize a city, county, or city and county to impose a transactions and use tax at a rate of no more than an unspecified percentage that in combination with other transactions and use taxes would exceed the above-described combined rate limit of 2%, if certain conditions are met.
Status: First hearing canceled at the request of the author, 4/17/24.
SB 1144 (SKINNER) ONLINE MARKETPLACE REQUIREMENT REVISION
Current law requires an online marketplace to require a high-volume third-party seller on the online marketplace to make certain disclosures. This bill would revise the types of transactions that qualify a third-party seller as a “high- volume third-party seller,” for those purposes. Specifically, the bill would remove the conditions that the transactions be made through an online marketplace and that the online marketplace process the payment and, instead, would add the condition that the transactions were made utilizing an online marketplace.
Status: Chaptered by Secretary of State. Chapter 172, Statutes of 2024, 8/16/24.
SB 1494 (GLAZER) LOCAL AGENCY SALES AND USE TAX AGREEMENTS WITH RETAILERS
This bill would prohibit, on or after January 1, 2024, a local agency from entering into, renewing, or extending any form of agreement that would result in the payment, transfer, diversion, or rebate of Bradley-Burns local tax revenues to any retailer in exchange for the retailer locating or continuing to maintain a place of business that serves as the place of sale for the local agency under the Bradley-Burns Uniform Local Sales and Use Tax Law, making those forms of agreements existing before January 1, 2024, void and unenforceable on January 1, 2030. The bill would require a local agency to post those forms of agreements existing before January 1, 2024, on the local agency’s internet website until the form of agreement expires or becomes void and unenforceable by these provisions.
Status: Ordered to Inactive File on request of Senator Glazer, 5/24/24.
AB 3259 (WILSON) TRANSACTIONS AND USE TAXES: COUNTY OF SOLANO
The bill would authorize the City of Campbell, the City of Pinole, the County of Solano or any city within the County of Solano to impose a transactions and use tax for general or specific purposes at a rate of up to 0.5%. This tax could exceed the existing combined rate limit of 2% for the county, if certain requirements are met. The bill would provide that a transactions and use tax rate imposed pursuant to the bill would not be considered for purposes of the combined rate described above. If an ordinance or citizen’s initiative proposing the tax is not approved by January 1, 2029, the authorization would be repealed.
Status: Enrolled and presented to the Governor, 9/16/24.
SB 1031 (WEINER) SAN FRANCISCO BAY AREA: LOCAL REVENUE MEASURE: TRANSPORTATION IMPROVEMENTS
This bill would authorize the Metropolitan Transportation Commission (MTC) to raise and allocate new revenue, issue bonds, and incur indebtedness until January 1,2041. This could include retail transactions and use tax, a regional payroll tax, a parcel tax, and a regional vehicle registration surcharge in any or all of the included nine counties. The bill would require the MTC to develop an expenditure plan for revenue generated, in consultation with county transportation authorities, and the revenue must be used for transportation improvements in the San Francisco Bay Area.
Status: Held at desk in the Assembly, 5/24/24.
SB 1524 (DODD) CONSUMERS LEGAL REMEDIES ACT: ADVERTISEMENTS: RESTAURANT, BAR, AND OTHER FOOD SERVICES
The Consumers Legal Remedies Act makes unlawful advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges other than taxes or fees imposed by a government on the transaction, as specified. This bill would specify that the above provision does not apply to a mandatory fee or charge for individual food or beverage items sold directly to a customer by a restaurant, bar, food concession, grocery store, or grocery delivery service, or by means of a menu or contract for banquet or catering services that fully discloses the terms of service, subject to certain exclusions and conditions. These conditions would include that a mandatory fee or charge be clearly and conspicuously displayed with an explanation of its purpose on an advertisement, menu, or other display and, as of July 1, 2025, meet certain text requirements, as prescribed. This bill would declare that it is to take effect immediately as an urgency statute.
Status: Chaptered by Secretary of State. Chapter 43, Statutes of 2024, 6/29/24.
UTILITY USERS TAX LEGISLATION
AB 1826 (HOLDEN) DIGITAL EQUITY IN VIDEO FRANCHISING ACT OF 2024
The bill would revise and recast the Digital Infrastructure and Video Competition Act of 2006 to rename the act to the Digital Equity in Video Franchising Act of 2024. The bill would require the Public Utilities Commission to hold a public hearing related to each application for renewal of a state franchise, require the commission to issue a state franchise or a reject each application for a state franchise not more than 90 days after the public hearing if required, or after the application is deemed complete, as specified, and require a franchise applicant to submit a description of the households that are known to be unserved in the video service area footprint that the applicant proposes to serve, and extend deadlines related to the Commission’s review of applications for state franchises.
Status: Enrolled and presented to the Governor, 9/11/24.
