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CAA: Legislative Update, "California Assembly Bill 66 One Year Later - Allocations of Local Sales Tax From Jet Fuel"



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As promised last year, please find attached current statewide Board of Equalization data on the disbursement of the Bradley-Burns local jet fuel sales tax affected by enactment of California Assembly Bill 66 in October of 1998. AB 66 called for return of the 1% local sales tax generated from sales of jet fuel to local airport sponsors.

Hopefully, these numbers may allow you to approach your sponsors with the aim of returning all or a portion of these monies to the airport. The attached file is in Microsoft Excel format - Steve


Background Information Follows
------------------------------
Since 1991, four cities - Los Angeles, San Francisco, Laguna Hills and Walnut Creek - have been allowed to keep the local portion of the state's tax on jet fuel (roughly $9 million to $10 million each year) simply because the fuel contracts were signed in their jurisdictions.

At the same time, there are over 100 cities and 48 counties responsible for the ,safety, maintenance, proper operation and infrastructure supporting the 104 airports servicing jets of all kinds in California - and they receive nothing from the local portion of the jet fuel sales tax. The City and County of Los Angeles support AB 66 and San Francisco is neutral on this bill. As you know, these jurisdictions have major airports to maintain and operate.

Is it really fair, however, that 20 rural counties like Shasta, Kern, San Luis Obispo and Irnperial that provide vital services at their airports not be allowed to retain the local portion of this tax? Is it equitable that any city or county committing its financial resources, Personnel and equipment to these airports not be allowed to retain its share of this state tax? Allowing communities with airports to keep the jet fuel tax revenues is consistent with the intent of the Bradley-Burns sales tax law because a portion of the jet fuel sales tax is designated for county transportation projects, including airport operations.

The Board of Equalization believes AB 66 provides a fair and equitable solution to the distribution of the jet fuel sales tax dollars. It has voted to support AB 66 because it agrees that like filling your car at the gas pump, the sale of jet fuel is consummated when and where the fuel is pumped into the jet, When gasoline is sold at the pump, cities me allowed to keep the 1 percent tax and counties receive the 1/4 percent tax earmarked for transportation projects. AB 66 makes the law consistent with what is already on the books concerning the Bradley-Burns sales tax law.

AB 66 is not a tax revenue giveaway to San Francisco: The City of San Francisco would split the jet fuel sales tax revenue at San Francisco international Airport with San Mateo County because this airport, like 10 others, is considered a multi-jurisdictional airport in the bill.


AB 66 will not undermine the Bradley-Burns sales tax law: 10 activities and commodities subject to state sales tax have been cited by critics as possible targets if AB 66 becomes law. These arguments are without merit. The state sales tax on six of these (1-offsite warehouse and distribution operations; 2-long-term leases of equipment; 3-hospital supplies and equipment, 4-construction contracts; 5-purchases of manufacturing equipment; and 6-construction of pipelines, mass transportation lines, etc.) is equitably redistributed back to the communities in each county.

As you can see from the attached roll calls, AB 66 has strong, bipartisan support in every region of the state. It will directly assist communities in 48 counties in maintaining their airports, providing safety for everyone using the facilities, and supporting infrastructure that keeps these operations running. These airports, ranging from general aviation facilities to international airports, are vital links to the state and regional economies.

Jurisdiction City of City of City of City of County of City of City of City of City/County County of City of County of County of City of City of
Burbank Fresno Los Angeles Long Beach Sacramento Oakland Ontario San Diego San Francisco San Mateo San Jose Orange Sacramento Bakersfield Palm Springs
Airport Burbank Fresno LAX Long Beach Mather Oakland Ontario San Diego SFO SFO San Jose John Wayne Sacramento Bakersfield Palm Springs
1st, 2nd, &
3rd Qtrs. 1999 28,542 2,393 1,853,389 101,330 7,083 130,245 246,277 310,104 724,388 724,388 581,893 182,055 198,654 4,195 18,395
Recap of first three quarters of calendar 1999 showing local sales tax allocated to airport jurisdictions pursuant to AB 66.

AIRPORT2.XLS


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