Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

General Law Provisions

Supplemental Acts to the Revenue and Taxation Code

Stats. 1971, Ch. 1762

Stats. 1971, Ch. 1762An act relating to exemptions from taxation.

Section 1. Department of Finance to prepare report of tax structure showing reduction of base because of exemptions, etc. The Department of Finance is directed to prepare a report which contains an outline of the California tax structure describing the state and local revenue bases and their relationship to present deductions, credits, exclusions, exemptions and preferential rates designed to achieve various social and economic objectives but which constitute tax expenditures from the state and local revenue base.

The department's prepared report should contain a general statement as to the approximate amount, if precise figures or estimates are not available, of reduction in the tax base to either local government or to state general and special funds occurring by the operation of such deductions, credits, exclusions, exemptions and preferential rates. The department is authorized to request from the various agencies of the state whatever information is necessary to facilitate the completion of this portion of the report.

Sec. 2. Recommendations. The department shall include in its report recommendations of alternative means to enlarge upon the initial, exploratory report in future years and the estimated cost of each alternative. The department should also include recommendations of how this information may be utilized to improve the format of the budget. Information concerning tax expenditures should be related to the various levels of California government.

Sec. 3. Legislative intent. The intent of this act is to explore an extension of the budget to include state and local tax expenditure made through the structure of the tax system. The present tax structure contains a number of special deductions, credits, exclusions, exemptions, and preferential rates. These provisions serve ends similar in nature to those served by direct state and local expenditures. A tax expenditure has an effect on the private economy and an impact on the budget surplus or deficiency as a direct increase in expenditures. But since tax expenditures are not disclosed in the budget, they are not exposed to the public and are not subject to needed annual scrutiny in the budgetary process. The Legislature intends that this report be a step toward the eventual inclusion in the annual state budget of tax expenditures through the tax structure.

Sec. 4. Report submitted annually. The report required by this act shall be submitted to the Legislature on or before March 30, 1972. After 1972, an updated report shall be submitted every two years on or before March 30.

History.—Enacted by Stats. 1971, p. 3810, in effect December 8, 1971.