BILL ANALYSIS
Date of Hearing: April 21, 2003
ASSEMBLY COMMITTEE ON TRANSPORTATION
John Dutra, Chair
ACA 7 (Dutra) - As Amended: March 19, 2003
SUBJECT : Transportation sales and taxes: voter approval
SUMMARY : Authorizes, upon approval of the state's voters, a
local transportation agency and a regional transportation
agency, as defined, to impose or extend a sales and use tax at
the rate of percent to fund transportation projects with the
approval of 55% of the voters in their jurisdiction.
Specifically, this bill :
1)Authorizes a local transportation agency or a regional
transportation agency, with the approval of 55% of the voters
in their respective jurisdiction, to impose a sales and use
tax at a rate of percent for the exclusive purpose of
funding local and regional transportation planning, research,
design, construction, operation, maintenance, rehabilitation,
and environmental mitigation related to the impacts of
transportation projects.
2)Provides that if a local transportation sales tax of limited
duration is not in effect in the jurisdiction of a local or
regional transportation agency on the date that the tax is
approved by the voters, the tax is imposed for a period of 20
years. The new tax would be effective on the first day of the
first calendar quarter that commences more than 90 days after
the approval of the tax by the voters.
3)Provides that if a local transportation sales tax of limited
duration, is in effect in the county or region on the date
that the tax is approved by the voters, the tax is imposed for
a period of not more than 30 years. The new tax would be
effective upon the first day that that the prior tax is
repealed or otherwise becomes inoperative.
4)Defines a local transportation agency as either of the
following:
a) The local public entity designated within a county or a
city and county, or authorized by statute whose function it
is to administer, deliver, or implement a voter-approved
transportation sales tax for transportation projects and
programs within the boundaries of a county or a city and
county, or its successor. If an entity meeting this
criteria does not exist, the designated congestion
management agency within a county or a city and county, or
its successor, or the county transportation commission, or
its successor;
b) A local council of governments with the authority to
administer or deliver a county transportation expenditure
plan, or its successor.
5)Defines a regional transportation agency as all of the
following:
a) The Metropolitan Transportation Commission (MTC), as
that entity was established in state law as of January 1,
2002;
b) The Los Angeles County Metropolitan Transportation
Authority (MTA), or its successor;
c) Any transportation entity designated or authorized by
state law as a regional transportation agency.
6)Specifies that the tax shall be collected and administered by
the State Board of Equalization (BOE), or its successor
agency. The revenues derived by the tax shall deposited in
the Local Transportation Infrastructure Account, which the
bill establishes in the State Transportation Fund.
7)Directs the BOE, after collecting its costs for collection and
administration and making refunds as appropriate, to allocate
the balance of revenues, on less frequently than a quarterly
basis, to each local or regional transportation agency where
the tax revenues were collected.
8)Specifies that the local sales tax revenues that are derived
under this measure are not General Fund proceeds for specified
state budgetary purposes. The bill also specifies that
allocations that from the Local Transportation Improvement ACT
(LTIA) that are made under this act shall not be considered
"appropriations subject to limitation" under specified
provisions of the State Constitution.
EXISTING LAW , the California Constitution, conditions the
imposition of a special tax by a city, county, or special
district upon the approval of two-thirds of the voters of the
city, county, or special district voting on that tax, and
prohibits these entities from imposing an ad valorem tax on real
property or a transactions or sales tax on the sale of real
property.
FISCAL EFFECT : Unknown
COMMENTS : The Legislature has authorized local governments to
impose sales taxes to generate additional revenue for local
transportation improvements. Counties use these local
transportation sales taxes for purposes similar to state and
federal transportation funds. In 1996-97, local transportation
sales taxes generated about $1.2 billion, while state and
federal gas taxes generated approximately $5.3 billion.
Although these local option sales taxes were authorized with
majority votes, all of the sales tax programs that require
renewal must be reauthorized within a 15 to 20 year period.
There are 17 counties in the state that have voter-approved
countywide sales tax measures. Most of the locally approved
sales tax measures were passed on a limited-term basis. Many
are scheduled to expire between now and 2011.
A decision rendered by the State Supreme Court in 1995 (Santa
Clara County Local Transportation Authority v. Guardino),
however, may make many of the reauthorizations very difficult or
virtually impossible to achieve. Current law requires that
these measures receive two-thirds voter approval for
reauthorization. The loss of local sales taxes as a viable
revenue source for transportation purposes will only increase
the funding burden on the state.
In November of 2002, voters cast their ballots on a number of
transportation issues, including five sales tax measures. While
only Riverside County received the necessary two-thirds YES
vote, all five won the majority of votes:
--------------------------------------------------
|County |Percent YES |Percent NO |
|----------------+----------------+----------------|
|Madera County: |50.7% |49.3% |
|----------------+----------------+----------------|
|Fresno County: |53.68% |46.32% |
|----------------+----------------+----------------|
|Solano County: |59.87% |40.13% |
|----------------+----------------+----------------|
|Merced County: |61.31% |38.69% |
|----------------+----------------+----------------|
|Riverside |69.07% |30.93% |
|County: | | |
--------------------------------------------------
In a report to the Legislature, the Legislative Analyst's Office
(LAO) estimated that in 1999-00, local funds constituted half,
or about $7.5 billion of all revenues for transportation. Over
one-third of local funds for transportation are derived from
optional local sales taxes (on all sales, not just gasoline)
dedicated for transportation purposes.
In February of 2002, the Governor's Commission on Building for
the 21st Century released its final report, which included
several proposals for improving the planning, financing, and
delivery of infrastructure projects in the state. One of the
recommendations in the report suggested that the Legislature
should amend the State Constitution to lower the threshold for
voter approval of local transportation sales tax initiatives
from the current level (2/3rds) to 55%. ACA 7 would implement
this recommendation.
Author's amendments : The author intends to offer the following,
clarifying amendments:
1)Clarify that the sales tax proceeds can be used for transit as
well as transportation projects, operations and facilities.
2)Revise the measure to allow a local or regional transportation
sales tax to be imposed for 30 years in situations where a
local transportation sales tax already existed, regardless of
the duration of the previous tax. The bill currently would
allow this only in situations where the previous tax is
imposed for a limited duration.
3)Clarify that a local or regional sales tax that is imposed,
under this measure, for 30 years could take effect on the
first day of the first calendar quarter that commences more
than 90 days after the approval of the tax by the voters.
4)Make technical changes in reference to the Sales and Use Tax
Law (Revenue and Taxation Code) that were suggested by the
BOE.
Double referral : This measure has also been referred to the
Committee on Elections and Reapportionment.
REGISTERED SUPPORT / OPPOSITION :
Support
Alameda County Congestion Management Agency
Alameda County Transportation Improvement Authority
Alameda-Contra Costa Transit District
American Planning Association California Chapter
Associated General Contractors
California Asphalt Pavement Alliance
California Association of Councils of Government
California Association of Realtors
California Building Industry Association
California Business Roundtable
California Chamber of Commerce
California State Association of Counties
California Transit Association
Capitol Corridor Joint Powers Authority
CH2MHill
City of Burlingame
City of Redwood City; Offices of the Mayor and Vice Mayor,
County of Sacramento
County of Santa Cruz
Engineering and Utility Contractor's Association
Granite Construction
International Brotherhood of Electrical Workers, AFL-CIO
League of California Cities
Madera County Transportation Commission
Metropolitan Transportation Commission
Morgner Technology Management
Napa County Transportation Planning Agency
Orange County Business Council
Orange County Transportation Authority
Peninsula Corridor Joint Powers Board
Sacramento Regional Transit District
San Diego Regional Economic Development Corporation
San Mateo City/County Association of Governments
San Mateo County Transportation Authority
Santa Clara Valley Transportation Authority
Self Help Counties Coalition
Solano Transportation Authority
South Bay Cities Council of Governments
Transportation California
Water Transit Authority
Opposition
Howard Jarvis Taxpayers Association
BILL NUMBER: ACA 7 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 19, 2003
INTRODUCED BY Assembly Member Members
Dutra and Wolk
(Principal coauthor: Assembly Member Wolk)
(Coauthors: Assembly Members Diaz and Mullin)
JANUARY 14, 2003
Assembly Constitutional Amendment No. 7--A resolution to propose
to the people of the State of California an amendment to the
Constitution of the State, by adding Article XIX C thereto, relating
to transportation.
LEGISLATIVE COUNSEL'S DIGEST
ACA 7, as amended, Dutra. Transportation funding: sales and use
tax.
The California Constitution conditions the imposition of a special
tax by a city, county, or special district upon the approval of 2/3
of the voters of the city, county, or special district voting on that
tax, and prohibits these entities from imposing an ad valorem tax on
real property or a transactions or sales tax on the sale of real
property. Existing statutory provisions and provisions in the
California Constitution either impose or authorize the imposition of
state or local sales and use taxes upon the gross receipts from the
sale within the taxing jurisdiction of, or the storage, use, or other
consumption in this jurisdiction of, tangible personal property.
This measure would authorize a county, a city and county,
local transportation agency and a regional
transportation agency, as defined, notwithstanding any other
provision of the California Constitution, to impose an additional
sales and use tax for a period of 20 to 30 years, as specified, at a
rate of 0.5% exclusively for transportation purposes within the
jurisdiction of the county, city and county,
local or regional transportation agency if the additional tax
is approved by 55% of the voters of the jurisdiction voting on the
proposition to impose the tax.
This measure would require the revenues derived from these taxes
to be deposited in the Local Transportation Infrastructure Account,
which would be created in the State Transportation Fund. The measure
would require the State Board of Equalization to collect and
administer the tax revenue. The measure would require moneys in the
account that were collected in each county, city and county,
local or regional transportation agency, less
administrative costs and refunds, to be allocated by the State Board
of Equalization to the county, city and county,
local or regional transportation agency imposing the tax,
and to be used for specified transportation purposes.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2003-04 Regular Session
commencing on the second day of December 2002, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California that the Constitution of the State be
amended by adding Article XIX C thereto, to read:
ARTICLE XIX C
TRANSPORTATION IMPROVEMENT AND MAINTENANCE ACT
SECTION 1. (a) Notwithstanding Section 4 of Article XIII A,
Section 2 of Article XIII C, or any other provision of this
Constitution, for the exclusive purpose of funding local and regional
transportation planning, research, design, construction, operation,
maintenance, and rehabilitation, and environmental mitigation related
to the impacts of transportation projects, a county, a city
and county, local transportation agency or a
regional transportation agency may, with the approval of 55 percent
of the voters of the jurisdiction voting on the proposition, impose
the following sales and use tax within its jurisdiction:
(1) For the privilege of selling tangible personal property at
retail, a sales tax upon all retailers at the rate of one-half of 1
percent of the gross receipts of any retailer from the sale of all
tangible personal property sold at retail in this state.
(2) An excise tax upon the storage, use, or other consumption in
this state of tangible personal property purchased from any retailer
for storage, use, or other consumption in this state at the rate of
one-half of 1 percent of the sales price of the property.
(b) (1) If a transactions and use tax of limited duration,
authorized to be imposed by the local or regional
transportation agency for transportation purposes or
general purposes, , has not been imposed and is
not in effect in the jurisdiction of a county, a city and
county, or a local or regional transportation
agency on the date that a tax described in subdivision (a) is
approved by 55 percent of the voters of the jurisdiction voting on
the proposition to impose the tax, the tax described in subdivision
(a) is imposed for a period of 20 years commencing with the first
calendar quarter that commences more than 90 days after the effective
date of the approval of the tax by the voters.
(2) If a transactions and use tax of limited duration, imposed for
transportation purposes or for general purposes
by the local or regional transportation agency , is in
effect in the jurisdiction of a county, a city and county,
or a local or regional transportation agency on
the date that a tax described in subdivision (a) is approved by 55
percent of the voters of the jurisdiction voting on the proposition
to impose the tax, the tax described in subdivision (a) is imposed
for a period of not more than 30 years commencing with the first day
upon which the transactions and use tax then in effect is
repealed or otherwise becomes inoperative.
(3) (A) Except as otherwise provided in paragraphs (1) and (2),
the tax described in subdivision (a) shall be imposed in a
county, a city and county, or a local or
regional transportation agency in addition to any other state or
local sales and use tax or transactions and use tax imposed in that
jurisdiction in accordance with law.
(B) For purposes of this article, a transactions and use tax
imposed for transportation purposes in accordance with this
article does not include any portion of a local sales and use
tax that is imposed pursuant to the Bradley-Burns Uniform Local Sales
and Use Tax Law (Part 1.5 (commencing with Section 7200) of Division
2 of the Revenue and Taxation Code), or its successor.
(4) The tax described in subdivision (a) shall be administered in
the same manner as the tax imposed pursuant to the Sales and Use Tax
Law (Part 1 (commencing with Section 6001) of Division 2 of the
Revenue and Taxation Code), or its successor, and shall be subject to
any exemption from taxation set forth in that law.
(c) For purposes of this section, "regional transportation agency"
means all of the following:
(1) The Metropolitan Transportation Commission created by Section
66502 of the Government Code, as that statute read on January 1,
2002.
(2) The Los Angeles County Metropolitan Transportation Authority,
or any successor to that authority.
(3) The Orange County Transportation Authority.
(4) Any local or regional transportation entity
designated or authorized by statute as a regional
transportation agency.
(d) For purposes of this section, "local transportation
agency" means both of the following:
(1) (A) The local public entity designated within a county or a
city and county, or authorized by statute, whose function is to
administer, deliver, or implement a voter-approved transportation
sales tax for transportation projects and programs within the
boundaries of a county or a city and county, or its successor.
(B) If an entity meeting the criteria of subparagraph (A) does not
exist, the designated congestion management agency within a county
or a city and county, or its successor, or the county transportation
commission, or its successor.
(2) A local council of governments with the authority to
administer or deliver a county transportation expenditure plan, or
its successor.
(e) The tax described in subdivision (a) shall be collected
and administered by the State Board of Equalization, or its successor
agency. The revenues derived from that tax shall be deposited in
the Local Transportation Infrastructure Account, which is hereby
created in the State Transportation Fund. The State Board of
Equalization shall allocate the moneys in that account no less
frequently than on a quarterly basis as follows:
(1) To the State Board of Equalization for its costs of collection
and administration.
(2) For the payment of refunds of amounts of tax improperly
collected pursuant to this section.
(3) The balance to each county, city and county,
local or regional transportation agency of the
remaining amount of those tax revenues that were collected with
respect to a sale, use, storage, or other consumption of tangible
personal property that occurred in the jurisdiction of the
county, city and county, local or regional
transportation agency imposing the tax.
(e)
(f) All revenues received by a county, a city and
county, or a local or regional transportation
agency pursuant to this section shall be expended exclusively for
local and regional transportation planning, research, design,
construction, operation, maintenance, and rehabilitation, and for
environmental mitigation related to the impacts of transportation
projects.
(f)
(g) Revenues derived from the tax imposed pursuant to
subdivisions (a) and (b) are not General Fund proceeds of taxes
within the meaning of Article XVI.
(g)
(h) Allocations made from the Local Transportation
Infrastructure Account, and the expenditure by a county, a
city and county, or a local or regional
transportation agency of revenues received from that account, are not
"appropriations subject to limitation" within the meaning of Article
XIII B.
Speaking at an April 26 LB conference on Redevelopment practices [separate LBReport.com coverage, click