Good afternoon sf.citi members,
This morning, Supervisor Mar has announced his proposed Stock-Based Compensation Tax and has the support, by way of co-sponsorship, from Supervisors Fewer, Haney, Walton, Ronen, Yee, and Mandelman. According to the Clerk of the Board, being that this legislation has support from 4+ members of the Board of Supervisors, this legislation has qualified for the November 5th, 2019 ballot and will likely be heard at the Rules Committee for an informational presentation without the possibility of amendments. We will keep you updated regarding when this legislation will be heard.
According to the proposed legislation, this initiative ordinance would impose an additional payroll expense tax (“Stock-Based Compensation Tax”), at the rate of 1.12% on persons with taxable payroll expense attributable to stock-based compensation (any form of any compensation in the form of, or dependent on the value of, equity interests, including but not limited to stock, stock options, restricted stock, restricted stock units, stock acquired as a result of employee stock purchase plans, stock appreciation rights, and phantom stock). This legislation applies to all companies, with the exception of small businesses, that offer stock-based compensation. As this legislation will go towards a specific purpose, it will require a 2/3 vote by residents during the November 5, 2019 election. The legislation will also be retroactive to May 7, 2019.
In addition, this legislation would create a “Shared Prosperity Fund”, a category four fund as defined in the Administrative Code, and would be appropriated in the following manner and for the following purposes:
- Up to 2% of the proceeds from the Stock-Based Compensation tax would be dedicated to:
- Payment of the administrative expenses of collecting the tax
- Payment for the City oversight of the expenditures
- Payment of the City expenses providing support for the Shared Prosperity Oversight Committee (see below)
- Refunds for any overpayments of the Stock-Based Compensation Tax
- All remaining amounts to provide funding for
- Affordable Housing
- Family, education, youth programs
- Support for the low- and moderate-income workforce
- Small business stabilization
A report, filed by the City Controller, shall be submitted annually with the Board of Supervisors by February 15th of each year. This report shall cover the fiscal year ending on June 30, 2020. The report shall include:
- Amount of monies collected in and expended from the Shared Prosperity Fund
- Status of any project required or authorized to be funded by this fund
- Such other information the Controller deems relevant
Lastly, this legislation establishes a “Shared Prosperity Oversight Committee” to make recommendations to the Mayor and Board of Supervisors to ensure the fund is administered in a manner consistent with goals. The Oversight Committee shall have nine voting members each of whom shall be appointed by the Board of Supervisors. The City Administrator shall provide adequate staffing to the Oversight Committee.
We will be hosting a call on Monday, May 13th from 12:30-1:00pm to discuss the call. Please call in at 415-429-8325.
Feel free to reach out if you have any questions in the meantime.
Jen
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