BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1665| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1665 Author: Bonilla (D) and Frazier (D), et al. Amended: 5/9/16 in Assembly Vote: 27 - Urgency SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/14/16 AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/22/16 AYES: Hertzberg, Nguyen, Beall, Hernandez, Moorlach, Pavley NO VOTE RECORDED: Lara ASSEMBLY FLOOR: 77-0, 5/16/16 - See last page for vote SUBJECT: Transactions and use taxes: County of Alameda, County of Contra Costa, and Contra Costa Transportation Authority SOURCE: Author DIGEST: This bill removes the existing authority granted to Alameda County and Contra Costa County to impose an additional transaction and use tax (TUT), subject to voter approval, and instead grants Contra Costa County's existing authority to the Contra Costa Transportation Authority (CCTA). ANALYSIS: Existing law: AB 1665 Page 2 1)Authorizes cities and counties to impose a local sales and use tax. 2)Authorizes cities and counties to impose transactions and use taxes. 3)Prohibits, in any county, the combined rate of all taxes imposed in accordance with TUT Law from exceeding 2%. 4)Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a TUT not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met: a) The local government entity adopts an ordinance proposing the TUT by any applicable voting requirements b) The ordinance proposing the TUT is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance c) The TUT conforms to the Transaction and Use Tax Law 5)Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a TUT that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020. This bill: 1)Removes the existing authority granted to Alameda County and Contra Costa County, and instead authorizes the CCTA to adopt an ordinance to impose a TUT, subject to voter approval, that AB 1665 Page 3 exceeds the combined statutory rate of 2% until December 31, 2020. 2)Provides, notwithstanding any other law, any ordinance previously adopted under the authority in existing law for Alameda and Contra Costa Counties to adopt an additional TUT, subject to voter approval, and in effect on January 1, 2016, may continue in effect. 3)Contains an urgency clause and states it is necessary that this bill take effect immediately in order to ensure the residents of Contra Costa County have adequate transportation services. 4)Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs. Comments 1)Purpose. The author asserts, "in light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents." 2)Agency streamlining. This bill proposes to shift the authorization to impose TUT from Contra Costa County to CCTA, similar to authorization granted to transportation authorities on behalf of other counties. The CCTA was formed by voters in 1988 to lead Contra Costa County's transportation efforts and manage funds generated by Measure C, a 0.50% TUT approved by AB 1665 Page 4 voters that same year for transportation purposes. The CCTA also manages funds generated by Measure J, approved by Contra Costa County voters in November 2004, to extend the TUT for another 30 years. Presently, CCTA is moving forward with proposing a transportation tax measure to county voters, but cannot do so directly under current law - instead Contra Costa County must first adopt an ordinance to present a tax to voters and then work with the State Board of Equalization to delegate administrative responsibilities from the county to CCTA. This bill transfers the authority to seek TUT voter approval to the local jurisdiction that would ultimately administer the tax proceeds if approved by two-thirds of voters: CCTA. Since plans to ask Contra Costa County voters for a new tax are already under way, the author has included an urgency measure in this bill to ensure state law is enacted in time to allow CCTA to propose its TUT measure to its voters. 3)Existing authority. While this bill streamlines TUT taxing authority for Contra Costa County, this bill also includes a provision to guarantee existing taxing authority in Alameda County (i.e., Measure BB, enacted in 2014) is not jeopardized with this streamlining process. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified6/24/16) Bay Area Council Contra Costa County Board of Supervisors Contra Costa Transportation Authority California-Nevada Conference of Operating Engineers San Francisco Bay Area Rapid Transit District AB 1665 Page 5 OPPOSITION: (Verified6/24/16) None received ASSEMBLY FLOOR: 77-0, 5/16/16 AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Travis Allen, Dababneh, Gallagher Prepared by:Manny Leon / T. & H. / (916) 651-4121 6/24/16 14:33:49 **** END ****