BILL ANALYSIS Ó
SB 425
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 425
(Hernandez) - As Amended June 14, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill provides the City of El Monte until June 30, 2021, to
meet the maintenance of effort (MOE) requirement applicable to
cities and counties as a condition of receiving an allocation
for maintenance of streets and roads from the Transportation
Investment Fund (TIF).
FISCAL EFFECT:
SB 425
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Absent this bill, the city would have to provide a $2 million
reimbursement to the state, which would be reallocated among
cities and counties for streets and roads. This bill requires
the city to instead spend this amount from its general fund, by
June 30, 2021, to maintain its own streets and roads.
COMMENTS:
1)Background. Prior law directed the transfer of revenue from
sales tax collected on motor vehicle fuel from the General
Fund to the TIF, and apportioned these revenues, in part, to
cities and counties for rehabilitation and maintenance of
local streets and roads. Receipt of these fund was conditioned
on each local entity meeting a specified MOE requirement.
Trailer bills to the 2010 Budget Act partially replaced the
sale tax on motor fuels with an excise tax and, thereafter,
rendered the TIF and related provisions obsolete.
Between 2006 and 2011, the City of El Monte received funding
from the TIF, and based on the MOE requirement, was obligated
to spend approximately $2 million on its streets and roads
from its general fund. A 2014 State Controller's Office (SCO)
audit found, however, that the city failed to comply with this
MOE requirement.
2)Purpose. According to the author, the city's failure to comply
with the MOE requirement was due to budgetary struggles
throughout the recession. SB 425 allows the city to meet its
MOE requirement by applying the amount owed ($2,015,165) to
its streets and roads over the next four-and-one-half years,
rather than having to repay that amount to the SCO.
SB 425
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3)Prior Legislation. The following entities have been granted
similar statutory relief:
a) Fresno County, though SB 524 (Cogdill) of 2010 and a
further time extension through AB 273` (Perea) of 2014.
b) City of Santa Rosa, through AB 115 (Committee on Budget)
of 2011.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081