BILL ANALYSIS Ó
SB 1037
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Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1037 (Hernandez) - As Amended: June 9, 2014
SENATE VOTE : 31-2
SUBJECT : Los Angeles County Metropolitan Transportation
Authority: transactions and use tax.
SUMMARY : Requires the Los Angeles County Metropolitan
Transportation Authority (LACMTA) to update its expenditure plan
and Long-Range Transportation Plan (LRTP) before placing another
transactions and use tax measure before the voters.
Specifically, this bill :
1)Requires LACMTA, before placing a transactions and use tax on
the ballot, to update and amend the expenditure plan with the
following information:
a) Most recent cost estimates for each project and program
identified in the amended expenditure plan;
b) Identification of the accelerated cost, if applicable,
for each project and program in the amended expenditure
plan;
c) Schedule that LACMTA anticipates funds will be available
for each project and program; and,
d) Expected completion dates for each project and program.
2)Requires LACMTA to develop a transparent process to determine
the most recent cost estimates for each project and program
identified in the amended expenditure plan.
3)Requires the amended expenditure plan to be included in the
revised and updated LRTP before placing a transactions and use
tax on the ballot.
4)Requires the updated LRTP to include capital projects and
capital programs adopted by each sub region that are submitted
to LACMTA for inclusion in the updated LRTP.
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5)Provides that inclusion of a capital project or program in the
LRTP is not a commitment or guarantee that the project or
program shall receive any future funding.
6)Requires LACMTA, at least 30 days before submitting the
ordinance to the voters, to post the amended expenditure plan
and LRTP on their website in a prominent manner.
EXISTING LAW :
1)Authorizes LACMTA to impose a transactions and use tax at a
rate of 0.5% that is applicable in the incorporated and
unincorporated areas of the county.
2)Provides, for purposes of the imposition of the transactions
and use tax, the following requirements:
a) The tax shall be proposed in a transactions and use tax
ordinance that conforms with specified laws and that is
approved by a majority of the entire membership of the
LACMTA; and,
b) The tax may be imposed only if the proposing ordinance
is approved by two-thirds of the voters in a specified
manner.
3)Requires LACMTA, prior to submitting the ordinance to the
voters, to adopt and amend the expenditure plan with updates
of the estimated total cost for each project or program, the
schedule during which LACMTA anticipates funds will be
available for each project or program, and the expected
completion dates for each project or program.
4)Allows LACMTA to incur bonded indebtedness payable from the
proceeds of the tax extension pursuant to LACMTA's bond
issuance provisions in existing law, and any successor act,
and specifies that proceeds from the bonds must be used to
accelerate the completion of the capital projects and capital
programs listed in existing law for LACMTA, and for operations
as specified.
5)Requires, upon completion of the projects that any funds
remaining from the bonds and any funds remaining from the
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proceeds of the tax, after payment of the bonded indebtedness,
must be deposited in LACMTA's sales tax revenue fund to be
used for the purposes of projects and programs contained in
the expenditure plan, LRTP, or its successor plans, and for
operation costs as specified.
FISCAL EFFECT : None
COMMENTS : AB 2321 (Feuer), Chapter 302, Statutes of 2008,
allowed LACMTA to impose a half-cent transactions and use tax
for 30 years. AB 2321 additionally required LACMTA to adopt an
expenditure plan prior to submitting a transactions and use tax
to the voters and to include specified projects and programs in
its LRTP. In November of 2008, more than 67% of Los Angeles
County voters approved this tax in a ballot measure known as
Measure R.
Most recently, AB 1446 (Feuer), Chapter 806, Statutes of 2012,
authorized LACMTA, subject to voter approval, to extend the
existing transactions and use tax for an unlimited amount of
time, allowing LACMTA to determine if a sunset date is
necessary. AB 1446 also required LACMTA to update its
expenditure plan prior to submitting the tax measure to the
voters.
This bill builds on existing requirements that LACMTA must
comply with before going to the voters with an additional
transactions and use tax measure. This bill requires LACMTA,
before placing a transactions and use tax on the ballot, to
update and amend the expenditure plan with the following: (1)
cost estimates for each project and program, using a transparent
process; (2) accelerated costs of each of the plan's projects
and programs, if applicable; (3) a schedule for when LACMTA
anticipates funds will be available for each project and
program; and, (4) expected completion dates for each project and
program. Additionally, this bill requires the revised and
updated LRTP to include the expenditure plan before placing the
measure on the ballot. The LRTP also must list capital projects
and programs adopted by each sub region that are submitted to
LACMTA for inclusion. The bill notes that including cost
estimates does not mean the project is guaranteed funding.
Under this bill, LACMTA would have to post the amended
expenditure plan and LRTP on its website at least 30 days prior
to submitting the tax measure.
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According to the author, Los Angeles County voters are subjected
to some of the worst traffic in the nation, and they are willing
to pass taxes upon themselves to help address the problem. SB
1037 will give voters comprehensive information on where their
money will go; how much and to what project; any outstanding
funding needs; and most importantly, will solicit current
figures on exact project outlays. This information will be
required to go to the voters before any vote to increase or
extend another transportation tax.
The genesis of the bill is criticism of LACMTA's current
internal system of coming up with project costs. LACMTA has
already begun to remedy this criticism by beginning the process
of reaching out to the various council of governments (COG) to
get their updated transportation priority list. In an action
taken in January 2014, LACMTA's board directed staff to update
cost estimates for the expenditure plan. Additionally, the
board each COG $500,000 to assist in their updating and planning
effort.
SB 1037 ensures LACMTA delivers on its commitment to provide
updated information prior to seeking a sale tax extension.
Double-referral : This bill was double-referred to the Assembly
Local Government Committee. It passed out of that committee on
June 18, 2014, unanimously.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093