AB 2069

AB2069:v97#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2069

An act to add and repeal Section 6372.9 to of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2069, as amended, Krell. Sales and Use Tax Law: exemption: fairgrounds.

Existing state sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes.

This bill, the Fairground Act for Investment and Revitalization, would, starting on and after January 1, 2027, and before January 1, 2032, would exempt the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, tangible personal property for use in a qualifying the construction, development, or ongoing operation of a qualified project, defined to mean a new development project, or new phase of an existing project, that is located on the land of a fairground, undertaken pursuant to a written agreement and approved by a governing body of a fairground, as provided. The bill would require a governing body of a fairground to approve a project for no longer than 20 years, and would authorize the governing body of a fairground to extend the approval of a project for no more than 20 years. project. By requiring additional duties be performed by the governing body of a fairground, this bill would impose a state-mandated local program.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill also would include additional information required for any bill authorizing a new tax expenditure.

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.

This bill would provide that the exemption created by the bill does not apply to local sales and use taxes or transactions and use taxes.

Existing law imposes or dedicates certain state sales and use tax rates for local funding, including through the Local Revenue Fund 2011.

This bill would provide that the exemption created by the bill does not apply to those state sales and use tax rates imposed or dedicated for local government funding, including those rates for which revenues are deposited into the Local Revenue Fund 2011.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

This bill would take effect immediately as a tax levy.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

Bill Text

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

SECTION 1.

Section 6372.9 is added to the Revenue and Taxation Code, to read:

6372.9.

(a) This section shall be known, and may be cited, as the Fairground Act for Investment and Revitalization.

(b) The Legislature finds and declares all of the following:

(1) California fairgrounds are valuable public assets with facilities suitable for economic development.

(2) Fairgrounds serve as critical sites for emergency and disaster response, community engagement, and regional events.

(3) Encouraging private investment on fairground property can generate long-term revenue streams for fairground operations and operations, create significant regional economic benefits, often in underserved communities, and also increases increase the state’s overall economic output.

(4) The high cost of construction, labor, utilities, and taxes has hindered development, resulting in lost opportunities.

(5) A targeted sales and use tax exemption to support public-private partnerships at state-recognized fairground properties would attract substantial private capital investment, provide fairgrounds with stable revenue streams, create jobs, and grow the state’s economy.

(6) A sales and use tax exemption applying only to new developments will not reduce existing revenues, and stimulating new projects will generate net new economic activity benefiting the region and state.

(c) (1) On or after January 1, 2027, and before January 1, 2032, there are exempted from the taxes imposed by this part the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, tangible personal property purchased for use within in the construction, development, or ongoing operation of a qualifying project that has been approved pursuant to subdivision (e).

(2) The exemption provided by this subdivision shall not apply to any sale where the place of sale in this state is on or within the real property of a fair as described in subdivision (a) of Section 3203 of the Food and Agricultural Code.

(d) For purposes of this section, the following definitions shall apply:

(1) “Fairground” means “fair” or “state-designate “state-designated fairground” as those terms are defined in subdivision (a) of Section 3101 of the Food and Agricultural Code.

(2) “Qualified project” means a new development project, or new phase of an existing project, that is located on the land of a fairground and undertaken pursuant to a lease, sublease, license, or other written agreement, and is approved by a governing body of a fairground pursuant to subdivision (e).

(e) (1)A governing body of a fairground shall approve a qualified project for no more than 20 years. project.

(2)A governing body of a fairground may extend the approval of a qualified project for no more than 20 years.

(f) (1) Notwithstanding any provision of the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), the exemption established by this section does not apply with respect to any tax levied by a county, city, or district pursuant to, or in accordance with, either of those laws.

(2) Notwithstanding subdivision (c), the exemption established by this section does not apply with respect to any tax levied pursuant to Section 6051.2 or 6201.2, pursuant to Section 35 of Article XIII of the California Constitution, or any tax levied pursuant to Section 6051 or 6201 that is deposited in the State Treasury to the credit of the Local Revenue Fund 2011 pursuant to Section 6051.15 or 6201.15.

(g) (1) An exemption shall not be allowed under this section with respect to sales by, or purchases from, a retailer engaged in business in this state or from a retailer that is authorized by the California Department of Tax and Fee Administration, under the rules and regulations as it may prescribe, to collect the tax and that is, for the purposes of this part relating to the use tax, regarded as a retailer engaged in business in this state, unless the purchaser furnishes the retailer with an exemption certificate completed in accordance with any instructions or regulations as the California Department of Tax and Fee Administration may prescribe and the retailer retains a copy of the exemption certificate in its records and furnishes the copy of the exemption certificate to the California Department of Tax and Fee Administration upon request.

(2) If a purchaser furnishes the retailer with a copy of an exemption certificate pursuant to paragraph (1), but uses property purchased with the exemption certificate in a manner not qualifying for the exemption, the purchaser is liable for payment of sales tax, with applicable interest, as if the purchaser were a retailer making a retail sale of the property at the time the property is so used, and the cost of the property to the purchaser shall be deemed the gross receipts from that retail sale.

(h) (1)For the purposes of complying with Section 41, the Legislature finds and declares the following:

(A)

(1) The specific goals of the tax exemption allowed by this section are all of the following:

(i)

(A) To encourage new private investment and economic development on fairgrounds.

(ii)

(B) To promote long-term financial sustainability of fairgrounds through public-private development partnerships that generate stable lease revenues and infrastructure improvements.

(iii)

(C) To increase statewide and regional economic activity by facilitating new development that would not otherwise occur due to, among other things, the high cost of construction, labor, utilities, and taxation in California.

(iv)

(D) To generate net new economic benefits, including construction activity, ongoing business operations, and indirect economic impacts, without reducing existing state or local tax revenues.

(B)

(2) The performance indicators for the Legislature to use in determining whether the exemption achieves the stated goals are all of the following:

(i)

(A) The number of qualified projects approved under this section.

(ii)

(B) The amount of private capital investment associated with qualified projects.

(iii)

(C) The extent to which qualified projects generate new economic activity, including construction activity and ongoing operations.

(iv)

(D) The number of leases generated for fairground operations as a result of qualified projects.

(v)

(E) The geographic distribution of qualified projects across regions of the state.

(2)It is the intent of the Legislature that the first evaluation of the tax exemption authorized by this section occur no later than December 1, 2031, and that subsequent evaluations occur as determined appropriate by the Legislature.

(i) This section shall remain in effect only until January 1, 2032, and as of that date is repealed.

SEC. 2.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 3.

This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.