Senate Constitutional AmendmentNo. 7


Introduced by Senator Huff

(Coauthors: Senators Anderson, Bates, Berryhill, Cannella, Fuller, Gaines, Morrell, Nguyen, Nielsen, Runner, Stone, and Vidak)

April 9, 2015


Senate Constitutional Amendment No. 7—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending Sections 1, 5, 6, and 8 of, and adding Section 11 to, Article XIX thereof, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SCA 7, as introduced, Huff. Motor vehicle fees and taxes: restriction on expenditures.

(1) Article XIX of the California Constitution restricts the expenditure of revenues from taxes imposed by the state on fuels used in motor vehicles upon public streets and highways to street and highway and certain mass transit purposes, and restricts the expenditure of revenues from fees and taxes imposed by the state upon vehicles or their use or operation to state administration and enforcement of laws regulating the use, operation, or registration of vehicles used upon the public streets and highways, as well as to street and highway and certain mass transit purposes. These restrictions do not apply to revenues from taxes or fees imposed under the Sales and Use Tax Law or the Vehicle License Fee Law.

Article XIX prohibits the Legislature from borrowing revenues from taxes imposed by the state on fuels used in motor vehicles, and from using those revenues other than as specifically permitted by Article XIX. Article XIX provides that up to 25% of fuel tax revenues allocated to the state may be pledged or used for the payment of principal and interest on voter-approved transportation bonds issued for street and highway purposes on and after November 2, 2010, upon voter approval and appropriation by the Legislature. Article XIX provides that up to 25% of fuel tax revenues allocated to cities and counties may be pledged or used for the payment of principal and interest on voter-approved transportation bonds issued for street and highway purposes. However, in counties where voters have approved the use of fuel tax revenues for certain mass transit purposes, Article XIX provides that the Legislature may authorize any fuel tax revenues allocated to mass transit purposes to be pledged or used for payment of principal and interest on voter-approved bonds issued for those mass transit purposes.

This measure would prohibit the Legislature from borrowing revenues from fees and taxes imposed by the state on vehicles or their use or operation, and from using those revenues other than as specifically permitted by Article XIX. The measure would also provide that none of those revenues may be pledged or used for the payment of principal and interest on bonds or other indebtedness. The measure would delete the provision that provides for use of any fuel tax revenues allocated to mass transit purposes to be pledged or used for payment of principal and interest on voter-approved bonds issued for those mass transit purposes, and would instead subject those expenditures to the existing 25% limitation applicable to use of fuel tax revenues for street and highway bond purposes.

(2) Article XI of the California Constitution requires, of the revenues derived under the Vehicle License Fee Law, the revenues from a rate that does not exceed 0.65% of the market value of a vehicle to be allocated to cities and counties, and does not restrict expenditure of those revenues for a particular purpose.

This measure would require revenues derived from that portion of the vehicle license fee rate that exceeds 0.65% of the market value of a vehicle to be used for street and highway purposes. The measure would prohibit the Legislature from borrowing those revenues, and from using those revenues other than as specifically permitted. This measure would also provide that none of those revenues may be pledged or used for the payment of principal and interest on bonds or other indebtedness.

(3) This measure would make other conforming changes.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

P3    1WHEREAS, Transportation infrastructure is vital to a growing
2and robust California economy; and

3WHEREAS, In order to continue growing and remain a national
4economic leader, California must prioritize transportation funding;
5and

6WHEREAS, California has 175,499 miles of public roads; and

7WHEREAS, California roadways have $59 billion in
8accumulated deferred maintenance, and 87 percent of county roads
9have an average pavement rating of “at risk” or “poor”; and

10WHEREAS, The average California driver pays $832 annually
11for the increased cost of vehicle maintenance, tire wear, and
12increased gas costs because California streets and roads are in such
13disrepair; and

14WHEREAS, In 2002, the voters passed Proposition 42, with 69
15percent of the vote, which purported to guarantee transportation
16taxes and fees would only be used for transportation purposes; and

17WHEREAS, During the fiscal crisis beginning in 2009, taxes
18and fees being paid by California’s drivers were diverted to the
19state General Fund and not used to repair or maintain California
20streets and roads; and

21WHEREAS, The state fiscal crisis has abated but the diversion
22of transportation taxes and fees continues; and

23WHEREAS, Unmet needs caused by the diversion of certain
24transportation taxes and fees have created an environment of
25crumbling infrastructure and increased costs to repair the state’s
26street and highway system; and

27WHEREAS, To keep the Proposition 42 promise to the voters
28that transportation taxes and fees shall only be used for
29transportation purposes and not diverted to the General Fund to
30pay the cost of general obligation bonds, and to ensure that any
31future transportation fees or taxes are used only for transportation
32purposes, the voters should be given an opportunity to close the
33Proposition 42 loophole; now, therefore, be it

34Resolved by the Senate, the Assembly concurring, That the
35Legislature of the State of California at its 2015-16 Regular
36Session commencing on the first day of December 2014, two-thirds
37of the membership of each house concurring, hereby proposes to
38the people of the State of California that the Constitution of the
39State be amended as follows:

P4    1

First--  

That Section 1 of Article XIX thereof is amended to
2read:

3

SECTION 1.  

The Legislature shall not borrowbegin delete revenue from
4the Highway Users Tax Account, or its successor,end delete
begin insert revenues subject
5to Section 2, 3, or 11,end insert
and shall not use these revenues for purposes,
6or in ways, other than those specifically permitted by this article.

7

Second--  

That Section 5 of Article XIX thereof is amended
8to read:

9

SEC. 5.  

Revenuesbegin delete allocated pursuantend deletebegin insert subjectend insert to Sectionbegin delete 4end deletebegin insert 2end insert
10 may not be expended for the purposes specified in subdivision (b)
11of Section 2, except for research and planning, untilbegin delete suchend deletebegin insert thatend insert use
12is approved by a majority of the votes cast on the proposition
13authorizingbegin delete suchend deletebegin insert thatend insert use ofbegin delete suchend deletebegin insert thoseend insert revenues in an election
14held throughout the county or counties, or a specified area of a
15county or counties, within which the revenues are to be expended.
16begin delete The Legislature may authorize the revenues approved for allocation
17or expenditure under this section to be pledged or used for the
18payment of principal and interest on voter-approved bonds issued
19for the purposes specified in subdivision (b) of Section 2.end delete

20

Third--  

That Section 6 of Article XIX thereof is amended to
21read:

22

SEC. 6.  

(a) Up to 25 percent of the revenuesbegin insert subject to Section
232 that areend insert
allocated to the Statebegin delete pursuant to Section 4 for the
24purposes specified in subdivision (a) of Section 2 of this articleend delete

25 may be pledged or used by the Statebegin delete, upon approval by the voters
26and appropriation by the Legislature,end delete
for the payment of principal
27and interest on voter-approved bondsbegin insert issued by the State on or
28after November 2, 2010,end insert
forbegin delete suchend deletebegin insert theend insert purposesbegin delete issued by the State
29on and after November 2, 2010.end delete
begin insert specified in Section 2, upon
30approval by the voters of this use of the revenues and appropriation
31of the revenues by the Legislature.end insert

32(b) Up to 25 percent of the revenuesbegin insert subject to Section 2 that
33areend insert
allocated to any city or countybegin delete pursuant to Section 4 for the
34purposes specified in subdivision (a) of Section 2 of this articleend delete

35 may be pledged or usedbegin delete onlyend delete bybegin delete anyend deletebegin insert thatend insert city or county for the
36payment of principal and interest on voter-approved bonds issued
37by that city or county forbegin delete suchend deletebegin insert theend insert purposesbegin insert specified in Section 2,
38upon approval by the voters of this use of the revenuesend insert
.

begin insert

P5    1(c) Revenues subject to Section 2, 3, or 11 shall not be pledged
2or used for the payment of principal and interest on bonds or other
3indebtedness, except as specifically provided in this section.

end insert
4

Fourth--  

That Section 8 of Article XIX thereof is amended to
5read:

6

SEC. 8.  

This article shall not affect or apply tobegin delete fees orend delete taxes
7imposed pursuant to the Sales and Use Taxbegin delete Lawend deletebegin insert Law,end insert or the
8Vehicle License Fee Law, and all amendments and additions now
9or hereafter made tobegin delete suchend deletebegin insert thoseend insert statutesbegin insert, except as provided in
10Section 11end insert
.

11

Fifth--  

That Section 11 is added to Article XIX thereof, to
12read:

13

SEC. 11.  

From the revenues derived from taxes imposed
14pursuant to the Vehicle License Fee Law, and all amendments and
15additions now or hereafter made to that statute, other than fees on
16trailer coaches and mobilehomes, over and above the costs of
17collection and any refunds authorized by law, those revenues
18derived from that portion of the vehicle license fee rate that exceeds
190.65 percent of the market value of the vehicle shall be used solely
20for the purposes specified in subdivision (a) of Section 2.



O

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