BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 425 Hearing Date: 8/24/2016
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|Author: |Hernandez |
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|Version: |6/14/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Manny Leon |
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SUBJECT: City of El Monte: maintenance of effort: streets and
roads allocations
DIGEST: This bill extends the date for the City of El Monte to
meet its maintenance of effort (MOE) requirement for funds
received from the Transportation Investment Fund (TIF).
ANALYSIS:
Existing law:
1)Previously directed the transfer of revenue from sales tax
collected on motor vehicle fuel from the General Fund to the
TIF; directed the revenue to be apportioned, in part, to
cities and counties for rehabilitation and maintenance of
local streets and roads.
2)Established an MOE requirement for cities and counties as a
condition of receiving TIF funds; specifically, in exchange
for receiving TIF allocations, cities and counties were
required to expend from their general fund for street, road,
and highway purposes an amount not less than the annual
average of their expenditures from their general fund during
the 1996-97, 1997-98, and 1998-99 fiscal years, as reported to
the State Controller's Office (SCO).
3)Provided that cities and counties had two fiscal years within
which to meet their MOE requirement; cities and counties that
failed to do so would have to return the TIF funds to the SCO
for redistribution to other cities and counties.
SB 425 (Hernandez) Page 2 of ?
4)Per ABX8 6 (Committee on Budget, Chapter 11, Statutes of 2010)
and SB 70 (Committee on Budget and Fiscal Review, Chapter 9,
Statutes of 2010), partially replaced the sales tax on motor
vehicle fuels with an excise tax and, as a result, rendered
the TIF and related provisions obsolete.
This bill:
1)Extends the date for City of El Monte to meet its MOE
requirement for funds received from the TIF to June 30, 2021.
2)Makes legislative findings and declarations regarding the need
for a statutory extension for the City of El Monte.
COMMENTS:
1)Purpose. The author notes, "Between 2006 and 2011, El Monte
received funding from the State's Traffic Congestion Relief
Fund, and as per state law, was required to contribute an MOE
amount of approximately $2 million as a local match.
Unfortunately, El Monte, as was the case with every other city
in California, underwent a recession during this time. It was
unable to contribute its MOE as a result. Since this was
revealed in an audit in 2014, El Monte has attempted to reach
an agreement with the State to repay its MOE, but was told
that repayment after the fact required a statutory change."
2)SCO Audit report. As noted by the author, in October 2014,
the SCO released an audit on the City's use of state
transportation revenues. The SCO's audit found that in the
period from July 1, 2006, to June 30, 2011, the City did not
meet its MOE requirements in return for monies from the
Traffic Congestion Relief Fund (TCRF) for two of those years,
totaling $2.05 million. As a result of this finding, the City
would be required to return the $2.05 million back to the SCO.
In response to the audit's findings, the City requested that
alternative arrangements be established to meet the TCRF's MOE
obligation; however, the SCO informed the City that existing
law does not provide the flexibility for alternative
arrangements and would require a legislative remedy in order
for the City to be provided some relief.
3)What is MOE? An MOE is a requirement in certain legislative,
SB 425 (Hernandez) Page 3 of ?
regulatory or administrative policies that a recipient of
specific funds (e.g., state or federal transportation funds)
must maintain a specified level of financial effort in that
particular program area (e.g., funding for road
rehabilitation) in order for these specified funds to be
provided to the recipient. MOE requirements are usually given
in terms of a previous base-year monetary amount and are
typically established to ensure a recipient of the funds is
committed to maintaining the same level of services it has
been providing prior to receiving the additional revenue.
4)Prior MOE relief to locals. Over the past six years, the
Legislature has provided MOE extensions to several local
entities. The County of Fresno also failed to meet its TIF
MOE obligations and was subsequently statutorily authorized to
fulfill that obligation by providing specialty medical
services in conjunction with federally funded clinics to
indigent individuals. Additionally, the City of Santa Rosa
sought statutory relief, similar to this bill, to grant it
more time to apply funds equal to its MOE requirements on
local streets and roads.
Related/Prior Legislation:
SB 524 (Cogdill, Chapter 716, Statutes of 2010) - granted Fresno
County additional time to meet its TIF MOE commitment.
AB 115 (Committee on Budget, Chapter 38, Statutes of 2011) -
provided the City of Santa Rosa a four-year extension to meet
its TIF MOE obligations.
AB 2731 (Perea, Chapter 743, Statutes of 2014) - allowed Fresno
County an additional five years to meet its TIF MOE commitment,
under certain conditions.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
Assembly votes:
SB 425 (Hernandez) Page 4 of ?
Floor: 70-0
Appr: 20-0
Trans 15-0
POSITIONS: (Communicated to the committee before noon on
Wednesday,
August 23, 2016.)
SUPPORT:
City of El Monte (sponsor)
OPPOSITION:
None recieved
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