BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1446
                                                                  Page  1

          Date of Hearing:   May 9, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 1446 (Feuer) - As Amended:  April 26, 2012 

          Policy Committee:                              Local 
          GovernmentVote:7-1
                        Transportation                               11-1

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows the Los Angeles County Metropolitan 
          Transportation Authority (MTA), subject to voter approval, to 
          extend the existing 0.5% transactions and use tax for specified 
          purposes. Specifically, this bill:  

          1)Allows MTA to extend an existing transactions and use tax 
            approved by voters in 2008 indefinitely if approved by a 
            majority of the entire membership of MTA and two-thirds of the 
            voters.

          2)Allows MTA to incur bonded indebtedness payable from the 
            proceeds of the tax extension, and specifies that proceeds 
            from the bonds must be used to accelerate completion of 
            capital projects and capital programs listed in existing law 
            for MTA.

          3)Requires, upon completion of the projects identified in 2) 
            above, any remaining funds to be deposited in MTA's sales tax 
            revenue fund for projects and programs contained in the 
            expenditure plan or MTA's Long Range Transportation Plan 
            (LRTP).

           FISCAL EFFECT  

          1)Increased revenues to the MTA if the tax is approved again by 
            MTA and the voters.  The amount of new revenues should be 
            roughly similar to those raise by Measure R, the original 
            sales tax, which is expected to raise $40 billion over 30 
            years.








                                                                  AB 1446
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          2)Negligible direct state fiscal impact.  

           COMMENTS
             
           1)Purpose.   According to the author, this bill is intended to 
            give Los Angeles County voters the opportunity to extend the 
            duration of a local source of funding for an ambitious program 

          of transportation infrastructure projects that will transform 
            the Los Angeles region.  The author states anticipated new 
            revenue can be used to pay for new bonds to build projects in 
            MTA's transportation plan sooner.  The author notes efforts 
            are underway to obtain federal loans secured by Measure R 
            revenues to expedite construction of Measure R projects.  
            While these efforts may yet succeed, the author argues 
            additional Measure R revenues will be necessary to accelerate 
            Measure R projects to the maximum extent.  The author notes 
            the bill does not change the project list already contained in 
            current law, and that all Measure R rail, highway, bus and 
            other projects will be accelerated at the same rate, without 
            prioritizing any one category.

           2)Background  .  California's transactions and use tax law was 
            adopted in 1969 to authorize the adoption of local add-on 
            rates to the combined state and local sales tax rate.  Over 
            the years, the law was amended to provide specific 
            authorizations for various particular cities, counties, 
            special districts and countywide authorities.  
                
            3)Previous legislation.  

             a)   SB 314 (Murray), Chapter 785, Statutes of 2003, enacted 
               provisions that authorized MTA to impose a 0.5% sales tax, 
               for no more than six and one-half years, for specific 
               transportation projects and programs. The tax was never 
               imposed.

             b)   AB 2321 (Feuer), Chapter 302, Statutes of 2008, 
               authorized MTA to levy a -cent sales tax for 30 years, 
               subject to voter approval, and required the MTA to include 
               specified projects and programs in its long range 
               transportation plan.   In November of 2008, more than 67% 
               of Los Angeles County voters approved this tax in a ballot 
               measure known as Measure R.  








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           4)Support.   Supporters point to the Los Angeles Economic 
            Development Council estimate made in 2008 that Measure R 
            projects alone will create 166,000 jobs.  They argue this bill 
            will help to expedite the building of transportation projects 
            in Los Angeles County.
                
            5)Opposition arguments  . The Howard Jarvis Taxpayers Association 
            has concerns about the bill's intent to use the revenue stream 
            for the purpose of incurring additional debt and believes that 
            the risks of getting money upfront to complete projects will 
            far outweigh the rewards.

          
          
           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081