Amended in Assembly July 16, 2015

Amended in Assembly July 8, 2015

Amended in Senate June 1, 2015

Senate BillNo. 767


Introduced by Senator De León

(Principal coauthors: Senators Allen, Hall, Hernandez, Lara, Liu, and Pavley)

(Principal coauthors: Assembly Members Bloom, Chau, Holden, Jones-Sawyer, and Nazarian)

February 27, 2015


An act to begin insertamend Section 130350.5 of, to end insertadd Section 130350.7begin delete toend deletebegin insert to, and to repeal Section 130350.6 of,end insert the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

SB 767, as amended, De León. Los Angeles County Metropolitan Transportation Authority: transactions and use tax.

Existing law authorizes the Los Angeles County Metropolitan Transportation Authority (MTA) to impose, in addition to any other tax that it is authorized to impose, a transactions and use tax at a rate of 0.5% for the funding of specified transportation-related projects and programs, subject to various requirements, including the adoption of an expenditure plan and voter approval. Existing law authorizes the MTA to seek voter approval to extend the transactions and use tax pursuant to an amended ordinance, subject to various requirements, including adoption of an amended expenditure plan that, among other things, updates certain cost estimates and identifies expected completion dates for projects and programs under the previous expenditure plan, and also requires the amended expenditure plan to be included in an updated long range transportation plan, as specified.

This bill wouldbegin insert delete the above-referenced provisions relative to extension of the transactions and use tax and an amended ordinance and expenditure plan, The bill would insteadend insert authorize the MTA to impose an additional transportation transactions and use tax at abegin delete specified rate of up to 0.5% or 1.0%end deletebegin insert maximum rate of 0.5% as long as a specified existing 0.5% transactions and use tax is in effect, and at a maximum rate of 1% thereafter, as specified, for a period of time determined by the MTA,end insert if certain conditions exist and subject to various requirements, including the adoption of an expenditure plan and voter approval, as specified.

The Transactions and Use Tax Law limits to 2% the combined rate of all transactions and use taxes imposed in any county, with certain exceptions.

This bill would exempt the transactions and use tax authorized by the bill from this limitation.

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

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 130350.5 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is
2amended to read:end insert

3

130350.5.  

(a) In addition to any other tax that it is authorized
4by law to impose, the Los Angeles County Metropolitan
5Transportation Authority (MTA) may impose, in compliance with
6subdivision (b)begin delete and Section 130350.6end delete, a transactions and use tax
7at a rate of 0.5 percent that is applicable in the incorporated and
8unincorporated areas of the county.

9(b) For purposes of the taxing authority set forth in subdivision
10(a), all of the following apply:

11(1) The tax shall be proposed in a transactions and use tax
12ordinance, that conforms with Chapter 2 (commencing with Section
137261) to Chapter 4 (commencing with Section 7275), inclusive,
14of the Transactions and Use Tax Law (Part 1.6 (commencing with
15Section 7251) of Division 2 of the Revenue and Taxation Code),
16and that is approved by a majority of the entire membership of the
17authority.

P3    1(2) The tax may be imposed only if the proposing ordinance is
2approved by two-thirds of the voters, in the manner as otherwise
3required by law, voting on this measure, in an election held on
4November 4, 2008, or at a subsequent election and, if so approved,
5shall become operative as provided in Section 130352.

6(3) The proposing ordinance shall specify, in addition to the
7rate of tax and other matters as required by the Transactions and
8Use Tax Law, that the net revenues derived from the tax are to be
9administered by the MTA as provided in this section. Net revenues
10shall be defined as all revenues derived from the tax less any
11refunds, costs of administration by the State Board of Equalization,
12and costs of administration by the MTA. Such costs of
13administration by the MTA shall not exceed 1.5 percent of the
14revenues derived from the tax. The MTA shall, during the period
15in which the ordinance is operative, allocate 20 percent of all net
16revenues derived from the tax for bus operations to all eligible and
17included municipal transit operators in the County of Los Angeles
18and to the MTA, in accordance with Section 99285. However, the
19allocations to the MTA and eligible and included municipal
20operators shall be made solely from revenues derived from a tax
21imposed pursuant to this section, and not from local discretionary
22sources. Funds allocated by MTA to itself pursuant to this section
23shall be used for transit operations and shall not supplant funds
24from any other source allocated by MTA to itself for public transit
25operations. Funds allocated by MTA to the eligible and included
26municipal operators pursuant to this section shall be used for transit
27operations and shall not supplant any funds authorized by other
28provisions of law and allocated by MTA to the eligible and
29included municipal operators for public transit. In addition to this
30amount, the MTA shall allocate 5 percent of all net revenues
31derived from the tax, for rail operations. The MTA shall include
32the projects and programs described in subparagraphs (A) and (B)
33in the expenditure plan required under subdivision (f). The MTA
34shall include all projects and programs described in the expenditure
35plan required under subdivision (f) in its Long Range
36Transportation Plan (LRTP). The priorities for projects and
37programs described in subparagraphs (A) and (B) and in the
38expenditure plan required under subdivision (f) shall be those set
39forth in the expenditure plan. The funding amounts specified in
40subparagraphs (A) and (B) are minimum amounts that shall be
P4    1allocated by the MTA from the net revenues derived from a tax
2imposed pursuant to this section. Nothing in this section prohibits
3the MTA from allocating additional net revenues derived from the
4tax to these projects and programs.

5(A) Capital Projects.

6(i) Exposition Boulevard Light Rail Transit Project from
7downtown Los Angeles to Santa Monica. The sum of nine hundred
8twenty-five million dollars ($925,000,000).

9(ii) Crenshaw Transit Corridor from Wilshire Boulevard to Los
10Angeles International Airport along Crenshaw Boulevard. The
11sum of two hundred thirty-five million five hundred thousand
12dollars ($235,500,000).

13(iii) San Fernando Valley North-South Rapidways. The sum of
14one hundred million five hundred thousand dollars ($100,500,000).

15(iv) Metro Gold Line (Pasadena to Claremont) Light Rail Transit
16Extension. The sum of seven hundred thirty-five million dollars
17($735,000,000).

18(v) Metro Regional Connector. The sum of one hundred sixty
19million dollars ($160,000,000).

20(vi) Metro Westside Subway Extension. The sum of nine
21hundred million dollars ($900,000,000).

22(vii) State Highway Route 5 Carmenita Road Interchange
23Improvement. The sum of one hundred thirty-eight million dollars
24($138,000,000).

25(viii) State Highway Route 5 Capacity Enhancement (State
26Highway Route 134 to State Highway Route 170, including access
27improvement for Empire Avenue). The sum of two hundred
28seventy-one million five hundred thousand dollars ($271,500,000).

29(ix) State Highway Route 5 Capacity Enhancement (State
30Highway Route 605 to the Orange County line, including
31improvements to the Valley View Interchange). The sum of two
32hundred sixty-four million eight hundred thousand dollars
33($264,800,000).

34(x) State Highway Route 5/State Highway Route 14 Capacity
35Enhancement. The sum of ninety million eight hundred thousand
36dollars ($90,800,000).

37(xi) Capital Project Contingency Fund. The sum of one hundred
38seventy-three million dollars ($173,000,000).

39(B) Capital Programs.

P5    1(i) Alameda Corridor East Grade Separations. The sum of two
2hundred million dollars ($200,000,000).

3(ii) MTA and Municipal Regional Clean Fuel Bus Capital
4(Facilities and Rolling Stock). The sum of one hundred fifty million
5dollars ($150,000,000).

6(iii) Countywide Soundwall Construction (MTA Regional List
7and Monterey Park/State Highway Route 60). The sum of two
8hundred fifty million dollars ($250,000,000).

9(iv) Local return for major street resurfacing, rehabilitation, and
10reconstruction. The sum of two hundred fifty million dollars
11($250,000,000).

12(v) Metrolink Capital Improvements. The sum of seventy million
13dollars ($70,000,000).

14(vi) Eastside Light Rail Access. The sum of thirty million dollars
15($30,000,000).

16(c) The MTA may incur bonded indebtedness payable from the
17proceeds of the tax provided by this section pursuant to the bond
18issuance provisions ofbegin delete Section 130500 et seq. of the Public Utilities
19Code,end delete
begin insert Chapter 5 (commencing with Section 130500)end insert and any
20successor act. The MTA shall include in the expenditure plan,
21required under subdivision (f), the amount of net revenue specified
22for all projects and programs in subparagraphs (A) and (B) of
23paragraph (3) of subdivision (b) as a condition of the use and
24expenditure of the proceeds of the tax. The MTA shall maintain
25the current amount of any funding for the projects and programs
26specified in this section that has been previously programmed or
27received from sources other than the proceeds of the tax, and may
28not reallocate money that has been previously programmed or
29received for those projects and programs to other projects or uses.

30(d) Notwithstanding Section 7251.1 of the Revenue and Taxation
31Code, the tax rate authorized by this section shall not be considered
32for purposes of the combined rate limit established by that section.

33(e) A jurisdiction or recipient is eligible to receive funds from
34the local return program, described in clause (iv) of subparagraph
35(B) of paragraph (3) of subdivisionbegin delete (b) of this section and in
36subdivision (c) of Section 130350.6,end delete
begin insert (b),end insert only if it continues to
37contribute to that program an amount that is equal to its existing
38commitment of local funds or other available funds. The MTA
39may develop guidelines that, at a minimum, specify maintenance
40of effort requirements for the local return program, matching funds,
P6    1and administrative requirements for the recipients of revenue
2derived from the tax.

3(f) Prior to submitting the ordinance to the voters, the MTA
4shall adopt an expenditure plan for the net revenues derived from
5the tax. The expenditure plan shall include, in addition to other
6projects and programs identified by the MTA, the specified projects
7and programs listed in paragraph (3) of subdivision (b), the
8estimated total cost for each project and program, funds other than
9the tax revenues that the MTA anticipates will be expended on the
10projects and programs, and the schedule during which the MTA
11anticipates funds will be available for each project and program.
12The MTA shall also identify in its expenditure plan the expected
13completion dates for each project described in subparagraph (A)
14of paragraph (3) of subdivision (b). To be eligible to receive
15revenues derived from the tax, an agency sponsoring a capital
16project or capital program shall submit to the MTA an expenditure
17plan for its project or program containing the same elements as
18the expenditure plan that MTA is required by this subdivision to
19prepare.

20(g) The MTA shall establish and administer a sales tax revenue
21fund. The net revenue derived from the tax, after payment of any
22debt services and related obligations, shall be credited to this fund.
23The moneys in the fund shall be available to the MTA to meet
24expenditure and cashflow needs of the projects and programs
25described in the expenditure plan required under subdivision (f).
26In the event that there are net revenues in excess of the amount
27necessary to provide the amount of net revenues specified in the
28expenditure plan for the projects and programs described therein,
29the MTA may expend the excess net revenues on projects and
30programs in the expenditure plan or the LRTP. In the event that
31projects and programs in the expenditure plan are completed
32without the expenditure of the amount of net revenues specified,
33the MTA shall expend the excess net revenues on projects and
34programs in the expenditure plan or the LRTP within the same
35subregion as the project or program that is completed. For the
36purposes of this section, “subregion” shall be defined in the LRTP.

37(h) If other funds become available and are allocated to provide
38all or a portion of the amount of net revenues specified in the
39expenditure plan for the projects or programs described therein,
P7    1the MTA may expend the surplus net revenues on other projects
2and programs in the expenditure plan or the LRTP.

3(i) (1) Notwithstanding subdivision (h), if a capital project or
4capital program described in clauses (i) to (x), inclusive, of
5subparagraph (A) of paragraph (3) of subdivision (b) and clauses
6(i) and (vi) of subparagraph (B) of paragraph (3) of subdivision
7(b), has been fully funded from other sources on or before
8December 31, 2008, the funds designated to the project or program
9in clauses (i) to (x), inclusive, of subparagraph (A) of paragraph
10(3) of subdivision (b) and clauses (i) and (vi) of subparagraph (B)
11of paragraph (3) of subdivision (b) shall remain in the subregion
12in which the project or program is located and shall be allocated
13to other projects or programs in the subregion prior to the
14expiration of the tax.

15(2) A capital project or capital program funded with reallocated
16funds pursuant to paragraph (1) shall be included in the adopted
172008 Long Range Transportation Plan or the successor plan and
18shall be of regional significance as determined by the MTA. For
19purposes of this subdivision, “subregions” means the subregions
20as defined in the LRTP in effect as of January 1, 2008.

21(j) Notwithstanding Section 130354, revenues raised under this
22sectionbegin delete and Section 130350.6end delete may be used to facilitate the
23transportation of people and goods within Los Angeles County.
24The use of the revenues shall not be limited to public transit
25purposes.

26(k) No later than 365 days prior to the adoption of an amendment
27described in paragraph (1) to an expenditure plan adopted pursuant
28to subdivision (f), including, but not limited to, the expenditure
29plan adopted by the MTA board as “Attachment A” in Ordinance
30#08-01 adopted by the board on July 24, 2008, and in addition to
31any other notice requirements in the proposing ordinance, the board
32shall notify the Members of the Legislature representing the County
33of Los Angeles of all of the following:

34(1) A description of the proposed amendments to the adopted
35expenditure plan that would do any of the following:

36(A) Affect the amount of net revenues derived from the tax
37imposed pursuant to this act that is proposed to be expended on a
38capital project or projects identified in the adopted expenditure
39plan.

P8    1(B) Delay the schedule for the availability of funds proposed
2to be expended on a capital project or projects identified in the
3adopted expenditure plan.

4(C) Delay the schedule for the estimated or expected completion
5date of a capital project or projects identified in the adopted
6expenditure plan.

7(2) The reason for the proposed amendment.

8(3) The estimated impact the proposed amendment will have
9on the schedule, cost, scope, or timely availability of funding for
10the capital project or projects contained in the adopted expenditure
11plan.

12(l) The notification required pursuant to subdivision (k) shall
13be achieved by resolution adopted by the MTA board.

14(m) The MTA board shall provide prior written notice to the
15Members of the Legislature representing the County of Los
16Angeles of any proposed amendments to the adopted expenditure
17plan that would accelerate funding for a capital project or projects
18in the adopted expenditure plan.

19begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 130350.6 of the end insertbegin insertPublic Utilities Codeend insertbegin insert is
20repealed.end insert

begin delete
21

130350.6.  

(a) The tax authorized by Section 130350.5 may
22be imposed as set forth in paragraph (3) of subdivision (b) of
23Section 130350.5 in a transactions and use tax ordinance, or an
24amendment of the ordinance approved pursuant to paragraph (1)
25of subdivision (b) of Section 130350.5, that conforms with Chapter
262 (commencing with Section 7261) to Chapter 4 (commencing
27with Section 7275), inclusive, of the Transactions and Use Tax
28Law (Part 1.6 (commencing with Section 7251) of Division 2 of
29the Revenue and Taxation Code), and that is approved by a
30majority of the entire membership of the authority. The tax may
31be imposed pursuant to this section only if the proposing ordinance,
32or amendment thereof, is approved by two-thirds of the voters, in
33the manner as otherwise required by law, voting on this measure,
34in a special or general election and, if so approved, shall become
35operative as provided in Section 130352. The proposing ordinance
36shall specify that the net revenues derived from the tax are to be
37administered by the Los Angeles County Metropolitan
38Transportation Authority (MTA) as provided in this section. Net
39revenues shall be defined as all revenues derived from the tax less
40any refunds, costs of administration by the State Board of
P9    1Equalization, and costs of administration by the MTA. Such costs
2of administration by the MTA shall not exceed 1.5 percent of the
3revenues derived from the tax. The proposing ordinance shall be
4accompanied by a new expenditure plan for the net revenues
5derived from the tax. This new expenditure plan shall identify the
6years in which the MTA anticipates net revenues derived from the
7tax will be available to each project or program in the new
8expenditure plan.

9(b) The MTA may incur bonded indebtedness payable from the
10proceeds of the tax authorized by this section pursuant to the bond
11issuance provisions of this chapter, and any successor act.

12(c) Proceeds from the tax authorized by this section, including
13proceeds from bonds issued pursuant to subdivision (b), after
14payment of the bonded indebtedness, shall be used to accelerate
15the completion of the projects and programs identified in
16subparagraphs (A) and (B) of paragraph (3) of subdivision (b) of
17Section 130350.5, for the expenditure plan adopted by the MTA
18board on July 24, 2008, and for operations pursuant to paragraph
19(3) of subdivision (b) of Section 130350.5.

20(d) Upon completion of the projects and programs identified in
21subparagraphs (A) and (B) of paragraph (3) of subdivision (b) of
22Section 130350.5 and the expenditure plan adopted by the MTA
23board on July 24, 2008, any funds remaining from the bonds
24described in subdivision (b) and any funds remaining from the
25proceeds of the tax authorized by this section, after payment of
26the bonded indebtedness, shall be expended by the MTA on
27projects and programs in the Long Range Transportation Plan or
28its successor plans, and for operations pursuant to paragraph (3)
29of subdivision (b) of Section 130350.5.

30(e) To the extent that the MTA deems it necessary to accelerate
31the completion of a project or program in a new expenditure plan
32adopted pursuant to this section, the MTA shall expend funds
33derived from the sales tax authorized by Section 130350.5
34according to the schedule described in the new expenditure plan
35adopted pursuant to this section. The MTA shall make this
36determination by a majority vote of the MTA board.

37(f) (1) Before submitting the ordinance described in subdivision
38(a) to the voters, the MTA shall amend the expenditure plan
39adopted pursuant to subdivision (f) of Section 130350.5. The
40amended expenditure plan shall update all of the following for the
P10   1projects and programs listed in subparagraphs (A) and (B) of
2paragraph (3) of subdivision (b) of Section 130350.5:

3(A) The most recent cost estimates for each project and program
4identified in the amended expenditure plan.

5(B) The identification of the accelerated cost, if applicable, for
6each project and program in the amended expenditure plan.

7(C) The schedule during which the MTA anticipates funds will
8be available for each project and program.

9(D) The expected completion dates for each project and program.

10(2) The MTA shall develop a transparent process to determine
11the most recent cost estimates for each project and program
12identified in the amended expenditure plan.

13(3) The amended expenditure plan shall also be included in the
14revised and updated Long Range Transportation Plan before the
15ordinance described in subdivision (a) is submitted to the voters.
16The revised and updated Long Range Transportation Plan shall
17also include capital projects and capital programs that are adopted
18by each subregion that are submitted to the MTA for inclusion in
19the revised and updated Long Range Transportation Plan. Inclusion
20of a capital project or a capital program in the Long Range
21Transportation Plan is not a commitment or guarantee that the
22project or program shall receive any future funding. As used in
23this paragraph, “subregion” shall have the meaning as defined in
24the Long Range Transportation Plan in effect as of January 1,
252008.

26(4) At least 30 days before submitting the ordinance described
27in subdivision (a) to the voters, the MTA shall post the amended
28expenditure plan and the Long Range Transportation Plan on the
29MTA’s Internet Web site in a prominent manner.

end delete
30

begin deleteSECTION 1.end delete
31begin insertSEC. 3.end insert  

Section 130350.7 is added to the Public Utilities Code,
32to read:

33

130350.7.  

(a) The Los Angeles County Metropolitan
34Transportation Authority (MTA), in addition to any other tax it is
35authorized to impose or has imposed, may impose a transactions
36and use tax, for a period to be determined by the MTA, that is
37applicable in the incorporated and unincorporated areas of Los
38Angeles County. The begin insertrate of end inserttax authorized by thisbegin delete section shall
39not exceed either of the following:end delete
begin insert section, when combined with
40the rate of tax authorized by voter approval of Measure R pursuant
P11   1to Section 130350.5 during any period when that tax is in effect,
2and upon the expiration of that tax, shall not exceed 1 percent.end insert

begin delete

3(1) The rate of 0.5 percent if a tax authorized by Section
4130350.5 or 130350.6 is in effect.

end delete
begin delete

5(2) The rate of 1.0 percent if a tax authorized by Section
6130350.5 or 130350.6 is not in effect.

end delete

7(b) The ordinance imposing the tax shall contain all of the
8following:

9(1) An expenditure plan that lists the transportation projects and
10programs to be funded from net revenues from the tax. The
11expenditure plan shall appear in the ordinance as an exhibit. The
12expenditure plan shall include all of the following:

13(A) The most recent cost estimates for each project and program
14identified in the expenditure plan.

15(B) The identification of the accelerated cost, if applicable, for
16each project and program in the expenditure plan.

17(C) The approximate schedule during which the MTA anticipates
18funds will be available for each project and program.

19(D) The expected completion dates for each project and program
20within a three-year range.

21(2) Provisions conforming to the Transactions and Use Tax Law
22(Part 1.6 (commencing with Section 7251) of Division 2 of the
23Revenue and Taxation Code), except as otherwise provided in
24subdivision (f).

25(3) A provision limiting the MTA’s costs of administering the
26ordinance and the net revenues from the tax to 1.5 percent of the
27total tax revenues.

28(4) A requirement that the net revenues from the tax, defined
29to mean the total tax revenues less any refunds, costs of
30administration by the State Board of Equalization, and the MTA’s
31administration costs, shall be used by the MTA to fund
32transportation projects and programs identified in the expenditure
33plan.

34(5) The rate of thebegin delete tax, which shall not exceed the applicable
35maximum rate described in subdivision (a).end delete
begin insert tax.end insert

36(c) The MTA shall do all of the following:

37(1) Develop a transparent process to determine the most recent
38costs estimates for each project and program identified in the
39expenditure plan.

P12   1(2) At least 30 days before submitting the ordinance described
2in subdivision (b) to the voters, post the expenditure plan on its
3Internet Web site in a prominent manner.

4(d) The ordinance shall be adopted by the MTA board, which
5shall also adopt a resolution that submits the ordinance to the
6voters.

7(e) The ordinance shall become operative pursuant to Section
8130352 if approved by two-thirds of the voters voting on the
9measure, pursuant to subdivision (d) of Section 2 of Article XIII
10C of the California Constitution.

11(f) (1) If the voters approve the ordinance authorized by this
12section, the expenditure plan included as an exhibit to the ordinance
13pursuant to paragraph (1) of subdivision (b) shall also be included
14in the revised and updated Long Range Transportation Plan within
15one year of the date the ordinance takes effect. The revised and
16updated Long Range Transportation Plan shall also include capital
17projects and capital programs that are adopted by each subregion
18that are submitted to the MTA for inclusion in the revised and
19updated Long Range Transportation Plan, if the cost and schedule
20details are provided by the subregions, in a manner consistent with
21the requirements of the plan. Inclusion of a capital project or a
22capital program in the Long Range Transportation Plan is not a
23commitment or guarantee that the project or program shall receive
24any future funding.

25(2) For purposes of this subdivision, “subregion” shall have the
26same meaning asbegin delete that term isend delete defined in the Long Range
27Transportationbegin delete Plan process in effect as of January 1, 2008.end deletebegin insert Plan.end insert

28(g) The MTA may incur bonded indebtedness payable from the
29net revenues of the tax pursuant to the bond issuance provisions
30ofbegin delete this chapterend deletebegin insert Chapter 5 (commencing with Section 130500)end insert and
31any successor act.

32(h) The tax authorized by this section shall be imposed pursuant
33to the Transactions and Use Tax Law (Part 1.6 (commencing with
34Section 7251) of Division 2 of the Revenue and Taxation Code),
35notwithstanding the combined rate limitation in Section 7251.1 of
36the Revenue and Taxation Code.



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