BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 767 Hearing Date: 4/14/2015
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|Author: |De León |
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|Version: |2/27/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Eric Thronson |
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SUBJECT: Los Angeles County Metropolitan Transportation
Authority: transactions and use tax
DIGEST: This bill authorizes the Los Angeles County
Metropolitan Transportation Authority (LACMTA) to impose by
ordinance an additional local, countywide, one-half-cent sales
tax.
ANALYSIS:
Existing law permits a county board of supervisors to create a
countywide transportation authority to plan and fund
transportation projects within the county. These transportation
authorities may impose a local sales tax for transportation
purposes, if the tax ordinance is within statutory limits and
abides by restrictions on local taxes contained in the
California Constitution. Counties that have chosen to tax
themselves for transportation purposes call themselves
"self-help" counties because they have approved measures to help
themselves address their own transportation problems.
Instead of asking voters to impose a local sales tax for
transportation purposes under the generic authority in existing
law, some counties have specific authorization to propose a
measure to increase the sales tax for transportation purposes.
For example, the Legislature has passed specific legislation
authorizing Los Angeles County to propose to the voters an
increase in the local sales tax for transportation. Voters have
approved three separate measures in Los Angeles County, for a
SB 767 (De León) Page 2 of ?
total sales tax rate of 1.5% dedicated to transportation
purposes.
This bill:
1.Authorizes LACMTA to impose by ordinance an additional local,
countywide, one-half-cent sales tax for a period to be
determined by LACMTA.
2.Requires LACMTA to adopt the ordinance and submit the proposal
to the voters.
3.Specifies that the ordinance only becomes operative if
approved by two-thirds of the voters voting on the measure.
4.Requires the ordinance imposing the tax to contain all of the
following:
An expenditure plan that lists the projects and programs
to be funded from the tax
Provisions conforming to existing requirements for the
imposition of a sales tax, except the limitation that the
combined sales tax rate cannot exceed 2%
Provisions limiting LACMTA's administration costs to
1.5%
A requirement that net revenues must be used for
projects and programs in the expenditure plan
COMMENTS:
1.Purpose. In 2008, the L.A. County voters recognized the need
for additional transportation investments and approved Measure
R to fund both increased transit options and highway
improvements. While Measure R will dramatically change
mobility throughout L.A. County, the author states that the
projects funded by the measure do not encompass all of the
transportation need in the region. Residents, local
governments, and transportation leaders in the region believe
that there are thousands of worthy projects which will not be
funded by Measure R. The author contends that an additional
one-half-cent sales tax will allow L.A. County to further
expand its transit system, address key highway needs around
the county, support local agency transportation programs, and
improve regional rail service.
SB 767 (De León) Page 3 of ?
2.L.A. County measure history. Los Angeles County currently has
in place three separate one-half-cent sales taxes for
transportation purposes (for a total of 1.5 cents per dollar
spent). The first two one-half-cent taxes were initiated in
1981 and 1991 under terms of special legislation and after
local voter approval, and have no expiration date.
In 2008, the Legislature passed and the governor signed AB
2321 (Feuer), Chapter 302, which authorized LACMTA to place
before the voters an ordinance to increase the local
transportation sales tax by another one-half cent for 30
years. The statute required LACMTA to adopt an expenditure
plan prior to submitting the ordinance to the voters, and
identified 18 projects to be included in that expenditure
plan. AB 2321 required LACMTA to include in the expenditure
plan the anticipated completion date for each project. In
November 2008, LACMTA placed the sales tax ordinance, referred
to as Measure R, on the ballot, and 67% of the voters approved
the measure.
At the time voters approved Measure R, LACMTA estimated that
the 30-year program would raise about $40 billion. Because of
the recession and general economic malaise that followed that
vote, LACMTA adjusted its revenue estimates downward and now
only expects the sales tax measure to generate about $36
billion. To address this funding shortfall, LACMTA began a
search for additional revenue or funding mechanisms to meet
its transportation needs. In 2012, the Legislature passed and
the governor signed AB 1446 (Feuer), Chapter 806, which
authorized LACMTA to place before the voters an ordinance to
either eliminate or extend Measure R's 30-year sunset date.
The measure, put before the voters in November 2012, failed to
achieve the two-thirds majority necessary for passage.
Instead of seeking to extend Measure R, the author of this
bill is authorizing LACMTA to propose to voters another
half-cent sales tax. This new authorization would not contain
the required projects of past measures, nor the restrictions
of past legislation, but is somewhat a "clean slate" from
which LACMTA can build a new expenditure plan and funding
prioritization.
3.Project selection concerns. In 1998, the Legislature created
the Metro Gold Line Foothill Extension Construction Authority
to oversee the construction of a light rail system from Los
SB 767 (De León) Page 4 of ?
Angeles to Claremont. This Authority has nearly completed the
project to Azusa, but lacks funding to complete the project
all the way to Claremont. The Authority would like to be
included in the expenditure plan for this new sales tax
measure, thereby securing the funding necessary to complete
its project. In a letter to the author, the Authority
expresses concern that LACMTA staff may give priority to new
projects at the expense of projects that have been previously
approved. The author has expressed a desire for the local
process to determine the projects to be included in the
expenditure plan instead of the Legislature making that
determination.
4.Similar legislation in Assembly. Similar to this bill,
Assembly Bill 338 (R. Hernandez), currently pending in the
Assembly Local Government Committee, authorizes LACMTA to
impose an additional countywide sales tax measure, with a few
significant differences. First, AB 338 limits the length of
the measure's term to no longer than 30 years, whereas this
bill allows LACMTA to determine the length of the measure's
term. Second, AB 338 requires LACMTA to notify the
Legislature prior to amending the adopted expenditure plan.
Finally, AB 338 allocates an undetermined percentage of the
revenue raised by the potential measure to bus and rail
operations.
5.Double referral. The Rules Committee has referred this bill
to both this committee and the Governance and Finance
Committee. Therefore, if the bill passes this committee, it
will be referred to the Committee on Governance and Finance.
RELATED LEGISLATION:
SB 314 (Murray, 2003) established a list of projects that LACMTA
was to construct with proceeds from a voter-approved 6.5-year,
one-half-cent sales tax.
AB 2321 (Feuer, 2008) superseded SB 314, authorizing LACMTA to
place before the voters an ordinance to increase by one-half
cent the local transportation sales tax for 30 years.
AB 1446 (Feuer, 2012) authorized LACMTA to place before the
voters an ordinance to either eliminate or extend Measure R's
30-year sunset date.
SB 767 (De León) Page 5 of ?
SB 1037 (E. Hernandez, 2014) required LACMTA to update its
expenditure plan and Long-Range Transportation Plan before
presenting another measure to extend Measure R before the
voters.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 8, 2015.)
SUPPORT:
Amalgamated Transit Union
Climate Resolve
Los Angeles County Metropolitan Transportation Authority
Move LA
OPPOSITION:
California Taxpayers Association
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