BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 425|
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UNFINISHED BUSINESS
Bill No: SB 425
Author: Hernandez (D), et al.
Amended: 6/14/16
Vote: 21
PRIOR VOTES NOT RELEVANT
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 8/24/16 (pursuant to
Senate Rule 29.10)
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
ASSEMBLY FLOOR: 79-0, 8/18/16 - See last page for vote
SUBJECT: City of El Monte: maintenance of effort: streets
and roads allocations
SOURCE: City of El Monte
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).
Assembly Amendments delete the Senate version of the bill and
replace it with the current language.
ANALYSIS:
Existing law:
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1)Directs the transfer of revenue from sales tax collected on
motor vehicle fuel from the General Fund to the TIF; directs
the revenue to be apportioned, in part, to cities and counties
for rehabilitation and maintenance of local streets and roads.
2)Establishes 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)Provides 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.
4)Replaces partially, per ABX8 6 (Committee on Budget, Chapter
11, Statutes of 2009-10 Eighth Extraordinary Session) and SB
70 (Committee on Budget and Fiscal Review, Chapter 9, Statutes
of 2010), 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 (TCRF), 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
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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 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,
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
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local streets and roads.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, 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.
SUPPORT: (Verified8/24/16)
City of El Monte (source)
OPPOSITION: (Verified8/24/16)
None received
ASSEMBLY FLOOR: 79-0, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
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,
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Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Roger Hernández
Prepared by:Manny Leon / T. & H. / (916) 651-4121
8/25/16 18:00:21
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