BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1037
                                                                  Page  1

          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