BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 338


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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          338 (Roger Hernández) - As Amended April 13, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill authorizes the Los Angeles County Metropolitan  
          Transportation Authority (MTA), subject to voter approval, to  
          impose an additional 0.5% transactions and use tax (sales tax)  
          for no more than 30 years, for funding transportation-related  








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          projects and programs.


          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.


          COMMENTS:


          1)Purpose. According to the author, "While Los Angeles continues  
            to experience some of the most challenging traffic congestion  
            in the state and nation, Los Angeles voters have also  
            recognized the importance of investing in a transportation  
            network that is responsive to the needs to commuters, transit  
            users, and that facilitates the movement of goods in the  
            region.  Most importantly, Los Angeles voters have responded  
            to an expenditure plan that can demonstrate fairness in the  
            distribution of investments throughout the region.  AB 338  
            provides an approach to bring additional resources to Los  
            Angeles County predicated on fairness, transparency and  
            acknowledgement of best practices."  


          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  
            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 to several  








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            counties to allow an additional sales tax for transportation  
            purposes.  

            According to the Board of Equalization, 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 funding.


          3)Related legislation:  


             a)   SB 767 (De León) also authorizes MTA to impose an  
               additional countywide 0.5% transactions and use tax, but is  
               not identical to this bill.  SB 767 is pending in the  
               Senate Appropriations Committee.


             b)   AB 464 (Mullin) raises the transactions and use tax rate  
               cap from 2% to 3%.  AB 464 is pending on the Assembly  
               Floor.


          1)Prior legislation:  


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








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               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  
               passage.  


             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,  
               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)  
          319-2081



















                                                                     AB 338


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