Existing law authorizes the County of Alameda and the County of Contra Costa to impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5% that, in combination with other specified taxes, exceeds the combined rate of all these taxes that may be imposed, if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters. Existing law repeals this authority on December 31, 2020, if the ordinance is not approved by the voters by that date.

This bill would remove this taxing authority from the County of Alameda and the County of Contra Costa and grant this taxing authority to the Contra Costa Transportation Authority.

This bill would authorize the continued effect of an existing ordinance in effect on January 1, 2016, and previously adopted under the authority of existing law amended by this bill.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law authorizes the County of Alameda and the County of Contra Costa to impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5% that, in combination with other specified taxes, exceeds the combined rate of all these taxes that may be imposed, if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters. Existing law repeals this authority on December 31, 2020, if the ordinance is not approved by the voters by that date.

This bill would remove this taxing authority from the County of Alameda and the County of Contra Costa and grant this taxing authority to the Contra Costa Transportation Authority.

This bill would authorize the continued effect of an existing ordinance in effect on January 1, 2016, and previously adopted under the authority of existing law amended by this bill.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law authorizes the County of Alameda and the County of Contra Costa to impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5% that, in combination with other specified taxes, exceeds the combined rate of all these taxes that may be imposed, if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters. Existing law repeals this authority on December 31, 2020, if the ordinance is not approved by the voters by that date.

This bill would extend this taxing authority of the County of Alameda until December 31, 2024, and would shift remove this same taxing authority, as so extended, authority from the County of Alameda and the County of Contra Costa and grant this taxing authority to the Contra Costa Transportation Authority.

Existing law authorizes the County of Alameda and the County of Contra Costa to impose a transactions and use tax for the support of countywide transportation programs at a rate of no more than 0.5% that, in combination with other specified taxes, exceeds the combined rate of all these taxes that may be imposed, if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters. Existing law repeals this authority on December 31, 2020, if the ordinance is not approved by the voters by that date.

This bill would extend this taxing authority of the County of Alameda until December 31, 2024, and would shift this same taxing authority, as so extended, from the County of Contra Costa to the Contra Costa Transportation Authority.

 THIRD READING  

Bill No: AB 1665

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/14/16

AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/22/16

AYES: Hertzberg, Nguyen, Beall, Hernandez, Moorlach, Pavley

NO VOTE RECORDED: Lara

ASSEMBLY FLOOR: 77-0, 5/16/16 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill removes the existing authority granted to Alameda County and Contra Costa County to impose an additional transaction and use tax (TUT), subject to voter approval, and instead grants Contra Costa County’s existing authority to the Contra Costa Transportation Authority (CCTA).

ANALYSIS:

Existing law:

1. Authorizes cities and counties to impose a local sales and use tax.
2. Authorizes cities and counties to impose transactions and use taxes.
3. Prohibits, in any county, the combined rate of all taxes imposed in accordance with TUT Law from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a TUT not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the TUT by any applicable voting requirements
   2. The ordinance proposing the TUT is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance
   3. The TUT conforms to the Transaction and Use Tax Law
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a TUT that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

This bill:

1. Removes the existing authority granted to Alameda County and Contra Costa County, and instead authorizes the CCTA to adopt an ordinance to impose a TUT, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2020.
2. Provides, notwithstanding any other law, any ordinance previously adopted under the authority in existing law for Alameda and Contra Costa Counties to adopt an additional TUT, subject to voter approval, and in effect on January 1, 2016, may continue in effect.
3. Contains an urgency clause and states it is necessary that this bill take effect immediately in order to ensure the residents of Contra Costa County have adequate transportation services.
4. Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs.

Comments

1. Purpose. The author asserts, “in light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents.”
2. Agency streamlining. This bill proposes to shift the authorization to impose TUT from Contra Costa County to CCTA, similar to authorization granted to transportation authorities on behalf of other counties. The CCTA was formed by voters in 1988 to lead Contra Costa County's transportation efforts and manage funds generated by Measure C, a 0.50% TUT approved by voters that same year for transportation purposes. The CCTA also manages funds generated by Measure J, approved by Contra Costa County voters in November 2004, to extend the TUT for another 30 years.

Presently, CCTA is moving forward with proposing a transportation tax measure to county voters, but cannot do so directly under current law — instead Contra Costa County must first adopt an ordinance to present a tax to voters and then work with the State Board of Equalization to delegate administrative responsibilities from the county to CCTA. This bill transfers the authority to seek TUT voter approval to the local jurisdiction that would ultimately administer the tax proceeds if approved by two-thirds of voters: CCTA. Since plans to ask Contra Costa County voters for a new tax are already under way, the author has included an urgency measure in this bill to ensure state law is enacted in time to allow CCTA to propose its TUT measure to its voters.

1. Existing authority. While this bill streamlines TUT taxing authority for Contra Costa County, this bill also includes a provision to guarantee existing taxing authority in Alameda County (i.e., Measure BB, enacted in 2014) is not jeopardized with this streamlining process.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/24/16)

Bay Area Council

Contra Costa County Board of Supervisors

Contra Costa Transportation Authority

California-Nevada Conference of Operating Engineers

San Francisco Bay Area Rapid Transit District

OPPOSITION: (Verified 6/24/16)

None received

ASSEMBLY FLOOR: 77-0, 5/16/16

AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Dababneh, Gallagher

Prepared by:

6/24/16 14:33:49

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Robert M. Hertzberg, Chair

2015 - 2016 Regular

Transactions and use taxes: County of Alameda, County of Contra Costa, and Contra Costa Transportation Authority

Shifts Contra Costa County's existing authority to impose transactions and use taxes to the Contra Costa Transportation Authority.

Background

State law imposes a sales and use tax (SUT) on the sale, storage, or use of tangible personal property unless exempted by state law. Cities and Counties may increase the SUT rate up to 2% as a transactions and use tax for either specific or general purposes with voter approval as required by the California Constitution.

The current state SUT is 7.5%, but beginning January 1, 2017, the state SUT rate on tangible personal property will be 7.25% and imposed as follows:

Transactions & Use Tax

Existing law allows cities and counties to impose additional sales and use taxes, called transactions and use taxes (TUT), up to a combined 2% rate, with voter approval. The tax must be imposed in increments of 0.125%. In rare cases, the Legislature allows local agencies to exceed the 2% cap.

Current law authorizes Alameda County and Contra Costa County to impose a district tax for countywide transportation programs at a capped rate of 0.5%, which in combination with other district taxes, would exceed the 2% limitation established in existing law if:

• Alameda County and Contra Costa County adopt an ordinance proposing the district tax by any applicable voting requirements.
• The proposed ordinance is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance.
• The district tax conforms to the Transactions and Use Tax Law.

Proposed Law

Assembly Bill 1665 removes the existing authority granted to Alameda County and Contra Costa County, and instead authorizes the Contra Costa Transportation Authority (CCTA) to adopt an ordinance to impose a TUT, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2020.

AB 1665 provides any ordinance previously adopted under the authority in existing law for Alameda and Contra Costa Counties to adopt an additional TUT may continue in effect.

The bill contains an urgency clause and states that it is necessary for this bill take effect immediately in order to ensure the residents of Contra Costa County have adequate transportation services.

AB 1665 finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and by the Contra Costa Transportation Authority in providing essential transportation programs.

State Revenue Impact

Unknown.

Comments

1. Purpose of the bill. According to the author, “In light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh-in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents.”

2. Transactions and Use Tax Law. Cities and counties are authorized to impose additional TUT to the state's SUT rate, subject to voter approval as required by the California Constitution. General purpose taxes require majority voter approval and special purpose taxes restricted for a specified use require two-thirds voter approval. According to the State Board of Equalization (BOE), as of January 1, 2016, 4 of 48 county-imposed taxes are general purpose taxes and 44 are special purpose taxes with 30 dedicated for transportation purposes.

Generally, TUT may be imposed in 0.125% increments, up to a total of 2% within the county. However, the Legislature has granted several exemptions to the 2% cap, subject to voter approval, as local jurisdictions where both the county and cities within the county impose TUT may otherwise easily exceed the cap. These jurisdictions include the City of El Cerrito, County of Alameda, County of Contra Costa, County of San Mateo, Transportation Agency for Monterey County, and the Los Angeles Metropolitan Transportation Authority (MTA).

3. Existing cap. SB 566, (Scott, 2003) imposed the uniform 2% cap for both cities and counties, in response to at least five bills a year seeking to impose the tax. The cap set an upper limit on the local rate, as California’s sales and use tax rate is very high. Last year, AB 464 (Mullin and Gordon) attempted to raise the cap to 3%, however, Governor Brown vetoed the bill, stating:

“This bill would raise, on a blanket basis, the limit on local transactions and use tax for all counties and cities from two percent to three percent. Although I have approved raising the limit for individual counties, I am reluctant to approve this measure in view of all the taxes being discussed and proposed for the 2016 ballot.”

4. High rate. Eight cities in California already impose the highest sales and use tax rate in the state. An additional 0.5% will expand the number of cities with a double digit sales and use tax rate. Unfortunately, this will disproportionately impact low income individuals and families that generally pay a higher percentage of their income in sales and use tax.

5. Alameda County. On November 4, 2014, 70.76% of Alameda County voters approved an additional 0.50% TUT via Measure BB to fund transportation improvements for 30 years, the first tax in the county levied in excess of the 2% cap. As such, Alameda County is currently at its 2.5% countywide cap.

6. Contra Costa County. This bill shifts the authorization to impose TUT from Contra Costa County to CCTA, similar to authorization granted to transportation authorities on behalf of other counties. The CCTA was formed by voters in 1988 to lead Contra Costa County's transportation efforts and manage funds generated by Measure C, a 0.50% TUT approved by voters that same year for transportation purposes. The CCTA also manages funds generated by Measure J, approved by Contra Costa County voters in November 2004, to extend the TUT for another 30 years.

Presently, CCTA is moving forward with proposing a transportation tax measure to county voters, but cannot do so directly under current law. Instead, Contra Costa County must first adopt an ordinance to present a tax to voters and then work with the State Board of Equalization to delegate administrative responsibilities from the county to CCTA. This bill transfers the authority to seek TUT voter approval to CCTA if approved by two-thirds of voters. Since plans to ask Contra Costa County voters for a new tax are already under way, the author has included an urgency measure in the bill to ensure state law is enacted in time to allow CCTA to propose the TUT measure to its voters.

7. Prior Legislation. AB 210 (Wieckowski, 2013), extended the authority of Alameda County and authorized Contra Costa County, until December 31, 2020, to impose TUT in excess of the 2% countywide cap if approved by voters.

8. Incoming! The Senate Transportation and Housing Committee approved AB 1655 by a vote of 11-0 on June 14, 2016.

9. Special legislation. The California Constitution prohibits special legislation when a general law can apply (Article IV, §16). AB 1665 contains findings and declarations explaining the need for legislation that applies only to the County of Alameda and the Contra Costa Transportation Authority.

Assembly Actions

Assembly Local Government 6-3

Assembly Revenue and Taxation 6-0

Assembly Floor 77-0

Support and Opposition

(6/15/16)

Support: Bay Area Council; Contra Costa County Board of Supervisors; Contra Costa Transportation Authority; California-Nevada Conference of Operating Engineers; San Francisco Bay Area Rapid Transit District.

Opposition: Unknown.

-- END --

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: AB 1665 Hearing Date: June 14, 2016

SUBJECT: Transactions and use taxes: County of Alameda, County of Contra Costa, and Contra Costa Transportation Authority

DIGEST: This bill removes the existing authority granted to Alameda County and Contra Costa County to impose an additional transactions and use tax (TUT), subject to voter approval, and instead grants Contra Costa County's existing authority to the Contra Costa Transportation Authority (CCTA).

ANALYSIS:

Existing law:

1. Authorizes cities and counties to impose a local sales and use tax.
2. Authorizes cities and counties to impose transactions and use taxes.
3. Prohibits, in any county, the combined rate of all taxes imposed in accordance with Transactions and Use Tax Law from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a TUT not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the transactions and use tax by any applicable voting requirements
   2. The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance
   3. The transactions and use tax conforms to the Transaction and Use Tax Law
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a TUT that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

This bill:

1. Removes the existing authority granted to Alameda County and Contra Costa County, and instead authorizes the CCTA to adopt an ordinance to impose a TUT, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2020.
2. Provides, notwithstanding any other law, any ordinance previously adopted under the authority in existing law for Alameda and Contra Costa Counties to adopt an additional TUT, subject to voter approval, and in effect on January 1, 2016, may continue in effect.
3. Contains an urgency clause and states it is necessary that this bill take effect immediately in order to ensure the residents of Contra Costa County have adequate transportation services.
4. Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs.

COMMENTS:

1. Purpose. The author asserts, “in light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents.”
2. Agency streamlining. This bill proposes to shift the authorization to impose TUT from Contra Costa County to CCTA, similar to authorization granted to transportation authorities on behalf of other counties. The CCTA was formed by voters in 1988 to lead Contra Costa County's transportation efforts and manage funds generated by Measure C, a 0.50% TUT approved by voters that same year for transportation purposes. The CCTA also manages funds generated by Measure J, approved by Contra Costa County voters in November 2004, to extend the TUT for another 30 years.

Presently, CCTA is moving forward with proposing a transportation tax measure to county voters, but cannot do so directly under current law — instead; Contra Costa County must first adopt an ordinance to present a tax to voters and then work with the State Board of Equalization to delegate administrative responsibilities from the county to CCTA. This bill transfers the authority to seek TUT voter approval to the local jurisdiction that would ultimately administer the tax proceeds if approved by two-thirds of voters: CCTA. Since plans to ask Contra Costa County voters for a new tax are already under way, the author has included an urgency measure in the bill to ensure state law is enacted in time to allow CCTA to propose its TUT measure to its voters.

1. Existing authority. While this bill streamlines TUT taxing authority for Contra Costa County, this bill also includes a provision to guarantee existing taxing authority in Alameda County (i.e., Measure BB, enacted in 2014) is not jeopardized with this streamlining process.
2. Double-referral. This bill has been double referred to this committee and the Senate Governance and Finance committee.

Related Legislation:

AB 210 (Wieckowski, Chapter 194, Statutes of 2013) — extended the authority of Alameda County and authorized Contra Costa County, until December 31, 2020, to impose a TUT in excess of the 2% countywide cap if approved by voters.

Assembly Votes:

Floor: 77-0

Rev. & Tax: 6-0

L. Gov.: 6-3

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 8, 2016.)

SUPPORT:

Bay Area Council

Contra Costa County Board of Supervisors

Contra Costa Transportation Authority

California-Nevada Conference of Operating Engineers

San Francisco Bay Area Rapid Transit District

OPPOSITION:

None recieved

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1665

Author:(Bonilla and Frazier)

As Amended Ver:May 9, 2016

2/3 vote. Urgency

SUMMARY: Removes the existing authority granted to Alameda County and Contra Costa County to impose an additional transactions and use tax, subject to voter approval, and instead, grants Contra Costa County's existing authority to the Contra Costa Transportation Authority. Specifically, this bill:

1. Removes the existing authority granted to Alameda County and Contra Costa County, and instead, authorizes the Contra Costa Transportation Authority (CCTA) to adopt an ordinance, in the same manner as Alameda County, to impose a transactions and use tax, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2020.
2. Provides, notwithstanding any other law, any ordinance previously adopted under the authority in existing law for the Alameda and Contra Costa Counties to adopt an additional transactions and use tax, subject to voter approval, and in effect on January 1, 2016 may continue in effect.
3. Contains an urgency clause and states it is necessary that this bill take effect immediately in order to ensure the residents of Contra Costa County have adequate transportation services.
4. Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs.

EXISTING LAW:

1. Authorizes cities and counties to impose a local sales and use tax.
2. Authorizes cities and counties to impose transactions and use taxes.
3. Prohibits, in any county, the combined rate of all taxes imposed in accordance with Transactions and Use Tax Law from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a transactions and use tax not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the transactions and use tax by any applicable voting requirements;
   2. The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance; and,
   3. The transactions and use tax conforms to the Transaction and Use Tax Law.
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a transactions and use tax that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

FISCAL EFFECT: None

COMMENTS:

1. Transactions and Use Taxes. Existing law authorizes cities and counties to impose transactions and use taxes in 0.125% increments in addition to the state's 7.5% sales tax provided that the combined rate in the county does not exceed 2%. Transactions and use taxes are taxes imposed on the total retail price of any tangible personal property and the use or storage of such property when sales tax is not paid. These types of taxes may be levied as general taxes (majority vote required), which are unrestricted, or special taxes (two-thirds vote required), which are restricted for a specified use.

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 transactions and use tax, if voters approve the tax. Currently, 20 counties have transactions and use taxes for public transportation or transit.

Prior to 2003, cities lacked the ability to place transactions and use taxes before their voters without first obtaining approval by the Legislature to bring an ordinance before the city council, and, if approved at the council level, to the voters. This was remedied by SB 566 (Scott), Chapter 709, Statutes of 2003. SB 566 also contained provisions to increase a county's transactions and use tax cap because of the possibility that certain counties were going to run out of room under their caps, if cities within those counties approved transactions and use taxes.

Because of the interaction between city-imposed and county-imposed transactions and use taxes, the concern that counties will run into the 2% cap still applies today. Currently, the Counties of Alameda, Contra Costa, Los Angeles, and San Mateo have reached the 2% limit, and the Counties of Marin, San Diego, and Sonoma are near the 2% limit. The Legislature has granted several exemptions to the 2% cap, including to several counties to allow an additional countywide transactions and use tax for transportation purposes.

1. Bill Summary. In 2011, the Legislature provided a one-time exemption for Alameda County from the 2% transactions and use tax combined rate cap [AB 1086 (Wieckowski), Chapter 327, Statutes of 2011]. After a ballot measure in Alameda County fell narrowly short of the necessary two-thirds vote, the Legislature extended the authority for Alameda County to adopt an ordinance imposing a transactions and use tax from January 1, 2014, to December 31, 2020, and authorized Contra Costa County to adopt an ordinance imposing a transactions and use tax in the same manner as Alameda County [AB 210 (Wieckowski), Chapter 194, Statutes of 2013]. In November of 2014, voters in Alameda County passed Measure BB, a transactions and use tax at 0.5% to fund transportation improvements for 30 years.

This bill replaces Contra Costa County with CCTA as the entity authorized to impose a countywide transactions and use tax, subject to voter approval, beyond the 2% cap. Additionally, this bill removes the existing authority granted to Alameda County and provides that any ordinance previously adopted and in effect by January 1, 2016, may continue in effect. This bill does not impact the required two-thirds vote needed for transactions and use taxes for the support of countywide transportation programs. This bill is sponsored by CCTA.

1. Contra Costa Transportation Authority (CCTA). CCTA was formed by the voters in 1988 to manage the funds generated by transactions and use taxes for transportation purposes and to lead Contra Costa County's transportation planning efforts. That same year Contra Costa County voters passed Measure C which imposed a 0.5% countywide transactions and use tax for CCTA to extend Bay Area Rapid Transit (BART), make freeway improvements, improve bus service, enhance bicycle facilities, and provide more transportation options for senior citizens and people with disabilities. In November 2004, voters approved Measure J with a 71% vote to extend the half-cent transactions and use tax from 2009 to 2034.
2. Author's Statement. According to the author, "CCTA is considering bringing forth a transportation tax measure to the Contra Costa County voters. However, as it currently stands, CCTA cannot place a tax measure before the voters without the support of the county. The county must adopt an ordinance to present a tax to the voters and then work with the Board of Equalization to delegate responsibilities from the county to CCTA. To that end, AB 1665 proposes to transfer the authority from the county to CCTA. The rationale is that CCTA oversees this county's countywide transportation program and will have the responsibility to administer the tax proceeds, thus they should have independent authority to place a ballot measure before the voters.

"As a regional leader in transportation, CCTA, not the county, is the Congestion Management Agency, [that] oversees long-range planning efforts, and delivers the Transportation Expenditure Plan for the existing $0.05 cent sales tax. Since they are the public agency tasked with managing the county's transportation sales tax program, CCTA is in the best position to adopt an ordinance proposing a transportation program tax and achieving the maximum voter approval necessary for its passage. Most importantly, CCTA keenly understands the community's transportation needs, working in the field and receiving community feedback.

"CCTA has a greater pulse on the necessity of local transportation funding and has a proven track record of planning and delivering critical transportation infrastructure projects and programs. They have developed major projects on state highways working with CalTrans; provided critical funding to local cities, the county and transit districts; met the goals of the countywide transportation plan to create a balanced, safe and efficient transportation network; and plays a significant role in reducing congestion, improving air quality, and increasing mobility options for residents. In effect, CCTA has the trust of the voters and the expertise to deliver the vision of local communities.

"In light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh-in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents."

1. Prior Legislation. SB 314 (Murray), Chapter 785, Statutes of 2003, originally enacted provisions that authorized the Los Angeles County Metropolitan Transportation Authority (MTA) to impose a 0.5% transactions and use tax, not subject to the 2% cap for no more than six and one-half years, for specific transportation projects and programs. The authority to put a tax measure on the ballot was never used. AB 2321 (Feuer), Chapter 302, Statutes of 2008, modified those provisions to allow MTA to impose a transactions and use tax for 30 years. SB 767 (De León), Chapter 580, Statutes of 2015, authorized MTA to impose an additional countywide transactions and use tax.

AB 1324 (Skinner), Chapter 795, Statutes of 2014, allowed the City of El Cerrito (in Contra Costa County) to adopt an ordinance to impose a transactions and use tax not to exceed 0.5% for general purposes that would, in combination with other taxes, exceed the statutory limit of 2%. Most recently, AB 464 (Mullin) of 2015 would have increased the countywide transactions and use tax combined cap from 2% to 3%, but was vetoed by the Governor.

1. Arguments in Support. CCTA argues that this bill "provides an opportunity for Contra Costa voters to support transportation investments consistent with an adopted Transportation Expenditure Plan that could help our community advance our competitive edge, improve mobility, and meet the State's ambitious environmental goals."
2. Arguments in Opposition. None on file.

Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0002907

ASSEMBLY THIRD READING

ATR Bill Id:AB 1665

Author:(Bonilla)

As Introduced Ver:January 14, 2016

Majority vote

SUMMARY: Extends the sunset date on the authority of Alameda County and Contra Costa County to impose an additional transactions and use tax, subject to voter approval, and grants Contra Costa County's existing authority to the Contra Costa Transportation Authority. Specifically, this bill:

1. Extends the sunset date from December 31, 2020, to December 31, 2024, on the existing authority granted to Alameda County to adopt an ordinance to impose a transactions and use tax, subject to voter approval, that exceeds the combined statutory rate of 2%.
2. Removes the existing authority granted to Contra Costa County, and instead, authorizes the Contra Costa Transportation Authority (CCTA) to adopt an ordinance, in the same manner as Alameda County, to impose a transactions and use tax, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2024.
3. Makes technical and conforming changes.
4. Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs.

EXISTING LAW:

1. Authorizes cities and counties to impose a local sales and use tax.
2. Authorizes cities and counties to impose transactions and use taxes.
3. Prohibits, in any county, the combined rate of all taxes imposed in accordance with Transactions and Use Tax Law from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a transactions and use tax not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the transactions and use tax by any applicable voting requirements;
   2. The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance; and,
   3. The transactions and use tax conforms to the Transaction and Use Tax Law.
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a transactions and use tax that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

FISCAL EFFECT: None

COMMENTS:

1. Transactions and Use Taxes. Existing law authorizes cities and counties to impose transactions and use taxes in 0.125% increments in addition to the state's 7.5% sales tax provided that the combined rate in the county does not exceed 2%. Transactions and use taxes are taxes imposed on the total retail price of any tangible personal property and the use or storage of such property when sales tax is not paid. These types of taxes may be levied as general taxes (majority vote required), which are unrestricted, or special taxes (two-thirds vote required), which are restricted for a specified use.

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 transactions and use tax, if voters approve the tax. Currently, 20 counties have transactions and use taxes for public transportation or transit.

Prior to 2003, cities lacked the ability to place transactions and use taxes before their voters without first obtaining approval by the Legislature to bring an ordinance before the city council, and, if approved at the council level, to the voters. This was remedied by SB 566 (Scott), Chapter 709, Statutes of 2003. SB 566 also contained provisions to increase a county's transactions and use tax cap because of the possibility that certain counties were going to run out of room under their caps, if cities within those counties approved transactions and use taxes.

Because of the interaction between city-imposed and county-imposed transactions and use taxes, the concern that counties will run into the 2% cap still applies today. Currently, the Counties of Alameda, Contra Costa, Los Angeles, and San Mateo have reached the 2% limit, and the Counties of Marin, San Diego, and Sonoma are near the 2% limit. The Legislature has granted several exemptions to the 2% cap, including to several counties to allow an additional countywide transactions and use tax for transportation purposes.

1. Bill Summary. In 2011, the Legislature provided a one-time exemption for Alameda County from the 2% transactions and use tax combined rate cap [AB 1086 (Wieckowski), Chapter 327, Statutes of 2011]. After a ballot measure in Alameda County fell narrowly short of the necessary two-thirds vote, the Legislature extended the authority for Alameda County to adopt an ordinance imposing a transactions and use tax from January 1, 2014, to December 31, 2020, and authorized Contra Costa County to adopt an ordinance imposing a transactions and use tax in the same manner as Alameda County [AB 210 (Wieckowski), Chapter 194, Statutes of 2013].

This bill replaces Contra Costa County with CCTA as the entity authorized to impose a countywide transactions and use tax, subject to voter approval, beyond the 2% cap. Additionally, this bill provides an extension to the sunset date on the authority granted to Alameda County and CCTA from December 31, 2020, to December 31, 2024. This bill does not impact the required two-thirds vote needed for transactions and use taxes for the support of countywide transportation programs. This bill is sponsored by CCTA.

1. Contra Costa Transportation Authority (CCTA). CCTA was formed by the voters in 1988 to manage the funds generated by transactions and use taxes for transportation purposes and to lead Contra Costa County's transportation planning efforts. That same year Contra Costa County voters passed Measure C which imposed a 0.5% countywide transactions and use tax for CCTA to extend Bay Area Rapid Transit (BART), make freeway improvements, improve bus service, enhance bicycle facilities, and provide more transportation options for senior citizens and people with disabilities. In November 2004, voters approved Measure J with a 71% vote to extend the half-cent transactions and use tax from 2009 to 2034.
2. Author's Statement. According to the author, "CCTA is considering bringing forth a transportation tax measure to the Contra Costa County voters. However, as it currently stands, CCTA cannot place a tax measure before the voters without the support of the county. The county must adopt an ordinance to present a tax to the voters and then work with the Board of Equalization to delegate responsibilities from the county to CCTA. To that end, AB 1665 proposes to transfer the authority from the county to CCTA. The rationale is that CCTA oversees this county's countywide transportation program and will have the responsibility to administer the tax proceeds, thus they should have independent authority to place a ballot measure before the voters.

"As a regional leader in transportation, CCTA, not the county, is the Congestion Management Agency, [that] oversees long-range planning efforts, and delivers the Transportation Expenditure Plan for the existing $0.05 cent sales tax. Since they are the public agency tasked with managing the county’s transportation sales tax program, CCTA is in the best position to adopt an ordinance proposing a transportation program tax and achieving the maximum voter approval necessary for its passage. Most importantly, CCTA keenly understands the community's transportation needs, working in the field and receiving community feedback.

"CCTA has a greater pulse on the necessity of local transportation funding and has a proven track record of planning and delivering critical transportation infrastructure projects and programs. They have developed major projects on state highways working with CalTrans; provided critical funding to local cities, the county and transit districts; met the goals of the countywide transportation plan to create a balanced, safe and efficient transportation network; and plays a significant role in reducing congestion, improving air quality, and increasing mobility options for residents. In effect, CCTA has the trust of the voters and the expertise to deliver the vision of local communities.

"In light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh-in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents."

1. Prior Legislation. SB 314 (Murray), Chapter 785, Statutes of 2003, originally enacted provisions that authorized the Los Angeles County Metropolitan Transportation Authority (MTA) to impose a 0.5% transactions and use tax, not subject to the 2% cap for no more than six and one-half years, for specific transportation projects and programs. The authority to put a tax measure on the ballot was never used. AB 2321 (Feuer), Chapter 302, Statutes of 2008, modified those provisions to allow MTA to impose a transactions and use tax for 30 years. SB 767 (De León), Chapter 580, Statutes of 2015, authorized MTA to impose an additional countywide transactions and use tax.

AB 1324 (Skinner), Chapter 795, Statutes of 2014, allowed the City of El Cerrito (in Contra Costa County) to adopt an ordinance to impose a transactions and use tax not to exceed 0.5% for general purposes that would, in combination with other taxes, exceed the statutory limit of 2%. Most recently, AB 464 (Mullin and Gordon) of 2015 would have increased the countywide transactions and use tax combined cap from 2% to 3%, but was vetoed by the Governor.

1. Arguments in Support. CCTA argues that this bill "provides an opportunity for Contra Costa voters to support transportation investments consistent with an adopted Transportation Expenditure Plan that could help our community advance our competitive edge, improve mobility, and meet the State's ambitious environmental goals."
2. Arguments in Opposition. The Howard Jarvis Taxpayers Association argues even if appropriate voter approval is achieved locally this bill still represents poor public policy because it increases a deeply regressive sales tax. Additionally, opposition argues that California already has the highest state sales tax in the nation.

Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0002787

Date of Hearing: April 25, 2016

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Sebastian Ridley-Thomas, Chair

ABPCA Bill Id:AB 1665 (

Author:Bonilla) – As Introduced Ver:January 14, 2016

Majority vote. Non-fiscal.

SUBJECT: Transactions and use taxes: County of Alameda, County of Contra Costa, and Contra Costa Transportation Authority

SUMMARY: Extends the sunset date on the authority of Alameda County and Contra Costa County to impose an additional transactions and use tax (TUT), subject to voter approval, and shifts Contra Costa County's existing or extended authority to impose the TUT to the Contra Costa Transportation Authority (CCTA). Specifically, this bill:

1. Extends the sunset date from December 31, 2020 to December 31, 2024, on the existing authority granted to Alameda County to adopt an ordinance to impose a TUT for county transportation programs at a rate of no more than 0.5%, subject to voter approval, that exceeds the combined statutory rate of 2%.
2. Extends and shifts to the CCTA the existing authority granted to Contra Costa County to adopt an ordinance in the same timeframe and manner as Alameda County to impose a TUT.
3. Finds and declares that a special law is necessary because of the unique fiscal pressures being experienced in the County of Alameda and by the CCTA in providing essential transportation programs.

EXISTING LAW:

1. Authorizes cities and counties, under the Bradley-Burns Uniform Local Sales and Use Tax (SUT) Law, to impose local SUT for the privilege of selling tangible personal property (TPP) at retail in the local jurisdiction, or purchasing TPP outside the local jurisdiction for use within the local jurisdiction.
2. Authorizes cities, counties, or other authorized governmental entities to impose TUT for general or special purposes, in addition to SUT, at a rate of 0.125% or multiples of 0.125%, if approved by the requisite threshold of voters.
3. Prohibits, in any county, the combined rate of all TUT from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a TUT not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with other TUT, exceed the 2% limit established in existing law, if the all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the TUT by any applicable voting approval requirement;
   2. The ordinance proposing the TUT is submitted to the electorate and approved by voters pursuant to Article XIII C of the California Constitution governing voter approval for local tax levies; and,
   3. The TUT conforms to existing law governing TUTs.
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance imposing TUT in excess of the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

FISCAL EFFECT: Unknown

COMMENTS:

1. Author's Statement: The Author has provided the following statement in support of this bill:

In light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh-in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents.

1. Arguments in Support: Proponents of this bill state that "this bill provides an opportunity for Contra Costa voters to support transportation investments consistent with an adopted Transportation Expenditure Plan that could help our community advance our competitive edge, improve mobility, and meet the State's ambitious environmental goals."
2. Arguments in Opposition: Opponents of this bill state that "California already has the highest sales and use tax rate in the country." Extending the sunset date on the TUT in Alameda County and Contra Costa County "increases the cost of doing business" and "imposes a regressive tax on disadvantaged communities."
3. Transactions and Use Tax Law: Cities and counties are authorized to impose additional TUT to the state's 7.5% SUT rate, subject to a vote of the People. General purpose taxes require majority voter approval and special purpose taxes restricted for a specified use require two-thirds voter approval. According to the State Board of Equalization (BOE), as of January 1, 2016, 4 of 48 county-imposed taxes are general purpose taxes and 44 are special purpose taxes with 30 dedicated for transportation purposes.

Generally, TUT may be imposed in 0.125% increments, up to a total of 2% within the county. However, the Legislature has granted several exemptions to the 2% cap, subject to voter approval, as local jurisdictions where both the county and cities within the county impose TUT may otherwise easily exceed the cap. These jurisdictions include the City of El Cerrito, County of Alameda, County of Contra Costa, County of San Mateo, Transportation Agency for Monterey County, and the Los Angeles Metropolitan Transportation Authority (MTA).

1. Alameda County: This bill extends the existing authority granted to Alameda County to impose TUT in excess of the 2% countywide cap if an ordinance is submitted and approved by voters prior to December 31, 2024. However, on November 4, 2014, 70.76% of Alameda County voters approved an additional 0.50% TUT via Measure BB to fund transportation improvements for 30 years, the first tax in the county levied in excess of the 2% cap. As such, Alameda County is currently at its 2.5% countywide cap; the extension of the sunset date has no practical effect on county taxpayers at this time.
2. Contra Costa Transportation Authority: This bill also extends the existing authority granted to Contra Costa County to impose TUT in excess of the 2% countywide cap if an ordinance is submitted and approved by voters prior to December 31, 2024. This bill also shifts the authorization to impose TUT from the county to the CCTA, similar to authorization granted to transportation authorities on behalf of other counties. The CCTA was formed by voters in 1988 to lead Contra Costa County's transportation efforts and manage funds generated by Measure C, a 0.50% TUT approved by voters that same year for transportation purposes. The CCTA also manages funds generated by Measure J, approved by voters in November 2004 to extend the TUT for another 30 years.

According to the author, CCTA is considering bringing forth a transportation tax measure to county voters, but cannot do so directly under current law – instead, Contra Costa County must first adopt an ordinance to present a tax to voters and then work with the BOE to delegate administrative responsibilities from the county to CCTA. This bill transfers the authority to seek TUT voter approval to the local jurisdiction that would ultimately administer the tax proceeds if approved by two-thirds of voters. Since plans to ask voters for a new tax are already under way, however, the Committee may wish to consider whether CCTA needs an additional four years to put forth its ordinance.

1. Double Referral: This bill was double-referred to the Assembly Committee on Local Government, which passed this bill on April 6, 2016, with a vote of 6-3. For additional discussion of local government issues, please refer to the analysis prepared by the Assembly Committee on Local Government.
2. Related Legislation: SB 705 (Hill), Chapter 579, Statutes of 2015, authorized San Mateo County and the Transportation Agency for Monterey County, until January 1, 2026, to impose TUT in excess of the 2% countywide cap if approved by voters.

SB 767 (De Leon), Chapter 580, Statutes of 2015, authorized MTA to impose TUT in excess of the 2% countywide cap if approved by voters.

1. Prior Legislation: AB 210 (Wieckowski), Chapter 194, Statutes of 2013, extended the authority of Alameda County and authorized Contra Costa County, until December 31, 2020, to impose TUT in excess of the 2% countywide cap if approved by voters.

REGISTERED SUPPORT / OPPOSITION:

Support

California-Nevada Conference of Operating Engineers

Contra Costa County Board of Supervisors

Contra Costa Transportation Authority

Opposition

California Taxpayers Association

Analysis Prepared by: Irene Ho / REV. & TAX. / (916) 319-2098

Date of Hearing: April 6, 2016

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Susan Talamantes Eggman, Chair

ABPCA Bill Id:AB 1665 (

Author:Bonilla) – As Introduced Ver:January 14, 2016

SUBJECT: Transactions and use taxes: County of Alameda, County of Contra Costa, and Contra Costa Transportation Authority.

SUMMARY: Extends the sunset date on the authority of Alameda County and Contra Costa County to impose an additional transactions and use tax, subject to voter approval, and grants Contra Costa County's existing authority to the Contra Costa Transportation Authority. Specifically, this bill:

1. Extends the sunset date from December 31, 2020, to December 31, 2024, on the existing authority granted to Alameda County to adopt an ordinance to impose a transactions and use tax, subject to voter approval, that exceeds the combined statutory rate of 2%.
2. Removes the existing authority granted to Contra Costa County, and instead, authorizes the Contra Costa Transportation Authority (CCTA) to adopt an ordinance, in the same manner as Alameda County, to impose a transactions and use tax, subject to voter approval, that exceeds the combined statutory rate of 2% until December 31, 2024.
3. Makes technical and conforming changes.
4. Finds and declares that a special law is necessary because of the unique fiscal pressures experienced in Alameda County and CCTA in providing essential transportation programs.

EXISTING LAW:

1. Authorizes cities and counties to impose a local sales and use tax.
2. Authorizes cities and counties to impose transactions and use taxes.
3. Prohibits, in any county, the combined rate of all taxes imposed in accordance with Transactions and Use Tax Law from exceeding 2%.
4. Authorizes Alameda County and Contra Costa County to adopt an ordinance imposing a transactions and use tax not to exceed 0.5% for the support of countywide transportation programs at a rate that would, in combination with all other transaction and use taxes, exceed the 2% limit established in existing law, if all the following conditions are met:
   1. The local government entity adopts an ordinance proposing the transactions and use tax by any applicable voting requirements;
   2. The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by two-thirds of the voters voting on the ordinance; and,
   3. The transactions and use tax conforms to the Transaction and Use Tax Law.
5. Provides that the authority for Alameda County and Contra Costa County to adopt an ordinance to impose a transactions and use tax that exceeds the combined statutory rate of 2% shall only remain in effect until December 31, 2020.

FISCAL EFFECT: None

COMMENTS:

1. Transactions and Use Taxes. Existing law authorizes cities and counties to impose transactions and use taxes in 0.125% increments in addition to the state's 7.5% sales tax provided that the combined rate in the county does not exceed 2%. Transactions and use taxes are taxes imposed on the total retail price of any tangible personal property and the use or storage of such property when sales tax is not paid. These types of taxes may be levied as general taxes (majority vote required), which are unrestricted, or special taxes (two-thirds vote required), which are restricted for a specified use.

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 transactions and use tax, if voters approve the tax. Currently, twenty counties have transactions and use taxes for public transportation or transit.

Prior to 2003, cities lacked the ability to place transactions and use taxes before their voters without first obtaining approval by the Legislature to bring an ordinance before the city council, and, if approved at the council level, to the voters. This was remedied by SB 566 (Scott), Chapter 709, Statutes of 2003. SB 566 also contained provisions to increase a county's transactions and use tax cap because of the possibility that certain counties were going to run out of room under their caps, if cities within those counties approved transactions and use taxes.

Because of the interaction between city-imposed and county-imposed transactions and use taxes, the concern that counties will run into the 2% cap still applies today. Currently, the Counties of Alameda, Contra Costa, Los Angeles, and San Mateo have reached the 2% limit, and the Counties of Marin, San Diego, and Sonoma are near the 2% limit. The Legislature has granted several exemptions to the 2% cap, including to several counties to allow an additional countywide transactions and use tax for transportation purposes.

1. Bill Summary. In 2011, the Legislature provided a one-time exemption for Alameda County from the 2% transactions and use tax combined rate cap [AB 1086 (Wieckowski), Chapter 327, Statutes of 2011]. After a ballot measure in Alameda County fell narrowly short of the necessary two-thirds vote, the Legislature extended the authority for Alameda County to adopt an ordinance imposing a transactions and use tax from January 1, 2014, to December 31, 2020, and authorized Contra Costa County to adopt an ordinance imposing a transactions and use tax in the same manner as Alameda County [AB 210 (Wieckowski), Chapter 194, Statutes of 2013].

This bill replaces Contra Costa County with CCTA as the entity authorized to impose a countywide transactions and use tax, subject to voter approval, beyond the 2% cap. Additionally, this bill provides an extension to the sunset date on the authority granted to Alameda County and CCTA from December 31, 2020, to December 31, 2024. This bill does not impact the required two-thirds vote needed for transactions and use taxes for the support of countywide transportation programs. This bill is sponsored by CCTA.

1. Contra Costa Transportation Authority (CCTA). CCTA was formed by the voters in 1988 to manage the funds generated by transactions and use taxes for transportation purposes and to lead Contra Costa County's transportation planning efforts. That same year Contra Costa County voters passed Measure C which imposed a 0.5% countywide transactions and use tax for CCTA to extend Bay Area Rapid Transit (BART), make freeway improvements, improve bus service, enhance bicycle facilities, and provide more transportation options for senior citizens and people with disabilities. In November 2004, voters approved Measure J with a 71% vote to extend the half-cent transactions and use tax from 2009 to 2034.
2. Author's Statement. According to the author, "CCTA is considering bringing forth a transportation tax measure to the Contra Costa County voters. However, as it currently stands, CCTA cannot place a tax measure before the voters without the support of the county. The county must adopt an ordinance to present a tax to the voters and then work with the Board of Equalization to delegate responsibilities from the county to CCTA. To that end, AB 1665 proposes to transfer the authority from the county to CCTA. The rationale is that CCTA oversees this county’s countywide transportation program and will have the responsibility to administer the tax proceeds, thus they should have independent authority to place a ballot measure before the voters.

"As a regional leader in transportation, CCTA, not the county, is the Congestion Management Agency, [that] oversees long-range planning efforts, and delivers the Transportation Expenditure Plan for the existing ½ cent sales tax. Since they are the public agency tasked with managing the county’s transportation sales tax program, CCTA is in the best position to adopt an ordinance proposing a transportation program tax and achieving the maximum voter approval necessary for its passage. Most importantly, CCTA keenly understands the community’s transportation needs, working in the field and receiving community feedback.

"CCTA has a greater pulse on the necessity of local transportation funding and has a proven track record of planning and delivering critical transportation infrastructure projects and programs. They have developed major projects on state highways working with CalTrans; provided critical funding to local cities, the county and transit districts; met the goals of the countywide transportation plan to create a balanced, safe and efficient transportation network; and plays a significant role in reducing congestion, improving air quality, and increasing mobility options for residents. In effect, CCTA has the trust of the voters and the expertise to deliver the vision of local communities.

"In light of the severe state funding shortfall for transportation, it is imperative that local governments, agencies and their constituents have the ability to generate additional funding to plan and bring forth critical transportation projects. AB 1665 will streamline this process, making local governments more efficient so voters can weigh-in on the transportation issues of the county. Simply put, this bill will allow CCTA to continue the great work they have been known to accomplish, while meeting the precise needs of Contra Costa County and its residents."

1. Prior Legislation. SB 314 (Murray), Chapter 785, Statutes of 2003, originally enacted provisions that authorized the Los Angeles County Metropolitan Transportation Authority (MTA) to impose a 0.5% transactions and use tax, not subject to the 2% cap for no more than six and one-half years, for specific transportation projects and programs. The authority to put a tax measure on the ballot was never used. AB 2321 (Feuer), Chapter 302, Statutes of 2008, modified those provisions to allow MTA to impose a transactions and use tax for 30 years. SB 767 (De León), Chapter 580, Statutes of 2015, authorized MTA to impose an additional countywide transactions and use tax.

AB 1324 (Skinner), Chapter 795, Statutes of 2014, allowed the City of El Cerrito (in Contra Costa County) to adopt an ordinance to impose a transactions and use tax not to exceed 0.5% for general purposes that would, in combination with other taxes, exceed the statutory limit of 2%. Most recently, AB 464 (Mullin and Gordon) of 2015 would have increased the countywide transactions and use tax combined cap from 2% to 3%, but was vetoed by the Governor.

1. Arguments in Support. CCTA argues that this bill "provides an opportunity for Contra Costa voters to support transportation investments consistent with an adopted Transportation Expenditure Plan that could help our community advance our competitive edge, improve mobility, and meet the State's ambitious environmental goals."
2. Arguments in Opposition. The Howard Jarvis Taxpayers Association argues even if appropriate voter approval is achieved locally this bill still represents poor public policy because it increases a deeply regressive sales tax. Additionally, opposition argues that California already has the highest state sales tax in the nation.
3. Double-Referral. This bill is double-referred to the Revenue and Taxation Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Contra Costa Transportation Authority [SPONSOR]

Contra Costa County Board of Supervisors

Opposition

California Taxpayers Association

Howard Jarvis Taxpayers Association

Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958