BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 338 Hearing Date: 6/16/2015
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|Author: |Roger Hernández |
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|Version: |4/13/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Eric Thronson |
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SUBJECT: Los Angeles County Metropolitan Transportation
Authority: transactions and use tax
DIGEST: This bill authorizes the Los Angeles County
Metropolitan Transportation Authority (LACMTA) to impose by
ordinance an additional local, countywide, one-half-cent sales
tax.
ANALYSIS:
Existing law permits a county board of supervisors to create a
countywide transportation authority to plan and fund
transportation projects within the county. These transportation
authorities may impose a local sales tax for transportation
purposes, if the tax ordinance is within statutory limits and
abides by restrictions on local taxes contained in the
California Constitution. Counties that have chosen to tax
themselves for transportation purposes call themselves
"self-help" counties because they have approved measures to help
themselves address their own transportation problems.
Instead of asking voters to impose a local sales tax for
transportation purposes under the generic authority in existing
law, some counties have specific authorization to propose a
measure to increase the sales tax for transportation purposes.
For example, the Legislature has passed specific legislation
authorizing Los Angeles County to propose to the voters an
increase in the local sales tax for transportation. Voters have
approved three separate measures in Los Angeles County, for a
AB 338 (Roger Hernández) Page 2 of ?
total sales tax rate of 1.5% dedicated to transportation
purposes.
This bill:
1)Authorizes LACMTA to impose by ordinance an additional local,
countywide, one-half-cent sales tax for up to 30 years.
2)Requires LACMTA to adopt the ordinance and submit the proposal
to the voters.
3)Specifies that the ordinance only becomes operative if
approved by two-thirds of the voters voting on the measure.
4)Requires the ordinance imposing the tax to contain all of the
following:
a) An expenditure plan that lists the projects and programs
to be funded from the tax.
b) Provisions conforming to existing requirements for the
imposition of a sales tax, except the limitation that the
combined sales tax rate cannot exceed 2%.
c) Provisions limiting LACMTA's administration costs to
1.5%.
d) A requirement that net revenues must be used for
projects and programs in the expenditure plan.
1)Requires LACMTA to notify the Legislature prior to amending
the adopted expenditure plan.
2)Requires that net revenues are shared equitably between
regions of the county.
3)Requires LACMTA to allocate 20% of the revenues for bus
operations, and that these revenues for operations:
a) Must be allocated based on formulas in existing law.
b) Cannot be derived from local discretionary shares.
c) Cannot be used to supplant funds from any other source
designated for operations.
1)Requires LACMTA to allocate 5% of the revenues for rail
operations.
COMMENTS:
AB 338 (Roger Hernández) Page 3 of ?
1)Purpose. While Los Angeles continues to experience some of
the most challenging traffic congestion in the state and
nation, Los Angeles voters have also recognized the importance
of investing in a transportation network that is responsive to
the needs of commuters, and transit users, and that
facilitates the movement of goods in the region. Most
importantly, Los Angeles voters have responded to an
expenditure plan that can demonstrate fairness in the
distribution of investments throughout the region. According
to the author, this bill provides an approach to bring
additional resources to Los Angeles County predicated on
fairness, transparency, and acknowledgement of best practices.
2)L.A. County measure history. Los Angeles County currently has
in place three separate one-half-cent sales taxes for
transportation purposes (for a total of 1.5 cents per dollar
spent). The first two one-half-cent taxes were initiated in
1981 and 1991 under terms of special legislation and after
local voter approval, and have no expiration date.
In 2008, the Legislature passed and the governor signed AB
2321 (Feuer, Chapter 302), which authorized LACMTA to place
before the voters an ordinance to increase the local
transportation sales tax by another one-half cent for 30
years. The statute required LACMTA to adopt an expenditure
plan prior to submitting the ordinance to the voters, and
identified 18 projects to be included in that expenditure
plan. AB 2321 required LACMTA to include in the expenditure
plan the anticipated completion date for each project. In
November 2008, LACMTA placed the sales tax ordinance, referred
to as Measure R, on the ballot, and 67% of the voters approved
the measure.
At the time voters approved Measure R, LACMTA estimated that
the 30-year program would raise about $40 billion. Because of
the recession and general economic malaise that followed that
vote, LACMTA adjusted its revenue estimates downward and now
only expects the sales tax measure to generate about $36
billion. To address this funding shortfall, LACMTA began a
search for additional revenue or funding mechanisms to meet
its transportation needs. In 2012, the Legislature passed and
the governor signed AB 1446 (Feuer, Chapter 806), which
authorized LACMTA to place before the voters an ordinance to
either eliminate or extend Measure R's 30-year sunset date.
AB 338 (Roger Hernández) Page 4 of ?
The measure, put before the voters in November 2012, failed to
achieve the two-thirds majority necessary for passage.
Instead of seeking to extend Measure R, the author of this
bill is authorizing LACMTA to propose to voters another
half-cent sales tax. This new authorization would not contain
the required projects of past measures, nor the restrictions
of past legislation, but is somewhat a "clean slate" from
which LACMTA can build a new expenditure plan and funding
prioritization.
3)Similar legislation passed the Senate. Similar to this bill,
SB 767 (De León) authorizes LACMTA to impose an additional
countywide sales tax measure, with a few significant
differences. First, this bill limits the length of the
measure's term to no longer than 30 years, whereas SB 767
allows LACMTA to determine the length of the measure's term.
Second, SB 767 does not require LACMTA to notify the
Legislature prior to amending the adopted expenditure plan.
Finally, SB 767 does not allocate a percentage of the revenue
raised by the potential measure to bus and rail operations.
SB 767 was passed by this committee on April 14 8-0 and is
currently pending in the Assembly Rules Committee.
4)Chaptering amendments. This bill has chaptering conflicts
with SB 767. Should these bills continue to move through the
Legislature, the author will need to resolve this conflict at
some point.
5)Technical amendments.
Page 3, line 29, delete "regions" and insert
"subregions".
Page 3, line 33, delete "(f)" and insert "(g)".
1)Double-referral. The Rules Committee has referred this bill
to both this committee and the Governance and Finance
Committee. Therefore, if the bill passes this committee, it
will be referred to the Committee on Governance and Finance.
RELATED LEGISLATION:
SB 314 (Murray, 2003) - established a list of projects that
LACMTA was to construct with proceeds from a voter-approved
6.5-year, one-half-cent sales tax.
AB 338 (Roger Hernández) Page 5 of ?
AB 2321 (Feuer, 2008) - superseded SB 314, authorizing LACMTA to
place before the voters an ordinance to increase by one-half
cent the local transportation sales tax for 30 years.
AB 1446 (Feuer, 2012) - authorized LACMTA to place before the
voters an ordinance to either eliminate or extend Measure R's
30-year sunset date.
SB 1037 (E. Hernandez, 2014) - required LACMTA to update its
expenditure plan and Long-Range Transportation Plan before
presenting another measure to extend Measure R before the
voters.
Assembly Votes:
Floor: 49-29
Appr: 12-5
Trans: 11-5
L Gov: 6-3
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 10, 2015.)
SUPPORT:
Amalgamated Transit Union
California Teamsters Public Affairs Council
OPPOSITION:
California Taxpayers Association
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