Amended in Assembly March 19, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 338

Introduced by Assembly Member Roger Hernández

February 13, 2015

An act tobegin delete amendend deletebegin insert addend insert Sectionbegin delete 130001 ofend deletebegin insert 130350.7 to,end insert the Public Utilities Code, relating to transportation.


AB 338, as amended, Roger Hernández. begin deleteCounty transportation commissions: Los Angeles County. end deletebegin insertLos Angeles County Metropolitan Transportation Authority: transactions and use tax.end insert

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Existing law authorizes the Los Angeles County Metropolitan Transportation Authority (MTA) to impose, in addition to any other tax that it is authorized to impose, a transactions and use tax at a rate of 0.5% for the funding of specified transportation-related projects and programs, subject to various requirements, including the adoption of an expenditure plan and voter approval. Existing law authorizes the MTA to seek voter approval to extend the transactions and use tax pursuant to an amended ordinance, subject to various requirements, including adoption of an amended expenditure plan that, among other things, updates certain cost estimates and identifies expected completion dates for projects and programs under the previous expenditure plan, and also requires the amended expenditure plan to be included in an updated long range transportation plan, as specified.

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This bill would authorize the MTA to impose an additional transportation transactions and use tax at a rate of 0.5%, for a period not to exceed 30 years, subject to various requirements, including the adoption of an expenditure plan and voter approval.

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The Transactions and Use Tax Law limits to 2% the combined rate of all transactions and use taxes imposed in any county, with certain exceptions.

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This bill would exempt the transactions and use tax authorized by the bill from this limitation.

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The County Transportation Commissions Act provides for the creation of county transportation commissions with specified powers and duties in the southern California region, including Los Angeles County. The act makes various legislative findings regarding the transportation needs of the region.

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The bill would make an additional legislative finding that transportation resources should be equitably distributed within Los Angeles County.

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Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

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begin insertThe Legislature finds and declares all of the
2following:end insert

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3(a) Various economic studies have shown that the biggest burden
4on family incomes is the cost of housing and transportation. These
5two variables greatly affect the quality of life for Californians.

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6(b) Los Angeles County voters have recognized the importance
7of investing in a transportation network that is responsive to the
8needs of commuters and transit users and that facilitates the
9 movement of goods in the region. Los Angeles County has three
10existing voter-approved sales tax measures for transportation
11projects administered by Los Angeles County Metropolitan
12Transportation Authority (MTA).

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13(c) In 1980, voters in Los Angeles County approved Proposition
14A, a sales tax of one-half of 1 percent on most retail sales in Los
15Angeles County. The MTA returns 25 percent of Proposition A
16proceeds to the cities in Los Angeles County for transportation
17purposes. Thirty-five percent of Proposition A proceeds is required
18to be used for rail development while the remaining 40 percent is
19for discretionary purposes. Almost all of the discretionary portion
20is used to fund bus service provided by the MTA and 16 other
21municipal bus operators within Los Angeles County. The collection
22of the sales tax is ongoing.

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P3    1(d) In 1990, voters in Los Angeles County approved Proposition
2C, an additional sales tax of one-half of 1 percent on retail sales
3in Los Angeles County. The MTA returns 20 percent of Proposition
4C proceeds to the cities in Los Angeles County for transportation
5purposes. Forty percent of the Proposition C proceeds is required
6to be used for construction and operation of the bus transit and
7rail system, 5 percent to expand rail and bus security, 10 percent
8for commuter rail, and construction of transit centers, park and
9ride lots, and freeway bus stops, and 25 percent for transit-related
10improvements to freeways and state highways. The collection of
11the sales tax is ongoing.

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12(e) Most recently, voters in Los Angeles County approved
13Measure R in 2008. Measure R is an ordinance authorizing an
14additional sales tax of one-half of 1 percent to fund traffic relief
15and rail expansion according to an expenditure plan contained in
16the ordinance. Measure R became effective July 1, 2009, and will
17remain in effect for 30 years.

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18(f) MTA has been entrusted with the responsibility and has the
19voters’ confidence that it will protect and use the sales tax funding
20responsibly and according to the rules approved by the voters.

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21begin insert

begin insertSEC. 2.end insert  

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begin insertSection 130350.7 is added to the end insertbegin insertPublic Utilities Codeend insertbegin insert,
22to read:end insert

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begin insert130350.7.end insert  

(a) The Los Angeles County Metropolitan
24Transportation Authority (MTA), in addition to any other tax it is
25authorized to impose or has imposed, may impose a transactions
26and use tax at the rate of 0.5 percent, for a period not to exceed
2730 years, that is applicable in the incorporated and unincorporated
28areas of the County of Los Angeles.

29(b) The ordinance imposing the tax shall contain all of the

31(1) An expenditure plan that lists the transportation projects
32and programs to be funded from net revenues from the tax. The
33expenditure plan shall appear in the ordinance as an exhibit. The
34expenditure plan shall include measures that ensure net revenues
35are shared equitably between regions of the county.

36(2) Provisions conforming to the Transactions and Use Tax
37Law (Part 1.6 (commencing with Section 7251) of Division 2 of
38the Revenue and Taxation Code), except as otherwise provided in
39subdivision (f).

P4    1(3) A provision limiting the MTA’s costs of administering the
2ordinance and the net revenues from the tax to 1.5 percent of the
3total tax revenues.

4(4) A requirement that the net revenues from the tax, defined to
5mean the total tax revenues less any refunds, costs of
6administration by the State Board of Equalization, and the MTA’s
7administration costs, shall be used by the MTA to fund
8transportation projects and programs identified in the expenditure

10(5) A requirement that the MTA, during the period that the
11 ordinance is operative, allocate ____ percent of all net revenues
12derived from the tax for bus operations. These revenues shall be
13allocated to all eligible and included municipal transit operators
14in the County of Los Angeles and to the MTA, in accordance with
15Section 99285. However, the allocations to the MTA and eligible
16and included municipal operators shall be made solely from
17revenues derived from a tax imposed pursuant to this section, and
18not from local discretionary sources. Funds allocated by MTA to
19itself pursuant to this section shall be used for transit operations
20and shall not supplant funds from any other source allocated by
21MTA to itself for public transit operations. Funds allocated by
22MTA to the eligible and included municipal operators pursuant
23to this section shall be used for transit operations and shall not
24supplant any funds authorized by other provisions of law and
25allocated by MTA to the eligible and included municipal operators
26for public transit. In addition to this amount, the MTA shall
27allocate ____ percent of all net revenues derived from the tax for
28rail operations.

29(c) The MTA shall notify the Legislature prior to the adoption
30of amendments to the adopted expenditure plan.

31(d) The ordinance shall be adopted by the MTA board, which
32shall also adopt a resolution that submits the ordinance to the

34(e) The ordinance shall become operative pursuant to Section
35130352 if approved by two-thirds of the voters voting on the
36measure, pursuant to subdivision (d) of Section 2 of Article XIII
37C of the California Constitution.

38(f) The MTA may incur bonded indebtedness payable from the
39net revenues of the tax pursuant to the bond issuance provisions
40of this chapter and any successor act.

P5    1(g) The tax authorized by this section shall be imposed pursuant
2to the Transactions and Use Tax Law (Part 1.6 (commencing with
3Section 7251) of Division 2 of the Revenue and Taxation Code),
4notwithstanding the combined rate limitation in Section 7251.1 of
5the Revenue and Taxation Code.

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Section 130001 of the Public Utilities Code is
7amended to read:



The Legislature hereby finds and declares that:

9(a) Public demand for an efficient public transportation system
10in the southern California region resulting from population sprawl,
11the concentration of many transit dependent citizens in the large
12urban areas, and increasing mobility requirements indicates a need
13for improved, as well as more innovative, policy and
14decisionmaking institutions to resolve these problems.

15(b) A basic purpose of transportation policy within the region
16should be to avoid undesirable duplication of transportation
17services, achieve the operation of a coordinated and integrated
18transportation system which will reduce automobile usage and
19dependency, reduce the consumption of scarce and expensive
20energy fuels, and reduce the levels of automobile-related air

22(c) Recognizing the scarcity of resources available for all
23transportation development, the commissions shall give priority
24to low-cost highway and transit improvements, and shall work
25toward maximizing the effectiveness of existing resources available
26to the commissions.

27(d) Recognizing the importance of the state highway system in
28the Los Angeles metropolitan area to bus, automobile, and freight
29transportation, it is necessary to maintain this highway system at
30least at its present operating standards and to increase the
31person-moving capability of this system by such methods as
32carpooling, improved traffic operations, exclusive busways, and
33fringe parking facilities.

34(e) Recognizing the geographic diversity and transportation
35needs in Los Angeles County, transportation resources should be
36equitably distributed within the county.

37(f) The transportation system should offer adequate public
38transportation to all citizens, including those immobilized by
39poverty, age, physical handicaps, or other reasons.

P6    1(g) The cities and local communities acting singly or jointly
2should be given more responsibilities for designing and providing
3local transit services to improve the responsiveness of public transit
4to public needs.

5(h) The transportation decisionmaking process should be
6responsive to public values, and provide for the continuing
7involvement of the public in the preparation, revision, and
8discussion of transportation plans and services.

9(i) Transportation planning should recognize that transportation
10systems have significant effect on the physical and socioeconomic
11characteristics of the areas served, and emphasis should be given
12to the protection and enhancement of the environment and the
13restoration of blighted neighborhoods near community centers.
14Los Angeles County, in particular, is a multicentered area with
15diverse socioeconomic levels and travel patterns, and a majority
16of the trips in the county are four miles or less.

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