BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1078|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
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THIRD READING
Bill No: AB 1078
Author: Feuer (D), et al
Amended: 8/20/10 in Senate
Vote: 27 - Urgency
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-0, 8/18/10
AYES: Lowenthal, Huff, Ashburn, DeSaulnier, Harman, Kehoe,
Pavley, Wolk
NO VOTE RECORDED: Simitian
ASSEMBLY FLOOR : Not relevant
SUBJECT : Los Angeles County Metropolitan Transportation
Authority:
transactions and use tax
SOURCE : Los Angeles County Metropolitan Transportation
Authority
DIGEST : This bill changes the notification to Los
Angeles County members of the Legislature required for
amendments to the Measure R transportation sales tax
expenditure plan.
ANALYSIS : AB 2321 (Feuer), Chapter 302, Statutes of
2008, authorizes the Los Angeles County Metropolitan
Transportation Authority (MTA) to place a 1/2 percent
transportation sales tax proposal before Los Angeles County
voters. MTA exercised this authorization in November 2008,
when voters there approved Measure R, a 1/2 percent sales
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tax for transportation improvements. Measure R gained the
support of 68 percent of the voters. It is estimated that
this sales tax will generate $39.4 billion before it
expires in 2040. Prior to submitting Measure R to the
voters, existing law required MTA to adopt an expenditure
plan, which was part of the ballot measure, for the use of
sales tax revenues. The program is summarized in the
following table provided by MTA:
Voter Approved Measure R Expenditure Plan Allocations
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| Programs | Est. 30-Year Amount of |Percentage|
| | Sales Tax Revenue | |
| | (billions) | Share |
|-------------------------+------------------------+----------|
|Transit Capital | $13.790 | 35% |
|-------------------------+------------------------+----------|
|Miscellaneous Transit | 1.970 | 5% |
|-------------------------+------------------------+----------|
|Highway Capital | 7.880 | 20% |
|-------------------------+------------------------+----------|
|Rail Operations | 1.970 | 5% |
|-------------------------+------------------------+----------|
|Bus Operation | 7.880 | 20% |
|-------------------------+------------------------+----------|
|Local Return (Streets & | 5.910 | 15% |
|Roads) | | |
|-------------------------+------------------------+----------|
|TOTAL | $39.4 |100% |
| | | |
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In addition to the program of projects, the expenditure
plan has several transit and highway projects that have
been assigned "expected completion" dates. Existing law
requires all projects in the expenditure plan must be in
MTA's Long Range Transportation Plan.
Existing law requires MTA to notify the Los Angeles County
legislative delegation of changes to the adopted
expenditure plan no later than 365-days prior to MTA
adopting the expenditure plan amendments. The notification
applies to amendments to the expenditure plan that:
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Affect the amount of net revenue that is proposed to be
spent on projects.
Affect the schedule for the availability of funds for
projects.
Affect the schedule for estimated completion date for a
project.
The notification must also include an explanation of the
proposed amendments and an estimate of the impact the
proposed amendment would have on the project scope,
schedule, cost, or availability of funding.
In addition to procedural requirements regarding the
expenditure plan, existing law authorizes MTA to issue debt
guaranteed by the net proceeds of the Measure R sales tax.
This bill:
1. Requires MTA to notify the Los Angeles County
legislative delegation if an amendment to the
expenditure plan would delay the availability of the
funding for a project.
2. Requires MTA to notify the Los Angeles County
legislative delegation if an amendment to the
expenditure would delay the estimated completion date
for a project.
3. Declares this act is an urgency statute in order to
provide increased flexibility to MTA for implementation
of its sales tax program.
4. Requires MTA to provide prior written notice to the
Members of the legislature representing the County of
Los Angeles of any proposed amendments to the adopted
expenditure plan that would accelerate funding for a
project(s) in the adopted expenditure plan.
Comments
Purpose . The purpose of this bill is to waive the 365-day
notice for amendments to Measure R's expenditure plan when
they accelerate the availability of funds and advance the
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completion of transit and highway projects. The 365-day
notice would still apply if an amendment to the expenditure
plan would result in a delay to either the availability of
funds or to the completion schedule. This bill's
provisions apply to 12 transit projects and to up to
fifteen highway projects that have been identified as being
candidates for schedule acceleration.
The fundamental argument underlying this bill is that
accelerating a project's funding and schedule is valuable
as the benefits from enhanced mobility occur sooner. The
more serious matter of delayed projects still requires
legislative notification.
30/10 Initiative . Since the enactment of AB 2321 and the
passage of Measure R, MTA has embarked upon an effort to
accelerate federal funding for MTA's rail development
program. This program, initiated by Mayor Antonio
Villaraigosa, and adopted unanimously by the MTA board, is
popularly referred to as the 30/10 Initiative. The 30/10
Initiative applies only to transit projects. The
Initiative's objective is to create a financial strategy
allowing for the construction of 12 rail transit projects
in 10 years as opposed to the usual thirty years when
relying upon federal capital grants. MTA estimates in its
Long Range Transportation Plan that the cost of the 12
projects over 30 years would be $17.5 billion. This is
unaffordable under the Measure R Program. Using the 30/10
Initiative framework, the cost of the 12 projects is
reduced to $13.7 billion, a 21 percent saving. The essence
of this program is to use the 30-year revenue stream
generated by the Measure R for transit projects as
collateral for long-term financing. The elements of the
30/10 Initiative include a combination of grants and debt
as indicated below:
$2.9 billion in federal new rail starts funding.
$5.7 billion federal loan.
$160 million in loans and guarantees from the federal
Transportation Infrastructure Finance and Innovation Act
(TIFIA)
MTA is in negotiations with congressional and
administration officials in Washington to secure
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implementing federal legislation.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/20/10)
Los Angeles County Metropolitan Transportation Authority
JJA:mw 8/20/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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