BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                     SB 767  

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          Date of Hearing:  August 19, 2015


                                 Jimmy Gomez, Chair

          SB 767  
          (De León) - As Amended July 16, 2015

          |Policy       |Local Government               |Vote:|6 - 3        |
          |Committee:   |                               |     |             |
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          |             |Transportation                 |     |12 - 2       |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill deletes authority previously granted to the Los  
          Angeles County Metropolitan Transportation Authority (MTA) to  
          extend an existing 0.5% sales tax measure for transportation  
          (Measure R) by 30 years, and instead authorizes MTA to impose,  


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          by ordinance and subject to 2/3 voter approval, an additional  
          sales and use tax in Los Angeles County for a period to be  
          determined by MTA at a rate that, when combined with Measure R,  
          shall not exceed 1%.

          FISCAL EFFECT:

          Negligible state fiscal impact.

          According to the State Board of Equalization (BOE) a new 0.5%  
          district tax in LA County would raise approximately $8 million  
          in the first full year of implementation.


          1)Purpose.  In Los Angeles, Measure R was approved by a majority  
            of the voters in November of 2008 and enacted a 0.5% sales tax  
            increase, in addition to the two 0.5% sales tax measures  
            already in place.  The Measure R sales tax increase, effective  
            for 30 years, finances transportation projects and programs,  
            and accelerates those that were already in the pipeline.

            The author believes that, although Measure R is drastically  
            changing transportation in Los Angeles, further investment is  
            necessary.  SB 767 will provide Los Angeles County voters with  
            the opportunity to approve an additional sales tax for  
            transportation and will allow MTA to further expand its  
            transit systems, address key highway needs around the county,  
            support local agency transportation programs, and improve the  
            Metrolink service.

          2)Background.  The transactions and Use Tax Law authorizes the  
            adoption of local add-on rates to the combined state and local  
            sales tax rate.  The law has been amended multiple times to  


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            authorize specific cities, counties, special districts, and  
            county transportation authorities to impose a sales tax,  
            subject to two-thirds voter approval.  Existing law caps the  
            combined rate of all sales taxes in a county at 2%, but  
            provides several exemptions to the cap, including allowing an  
            additional sales tax for transportation purposes in several  

            According to the BOE, Los Angeles County has 14 sales taxes,  
            including three county-wide taxes for transportation purposes  
            and 11 city-wide taxes. Despite the statutory exemption for  
            Measure R, the County has reached the 2% cap.  Measure R, in  
            addition to Measure C (1990) and Proposition A (1980), which  
            were both imposed indefinitely, are the three one-half cent  
            county-wide sales taxes that provide the majority of MTA's  
          3)Related Legislation. 

             a)   AB 338 (Hernández), pending in the Senate Transportation  
               Committee, also authorizes MTA to impose an additional  
               county wide 0.5% transactions and use tax, but is not  
               identical to this bill. 

             b)   AB 464 (Mullin), on the Governor's Desk raises the  
               county transactions and use tax rate cap from 2% to 3%  

          1)Prior Legislation:  

             a)   SB 1037 (Hernández), Chapter 196, Statutes of 2014,  


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               required MTA to update its expenditure plan and Long Range  
               Transportation Plan before placing another sales tax  
               measure before the voters.  

             b)   AB 1446 (Feuer), Chapter 806, Statutes of 2012,  
               authorized MTA, subject to voter approval, to extend the  
               existing sales tax (Measure R) indefinitely.  AB 1446 also  
               required MTA to update its expenditure plan prior to  
               submitting the tax measure to the voters.  The measure was  
               put before Los Angeles County voters in November 2012 but  
               failed to achieve the two-thirds threshold necessary for  

             c)   AB 2321 (Feuer), Chapter 302, Statutes of 2008,  
               authorized MTA to impose, subject to voter approval, a 0.5%  
               sales tax for 30 years and required MTA to include  
               specified projects and programs in its long-range  
               transportation plan.  In November of 2008, more than 67% of  
               Los Angeles County voters approved this tax in a ballot  
               measure known as Measure R.  

             d)   SB 314 (Murray), Chapter 785, Statutes of 2003,  
               originally enacted provisions that authorized MTA to  
               impose, subject to voter approval, a 0.5% sales tax for no  
               more than six and one-half years for specific  
               transportation projects and programs.  That sales tax was  
               never imposed.   

          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  


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