BILL ANALYSIS �
AB 431
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Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 431 (Mullin) - As Amended: April 2, 2013
SUBJECT : Regional transportation plan: sustainable communities
strategy: funding.
SUMMARY : Allows specified metropolitan planning organizations,
subject to voter approval, to impose a transaction and use tax
of no more than 0.5% for the purpose of achieving the goals of
the sustainable communities strategy. Specifically, this bill :
1)Allows a transportation planning agency that is designated as
a metropolitan planning organization (MPO) to impose a
transaction and use tax within all or a portion of its
jurisdiction for the purpose of achieving the goals of the
sustainable communities strategy (SCS), at a rate of no more
than 0.5 %, subject to all of the following conditions:
a) An ordinance proposing the tax and expenditure plan
shall be approved by a majority
of the governing board of the transportation planning agency;
b) The voters within the jurisdiction of the transportation
planning agency shall approve the ballot measure as
specified; and,
c) Requires the transaction and use tax to be levied in
accordance with the Transaction and Use Tax Law, with the
exception of the 2% combined county rate cap contained in
existing law.
2)Allows a transaction and use tax to be imposed pursuant to the
bill's provisions even if the combined rate of the tax and all
taxes imposed in accordance with the 2% combined county rate
cap exceed that 2% limit.
3)Allows a transportation planning agency that includes
territory of more than one county, or portions of a county, to
elect to exclude one or more counties from the transactions
and use tax ordinance.
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4)Requires, as part of the ordinance, the transportation
planning agency to adopt an expenditure plan for the net
revenues to be generated by the transactions and use tax.
5)Requires the expenditure plan to include funding for
transportation, affordable housing, and parks and open space
in conformity with the SCS for the region and its priorities.
6)Requires not less than 25% of available net revenues to be
allocated under the expenditure plan to each category of
transportation, affordable housing, and parks and open space,
and provides that net revenues not used for these purposes
shall be available for purposes determined by the
transportation planning agency to assist in attaining the
goals of the SCS.
7)Provides, for purposes of voter approval, that the ordinance
shall be approved if the requisite number of voters from all
areas cumulatively voting on the measure approve the
ordinance.
8)Allows the transportation planning agency to call a special
election for the purposes of submitting the ordinance
containing the tax and the expenditure plan to the voters
within the jurisdiction of the transportation planning agency
or a portion of that jurisdiction as specified.
9)Requires the election to be consolidated with a statewide
primary or general election specified by the transportation
planning agency.
EXISTING LAW :
1)Requires, under the provisions of SB 375 (Steinberg), Chapter
728, Statutes of 2008, a regional transportation plan to
include a sustainable communities strategy designed to achieve
the targets for greenhouse gas emission reductions.
2)Authorizes cities and counties to impose a local sales and use
tax.
3)Authorizes cities and counties to impose a transactions and
use tax in accordance with the Transaction and Use Tax Law.
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4)Prohibits, in any county, the combined rate of all taxes
imposed in accordance with Transactions and Use Tax Law from
exceeding 2%, except in specified circumstances.
FISCAL EFFECT : Unknown
COMMENTS :
1)This bill authorizes a transportation planning agency that is
designed as a metropolitan planning organization to impose a
transactions and use tax of no more than 0.5% within all or a
portion of its jurisdiction, in order to fund transportation,
and affordable housing, as well as parks and open space in
conformity with the region's sustainable communities strategy.
The bill allows the proposed transactions and use tax to
exceed the 2% combined county cap that is contained in
existing law. In order to impose the tax, the transportation
planning agency must first develop an expenditure plan for the
revenues and then the governing board of the transportation
planning agency must then adopt an ordinance proposing the tax
by a majority vote of that governing board. Provisions in the
bill allow the transportation planning agency that includes
territory of more than one county, or portions of a county, to
elect to exclude one or more counties from the transactions
and use tax ordinance.
The bill is co-sponsored by the Center for Sustainable
Neighborhoods and the Non-Profit Housing Association of
Northern California.
2)Transactions and use taxes are taxes imposed on the total
retail price of any tangible personal property and the use or
storage of such property when sales tax is not paid. These
types of taxes may be levied as general taxes, which are
unrestricted, or special taxes, which are restricted for a
specified use. The Transactions and Use Tax law authorizes
the adoption of local add-on rates to the combined state and
local sales tax rate. The law has been amended multiple times
to authorize specific cities, counties, special districts and
county transportation authorities to impose a transactions and
use tax, if voters approve the tax.
3)According to the author, "local governments including
transportation agencies and park districts currently struggle
for funding to achieve the transportation and natural
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resources goals set forth in SB 375 (Steinberg, 2008).
Additionally, with the loss of redevelopment, cities and
counties have few financing tools to build affordable housing
in their communities - this is particularly difficult with
relatively costly infill development. This bill seeks to
cover this funding shortfall by providing MPOs with the option
of levying regional taxes for the purposes of achieving the
goals of their approved SCSs."
4)Committee amendments : For ease of administration and to
create consistency with existing law pertaining to
transactions and use taxes, the Committee may wish to ask the
author and sponsors to take the following amendments:
a) Clarify that in order to impose the tax, the ordinance
and expenditure plan must be approved by a two-thirds vote
of the governing board of the transportation planning
agency. Right now language in the bill specifies only a
majority of the governing body is necessary. This would
align the bill with existing transactions and use tax
requirements.
b) Delete language in the bill that allows for the
exclusion of portions of a county from the tax. As noted
by the Board of Equalization, who will administer the tax,
if the bill allows for imposition of tax along partial
county lines, the BOE will have to manually identify
accounts and addresses falling with the MPO's boundaries.
The BOE recommends restricting the tax boundaries to the
entirety of the participating county or counties within the
jurisdiction of the MPO.
5)The Orange County Transportation Authority, in opposition,
writes that the bill "fails to create a statewide framework to
meet the mandates under SB 375?by passing the burden
of developing a funding source to the regions, piecemeal
implementation of SB 375 will result, with only the regions
successful in securing a funding source able to fund the
additional demands resulting from SB 375."
6)Support arguments : Supporters argue that the bill will
provide metropolitan planning organizations with additional
funding options for the sustainable communities strategy and
for regions to meet their greenhouse gas emissions reduction
goals.
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Opposition arguments : CalTax argues that this bill would
"open the door for specified regional planning districts to
impose district taxes that crisscross city and county lines,
which would not only create administrative headaches for the
BOE, but would create compliance burdens for taxpayers."
7)This bill is double-referred to the Assembly Transportation
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Non-Profit Housing Association of Northern California
[CO-SPONSOR]
Center for Sustainable Neighborhoods [CO-SPONSOR]
East Bay Housing Organizations
Greenbelt Alliance
Opposition
CalTax
Howard Jarvis Taxpayers Association
Orange County Transportation Authority
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958