BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 767|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: SB 767
Author: De León (D), et al.
Amended: 6/1/15
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 8-0, 4/14/15
AYES: Beall, Cannella, Allen, Galgiani, Leyva, McGuire,
Mendoza, Wieckowski
NO VOTE RECORDED: Bates, Gaines, Roth
SENATE GOVERNANCE & FIN. COMMITTEE: 5-2, 4/22/15
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NOES: Nguyen, Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Los Angeles County Metropolitan Transportation
Authority: transactions and use tax
SOURCE: Author
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.
Senate Floor Amendments of 6/1/15 align this new taxing
authority with requirements in existing law for the extension of
LACMTA's existing taxing authority enacted last year in SB 1037
(Hernandez, Chapter 196, Statutes of 2014).
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ANALYSIS:
Existing law:
1)Allows cities and counties to impose beyond the state sales
tax additional sales and use taxes, called transactions and
use taxes, up to a combined 2% rate, with voter approval. The
tax must be imposed in increments of 0.125%.
2)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 total sales tax rate of 1.5% dedicated to
transportation purposes.
This bill:
1)Allows LACMTA to exceed the 2% statutory limitation on local
transactions and use taxes by 1%.
2)Authorizes LACMTA to impose by ordinance an additional local,
countywide, one-half-cent sales tax for a period to be
determined by LACMTA.
3)Requires LACMTA to adopt the ordinance and submit the proposal
to the voters.
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4)Specifies that the ordinance only becomes operative if
approved by two-thirds of the voters voting on the measure.
5)Requires the ordinance imposing the tax to contain all of the
following:
a) An expenditure plan that lists the projects and programs
to be funded from the tax.
b) Provisions conforming to existing requirements for the
imposition of a sales tax, except the limitation that the
combined sales tax rate cannot exceed 2%.
c) Provisions limiting LACMTA's administration costs to
1.5%.
d) A requirement that net revenues must be used for
projects and programs in the expenditure plan.
6)Requires the expenditure plan to include the most recent cost
estimates for each project, the approximate schedule during
which LACMTA anticipates making funds available for each
project and program, and the expected completion dates for
each project.
7)Requires LACMTA to develop a transparent process to determine
the most recent cost estimates, as well as to post the
expenditure plan on its website at least 30 days before
submitting the measure to the voters.
8)Requires the expenditure plan to be included in LACMTA's Long
Range Transportation Plan within one year of the date the
measure is approved by voters.
Comments
Purpose. In 2008, 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 needs in the
region. Residents, local governments, and transportation
leaders in the region believe that there are thousands of worthy
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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.
L.A. County measure history. L.A. 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
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can build a new expenditure plan and funding prioritization.
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 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.
Related Legislation
Similar to this bill, AB 338 (R. Hernandez), currently pending
in the Assembly Appropriations 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified6/2/15)
Amalgamated Transit Union
Amalgamated Transit Union Local 1277
Association for Commuter Transportation, Southern California
Avvantt Partners
California Asphalt Pavement Association
CALPIRG
CH2MHILL
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City of Culver City
Climate Resolve
Community Health Councils
DE Architects
Endangered Habitats League
Environment California
Eric Garcetti, Mayor of Los Angeles
Fixing Angelenos Stuck in Traffic
Green Communications Initiative
Hatch Mott McDonald
HDR
International Brotherhood of Electrical Workers Local 11
International Union of Operating Engineers Local 12
Jacobs Engineering Group
Kal Krishnan Consultant Services
LAANE
Laborers International Union Local 300
Los Angeles Area Chamber of Commerce
Los Angeles Community College District
Los Angeles County Bike Coalition
Los Angeles County Business Federation
Los Angeles County Federation of Labor
Los Angeles County Metropolitan Transportation Authority
Los Angeles County Museum of Art
Los Angeles River Revitalization Corporation
Los Angeles Urban League
Los Angeles Walks
Los Angeles/Orange County Building and Construction Trades
Council
Meghan Sahli-Wells, Mayor of Culver City
Metropolitan Pacific Capitol, Inc.
MNS Engineers
Mobility 21
Move LA
Natural Resources Defense Council
Pacifica Services Inc.
Parsons Brinkerhoff
railLA
SENER Engineering & Systems Inc.
SKANSKA
Solutions International
Southern California Association of Governments
Southern California Association of Nonprofit Housing
Southern California Contractors Association
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Southern California Transit Advocates
Stantec
State Building and Construction Trades Council
Subway to the Sea Coalition
Transpo Group
V&A Incorporated
Westchester Neighborhood Association
Westside Center for Independent Living
OPPOSITION: (Verified6/2/15)
California Taxpayers Association
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT: According to the proponents, this bill
grants LACMTA the flexibility to impose an additional
transportation transaction and use tax at a rate of 0.5%,
subject to voter approval and adoption of an expenditure plan.
Given Southern California's significant transportation needs,
supporters of this bill suggest that it is a common-sense
approach to address funding needs in a transparent and
accountable way.
ARGUMENTS IN OPPOSITION: Opponents argue that this bill sets
a negative taxation precedent because it would exempt the tax
from the existing 2% cap for local sales taxes. Also, a sales
tax increase is highly regressive, and therefore it seems unwise
to authorize additional tax increases.
Prepared by:Eric Thronson / T. & H. / (916) 651-4121
6/2/15 22:47:34
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