BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1446|
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THIRD READING
Bill No: AB 1446
Author: Feuer (D), et al.
Amended: 8/15/12 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMM. : 7-2, 6/26/12
AYES: DeSaulnier, Harman, Kehoe, Lowenthal, Pavley, Rubio,
Simitian
NOES: Gaines, Wyland
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 7/3/12
AYES: Wolk, DeSaulnier, Hernandez, Kehoe, Liu
NOES: Fuller, La Malfa
NO VOTE RECORDED: Dutton, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 54-17, 5/21/12 - See last page for vote
SUBJECT : Sales and use tax: Los Angeles County
SOURCE : Author
DIGEST : This bill authorizes the Los Angeles County
Metropolitan Transportation Authority (MTA) to place before
the voters an ordinance to eliminate or extend Los Angeles
Measure R sales tax.
Senate Floor Amendments of 8/15/12 allow the MTA to put
before the voters a proposal to either extend or eliminate
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the sunset date on a voter approved 0.5% local
transportation sales tax, and make a technical correction.
ANALYSIS : AB 2321 (Feuer), Chapter 302, Statutes of
2008, authorized MTA to place before the voters an
ordinance to increase the local transportation sales tax
for 30 years by 0.5%. The statute also requires MTA to
allocate 20% of the sales tax revenue for bus operations
and 5% for rail operations, authorizes MTA to incur bonded
indebtedness, and requires MTA to adopt an expenditure plan
prior to submitting the ordinance to the voters. Existing
law identifies 18 projects that MTA must include in the
expenditure plan and in its Long Range Transportation Plan.
Although state law identifies the minimum level of funding
for each project, MTA is allowed to increase funds to a
project if any funds are available after debt service
payments. The expenditure plan must also anticipate the
completion date for each project. MTA placed a sales tax
ordinance, referred to as Measure R, on the November 2008
ballot. 67% of the voters approved the sales tax increase.
This bill:
1. Authorizes MTA to place before the voters an ordinance
to either eliminate or extend the sunset date on Measure
R and requires that 2/3 of the voters vote in favor for
it to be adopted.
2. Requires the proposing ordinance be accompanied by a new
expenditure plan for the net revenues derived from the
tax.
3. Requires this new expenditure plan identify the years in
which the MTA anticipates net revenues derived from the
tax will be available to each project or program in the
new expenditure plan.
4. Authorizes MTA to incur bonded indebtedness payable from
the revenue from the new sales tax.
5. Requires proceeds from the tax authorized by this bill,
including proceeds from bonds issued, after payment of
the bonded indebtedness, be used to accelerate the
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completion of the projects and programs identified in AB
2321, and for the expenditure plan adopted by the MTA
board on July 24, 2008.
6. Continues the set aside of 20% of sales tax revenue for
bus operations in Los Angeles County and 5% for rail
transit operations.
7. Requires MTA, upon completion of the specified projects
and the payment of outstanding debt service, to spend
unencumbered sales tax revenue on other projects and
programs in its Long Range Transportation Plan or its
successor plans.
8. Requires MTA, to the extent that it deems it necessary
to accelerate the completion of a project or program in
a new expenditure plan adopted pursuant to this bill, to
expend funds derived from the sales tax authorized by
Measure R according to the schedule described in the new
expenditure plan adopted pursuant to this section.
Requires MTA make this determination by a majority vote
of the MTA board.
Comments
Purpose . 67% of Los Angeles County voters authorized the
imposition of a 30 year, 1/2% local transportation sales
tax in 2008. The decline in the state and national
economy, the diminishment of state and federal funding, the
increasing need to rely upon various debt financing
strategies, and unanticipated cost increases have delayed
project implementation. According to the author's office,
this bill provides the voters an opportunity to endorse the
Measure R program by asking them to approve converting the
existing tax to a permanent tax.
Background
When Measure R was adopted, MTA estimated that the 30-year
program was about $40 billion. Because of the recession
and general economic malaise, MTA is now estimating that
Measure R will generate about $36 billion by 2038. When
Los Angeles Mayor Antonio Villaraigosa proposed to
accelerate the construction of all 12 rail transit projects
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so that they would be completed in 10 years and not the
usual 30 years, MTA began a search for additional revenue
or funding mechanisms. This bill endeavors to solve the
problem of insufficient revenue by removing the sunset on
Measure R. Should the voters approve a new sales tax
without a sunset, MTA may be able to issue additional debt
and take advantage of the federal credit assistance program
included in The Transportation Infrastructure Finance and
Innovation Act.
Foothill Extension Construction Authority (Authority)
amendment . The Authority contends that MTA's current
adopted expenditure plan incorrectly characterizes Metro
Gold Line Foothill Extension. AB 2321 describes the
extension from east Pasadena to Claremont. The expenditure
plan provides $735 million from east Pasadena to Azusa.
The Authority believes the termination of the project is
defined as Claremont and that should be reflected in the
expenditure plan. The Authority proposes to amend this
bill to allow any sponsor of a project to submit its
expenditure plan for its project to MTA. The expenditure
plans will include the projects' cost and construction
schedule. The amendment requires MTA to include the
expenditure plans submitted by project sponsors in its
countywide expenditure plan without modification.
MTA's expenditure plan endeavors to harmonize competing
demands among projects and the revenue generated by the
sales tax. It appears the amendment would allow the
Authority and other project sponsors to develop their
project expenditure plans. The amendment requires MTA to
incorporate these plans into the countywide expenditure
plan. It is unclear exactly how the projects would be
harmonized with the limited sales tax revenues. It
essentially removes MTA from being the referee among
competing projects and appears to balkanize the project
development process in Los Angeles County.
Previous legislation . SB 314 (Murray), Chapter 785,
Statutes of 2003, established a list of projects that MTA
was to construct with proceeds from a voter approved six
and one-half years half percent sales tax. AB 2321
superseded SB 314.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/15/12)
American Council of Engineering Companies
American Jewish Committee
Associated General Contractor
California Chamber of Commerce
California Labor Federation
Los Angeles Area Chamber of Commerce
Los Angeles Business Council
Los Angeles County Federation of Labor
Los Angeles County Metropolitan Transportation Authority
Move LA
Sierra Club
South Bay Cities Council of Governments
Southern California Contractors Association
State Building and Construction Trades Council of
California
OPPOSITION : (Verified 8/13/12)
California Taxpayers Association
City of Cerritos
Howard Jarvis Taxpayers Association
Metro Gold Line Foothill Extension Construction Authority
ASSEMBLY FLOOR : 54-17, 5/21/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Blumenfield, Bonilla, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, Fong,
Fuentes, Furutani, Galgiani, Gatto, Gordon, Gorell, Hall,
Hayashi, Hill, Huber, Hueso, Huffman, Lara, Bonnie
Lowenthal, Ma, Mitchell, Monning, Nestande, Norby, Pan,
V. Manuel P�rez, Portantino, Skinner, Smyth, Solorio,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
P�rez
NOES: Conway, Donnelly, Beth Gaines, Garrick, Grove,
Halderman, Harkey, Jeffries, Jones, Knight, Logue,
Mansoor, Morrell, Nielsen, Olsen, Silva, Wagner
NO VOTE RECORDED: Bill Berryhill, Cook, Fletcher, Hagman,
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Roger Hern�ndez, Mendoza, Miller, Perea, Valadao
JJA:k 8/16/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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