BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: SB 1037 HEARING: 5/7/14 AUTHOR: Hernandez FISCAL: No VERSION: 5/1/14 TAX LEVY: No CONSULTANT: Grinnell LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORTY Requires the Los Angeles Metropolitan Transportation Authority to update specific items of information. Background and Existing Law The California Constitution requires 2/3 voter approval when a local agency wants to impose or increase a special tax, or majority vote for a general tax (Proposition 13, 1978). The Legislature must authorize special districts to impose taxes because these agencies have no plenary taxing powers. State law allows cities and counties to impose transactions and use taxes, which are basically sales and use taxes, in 0.125% increments on top of the state's base rate if the combined rate in the county doesn't exceed 2%. County boards of supervisors also can create a countywide transportation authority to plan and fund transportation projects within the county, and impose local transactions and use taxes to pay for projects. Counties that tax themselves for transportation purposes call themselves "self-help" counties because they have approved measures to help themselves address their own transportation problems. In rare cases, the Legislature allows local agencies to exceed the 2% cap. The Los Angeles County Metropolitan Transportation Authority (MTA) had authority to levy a half-cent transaction and use tax not subject to the 2% countywide cap for six and a half years (SB 314, Murray, 2003). However, MTA didn't put the measure authorized by that bill to the voters. In 2008, the Legislature reauthorized MTA to place the half-cent transactions and use tax for 30 years not subject to the cap; however, the measure required MTA to adopt an expenditure plan prior to SB 1037 - 3/24/14 -- Page 2 submitting the ordinance to the voters (AB 2321, Feuer, 2008). In November, 2008, Los Angeles County voters approved the tax measure, Measure R. Two years ago, the Legislature authorized MTA to impose a permanent transactions and use tax (AB 1446, Feuer, 2012). That measure required MTA to update its expenditure plan prior to submitting the ordinance to the voters. However, Los Angeles County voters didn't approve that tax. Proposed Law Senate Bill 1037 provides that if MTA again places a transactions and use tax on the ballot, it must update and amend the expenditure plan to list: Cost estimates for each project and program, using a transparent process, Accelerated costs of each of the plan's projects and programs, if applicable, A schedule for when MTA anticipates funds will be available for each project and program, Expected completion dates for each project and program. Additionally, the measure requires the revised and updated Long Range Transportation Plan to include the expenditure plan before placing the measure on the ballot. The Long Range Transportation Plan also must list capital projects and programs adopted by each subregion that are submitted to MTA for inclusion. The bill also notes that including cost estimates doesn't mean the project is guaranteed funding. State Revenue Impact No estimate. Comment Purpose of the bill . According to the author, "Los Angeles County voters are subjected to some of the worst traffic in the nation. To help address the problem, they are willing to pass taxes upon themselves, such as Measure R in 2008. SB 1037 - 3/24/14 -- Page 3 Voters deserve to know where their tax dollars are being spent, and how far they go in contributing towards the various transportation projects in the county. SB 1037 will give voters comprehensive information on where their tax money will go; how much and to what project; any outstanding funding needs; and most importantly, will solicit current figures on exact project outlays, prior to any vote on extending taxes or approving new ones. This is accomplished by requiring Metro to update its long range transportation plan and Measure R expenditure plan, with specified categories of information in conjunction with the region's planning entities." SB 1037 - 3/24/14 -- Page 4 Support and Opposition (04/30/14) Support : None received. Opposition : None received.