Amended in Senate May 28, 2015

Senate Constitutional AmendmentNo. 7


Introduced by Senator Huff

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

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(Coauthors: Assembly Members Travis Allen, Baker, Brough, Chang, Chávez, Gallagher, Hadley, Jones, Kim, Lackey, Olsen, Steinorth, and Waldron)

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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 addingbegin delete Sectionend deletebegin insert Sectionsend insert 11begin insert and 12end insert to, Article XIX thereof, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SCA 7, as amended, 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 tobegin insert theend insert use of fuel tax revenues for street and highway bond purposes.

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This measure would also restrict the expenditure of revenues from taxes imposed by the state on motor vehicle fuels used in propelling water-borne vessels solely to purposes relating to boating facilities, safety, and boating-related activities, as specified, and would prohibit the Legislature from borrowing those revenues.

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(2) Article XI of the California Constitutionbegin delete requires, ofend deletebegin insert requiresend insert the revenues derived under the Vehicle License Feebegin delete Law, the revenuesend deletebegin insert Lawend insert 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 usedbegin insert solelyend insert for street and highwaybegin delete purposes. The measureend deletebegin insert purposes andend insert would prohibit the Legislature from borrowing thosebegin delete revenues, and from using those revenues other than as specifically permitted. Thisend deletebegin insert revenues. Theend insert measure would alsobegin delete provide that none ofend deletebegin insert prohibitend insert those revenuesbegin delete may beend deletebegin insert from beingend insert 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
P4    1future transportation fees or taxes are used only for transportation
2purposes, the voters should be given an opportunity to close the
3Proposition 42 loophole; now, therefore, be it

4Resolved by the Senate, the Assembly concurring, That the
5Legislature of the State of California at its 2015-16 Regular
6Session commencing on the first day of December 2014, two-thirds
7of the membership of each house concurring, hereby proposes to
8the people of the State of California that the Constitution of the
9State be amended as follows:

10

First--  

That Section 1 of Article XIX thereof is amended to
11read:

12

SECTION 1.  

The Legislature shall not borrow revenues subject
13to Section 2, 3,begin delete orend delete 11,begin insert or 12end insert and shall not use these revenues for
14purposes, or in ways, other than those specifically permitted by
15this article.

16

Second--  

That Section 5 of Article XIX thereof is amended
17to read:

18

SEC. 5.  

Revenues subject to Section 2 may not be expended
19for the purposes specified in subdivision (b) of Section 2, except
20for research and planning, until that use is approved by a majority
21of the votes cast on the proposition authorizing that use of those
22revenues in an election held throughout the county or counties, or
23a specified area of a county or counties, within which the revenues
24are to be expended.

25

Third--  

That Section 6 of Article XIX thereof is amended to
26read:

27

SEC. 6.  

(a) Up to 25 percent of the revenues subject to Section
282 that are allocated to the State may be pledged or used by the
29State for the payment of principal and interest on voter-approved
30bonds issued by the State on or after November 2, 2010, for the
31purposes specified in Section 2, upon approval by the voters of
32this use of the revenues and appropriation of the revenues by the
33Legislature.

34(b) Up to 25 percent of the revenues subject to Section 2 that
35are allocated to any city or county may be pledged or used by that
36city or county for the payment of principal and interest on
37voter-approved bonds issued by that city or county for the purposes
38specified in Section 2, upon approval by the voters of this use of
39the revenues.

P5    1(c) Revenues subject to Section 2, 3,begin delete or 11end deletebegin insert 11, or 12end insert shall not
2be pledged or used for the payment of principal and interest on
3bonds or other indebtedness, except as specifically provided in
4this section.

5

Fourth--  

That Section 8 of Article XIX thereof is amended to
6read:

7

SEC. 8.  

This article shall not affect or apply to taxes imposed
8pursuant to the Sales and Use Tax Law, or the Vehicle License
9Fee Law, and all amendments and additions now or hereafter made
10to those statutes, except as provided in Section 11.

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.

21begin insert

begin insertSixth--end insert  

end insert

begin insertThat Section 12 is added to Article XIX thereof, to read:end insert

22begin insert

begin insertSEC. 12.end insert  

end insert

begin insertRevenues from taxes imposed by the State on motor
23vehicle fuels for use in propelling water-borne vessels, over and
24above the costs of collection and any refunds authorized by law,
25shall be deposited into the Harbors and Watercraft Revolving
26Fund (Section 85 of the Harbors and Navigation Code) or its
27successor, and shall be used solely for the following purposes:end insert

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28For boating facilities development, boating safety, boating
29regulation programs, construction of small craft harbor and
30boating facilities planned, designed, and constructed by the State
31at sites owned or under the control of the State, and other
32boating-related activities.

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