CA AB398

Imposes a tax of $275 per employee on for-profit, private entities with more than 500 employees performing duties in California, effective January 1, 2021 through December 31, 2025.

Establishes the COVID-19 Local Government and School Recovery and Relief Fund to receive tax revenues, with the Controller continuously appropriating funds for allocation to counties, cities, and K-12 school districts.

Requires the California Department of Tax and Fee Administration to administer and collect the tax under the Fee Collection Procedures Law, with large businesses filing quarterly returns and employee reports detailing which cities and counties employees work in.

Distributes fund revenues by county allocation, with 20 percent to counties, 30 percent to cities proportionally, and 50 percent to K-12 school districts within city jurisdictions.

Requires a two-thirds vote for passage as it results in a taxpayer paying a higher tax under California Constitution Article XIII A, Section 3.