AB 2060 Summary

• Requires fixed price contracts between government entities and contractors to authorize price adjustments for changes in state sales and use tax rates, paid per contract terms or mutual agreement.

• Applies to tangible personal property, materials, fixtures, and leases entered into before a tax rate increase, but excludes contracts where the contractor has an unconditional right to terminate.

• Modifies transactions and use tax law to change termination rights language from "any party" to "taxpayer/contractor/lessee" having unconditional right to terminate a contract or lease.

• Exempts the state from reimbursing local agencies for sales and use tax revenue losses resulting from this act, notwithstanding existing reimbursement requirements.

• Provides that if the Commission on State Mandates determines the act creates state-mandated local program costs, reimbursement shall follow standard statutory procedures under Government Code Section 17500 et seq.