Bradley-Burns Uniform Local Sales and Use Tax Law: tax sharing agreements.

The bill was reformatted from the amended draft format to the enrolled (final) format: line numbers were removed, amendment history dates were dropped, and the digest header changed from 'SB 1172, as amended, Hurtado' to 'SB 1172, Hurtado.'

Passage dates were added: 'Passed the Senate August 24, 2026' and 'Passed the Assembly August 13, 2026,' along with signature lines for the Secretary of the Senate and Chief Clerk of the Assembly.

Governor's receipt and approval language was added at the end, including a blank date line for when the bill was received by the Governor and a signature line for the Private Secretary of the Governor.

A new exclusion was added to the definition of 'tax sharing agreement': agreements between a local agency and a consultant to identify and recover tax revenues that have been incorrectly allocated and distributed to another local agency are now explicitly excluded from the bill's restrictions on consultant compensation.

Removed the word 'person' before 'local agency' in subsection (b), correcting what appears to be a drafting error ('A person local agency shall not pay' became 'A local agency shall not pay').

The fiscal committee vote was changed from 'yes' to 'no,' reflecting a procedural update rather than a policy change.

The definition of 'tax sharing agreement' was changed from 'any arrangement under which a local agency agrees to rebate, refund, or otherwise share a portion of locally generated tax revenues with a private entity' to 'any form of agreement that would result, directly or indirectly, in the payment, transfer, diversion, or rebate of any tax revenue resulting from the imposition of a sales and use tax under the Bradley-Burns Uniform Local Sales and Use Tax Law to any person for any purpose.' This narrows the scope to sales and use tax specifically but broadens it by covering indirect results and any person (not just private entities).

The entire publication and reporting requirement (former subsection (d)) was deleted. Local agencies would no longer be required to publish on their website and report to the Controller within 30 days of entering a tax sharing agreement, including consultant names, compensation amounts and structure, form of compensation, and copies of consultant contracts.

The subject of the compensation cap in subsection (b) was changed from 'A person shall not pay compensation to a consultant' to 'A person local agency shall not pay compensation to a consultant,' which appears to be a drafting error that may have intended to say 'a person or local agency.'

Section 2 was deleted in its entirety. This section had stated that no state reimbursement would be made for costs mandated by the act under Part 7 of Division 4 of Title 2 of the Government Code, while recognizing local agencies could pursue other available remedies.

The digest removed the reference to 'location of transaction: genuine human interaction' and changed the state-mandated local program designation from 'yes no' to 'no,' consistent with the removal of the publication/reporting requirement that had triggered the state-mandated local program finding.

The entire amendment to Section 7222 of the Revenue and Taxation Code (a nonsubstantive change to the definition of 'local tax') was removed. The bill now only adds Section 53084.6 to the Government Code.

A new subsection (e) was added containing a legislative finding that ensuring fairness in tax sharing agreements is a matter of statewide concern and not a municipal affair under Section 5 of Article XI of the California Constitution, explicitly applying the section to all cities including charter cities. This overrides potential charter city resistance.

The definition of 'tax sharing agreement' in subsection (a)(3) was expanded to explicitly reference Bradley-Burns Uniform Local Sales and Use Tax Law revenue and to cover any 'payment, transfer, diversion, or rebate' of that tax revenue to any person for any purpose, rather than just a local agency agreeing to 'rebate, refund, or otherwise share' locally generated tax revenues with a private entity.

The state-mandated local program designation changed from 'no' to 'yes,' formally recognizing that the bill imposes new duties on local agencies (publication and reporting requirements) that constitute a state-mandated local program, though Section 2 still provides no reimbursement for those costs.

The fiscal committee vote changed from 'no' to 'yes,' indicating the bill now requires fiscal committee review before passage.

Entirely new Section 53084.6 added to the Government Code, creating a regulatory framework for 'tax sharing agreements' - arrangements where a local agency rebates, refunds, or shares locally generated tax revenues with a private entity.

Consultant compensation is capped at the lower of 5% of total tax revenues shared under the agreement or $250,000.

Consultants cannot receive compensation from proceeds of a tax sharing agreement more than three years after the effective date or completion of the project phase that directly benefits from the agreement, whichever occurs first.

Provisions apply only to tax sharing agreements entered into on or after January 1, 2027.

Local agencies must publish on their website and report to the Controller within 30 days of entering a tax sharing agreement: names of all consultants, total amount and structure of compensation, form of compensation (flat fee, success fee, or percentage-based), and a copy of any consultant contract.

Exemptions for local agency staff directly employed by the jurisdiction and technical consultants providing noncompensated advisory services.

Fiscal committee answer changed from 'no' to 'yes' and state-mandated local program answer changed from 'no' to 'yes', reflecting the new obligations imposed on local agencies. A no-reimbursement clause was added for state-mandated costs.