The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would provide that the allowable expenditure categories for revenues from a tax imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development in areas nominated by local governments, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives, as specified. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

Existing law authorizes regional transportation agencies and the Department of Transportation to apply to the California Transportation Commission to develop and operate high-occupancy toll lanes or other toll facilities. Under existing law, revenue generated from the operation of a toll facility under these provisions is available to the sponsoring agency for the expenses related to the toll facility and for other uses within the corridor from which the revenue is generated pursuant to an expenditure plan developed by the sponsoring agency. Existing law authorizes a regional transportation agency to issue bonds to finance construction-related expenditures for a toll facility, and construction-related expenditures that are included in the expenditure plan, payable from the revenues generated from the toll facility. Existing law defines regional transportation agency for these purposes to mean, among other things, a joint exercise of powers authority subject to the consent of a transportation planning agency for the jurisdiction in which the transportation project will be developed. For purposes of these provisions, the Sacramento Area Council of Governments, the Yolo Transportation District, and the department formed a joint powers authority, known as the Capital Area Regional Tolling Authority (CARTA), to apply to the commission to develop and operate toll facilities in the Sacramento region.

This bill would authorize STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within the County of Sacramento approved by the commission pursuant to the above-described provisions. The bill would authorize those bonds to be payable from toll revenue or any other funds lawfully available to STA for those purposes, including sales tax revenue. Before STA issues bonds payable from toll revenue for a toll facility operated by CARTA, the bill would require STA to enter into an agreement with CARTA regarding the application of toll revenue to pay for bonds issued by STA and would require the governing board of CARTA to review and approve a toll facility expenditure plan.

The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would provide that the allowable expenditure categories for revenues from a tax imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development in areas nominated by local governments, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives, as specified. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

Existing law authorizes regional transportation agencies and the Department of Transportation to apply to the California Transportation Commission to develop and operate high-occupancy toll lanes or other toll facilities. Under existing law, revenue generated from the operation of a toll facility under these provisions is available to the sponsoring agency for the expenses related to the toll facility and for other uses within the corridor from which the revenue is generated pursuant to an expenditure plan developed by the sponsoring agency. Existing law authorizes a regional transportation agency to issue bonds to finance construction-related expenditures for a toll facility, and construction-related expenditures that are included in the expenditure plan, payable from the revenues generated from the toll facility. Existing law defines regional transportation agency for these purposes to mean, among other things, a joint exercise of powers authority subject to the consent of a transportation planning agency for the jurisdiction in which the transportation project will be developed. For purposes of these provisions, the Sacramento Area Council of Governments, the Yolo Transportation District, and the department formed a joint powers authority, known as the Capital Area Regional Tolling Authority (CARTA), to apply to the commission to develop and operate toll facilities in the Sacramento region.

This bill would authorize STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within the County of Sacramento approved by the commission pursuant to the above-described provisions. The bill would authorize those bonds to be payable from toll revenue or any other funds lawfully available to STA for those purposes, including sales tax revenue. Before STA issues bonds payable from toll revenue for a toll facility operated by CARTA, the bill would require STA to enter into an agreement with CARTA regarding the application of toll revenue to pay for bonds issued by STA and would require the governing board of CARTA to review and approve a toll facility expenditure plan.

The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would provide that the allowable expenditure categories for revenues from a tax imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development in areas nominated by local governments, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives, as specified. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

Existing law authorizes regional transportation agencies and the Department of Transportation to apply to the California Transportation Commission to develop and operate high-occupancy toll lanes or other toll facilities. Under existing law, revenue generated from the operation of a toll facility under these provisions is available to the sponsoring agency for the expenses related to the toll facility and for other uses within the corridor from which the revenue is generated pursuant to an expenditure plan developed by the sponsoring agency. Existing law authorizes a regional transportation agency to issue bonds to finance construction-related expenditures for a toll facility, and construction-related expenditures that are included in the expenditure plan, payable from the revenues generated from the toll facility. Existing law defines regional transportation agency for these purposes to mean, among other things, a joint exercise of powers authority subject to the consent of a transportation planning agency for the jurisdiction in which the transportation project will be developed. For purposes of these provisions, the Sacramento Area Council of Governments, the Yolo Transportation District, and the department formed a joint powers authority, known as the Capital Area Regional Tolling Authority (CARTA), to apply to the commission to develop and operate toll facilities in the Sacramento region.

This bill would authorize STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within the County of Sacramento approved by the commission pursuant to the above-described provisions. The bill would authorize those bonds to be payable from toll revenue or any other funds lawfully available to STA for those purposes, including sales tax revenue. Before STA issues bonds payable from toll revenue for a toll facility operated by CARTA, the bill would require STA to enter into an agreement with CARTA regarding the application of toll revenue to pay for bonds issued by STA and would require the governing board of CARTA to review and approve a toll facility expenditure plan.

The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would provide that the allowable expenditure categories for revenues from a tax imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development and would reduce vehicle miles traveled. in areas nominated by local governments, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives, as specified. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

Existing law authorizes regional transportation agencies and the Department of Transportation to apply to the California Transportation Commission to develop and operate high-occupancy toll lanes or other toll facilities. Under existing law, revenue generated from the operation of a toll facility under these provisions is available to the sponsoring agency for the expenses related to the toll facility and for other uses within the corridor from which the revenue is generated pursuant to an expenditure plan developed by the sponsoring agency. Existing law authorizes a regional transportation agency to issue bonds to finance construction-related expenditures for a toll facility, and construction-related expenditures that are included in the expenditure plan, payable from the revenues generated from the toll facility. Existing law defines regional transportation agency for these purposes to mean, among other things, a joint exercise of powers authority subject to the consent of a transportation planning agency for the jurisdiction in which the transportation project will be developed. For purposes of these provisions, the Sacramento Area Council of Governments, the Yolo Transportation District, and the department formed a joint powers authority, known as the Capital Area Regional Tolling Authority (CARTA), to apply to the commission to develop and operate toll facilities in the Sacramento region.

This bill would authorize STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within the County of Sacramento approved by the commission pursuant to the above-described provisions. The bill would authorize those bonds to be payable from toll revenue or any other funds lawfully available to STA for those purposes, including sales tax revenue. Before STA issues bonds payable from toll revenue for a toll facility operated by CARTA, the bill would require STA to enter into an agreement with CARTA regarding the application of toll revenue to pay for bonds issued by STA and would require the governing board of CARTA to review and approve a toll facility expenditure plan.

The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would provide that the allowable expenditure categories for revenues from a tax imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development and would reduce vehicle miles traveled. The bill would authorize STA to develop and operate toll facilities under specified laws. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

The Local Transportation Authority and Improvement Act authorizes a county board of supervisors to create or otherwise designate a local transportation authority in the county that may impose a transactions and use tax for transportation purposes subject to voter approval and other specified requirements. Pursuant to that authority, the county board of supervisors of the County of Sacramento created the Sacramento Transportation Authority (STA).

This bill would establish requirements under the act specific to STA, including provisions pertaining to contracting, provide that the allowable expenditures of expenditure categories for revenues from a tax revenues, and the terms and compensation of its governing board. imposed by STA include the construction, modernization, and improvement of infrastructure, as defined, that supports infill or transit-oriented development and would reduce vehicle miles traveled. The bill would expand the authority of STA by, among other things, authorizing it to condemn property and authorize STA to develop and operate toll facilities under specified laws. The bill would also authorize STA to impose a transactions and use tax under the act in a geographic area that comprises less than the total area of the County of Sacramento, subject to the approval of voters within that area and other specified requirements.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities.

This bill would state the intent of the Legislature to enact subsequent legislation related to public utilities.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1223

Author:(Nguyen and Krell)

As Amended Ver:July 15, 2025

Majority vote

SUMMARY

Makes changes to the Sacramento Transportation Authority's (STA's) ability to impose a transactions and use tax (TUT) and the allowable expenditures from a TUT imposed by STA, and authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County.

Senate Amendments

1. Specify that all revenues derived from a TUT adopted pursuant to this bill shall be expended for the primary benefit of the portion of the county in which the tax is imposed, and that expenditures made within that portion of the county are deemed to confer a primary benefit.
2. Requires STA to define primary benefit through guidelines as part of the expenditure plan, as specified.

COMMENTS

1. Local Transportation Authorities. District taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA) [SB 142 (Deddeh), Chapter 786, Statutes of 1987] which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 counties impose a transportation tax.
2. Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a half-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A, continuing the tax through 2039. STA is accountable for the administration of the funding provided by Measure A, which has provided local transportation funding for the following:
   1. Reduce traffic congestion.
   2. Improve air quality.
   3. Maintain and strengthen the county's road and transportation systems.
   4. Enhance Sacramento County's ability to secure state and federal funding by providing local matching funds.
   5. Preserve unique, natural amenities.
   6. Preserve agricultural land.

STA explains that, "STA developed an expenditure plan by incorporating feedback from multiple stakeholders, such as the general public, local governments, and transportation experts. Officially titled, 'The Measure A Ordinance and Transportation Expenditure Plan,' eligible expenditures were required to be incorporated into the ballot measure. STA distributes funding per the Measure A Ordinance and Transportation Expenditure Plan to the various partner agencies based on the identified formula and/or percentages for its intended purpose."

STA's board consists of 16 members: five from the Sacramento County Board of Supervisors, five Sacramento City Councilmembers, two Elk Grove City Councilmembers, one from the city councils of Citrus Heights, Folsom, and Rancho Cordova, and one combined seat from the Galt and Isleton City Councils.

1. Sales and Use Taxes. State law imposes the sales tax on every retailer "engaged in business in this state" that sells tangible personal property, and requires them to register with the CDTFA, as well as collect the appropriate tax at purchase and remit the amount to CDFTA. Sales tax applies whenever a retail sale occurs, which is generally any sale other than one for resale in the regular course of business. The current rate is 7.25%.

Unless the purchaser pays the sales tax to the retailer, they are liable for the use tax, which the law imposes on any person consuming tangible personal property in the state. The use tax is the same rate as the sales tax, and also like the sales tax, must be remitted on or before the last day of the month following the quarterly period in which the person made the purchase.

1. Transactions and Use Taxes. The California Constitution states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C). Proposition 13 (1978) required a 2/3 vote of each house of the Legislature for state tax increases, and a 2/3 vote for local special taxes. Proposition 62 (1986) prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes. Proposition 218 (1996) extended those vote thresholds to charter cities, and limited local agencies' powers to levy new assessments, fees, and taxes. Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing.

State law allows cities, counties, and specified special districts to increase the sales and use tax applicable in their jurisdiction, also known as district taxes or TUTs. Generally, the combined TUT tax rate imposed within a local jurisdiction cannot exceed 2%. To determine whether a county has reached this rate limitation, all countywide taxes and the highest combined rate imposed by a city within the county are counted towards the county's rate limit. For example, if a county imposes three 0.5% countywide taxes and two cities within the county each impose a 0.5% tax, the combined rate in those two cities would be 2%. In such a circumstance, the two cities could not impose another TUT, and the county could not impose another countywide TUT, absent special authority to exceed the rate limitation.

Prior to 2003, cities lacked the ability to place TUTs 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, which imposed the uniform 2% countywide cap. As of April 1, 2025, local agencies impose 478 district taxes for general or special purposes: 401 imposed citywide, 71 imposed countywide, and six imposed in unincorporated county areas. Generally, local agencies impose these taxes throughout the entire area of a single county, the entire unincorporated area within a single county, or a single incorporated city. However, three transportation operators in the Bay Area have regional district taxes:

• 1. BART, which covers Alameda, Contra Costa, and San Francisco.
  2. The Peninsula Corridor Joint Powers Board (CalTrain), which covers San Francisco, San Mateo, and Santa Clara counties.
  3. The Sonoma-Marin Rail Transit District, which includes Sonoma and Marin counties.

1. AB 1413 and AB 1052. AB 1413 (Gloria), Chapter 758, Statutes of 2019, authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a TUT in a portion of its jurisdiction with voter approval. Specifically, AB 1413 did the following:
   1. Authorized the Placer County Transportation Planning Agency to impose a TUT applicable to the entirety, or a portion, of the County of Placer in conformity with TUT Law at a rate of no more than 1% if certain requirements are met, including a requirement that the ordinance proposing the TUT be submitted to, and approved by, the voters.
   2. Provided the same abovementioned TUT authority to the Solano Transportation Improvement Agency for certain portions of Solano County.
   3. Authorized the San Diego Regional Transportation Commission, San Diego Association of Governments, San Diego Metropolitan Transit System and the North County Transit District to levy a TUT in a portion of their jurisdictions, with voter approval, and required revenues derived from the TUT to be spent only on transportation and transit infrastructure and services.

A similar bill, AB 1324 (Gloria) of 2018 would have authorized a local transportation authority, which has existing TUT authority, to levy a TUT in any portion of its jurisdiction, with voter approval. This bill was held on the Assembly Floor.

AB 1052 (McCarty), Chapter 674, Statutes of 2023, provided similar TUT authority to the Sacramento Regional Transit District. To date, the authority provided by AB 1413 and AB 1052 have not be successfully used by the respective agencies.

According to the Author

"AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Currently, the Sacramento Transportation Authority (STA) can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it. This district focused bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that's safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality. AB 1223 also updates STA's authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life."

Arguments in Support

According to STA, "This bill thoughtfully modernizes STA's statutory framework by establishing a dedicated section in the Public Utilities Code, giving our agency the flexibility to better meet Sacramento County's evolving transportation needs. AB 1223 enhances local control, allowing communities to pursue sub-regional funding mechanisms tailored to their priorities. It ensures that tax revenues stay local and are only enacted through a public vote—the bill does not raise taxes, but gives voters the option to invest in local transportation solutions. The bill also enables STA to support coordinated infrastructure improvements that promote infill development and corridor revitalization—advancing economic growth, housing, and sustainability goals through smarter use of existing infrastructure.

"In addition, AB 1223 authorizes the financing of express lanes and high-occupancy toll lanes, tools identified by Caltrans and SACOG to improve mobility, expand transit options, and reduce congestion and emissions—without requiring additional public spending. By updating STA's statutory authority, AB 1223 provides the tools and flexibility needed to address today's transportation challenges while positioning Sacramento County for a more sustainable and equitable future."

Arguments in Opposition

According to the Howard Jarvis Taxpayers Association, "AB 1223 would empower the Sacramento Transportation Authority (STA) to develop and operate toll facilities in addition to its existing power to impose a transactions and use tax for transportation purposes, subject to voter approval. Further, AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in 'infrastructure' and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.

AB 1223 would also allow STA to impose a transactions and use tax in a geographic area of its choosing that is less than the total area of the County of Sacramento. This potentially allows for the intentional disenfranchisement of county residents who are likely to oppose the tax, but who will have to pay it when they make purchases in the nearby geographic area. Sacramento County residents, like all Californians, are struggling with the high cost of living and would be further harmed by costly tolls and higher taxes."

FISCAL COMMENTS

None.

VOTES:

ASM LOCAL GOVERNMENT: 7-1-2

YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward

NO: Ta

ABS, ABST OR NV: Hoover, Wilson

ASM TRANSPORTATION: 12-4-0

YES: Wilson, Aguiar-Curry, Ahrens, Carrillo, Harabedian, Hart, Jackson, Lowenthal, Papan, Ransom, Rogers, Ward

NO: Davies, Hoover, Lackey, Macedo

ASSEMBLY FLOOR: 52-15-12

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Pacheco, Patel, Pellerin, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Bains, Castillo, Chen, Davies, DeMaio, Gallagher, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

ABS, ABST OR NV: Alanis, Bauer-Kahan, Bryan, Dixon, Ellis, Flora, Jeff Gonzalez, Irwin, Ortega, Papan, Petrie-Norris, Soria

SENATE FLOOR: 28-11-1

YES: Allen, Archuleta, Arreguín, Becker, Blakespear, Caballero, Cervantes, Cortese, Durazo, Gonzalez, Grayson, Hurtado, Laird, Limón, McGuire, McNerney, Menjivar, Padilla, Pérez, Reyes, Richardson, Rubio, Smallwood-Cuevas, Stern, Umberg, Wahab, Weber Pierson, Wiener

NO: Alvarado-Gil, Cabaldon, Choi, Dahle, Grove, Jones, Niello, Ochoa Bogh, Seyarto, Strickland, Valladares

ABS, ABST OR NV: Ashby

UPDATED

VERSION: July 15, 2025

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0001599

 THIRD READING  

Bill No: AB 1223

Author: Nguyen (D) and Krell (D)

Amended: 7/15/25 in Senate

Vote: 21

SENATE TRANSPORTATION COMMITTEE: 11-3, 6/24/25

AYES: Cortese, Archuleta, Arreguín, Blakespear, Cervantes, Gonzalez, Grayson, Limón, Menjivar, Richardson, Umberg

NOES: Strickland, Dahle, Seyarto

NO VOTE RECORDED: Valladares

SENATE REVENUE AND TAXATION COMMITTEE: 4-1, 7/9/25

AYES: McNerney, Ashby, Grayson, Umberg

NOES: Valladares

ASSEMBLY FLOOR: 52-15, 5/19/25 - See last page for vote

SUBJECT: Local Transportation Authority and Improvement Act: Sacramento Transportation Authority

SOURCE: Sacramento Transportation Authority

DIGEST:

This bill makes changes to the Sacramento Transportation Authority's (STA's) ability to impose a transactions and use tax (TUT) and the allowable expenditures from a TUT imposed by STA. Authorizes STA to issue bonds to finance costs of high-occupancy toll (HOT) lanes or other toll facilities within Sacramento County.

ANALYSIS:

Existing law:

1. Authorizes a county board of supervisors to create a local transportation authority (authority) to operate within the county.
2. Provides that a county that chooses to create an entirely new entity as an authority shall determine the membership of the authority with the concurrence of a majority of the cities having a majority of the population in the incorporated area of the county and provides for the board membership of the authority.
3. Requires an authority to prepare and adopt an annual report each year on progress made to achieve the objective of improving transportation conditions related to priority highway operation and local transportation needs.
4. Authorizes an authority to impose a retail TUT ordinance applicable in the incorporated and unincorporated territory of a county if the tax ordinance is adopted by a two-thirds vote of the authority and imposition of the tax is subsequently approved by the electors voting on the measure, or by any otherwise applicable voter approval requirement, at a special election called for that purpose by the board of supervisors, at the request of the authority, and a specified county transportation expenditure plan is adopted.
5. Requires the authority, in the ordinance, to state the nature of the tax to be imposed, to provide the tax rate or the maximum tax rate, to specify the period during which the tax will be imposed, and to specify the purposes for which the revenue derived from the tax will be used. The tax rate may be in .25% (1/4-cent) increments and shall not exceed a maximum rate of 1%.
6. Provides election procedures for the adoption of the ordinance.
7. Authorizes the revenues from an imposed tax to be allocated by the authority for construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems.
8. Requires a county transportation expenditure plan to be prepared for the expenditure of the revenues expected to be derived from the tax, together with other federal, state, and local funds expected to be available for transportation improvements, for the period during which the tax is to be imposed. A county transportation expenditure plan shall not be adopted until it has received the approval of the board of supervisors and the city council representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of the county. Requires the expenditure plan to be adopted prior to the call of the election.
9. Authorizes the authority to annually review and propose amendments to the expenditure plan to provide for the use of additional federal, state, and local funds, to account for unexpected revenues, or to take into consideration unforeseen circumstances.
10. Provides that, as part of the ballot proposition to approve the imposition of a retail TUT, authorization may be sought to issue bonds to finance capital outlay expenditures as may be provided for in the adopted county transportation expenditure plan, payable from the proceeds of the tax, and provides for further requirements related to issuing bonds.
11. Authorizes a regional transportation agency, as defined, to apply to the California Transportation Commission (CTC) to develop and operate HOT lanes or other toll lanes, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight, and establishes a process for review and approval by the CTC.

This bill:

1. Includes findings and declarations to support this bill’s purpose.
2. Defines the following terms for the purpose of this bill:
   1. “Active Transportation” to mean infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking, and includes projects consists with the Active Transportation Program.
   2. “Authority” to mean STA.
   3. “CARTA” to mean the Capital Area Regional Tolling Authority.
   4. “Expenditure plan” to mean a county transportation expenditure plan adopted in connection with a TUT ordinance, as specified.
   5. “Governing board” to mean the governing board of STA.
   6. “Member” or “member of the governing board” to mean an individual county supervisor or city council member who has been appointed to the governing board, or their alternate.
   7. “Ordinance” to mean a TUT ordinance authorized pursuant to existing law.
3. Authorizes STA to issue bonds to finance costs of HOT lanes or other toll facilities within Sacramento County approved by the CTC, as specified.
4. Authorizes bonds to be payable from toll revenue or any other funds lawfully available to STA for such purposes, including sales tax revenue, development impact fees, or state and federal grants.
5. Requires STA to do the following in order to issue bonds payable from toll revenue for a toll facility operated by CARTA:
6. STA shall enter into an agreement with the CARTA regarding the application of toll revenue to pay for bonds issued by STA.
7. The governing board of CARTA shall review and approve a toll facility expenditure plan.
8. Authorizes bonds issued may be sold pursuant to the terms and conditions set forth in a resolution adopted by STA. Requires bonds to be issued pursuant to a resolution adopted by a two-thirds vote of STA, which shall state the maximum principal amount of the bonds, the maximum term of the bonds, and the maximum rate of interest to be paid on the bonds, not to exceed the maximum rate permitted by law.
9. Stipulates that any bond issued shall not constitute a debt or liability of the state, as specified.
10. Provides that the allowable expenditure categories set forth in existing law shall also include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development, in areas nominated by local government, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives.
11. Defines “infrastructure” to mean any of the following: transportation facilities, as specified; and water, stormwater, wastewater, or other utility-related facilities.
12. Specifies that STA may only allocate revenues for a water, stormwater, wastewater, or other utility-related facility if that facility is combined with a project that includes a transportation facility. Requires that an expenditure plan shall not allocate more than 5% of the total revenues derived from a tax for these facilities.
13. Provides that a tax ordinance and corresponding expenditure plan may be imposed by STA in a geographic area that comprises less than the total area of Sacramento County, including its incorporated cities, subject to specific guidelines.
14. Requires an ordinance and expenditure plan to be adopted by at least two-thirds vote of the total membership of the governing board.
15. Specifies that an ordinance shall be subject to voter approval by the electors in the area to which TUT applies.
16. Provides that if an ordinance and expenditure plan for a portion of Sacramento County are approved, as specified, all subsequent governing board decisions and actions related to implementation of that ordinance and expenditure plan, including an action to amend the expenditure plan, shall be made by a majority of both of the following:
    1. Those members representing the city or cities subject to the ordinance, if any.
    2. All members appointed from the board of supervisors.
17. Specifies that the governing board shall determine the area to which the TUT would apply before the electors vote on the measure. If the TUT only applies to a portion of the county, all of the following shall apply:
    1. The incorporated area of a city within the county shall either be wholly included or wholly excluded from the area to be taxed.
    2. The unincorporated area of the county shall either be wholly included or wholly excluded from the area to be taxed.
    3. The area to be to be taxed shall include at least the incorporated area from two cities or the incorporated area from one city and the unincorporated area from the county.
18. Provides that the revenues derived from the TUT shall be expended for the primary benefit of the portion of the county in which the tax is imposed, and that expenditures made within that portion of the county are deemed to confer a primary benefit. Requires STA to define primary benefit through guidelines as part of the expenditure plan, as specified. Stipulates that any revenues derived from the TUT shall supplement, and not supplant, other transportation revenues available to the portion of the county to which the TUT applies.
19. Specifies that an expenditure plan applicable to a portion of the county shall not be adopted until it has received the approval of the board of supervisors and of the city councils representing both a majority of the cities included within the area subject to the TUT and a majority of the population residing in the unincorporated areas subject to the TUT.
20. Stipulates that the provisions of this bill that apply to an ordinance and expenditure plan shall also apply to an ordinance and expenditure plan applicable to a portion of the county, including the authority to issue bonds.
21. Stipulates that the term “district,” as defined in current law shall not be interpreted to preclude STA from imposing a TUT in accordance with TUT law in an area that comprises less than the total geographic jurisdiction of the authority, so long as all other applicable requirements of that law are complied with.

Comments

1. Purpose of this bill. According to the author, “AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Currently, the Sacramento Transportation Authority (STA) can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it. This district focused bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that’s safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality. AB 1223 also updates STA’s authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life.”
2. Local Transportation Authorities. TUT or district taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA), SB 142 (Deddeh, Chapter 786, Statutes of 1987), which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 so–called “Self-Help Counties” impose a transportation tax.
3. Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a 1/2-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A, continuing the tax through 2039. STA is responsible for the administration of the funding provided by Measure A, which has provided local transportation funding to reduce traffic congestion; improve air quality; maintain and strengthen the county’s road and transportation systems; enhance Sacramento County’s ability to secure state and federal funding by providing local matching funds; preserve unique, natural amenities; and preserve agricultural land.
4. Sacramento Area Council of Governments (SACOG). SACOG is the designated Metropolitan Planning Organization for the Sacramento region and consists of 28 member cities and counties. In that role, SACOG oversees the regional transportation plan/sustainable communities strategy (RTP/SCS) for the region, which updated every four years in collaboration with local governments. As designated by the state, Placer and El Dorado counties serve as regional transportation planning angecies (RTPA)s, responsible for their state-level transportation plans. SACOG, functioning as the RTPA for Sacramento, Sutter, Yolo, and Yuba Counties, collaborates with Placer County Transportation Planning Agency (PCTPA) and El Dorado County Transportation Commission (EDCTC) to maintain consistency across county plans and the broader regional framework.

SACOG launched a program called “Green Means Go”, described as a regional effort to accelerate infill development, which will lower GHG emissions and revitalize existing communities in the six-county Sacramento Area. According to SACOG, “Green means Go” is a key implementation activity to build a connected region with transportation options, affordable housing, and equitable investments. “Green Means Go” is intended to contribute to SACOG’s 2025 Blueprint (RTP/SCS) with the following: 32% of planned regional housing growth, creating an estimated 84,000 new homes; 40% of planned employment growth, or about 100,000 new jobs; 16% reduction of vehicle miles traveled (VMT) per capita in Green Zones, double the regional reduction per capita of 8%; and reducing the number of homes in high fire risk areas by 10,000 units over 20 years.

Every jurisdiction in the region supports Green Means Go, and 26 of the 28 have adopted Green Zones, which are areas that have infill capacity yet currently face market or other barriers to development

1. Toll lanes are new to the Sacramento region. The Capitol Area Regional Tolling Authority (CARTA), was created as a Joint Powers Authority in January 2024 to develop and operate toll facilities in the Sacramento Region. CARTA’s membership includes SACOG, the Yolo Transportation District (YoloTD), and the California Department of Transportation (Caltrans) District 3 and includes non-voting directors from STA, the PCTPA, and EDCTC. CARTA has five directors on its governing board: two appointed by YoloTD, two appointed by SACOG, and one appointed by Caltrans District 3.

According to CARTA, “As an integral component of the long-range plan for the Sacramento region, toll lanes are anticipated to be built over the next 20 years on the most congested portions of Interstate 80 (I-80), Interstate 5 (I-5), State Route 99, State Route 65, and Highway 50. Two toll lane projects are currently being developed: the first on I-80 from Davis to West Sacramento in Yolo County, and the second on I-5 from the Sacramento International Airport to downtown in Sacramento County. Both projects are currently in the environmental phase and are being developed with input from residents, drivers, and elected officials.”

1. AB 1223 would allow STA to help fund new Sacramento region priorities. As described above, STA was created in 1988 under the LTAIA, with the sole purpose of managing funding derived from Measure A to meet the goals of the expenditure plan. This bill seeks to evolve the authority of STA by authorizing new parameters for future tax measures and financing new projects in partnership with CARTA.

First, AB 1223 would expand the scope of what transportation authorities are authorized to fund with revenue generated by a TUT. As mentioned, exiting law allows a transportation authority to allocate revenues from the taxes imposed for the construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems. This bill includes “the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development, in areas nominated by local governments, and included in regionally adopted plans.”

This bill further defines this type of infrastructure to mean water, stormwater, or other utility-related facilities. While this bill does not directly reference the “Green Means Go” program, the types of projects eligible would support it. Additionally, this bill restricts STA to only be able to allocate revenues for this infrastructure if it is combined with a transportation project and caps the expenditures at 5% of the total revenues derived from the TUT.

Second, this bill authorizes STA to issue bonds to finance the costs of building HOT and other toll facilities in Sacramento County. Revenue derived from the toll revenues would be authorized to pay for the bonds, including other funds available to STA such as other TUT revenue, development impact fees, or state and local grants. As mentioned, the newly created CARTA is currently working on two toll projects, and will be the managing agency for the operation of the facilities. Prior to any bond issuance STA must enter into an agreement with CARTA regarding the use of toll revenue and the governing board of CARTA must review and approve an expenditure plan.

Finally, AB 1223 would give STA the authority to impose a TUT in a geographic area that comprises less than the total area of Sacramento County, including its cities. This bill details a process for STA to develop and approve the ordinance and expenditure plan and sets parameters for how the cities and unincorporated areas of the county must be included or excluded. This bill also requires the revenues derived from the tax be expended for the primary benefit of the portion of the county in which the tax is imposed.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 7/15/25)

Sacramento Transportation Authority (Source)

Sacramento County
Sacramento Regional Transit District

OPPOSITION: (Verified 7/15/25)

Howard Jarvis Taxpayers Association

ARGUMENTS IN SUPPORT: Writing as the sponsor of AB 1223, STA states, “AB 1223 enhances local control, allowing communities to pursue sub-regional funding mechanisms tailored to their priorities. It ensures that tax revenues stay local and are only enacted through a public vote—the bill does not raise taxes, but gives voters the option to invest in local transportation solutions.

“The bill also enables STA to support coordinated infrastructure improvements that promote infill development and corridor revitalization—advancing economic growth, housing, and sustainability goals through smarter use of existing infrastructure.

“In addition, AB 1223 authorizes the financing of express lanes and high-occupancy toll lanes, tools identified by Caltrans and SACOG to improve mobility, expand transit options, and reduce congestion and emissions—without requiring additional public spending.

“By updating STA’s statutory authority, AB 1223 provides the tools and flexibility needed to address today’s transportation challenges while positioning Sacramento County for a more sustainable and equitable future.”

ARGUMENTS IN OPPOSITION: Writing in opposition, the Howard Jarvis Taxpayers Association states, “AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in “infrastructure” and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.

“AB 1223 would also allow STA to impose a transactions and use tax in a geographic area of its choosing that is less than the total area of the County of Sacramento. This potentially allows for the intentional disenfranchisement of county residents who are likely to oppose the tax, but who will have to pay it when they make purchases in the nearby geographic area.

“Sacramento County residents, like all Californians, are struggling with the high cost of living and would be further harmed by costly tolls and higher taxes.”

ASSEMBLY FLOOR: 52-15, 5/19/25

AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Arambula, Ávila Farías, Bennett, Berman, Boerner, Bonta, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Pacheco, Patel, Pellerin, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NOES: Bains, Castillo, Chen, Davies, DeMaio, Gallagher, Hadwick, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

NO VOTE RECORDED: Alanis, Bauer-Kahan, Bryan, Dixon, Ellis, Flora, Jeff Gonzalez, Irwin, Ortega, Papan, Petrie-Norris, Soria

Prepared by: Melissa White / TRANS. / (916) 651-4121

7/15/25 16:23:48

**** END ****

SENATE COMMITTEE ON TRANSPORTATION

Senator Dave Cortese, Chair

2025 - 2026 Regular

Bill No: AB 1223 Hearing Date: 6/24/2025

SUBJECT: Local Transportation Authority and Improvement Act: Sacramento Transportation Authority

DIGEST: This bill makes changes to the Sacramento Transportation Authority's (STA's) ability to impose a transactions and use tax (TUT) and the allowable expenditures from a TUT imposed by STA. Authorizes STA to issue bonds to finance costs of high-occupancy toll (HOT) lanes or other toll facilities within Sacramento County.

ANALYSIS:

Existing law:

1. Authorizes a county board of supervisors to create a local transportation authority (authority) to operate within the county.
2. Provides that a county that chooses to create an entirely new entity as an authority shall determine the membership of the authority with the concurrence of a majority of the cities having a majority of the population in the incorporated area of the county and provides for the board membership of the authority.
3. Requires an authority to prepare and adopt an annual report each year on progress made to achieve the objective of improving transportation conditions related to priority highway operation and local transportation needs.
4. Authorizes an authority to impose a retail TUT ordinance applicable in the incorporated and unincorporated territory of a county if the tax ordinance is adopted by a two-thirds vote of the authority and imposition of the tax is subsequently approved by the electors voting on the measure, or by any otherwise applicable voter approval requirement, at a special election called for that purpose by the board of supervisors, at the request of the authority, and a specified county transportation expenditure plan is adopted.
5. Requires the authority, in the ordinance, to state the nature of the tax to be imposed, to provide the tax rate or the maximum tax rate, to specify the period during which the tax will be imposed, and to specify the purposes for which the revenue derived from the tax will be used. The tax rate may be in .25% (1/4-cent) increments and shall not exceed a maximum rate of 1%.
6. Provides election procedures for the adoption of the ordinance.
7. Authorizes the revenues from an imposed tax to be allocated by the authority for construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems.
8. Requires a county transportation expenditure plan to be prepared for the expenditure of the revenues expected to be derived from the tax, together with other federal, state, and local funds expected to be available for transportation improvements, for the period during which the tax is to be imposed. A county transportation expenditure plan shall not be adopted until it has received the approval of the board of supervisors and the city council representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of the county. Requires the expenditure plan to be adopted prior to the call of the election.
9. Authorizes the authority to annually review and propose amendments to the expenditure plan to provide for the use of additional federal, state, and local funds, to account for unexpected revenues, or to take into consideration unforeseen circumstances.
10. Provides that, as part of the ballot proposition to approve the imposition of a retail TUT, authorization may be sought to issue bonds to finance capital outlay expenditures as may be provided for in the adopted county transportation expenditure plan, payable from the proceeds of the tax, and provides for further requirements related to issuing bonds.
11. Authorizes a regional transportation agency, as defined, to apply to the California Transportation Commission (CTC) to develop and operate HOT lanes or other toll lanes, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight, and establishes a process for review and approval by the CTC.

This bill:

1. Includes findings and declarations to support the bill’s purpose.
2. Defines the following terms for the purpose of the bill:
   1. “Active Transportation” to mean infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking, and includes projects consists with the Active Transportation Program.
   2. “Authority” to mean STA.
   3. “CARTA” to mean the Capital Area Regional Tolling Authority.
   4. “Expenditure plan” to mean a county transportation expenditure plan adopted in connection with a TUT ordinance, as specified.
   5. “Governing board” to mean the governing board of STA.
   6. “Member” or “member of the governing board” to mean an individual county supervisor or city council member who has been appointed to the governing board, or their alternate.
   7. “Ordinance” to mean a TUT ordinance authorized pursuant to existing law.
3. Authorizes STA to issue bonds to finance costs of HOT lanes or other toll facilities within Sacramento County approved by the CTC, as specified.
4. Authorizes bonds to be payable from toll revenue or any other funds lawfully available to STA for such purposes, including sales tax revenue, development impact fees, or state and federal grants.
5. Requires STA to do the following in order to issue bonds payable from toll revenue for a toll facility operated by CARTA:
6. STA shall enter into an agreement with the CARTA regarding the application of toll revenue to pay for bonds issued by STA.
7. The governing board of CARTA shall review and approve a toll facility expenditure plan.
8. Authorizes bonds issued may be sold pursuant to the terms and conditions set forth in a resolution adopted by STA. Requires bonds to be issued pursuant to a resolution adopted by a two-thirds vote of STA, which shall state the maximum principal amount of the bonds, the maximum term of the bonds, and the maximum rate of interest to be paid on the bonds, not to exceed the maximum rate permitted by law.
9. Stipulates that any bond issued shall not constitute a debt or liability of the state, as specified.
10. Provides that the allowable expenditure categories set forth in existing law shall also include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development, in areas nominated by local government, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives.
11. Defines “infrastructure” to mean any of the following:
    1. Transportation facilities, as specified.
    2. Water, stormwater, wastewater, or other utility-related facilities.
12. Specifies that STA may only allocate revenues for a water, stormwater, wastewater, or other utility-related facility if that facility is combined with a project that includes a transportation facility. Requires that an expenditure plan shall not allocate more than 5% of the total revenues derived from a tax for these facilities.
13. Provides that a tax ordinance and corresponding expenditure plan may be imposed by STA in a geographic area that comprises less than the total area of Sacramento County, including its incorporated cities, subject to specific guidelines.
14. Requires an ordinance and expenditure plan to be adopted by at least two-thirds vote of the total membership of the governing board.
15. Specifies that an ordinance shall be subject to voter approval by the electors in the area to which the TUT applies.
16. Provides that if an ordinance and expenditure plan for a portion of Sacramento County are approved, as specified, all subsequent governing board decisions and actions related to implementation of that ordinance and expenditure plan, including an action to amend the expenditure plan, shall be made by a majority of both of the following:
    1. Those members representing the city or cities subject to the ordinance, if any.
    2. All members appointed from the board of supervisors.
17. Specifies that the governing board shall determine the area to which the TUT would apply before the electors vote on the measure. If the TUT only applies to a portion of the county, all of the following shall apply:
    1. The incorporated area of a city within the county shall either be wholly included or wholly excluded from the area to be taxed.
    2. The unincorporated area of the county shall either be wholly included or wholly excluded from the area to be taxed.
    3. The area to be to be taxed shall include at least the incorporated area from two cities or the incorporated area from one city and the unincorporated area from the county.
18. Provides that the revenues derived from the TUT shall be spent within, or for the benefit of, the portion of the county to which the tax applies. Any revenues derived from the TUT shall supplement, and not supplant, other transportation revenues available to the portion of the county to which the TUT applies.
19. Specifies that an expenditure plan applicable to a portion of the county shall not be adopted until it has received the approval of the board of supervisors and of the city councils representing both a majority of the cities included within the area subject to the TUT and a majority of the population residing in the unincorporated areas subject to the TUT.
20. Stipulates that the provisions of the bill that apply to an ordinance and expenditure plan shall also apply to an ordinance and expenditure plan applicable to a portion of the county, including the authority to issue bonds.
21. Stipulates that the term “district,” as defined in current law shall not be interpreted to preclude STA from imposing a TUT in accordance with TUT law in an area that comprises less than the total geographic jurisdiction of the authority, so long as all other applicable requirements of that law are complied with.

COMMENTS:

1. Purpose of the bill. According to the author, “AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Currently, the Sacramento Transportation Authority (STA) can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it.

“This district focused bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that’s safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality.

“AB 1223 also updates STA’s authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life.”

1. Local Transportation Authorities. TUT or district taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA), SB 142 (Deddeh, Chapter 786, Statutes of 1987), which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 so–called “Self-Help Counties” impose a transportation tax.
2. Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a 1/2-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A, continuing the tax through 2039. STA is responsible for the administration of the funding provided by Measure A, which has provided local transportation funding to reduce traffic congestion; improve air quality; maintain and strengthen the county’s road and transportation systems; enhance Sacramento County’s ability to secure state and federal funding by providing local matching funds; preserve unique, natural amenities; and preserve agricultural land.

In 2022, Sacramento County proposed a different Measure A, the Sacramento County Transportation, Maintenance, Safety and Congestion Relief Act of 2022, which would have imposed a district tax measure of an additional 1/2-cent for transportation purposes for 40 years. Measure A would have generated roughly $213 million annually for transportation and transit projects. Measure A included an expenditure plan, which identified projects and programs that would be funded from the measure. It failed passage 55% to 44%.

STA’s board consists of 16 members: five from the Sacramento County Board of Supervisors, five Sacramento City Councilmembers, two Elk Grove City Councilmembers, one from the city councils of Citrus Heights, Folsom, and Rancho Cordova, and one combined seat from the Galt and Isleton City Councils.

1. Regional Transportation Plans (RTPs). The Federal-Aid Highway Act of 1962 required that a regional entity, known as a Metropolitan Planning Organization (MPO), guide and maintain transportation planning in any urbanized area with a population of 50,000 or more. Boards comprised of representatives from local governments and transportation agencies direct MPOs. There are 18 MPOs and 26 Regional Transportation Planning Agencies (RTPAs) in California.

All of California’s MPOs and RTPAs are required by federal and state law to conduct long range planning to set goals for transportation in the region. The long range plan, known as the RTP, is an important policy document that is based on the unique needs and characteristics of a region and communicates the regional vision to the state and federal government. The RTP considers a minimum 20-year horizon and should be integrated with local jurisdiction’s land use plans. MPOs and RTPAs are required to update the RTP every four or five years, depending on a region’s clean air attainment. The RTP should represent a coordinated and balanced regional transportation system including, but not limited to, mass transportation, highway, railroad, maritime, bicycle, pedestrian, goods movement and aviation.

1. Sustainable Communities Strategies (SCS). As a part of the strategy to meet the state’s climate goals and focus on the transportation sector, the Legislature passed and Governor Schwarzenegger signed into law, SB 375 (Steinberg, Chapter 728, Statutes of 2008). SB 375 aligns transportation planning, land use and housing to reshape development in communities. SB 375 authorizes ARB to set greenhouse gas (GHG) emissions reduction targets for each of the state’s 18 MPO regions. The MPOs work with the California Air Resources Board (CARB), exchanging technical data, to set the targets, including recommending a target for their region.

MPOs are required to adopt an SCS as part of their RTP to demonstrate how their region will meet the target. The SCS sets forth a vision for growth in the region taking into account its transportation, housing, environmental, and economic needs. The SCS should set a development pattern for the region, which when integrated with the transportation network, will reduce GHG emissions from automobiles and light trucks to achieve the targets. If an MPO, through the development of an SCS, determines they will not be able to reach the target, the MPO may develop an alternative planning strategy (APS) that identifies the principal impediments to meeting the targets.

1. Sacramento Area Council of Governments (SACOG). SACOG consists of 28 member cities and counties in the Sacramento Region. According to SACOG, it is designated by the Federal government as the MPO, oversees the RTP for the Sacramento region, updated every four years in collaboration with local governments. As designated by the state, Placer and El Dorado counties serve as RTPAs, responsible for their state-level transportation plans. SACOG, functioning as the RTPA for Sacramento, Sutter, Yolo, and Yuba Counties, collaborates with Placer County Transportation Planning Agency (PCTPA) and El Dorado County Transportation Commission (EDCTC) to maintain consistency across county plans and the broader regional framework.

SACOG launched a program called “Green Means Go”, described as a regional effort to accelerate infill development, which will lower GHG emissions and revitalize existing communities in the six-county Sacramento Area. According to SACOG, “Green means Go” is a key implementation activity to build a connected region with transportation options, affordable housing, and equitable investments. “Green Means Go” is intended to contribute to SACOG’s 2025 Blueprint (RTP/SCS) with the following: 32% of planned regional housing growth, creating an estimated 84,000 new homes; 40% of planned employment growth, or about 100,000 new jobs; 16% reduction of vehicle miles traveled (VMT) per capita in Green Zones, double the regional reduction per capita of 8%; and reducing the number of homes in high fire risk areas by 10,000 units over 20 years.

Every jurisdiction in the region supports Green Means Go, and 26 of the 28 have adopted Green Zones, which are areas that have infill capacity yet currently face market or other barriers to development

1. Will infill help us meet our climate goals? A 2022 CARB report, known as the SB 150 Report, on the progress of MPOs in achieving these stated GHG emission reduction goals, finds that California is still not reducing GHG emissions from personal vehicle travel as needed to meet climate commitments. The report states, “No matter how robust, regional plans alone cannot reduce emissions. They must be coupled with the resources, policies, and political will to implement their identified strategies.” Further the report recommends the Legislature, “could give state and regional agencies a greater role in supporting congruent local land use actions to foster their alignment with SCS implementation…State agencies could prioritize support for complete streets and other infrastructure improvements to attract development in locations targeted in SCSs for growth. For example, the Sacramento Area Council of Governments (SACOG) Rural Main Streets program provides strategic investments to create vibrant commercial corridors and Green Means Go targets funding to promote infill development within planned center, corridor, or established communities identified in its SCS.”

The SB 150 report, along with a 2022 report from the Strategic Growth Council, known as the AB 285 Report, both suggest state agencies and the Legislature expand funding for infill-supportive infrastructure and encourage each MPO to identify low VMT zones in infill areas to support a substantial portion of growth as part of their adopted RTP/SCS. Infill development, the process of building in existing urban areas, often requires utility upgrades due to the age and capacity of the existing infrastructure. These upgrades can be costly and complex, particularly when dealing with aging water, sewer, and energy systems.

1. Toll lanes are new to the Sacramento region. The Capitol Area Regional Tolling Authority (CARTA), was created as a Joint Powers Authority in January 2024 to develop and operate toll facilities in the Sacramento Region. CARTA’s membership includes SACOG, the Yolo Transportation District (YoloTD), and the California Department of Transportation (Caltrans) District 3 and includes non-voting directors from STA, the PCTPA, and EDCTC. CARTA has five directors on its governing board: two appointed by YoloTD, two appointed by SACOG, and one appointed by Caltrans District 3.

According to the YoloTD, “YoloTD and the California Department of Transportation (Caltrans) have joined forces for a freeway expansion initiative aimed at enhancing traffic flow within the I-80 corridor on the west side of the Sacramento-Yolo metropolitan area. This comprehensive project encompasses multiple components, including the introduction of approximately 17 miles of tolled managed lanes, new lane construction, intelligent transportation system (ITS) enhancements, and improvements to cycling and pedestrian facilities.”

CARTA explains that, “As an integral component of the long-range plan for the Sacramento region, toll lanes are anticipated to be built over the next 20 years on the most congested portions of Interstate 80 (I-80), Interstate 5 (I-5), State Route 99, State Route 65, and Highway 50. Two toll lane projects are currently being developed: the first on I-80 from Davis to West Sacramento in Yolo County, and the second on I-5 from the Sacramento International Airport to downtown in Sacramento County. Both projects are currently in the environmental phase and are being developed with input from residents, drivers, and elected officials.”

1. AB 1223 would allow STA to help fund new Sacramento region priorities. As described above, STA was created in 1988 under the LTAIA, with the sole purpose of managing funding derived from Measure A to meet the goals of the expenditure plan. This bill seeks to evolve the authority of STA by authorizing new parameters for future tax measures and financing new projects in partnership with CARTA.

First, AB 1223 would expand the scope of what transportation authorities are authorized to fund with revenue generated by a TUT. As mentioned, exiting law allows a transportation authority to allocate revenues from the taxes imposed for the construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems. This bill includes “the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development, in areas nominated by local governments, and included in regionally adopted plans.”

The bill further defines this type of infrastructure to mean water, stormwater, or other utility-related facilities. While this bill does not directly reference the “Green Means Go” program, the types of projects eligible would support it. Additionally, the bill restricts STA to only be able to allocate revenues for this infrastructure if it is combined with a transportation project and caps the expenditures at 5% of the total revenues derived from the TUT.

Second, the bill authorizes STA to issue bonds to finance the costs of building HOT and other toll facilities in Sacramento County. Revenue derived from the toll revenues would be authorized to pay for the bonds, including other funds available to STA such as other TUT revenue, development impact fees, or state and local grants. As mentioned, the newly created CARTA is currently working on two toll projects, and will be the managing agency for the operation of the facilities. Prior to any bond issuance STA must enter into an agreement with CARTA regarding the use of toll revenue and the governing board of CARTA must review and approve an expenditure plan.

Finally, AB 1223 would give STA the authority to impose a TUT in a geographic area that comprises less than the total area of Sacramento County, including its cities. The bill details a process for STA to develop and approve the ordinance and expenditure plan and sets parameters for how the cities and unincorporated areas of the county must be included or excluded. The bill also requires the revenues derived from the tax be spent within, or to the benefit of, the portion of the county to which the tax applies.

1. We’ve done this before. AB 1413 (Gloria, Chapter 758, Statutes of 2019), was similar to this bill and authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a district tax in a portion of its jurisdiction with voter approval. Specifically, AB 1413 did the following:

• Authorized the Placer County Transportation Planning Agency to impose a district tax applicable to the entirety, or a portion, of the County of Placer in conformity with the law at a rate of no more than 1% if certain requirements are met, including a requirement that the ordinance proposing the district tax be submitted to, and approved by, the voters. It could only exclude the Tahoe Basin, which is not part of its jurisdiction.
• Provided the same abovementioned district tax authority to the Solano Transportation Improvement Agency for certain portions of Solano County.
• Authorized the San Diego Association of Governments (SANDAG), San Diego Metropolitan Transit System (MTS) and the North County Transit District to levy a district tax in a portion of their jurisdictions, with voter approval, and required revenues derived from the district tax to be spent only on transportation and transit infrastructure and services.

AB 1052 (McCarty, Chapter 674, Statutes of 2023), provided similar TUT authority to the Sacramento Regional Transit District (SacRT). To date, the authority provided by AB 1413 and AB 1052 have not be successfully used by the respective agencies.

1. Arguments in support. Writing as the sponsor of AB 1223, STA states, “AB 1223 enhances local control, allowing communities to pursue sub-regional funding mechanisms tailored to their priorities. It ensures that tax revenues stay local and are only enacted through a public vote—the bill does not raise taxes, but gives voters the option to invest in local transportation solutions.

“The bill also enables STA to support coordinated infrastructure improvements that promote infill development and corridor revitalization—advancing economic growth, housing, and sustainability goals through smarter use of existing infrastructure.

“In addition, AB 1223 authorizes the financing of express lanes and high-occupancy toll lanes, tools identified by Caltrans and SACOG to improve mobility, expand transit options, and reduce congestion and emissions—without requiring additional public spending.

“By updating STA’s statutory authority, AB 1223 provides the tools and flexibility needed to address today’s transportation challenges while positioning Sacramento County for a more sustainable and equitable future.”

1. Arguments in opposition. Writing in opposition, the Howard Jarvis Taxpayers Association states, “AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in “infrastructure” and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.

“AB 1223 would also allow STA to impose a transactions and use tax in a geographic area of its choosing that is less than the total area of the County of Sacramento. This potentially allows for the intentional disenfranchisement of county residents who are likely to oppose the tax, but who will have to pay it when they make purchases in the nearby geographic area.

“Sacramento County residents, like all Californians, are struggling with the high cost of living and would be further harmed by costly tolls and higher taxes.”

1. Double referral. This bill has been double referred to the Senate Revenue and Taxation Committee.

Related/PREVIOUS Legislation:

AB 1052 (McCarty, Chapter 674, Statutes of 2023) – Authorized the Sacramento Regional Transit District to levy a TUT in any portion of its jurisdiction, with voter approval.

AB 1413 (Gloria, Chapter 758, Statutes of 2019) – Authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a TUT in a portion of its jurisdiction with voter approval.

AB 1324 (Gloria, 2018) – Would have authorized a local transportation authority, which has existing TUT authority, to levy a TUT in any portion of its jurisdiction, with voter approval. This bill was held on the Assembly Floor.

AB 194 (Frazier, Chapter 687, Statutes of 2015) – Granted the CTC broad, indefinite authority to review and approve toll facility applications submitted by Regional Transportation Agencies and by Caltrans.

SB 142 (Deddeh, Chapter 786, Statutes of 1987) – Local Transportation Authority and Improvement Act provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

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

June 18, 2025.)

SUPPORT:

Sacramento Transportation Authority (sponsor)

Sacramento County

Sacramento Regional Transit District

OPPOSITION:

Howard Jarvis Taxpayers Association

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1223

Author:(Nguyen and Krell)

As Amended Ver:April 30, 2025

Majority vote

SUMMARY

Makes changes to the Sacramento Transportation Authority's (STA's) ability to impose a transactions and use tax (TUT) and the allowable expenditures from a TUT imposed by STA, and authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County.

Major Provisions

1. Authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County approved by the California Transportation Commission (CTC), as specified. Requires STA to do the following in order to issue bonds:
2. STA shall enter into an agreement with the Capital Area Regional Tolling Authority (CARTA) regarding the application of toll revenue to pay for bonds issued by the authority.
3. The governing board of CARTA shall review and approve a toll facility expenditure plan.
4. Provides that the allowable expenditure categories set forth in existing law shall include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development, in areas nominated by local government, and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives.
5. Defines infrastructure for 2), above, to mean any of the following:
   1. Transportation facilities, as specified.
   2. Water, stormwater, wastewater, or other utility-related facilities.
6. Specifies that STA may only allocate revenues for a utility-related facility if that facility is combined with a project that includes a transportation facility. An expenditure plan shall not allocate more than 5% of the total revenues derived from a tax for utility-related facilities.
7. Provides that a tax ordinance and corresponding expenditure plan may be imposed by STA in a geographic area that comprises less than the total area of Sacramento County, including its incorporated cities, subject to specific guidelines.
8. Requires an ordinance and expenditure plan described in 5), above, to be adopted by at least two-thirds vote of the total membership of the governing board.
9. Specifies that an ordinance described in 5), above, shall be subject to voter approval by the electors in the area to which the TUT applies.
10. Provides that if an ordinance and expenditure plan for a portion of Sacramento County are approved, as specified, all subsequent governing board decisions and actions related to implementation of that ordinance and expenditure plan, including an action to amend the expenditure plan, shall be made by a majority of both of the following:
    1. Those members representing the city or cities subject to the ordinance, if any.
    2. All members appointed from the board of supervisors.
11. Specifies that the governing board shall determine the area to which the TUT would apply before the electors vote on the measure. If the TUT only applies to a portion of the county, all of the following shall apply:
    1. The incorporated area of a city within the county shall either be wholly included or wholly excluded from the area to be taxed.
    2. The unincorporated area of the county shall either be wholly included or wholly excluded from the area to be taxed.
    3. The area to be to be taxed shall include at least the incorporated area from two cities or the incorporated area from one city and the unincorporated area from the county.
12. Provides that the revenues derived from the TUT shall be spent within, or for the benefit of, the portion of the county to which the tax applies. Any revenues derived from the TUT shall supplement, and not supplant, other transportation revenues available to the portion of the county to which the TUT applies.
13. Specifies that an expenditure plan applicable to a portion of the county shall not be adopted until it has received the approval of the board of supervisors and of the city councils representing both a majority of the cities included within the area subject to the TUT and a majority of the population residing in the unincorporated areas subject to the TUT.

COMMENTS

1. Local Transportation Authorities. District taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA) [SB 142 (Deddeh), Chapter 786, Statutes of 1987] which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 counties impose a transportation tax.
2. Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a half-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A, continuing the tax through 2039. STA is accountable for the administration of the funding provided by Measure A, which has provided local transportation funding for the following:
   1. Reduce traffic congestion.
   2. Improve air quality.
   3. Maintain and strengthen the county’s road and transportation systems.
   4. Enhance Sacramento County's ability to secure state and federal funding by providing local matching funds.
   5. Preserve unique, natural amenities.
   6. Preserve agricultural land.

STA explains that, "STA developed an expenditure plan by incorporating feedback from multiple stakeholders, such as the general public, local governments, and transportation experts. Officially titled, 'The Measure A Ordinance and Transportation Expenditure Plan,' eligible expenditures were required to be incorporated into the ballot measure. STA distributes funding per the Measure A Ordinance and Transportation Expenditure Plan to the various partner agencies based on the identified formula and/or percentages for its intended purpose."

STA's board consists of 16 members: five from the Sacramento County Board of Supervisors, five Sacramento City Councilmembers, two Elk Grove City Councilmembers, one from the city councils of Citrus Heights, Folsom, and Rancho Cordova, and one combined seat from the Galt and Isleton City Councils.

1. Sales and Use Taxes. State law imposes the sales tax on every retailer "engaged in business in this state" that sells tangible personal property, and requires them to register with the CDTFA, as well as collect the appropriate tax at purchase and remit the amount to CDFTA. Sales tax applies whenever a retail sale occurs, which is generally any sale other than one for resale in the regular course of business. The current rate is 7.25%.

Unless the purchaser pays the sales tax to the retailer, they are liable for the use tax, which the law imposes on any person consuming tangible personal property in the state. The use tax is the same rate as the sales tax, and also like the sales tax, must be remitted on or before the last day of the month following the quarterly period in which the person made the purchase.

1. Transactions and Use Taxes. The California Constitution states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C). Proposition 13 (1978) required a 2/3 vote of each house of the Legislature for state tax increases, and a 2/3 vote for local special taxes. Proposition 62 (1986) prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes. Proposition 218 (1996) extended those vote thresholds to charter cities, and limited local agencies' powers to levy new assessments, fees, and taxes. Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing.

State law allows cities, counties, and specified special districts to increase the sales and use tax applicable in their jurisdiction, also known as district taxes or TUTs. Generally, the combined TUT tax rate imposed within a local jurisdiction cannot exceed 2%. To determine whether a county has reached this rate limitation, all countywide taxes and the highest combined rate imposed by a city within the county are counted towards the county's rate limit. For example, if a county imposes three 0.5% countywide taxes and two cities within the county each impose a 0.5% tax, the combined rate in those two cities would be 2%. In such a circumstance, the two cities could not impose another TUT, and the county could not impose another countywide TUT, absent special authority to exceed the rate limitation.

Prior to 2003, cities lacked the ability to place TUTs 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, which imposed the uniform 2% countywide cap. As of April 1, 2025, local agencies impose 478 district taxes for general or special purposes: 401 imposed citywide, 71 imposed countywide, and six imposed in unincorporated county areas. Generally, local agencies impose these taxes throughout the entire area of a single county, the entire unincorporated area within a single county, or a single incorporated city. However, three transportation operators in the Bay Area have regional district taxes:

• 1. BART, which covers Alameda, Contra Costa, and San Francisco.
  2. The Peninsula Corridor Joint Powers Board (CalTrain), which covers San Francisco, San Mateo, and Santa Clara counties.
  3. The Sonoma-Marin Rail Transit District, which includes Sonoma and Marin counties.

1. AB 1413 and AB 1052. AB 1413 (Gloria), Chapter 758, Statutes of 2019, authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a TUT in a portion of its jurisdiction with voter approval. Specifically, AB 1413 did the following:
   1. Authorized the Placer County Transportation Planning Agency to impose a TUT applicable to the entirety, or a portion, of the County of Placer in conformity with TUT Law at a rate of no more than 1% if certain requirements are met, including a requirement that the ordinance proposing the TUT be submitted to, and approved by, the voters.
   2. Provided the same abovementioned TUT authority to the Solano Transportation Improvement Agency for certain portions of Solano County.
   3. Authorized the San Diego Regional Transportation Commission, San Diego Association of Governments, San Diego Metropolitan Transit System and the North County Transit District to levy a TUT in a portion of their jurisdictions, with voter approval, and required revenues derived from the TUT to be spent only on transportation and transit infrastructure and services.

A similar bill, AB 1324 (Gloria) of 2018 would have authorized a local transportation authority, which has existing TUT authority, to levy a TUT in any portion of its jurisdiction, with voter approval. This bill was held on the Assembly Floor.

AB 1052 (McCarty), Chapter 674, Statutes of 2023, provided similar TUT authority to the Sacramento Regional Transit District. To date, the authority provided by AB 1413 and AB 1052 have not be successfully used by the respective agencies.

According to the Author

"AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Right now, the STA can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it. This district bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that's safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality. AB 1223 also updates STA's authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life."

Arguments in Support

According to STA, "This bill is a crucial step toward modernizing the Sacramento Transportation Authority (STA) by establishing a distinct code section for our agency within the Public Utilities Code. AB 1223 will provide the necessary flexibility to address modern transportation priorities and funding mechanisms in the Sacramento region.

"Since the passage of Measure A in 1988, STA has operated under the Local Transportation Authority and Improvement Act (LTAIA), which has remained largely unchanged since its enactment in 1987. As a result, STA faces several limitations in meeting today's evolving transportation demands. The current law primarily focuses on traditional roadway infrastructure, leaving little room for innovative and sustainable solutions such as passenger rail, complete streets, active transportation, bikeways, and Intelligent Transportation Systems.

"AB 1223 directly addresses these challenges by creating a separate statutory section for STA, allowing the Authority to:

• 1. Expand funding options for diverse transportation solutions, including sustainable and active transportation projects.
  2. Adapt its statutory authority over time to respond to emerging transportation needs and technologies.
  3. Clarify implied powers within the LTAIA to improve operational efficiency and coordination with regional transportation initiatives.
  4. Enhance its ability to leverage toll financing as a complementary funding source alongside sales tax revenues.

"The modernization of STA's statutory framework is essential to ensure that Sacramento can effectively address congestion, mobility, and sustainability goals. By supporting AB 1223, the Legislature will empower STA to develop a more flexible, innovative, and forward-thinking transportation network that benefits residents, businesses, and visitors alike."

Arguments in Opposition

According to the Howard Jarvis Taxpayers Association, "AB 1223 would empower the Sacramento Transportation Authority (STA) to develop and operate toll facilities in addition to its existing power to impose a transactions and use tax for transportation purposes, subject to voter approval. Further, AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in "infrastructure" and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.

AB 1223 would also allow STA to impose a transactions and use tax in a geographic area of its choosing that is less than the total area of the County of Sacramento. This potentially allows for the intentional disenfranchisement of county residents who are likely to oppose the tax, but who will have to pay it when they make purchases in the nearby geographic area. Sacramento County residents, like all Californians, are struggling with the high cost of living and would be further harmed by costly tolls and higher taxes.

FISCAL COMMENTS

None.

VOTES

ASM LOCAL GOVERNMENT: 7-1-2

YES: Carrillo, Pacheco, Ramos, Ransom, Blanca Rubio, Stefani, Ward

NO: Ta

ABS, ABST OR NV: Hoover, Wilson

ASM TRANSPORTATION: 12-4-0

YES: Wilson, Aguiar-Curry, Ahrens, Carrillo, Harabedian, Hart, Jackson, Lowenthal, Papan, Ransom, Rogers, Ward

NO: Davies, Hoover, Lackey, Macedo

UPDATED

VERSION: April 30, 2025

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0000375

Date of Hearing: April 28, 2025

ASSEMBLY COMMITTEE ON TRANSPORTATION

Lori D. Wilson, Chair

ABPCA Bill Id:AB 1223 (

Author:Nguyen) – As Amended Ver:April 24, 2025

SUBJECT: Local Transportation Authority and Improvement Act: Sacramento Transportation Authority

SUMMARY: Allows expenditures from a tax the Sacramento Transportation Authority (STA) imposes to include infrastructure that supports infill or transit-oriented development and would reduce vehicle miles traveled, and authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County. Specifically, this bill:

1. Authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County approved by the California Transportation Commission (CTC). Requires STA to do the following in order to issue bonds:
2. Requires STA to enter into an agreement with Capital Area Regional Tolling Authority (CARTA) regarding the application of toll revenue to pay for bonds issued by the authority; and,
3. Requires the governing board of CARTA to review and approve a toll facility expenditure plan.
4. Stipulates terms and conditions of the bonds require:
5. A resolution adopted by the governing board of STA, which states the maximum principal amount of the bonds, the maximum term of the bonds and the maximum rate of interest to be paid on the bonds, not to exceed the maximum rate permitted by law;
6. Adopted by a two-thirds vote of the governing board; and,
7. Assurance the state is not liable to the debt or liability of the bond.
8. Establishes the maximum rate of interest on the bond to exceed 12% per year, per existing law.
9. Provides that the allowable expenditure categories set forth in existing law shall include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development and would reduce vehicle miles traveled (VMT).
   1. Defines infrastructure to mean any of the following:
10. Transportation facilities for public use, including active transportation, streets or highways, public transit, or passenger rail;
11. Utilities, including energy-related, communication-related, water-related, stormwater-related, and wastewater-related facilities or infrastructure.
12. Provides that an ordinance and corresponding expenditure plan may be imposed by the authority in a geographic area that comprises less than the total area of Sacramento County, including its incorporated cities, subject to specific guidelines.
13. Requires an ordinance and expenditure plan be adopted by at least two-thirds vote of the total membership of the governing board; and,
14. Specifies that an ordinance shall be subject to voter approval by the electors in the area to which the transactions and use tax (TUT) applies.
15. Provides that if an ordinance and expenditure plan for a portion of Sacramento County are approved, all subsequent governing board decisions and actions related to implementation of that ordinance and expenditure plan, including an action to amend the expenditure plan, shall be made by a majority of both of the following:
16. Those members representing the city or cities subject to the ordinance, if any; and,
17. All members appointed from the board of supervisors.
18. Specifies that the governing board shall determine the area to which the TUT would apply before the electors vote on the measure. If the TUT only applies to a portion of the county, all of the following shall apply:
19. The incorporated area of a city within the county shall either be wholly included or wholly excluded from the area to be taxed;
20. The unincorporated area of the county shall either be wholly included or wholly excluded from the area to be taxed; and,
21. The area to be to be taxed shall include at least the incorporated area from two cities or the incorporated area from one city and the unincorporated area from the county.
22. Requires the revenues derived from the TUT be spent within, or for the benefit of, the portion of the county to which the tax applies. Any revenues derived from the TUT shall supplement, and not supplant, other transportation revenues available to the portion of the county to which the TUT applies.
23. Specifies that an expenditure plan applicable to a portion of the county shall not be adopted until it has received the approval of the board of supervisors and of the city councils representing both a majority of the cities included within the area subject to the TUT and a majority of the population residing in the unincorporated areas subject to the TUT.
24. Defines the following terms for the purpose of this bill:
25. “Active Transportation” to mean infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking;
26. “Authority” to mean STA;
27. “CARTA” to mean Capital Area Regional Tolling Authority;
28. “Expenditure plan” to mean a county transportation expenditure plan adopted in connection with a TUT ordinance, as specified;
29. “Governing board” to mean the governing board of STA;
30. “Member” or “member of the governing board” to mean an individual county supervisor or city council member who has been appointed to the governing board, or their alternate;
31. “Ordinance” to mean a TUT ordinance authorized pursuant to existing law.

EXISTING LAW:

1. Authorizes a county board of supervisors to create a local transportation authority (authority) to operate within the county (Public Utilities Code Section (PUC) 180050)
2. Provides that a county that chooses to create an entirely new entity as an authority shall determine the membership of the authority with the concurrence of a majority of the cities having a majority of the population in the incorporated area of the county and provides for the board membership of the authority. (PUC 180051)
3. Authorizes an authority to impose a retail TUT ordinance applicable in the incorporated and unincorporated territory of a county if the tax ordinance is adopted by a two-thirds vote of the authority and imposition of the tax is subsequently approved by the electors voting on the measure. (PUC 180201)
4. Requires the authority, in the ordinance, to state the nature of the tax to be imposed, to provide the tax rate or the maximum tax rate, to specify the period during which the tax will be imposed, and to specify the purposes for which the revenue derived from the tax will be used. The tax rate may be in .25% increments and shall not exceed a maximum rate of 1%. (PUC 180202)
5. Authorizes the revenues from an imposed tax to be allocated by the authority for construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems. (PUC 180205)
6. Requires a county transportation expenditure plan to be prepared for the expenditure of the revenues for the period during which the tax is to be imposed. (PUC 180206)
7. Stipulates a county transportation expenditure plan not be adopted until it has received the approval of the board of supervisors and the city council representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of the county. (PUC 180206)
8. Authorizes the authority to annually review and propose amendments to the expenditure plan to provide for the use of additional federal, state, and local funds, to account for unexpected revenues, or to take into consideration unforeseen circumstances. (PUC 180207)
9. Provides that, as part of the ballot proposition to approve the imposition of a retail TUT, authorization of bonds to finance capital outlay expenditures may be provided for in the adopted county transportation expenditure plan, payable from the proceeds of the tax. (PUC 180250-180264)
10. Authorizes an RTA to apply to the CTC to develop and operate high-occupancy toll lands or other toll lanes, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight, and establishes a process for review and approval by the CTC. (Streets and Highways Code Section (SHC) 149.7)

FISCAL EFFECT: Unknown

COMMENTS: District taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA) which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to one percent for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 counties impose a transportation tax.

Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a half-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A in 2004, continuing the tax through 2039. STA is accountable for the administration of the funding provided by Measure A, which has provided local transportation funding to; reduce traffic congestion, improve air quality, maintain and strengthen the county’s road and transportation systems, enhance Sacramento County’s ability to secure state and federal funding by providing local matching funds, preserve unique, natural amenities, and preserve agricultural land.

In 2022, Sacramento County proposed an additional sales tax within Sacramento County of one-half of one percent for a period of 40 years from April 1, 2023, to March 31, 2063, for the purpose of financing a new expressway connecting Elk Grove and Folsom, an expansion of the light rail system and other transportation projects in Sacramento County. This proposed sales tax, also known as Measure A, was to be in addition to the existing transportation sales tax measure, and was projected to raise an estimated $8.5 billion. The measure was voted down with approximately 56 percent of Sacramento County voters voting no.

This bill gives STA the authority to impose a TUT in a geographic area that comprises less than the total area of Sacramento County, including its cities.

Metropolitan Planning Organizations. The Federal-Aid Highway Act of 1962 required that a regional entity, known as a Metropolitan Planning Organization (MPO), guide and maintain transportation planning in any urbanized area with a population of 50,000 or more. Boards comprised of representatives from local governments and transportation agencies direct MPOs. Counties can establish a local transportation fund in the county treasury, and contract with the California Department of Tax and Fee Administration (CDTFA) to deposit moneys from district taxes dedicated to transportation into this fund. There are 18 MPOs and 26 Regional Transportation Planning Agencies (RTPAs) in California.

Existing federal and state law requires each of California’s MPOs and RTPAs to prepare a long-range (20-year) plan. This plan, known as the regional transportation plan (RTP), identifies the region’s vision and goals and how to implement them. The RTP also supports the state’s goals for transportation, environmental quality, economic growth, and social equity. Federal law requires that they be updated at least every four years, and state law requires that these plans be updated every four years. California Air Resources Board (CARB) publishes a schedule for updates of each of these RTPs.

Existing law requires coordination of transportation and land use planning to help achieve the state’s climate action goals by requiring that each RTP include a sustainable communities strategy (SCS). The SCS demonstrates how the region will meet its greenhouse gas (GHG) emissions reduction targets through land use, housing, and transportation strategies. CARB must review the adopted SCS to confirm that it will indeed meet the regional GHG targets. If not, the MPO must prepare an alternative planning strategy, separate from the RTP.

Regional climate targets. A 2022 CARB report (SB 150 Report) on the progress of MPOs and the state in achieving these stated GHG emission reduction goals, finds that California is still not reducing GHG emissions from personal vehicle travel as needed to meet climate commitments and as targeted under existing law, SB 375 (Steinberg), Chapter 728, Statutes of 2008. The report states, “No matter how robust, regional plans alone cannot reduce emissions. They must be coupled with the resources, policies, and political will to implement their identified strategies,” and goes on to recommend the legislature, “could give state and regional agencies a greater role in supporting congruent local land use actions to foster their alignment with SCS implementation…State agencies could prioritize support for complete streets and other infrastructure improvements to attract development in locations targeted in SCSs for growth. For example, the Sacramento Area Council of Governments (SACOG) Rural Main Streets program provides strategic investments to create vibrant commercial corridors and Green Means Go targets funding to promote infill development within planned center, corridor, or established communities identified in its SCS.”

The SB 150 report, along with a 2022 report from the Strategic Growth Council (AB 285 Report) both suggest state agencies and the Legislature expand funding for infill-supportive infrastructure and encourage each MPO to identify low VMT zones in infill areas to support a substantial portion of growth as part of their adopted RTP/SCS. Infill development, the process of building in existing urban areas, often requires utility upgrades due to the age and capacity of the existing infrastructure. These upgrades can be costly and complex, particularly when dealing with aging water, sewer, and energy systems. However, infill development can be more cost-effective than greenfield development if infrastructure costs are managed strategically.

Sacramento Area Council of Governments. SACOG consists of 28 member cities and counties in the Sacramento Region. According to SACOG, it is designated by the Federal government as the MPO, oversees the RTP for the Sacramento region, updated every four years in collaboration with local governments. As designated by the state, Placer and El Dorado counties serve as RTPAs, responsible for their state-level transportation plans. SACOG, functioning as the RTPA for Sacramento, Sutter, Yolo, and Yuba counties, collaborates with Placer County Transportation Planning Agency and El Dorado County Transportation Commission to maintain consistency across county plans and the broader regional framework.

SACOG launched a program called “Green Means Go”, described as a regional effort to accelerate infill development, which will lower GHG emissions and revitalize existing communities in the six-county Sacramento Area. According to SACOG, “Green means Go” is a key implementation activity to build a connected region with transportation options, affordable housing, and equitable investments. “Green Means Go” is intended to contribute to SACOG’s 2025 Blueprint with the following; 32% of planned regional housing growth, creating an estimated 84,000 new homes, 40% of planned employment growth, or about 100,000 new jobs, 16% reduction of VMT per capita in Green Zones, double the regional reduction per capita of 8%, and reducing the number of homes in high fire risk areas by 10,000 units over 20 years.

Every jurisdiction in the region supports Green Means Go, and 26 of the 28 have adopted Green Zones, which are areas that have infill capacity yet currently face market or other barriers to development.

Transportation authorities. Existing law allows a transportation authority to allocate revenues from the taxes imposed for the construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems.

This bill significantly expands the allowable scope of transportation authorities by allowing transportation sales tax measures to allocate revenues for expenditures for utilities infrastructure including energy-related, communication-related, water-related, stormwater-related, and wastewater-related facilities or infrastructure.

Sacramento Region Toll Lanes. The Capitol Area regional Tolling Authority (CARTA) was created as a JPA in January 2024 to develop and operate toll facilities in the Sacramento Region. CARTA’s membership includes the SACOG), the Yolo Transportation District (YoloTD), and Caltrans District 3 and includes non-voting directors from STA, the Placer County Transportation Planning Agency, and the El Dorado County Transportation Commission. CARTA has five directors on its governing board: two appointed by YoloTD, two appointed by SACOG, and one appointed by Caltrans District 3.

According to the YoloTD, “YoloTD and the California Department of Transportation (Caltrans) have joined forces for a freeway expansion initiative aimed at enhancing traffic flow within the I-80 corridor on the west side of the Sacramento-Yolo metropolitan area. This comprehensive project encompasses multiple components, including the introduction of approximately 17 miles of tolled managed lanes, new lane construction, intelligent transportation system (ITS) enhancements, and improvements to cycling and pedestrian facilities.”

CARTA explains that, “As an integral component of the long-range plan for the Sacramento region, toll lanes are anticipated to be built over the next 20 years on the most congested portions of Interstate 80 (I-80), Interstate 5 (I-5), State Route 99, State Route 65, and Highway 50. Two toll lane projects are currently being developed: the first on I-80 from Davis to West Sacramento in Yolo County, and the second on I-5 from the Sacramento International Airport to downtown in Sacramento County. Both projects are currently in the environmental phase and are being developed with input from residents, drivers, and elected officials.”

Toll lanes. AB 194 (Frazier) Chapter 687, Statutes of 2015, granted the CTC broad, indefinite authority to review and approve toll facility applications RTAs and Caltrans submit. Current statue allows a RTA, or Caltrans, to apply to the CTC to develop and operate high-occupancy toll lanes or other toll facilities, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight. Eligibility criteria for an application includes, and is not limited to: 1) a demonstration that the proposed toll facility will improve the corridor’s performance especially for those traveling by carpool, vanpool, and transit; 2) a requirement that the proposed toll facility is contained in the constrained portion of a conforming RTP; 3) evidence of cooperation between the applicable RTA and Caltrans; and 4) a demonstration that a complete funding plan has been prepared, among other provisions related to reimbursable costs, and law enforcement matters.

Existing law defines RTA for the purposes of AB 194 as the following; specified transportation planning agencies, a county transportation commission, any other local or regional transportation entity that is designated by statutes as a RTA, a joint powers authority (JPA) with the consent of a transportation planning agency or a county transportation commission for the jurisdiction in which the transportation project will be developed, the Santa Clara Valley Transportation Authority.

This bill authorizes STA to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County, as approved by the CTC and authorized by CARTA.

According to the author, “AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Right now, the STA can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it. This district bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that’s safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality. AB 1223 also updates STA’s authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life.”

In support, STA writes, “The modernization of STA’s statutory framework is essential to ensure that Sacramento can effectively address congestion, mobility, and sustainability goals. By supporting AB 1223, the Legislature will empower STA to develop a more flexible, innovative, and forward-thinking transportation network that benefits residents, businesses, and visitors alike.”

In opposition, the Howard Jarvis Taxpayers Association writes, “AB 1223 would empower the Sacramento Transportation Authority (STA) to develop and operate toll facilities in addition to its existing power to impose a transactions and use tax for transportation purposes, subject to voter approval. Further, AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in “infrastructure” and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.”

Staff comments. While this bill does not directly reference the “Green Means Go” program, it would allow STA to include infrastructure projects that support infill or transit-oriented development and reduce VMT in an expenditure plan. “Infrastructure,” is defined as any of the following; transportation facilities for public use, active transportation, streets or highways, public transit, or passenger rail; utilities, including energy-related, communication-related, water-related, stormwater-related, and wastewater-related facilities or infrastructure. Including “utilities” as an allowable expenditure from a transportation authority’s transaction and use tax revenues is a significant expansion of the use of these revenues. Spending tax measure dollars on non-transportation investments will come at the cost of these revenues being unavailable for transportation-specific expenditures.

Committee amendments. The committee may wish to propose the following amendments:

1. PUC 180300.

(c) Sacramento County is unique in having a large, developed unincorporated population and seven cities with older commercial corridors that have potential for infill but which that regularly experience construction-related disruptions and pavement deterioration. To reduce these localized impacts and limit the need for future transportation system expansion, the Authority must be able to fund coordinated infrastructure improvements that support infill development as part of a single project.

1. PUC 180302. For purposes of this chapter, unless the context requires otherwise, the following definitions apply:

(a) “Active transportation” means infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking including projects consistent with Section 2382(f) of the Streets and Highways Code.

1. PUC 180304.

(a) The allowable expenditure categories set forth in Section 180205 shall also include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development in areas nominated by local governments and included in regionally adopted plans that advance state greenhouse gas emissions reduction objectives. and would reduce vehicle miles traveled.

(b) For purposes of this subdivision, section, “infrastructure” means any of the following:

(1) Transportation facilities, as allowable under Section 180205, for public use, including active transportation, streets or highways, public transit, or passenger rail.

(2) Utilities, including energy-related, communication-related, water-related, stormwater-related, and wastewater-related facilities or infrastructure. Water, stormwater, wastewater, or other utility-related expenditures that support infill or transit-oriented development. Expenditures pursuant to this paragraph must be combined with a project eligible under paragraph (1). Expenditures pursuant to this paragraph shall not exceed ten percent of the total tax revenue generated by the measure.

(c) This section does not apply to a retail transactions and use tax approved by the electors prior to January 1, 2026.

(d) Expenditures of (b) (2) within an expenditure plan, per section 180206, shall be equal to or less than five percent of revenues generated by a transactions and use tax.

Previous legislation. AB 1052 (McCarty), Chapter 674, Statutes of 2023 authorized the Sacramento Regional Transit District to levy a TUT in any portion of its jurisdiction, with voter approval.

AB 1413 (Gloria), Chapter 758, Statutes of 2019 authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a TUT in a portion of its jurisdiction with voter approval.

AB 1324 (Gloria) of 2018 would have authorized a local transportation authority, which has existing TUT authority, to levy a TUT in any portion of its jurisdiction, with voter approval. This bill was held on the Assembly Floor.

REGISTERED SUPPORT / OPPOSITION:

Support

Sacramento County

Sacramento Regional Transit District

Sacramento Transportation Authority

Opposition

Howard Jarvis Taxpayers Association

Analysis Prepared by: Julia Kingsley / TRANS. / (916) 319-2093

Date of Hearing: April 23, 2025

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 1223 (

Author:Nguyen and Krell) – As Amended Ver:April 1, 2025

SUBJECT: Local Transportation Authority and Improvement Act: Sacramento Transportation Authority.

SUMMARY: Makes changes to the Sacramento Transportation Authority’s (STA’s) ability to impose a transactions and use tax (TUT), the allowable expenditures an expenditure plan STA can contain, and designates STA as a “regional transportation agency” (RTA) for the purposes of developing and operating toll lanes and toll facilities. Specifically, this bill:

1. Defines the following terms for the purpose of this bill:
   1. “Active Transportation” to mean infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking.
   2. “Authority” to mean STA.
   3. “Expenditure plan” to mean a county transportation expenditure plan adopted in connection with a TUT ordinance, as specified.
   4. “Governing board” to mean the governing board of STA.
   5. “Member” or “member of the governing board” to mean an individual county supervisor or city council member who has been appointed to the governing board, or their alternate.
   6. “Ordinance” to mean a TUT ordinance authorized pursuant to existing law.
2. Designates STA as a “RTA” for the purposes of applying to the California Transportation Commission (CTC) to develop and operate toll lanes or other toll facilities.
3. Specifies that if submitting an application to the CTC to develop and operate high-occupancy toll lanes or other toll facilities, STA shall include in its application information from other RTAs in the County of Sacramento regarding existing or planned high-occupancy toll lanes or other toll facilities.
4. Provides that the allowable expenditure categories set forth in existing law shall include the construction, modernization, and improvement of infrastructure that supports infill or transit-oriented development and would reduce vehicle miles traveled (VMT).
5. Defines infrastructure for 4), above, to mean any of the following:
   1. Transportation facilities for public use, including active transportation, streets or highways, public transit, or passenger rail.
   2. Utilities, including energy-related, communication-related, water-related, stormwater-related, and wastewater-related facilities or infrastructure.
6. Provides that an ordinance and corresponding expenditure plan may be imposed by the authority in a geographic area that comprises less than the total area of Sacramento County, including its incorporated cities, subject to specific guidelines.
7. Requires an ordinance and expenditure plan described in 6), above, to be adopted by at least two-thirds vote of the total membership of the governing board.
8. Specifies that an ordinance described in 6), above, shall be subject to voter approval by the electors in the area to which the TUT applies.
9. Provides that if an ordinance and expenditure plan for a portion of Sacramento County are approved, as specified, all subsequent governing board decisions and actions related to implementation of that ordinance and expenditure plan, including an action to amend the expenditure plan, shall be made by a majority of both of the following:
   1. Those members representing the city or cities subject to the ordinance, if any.
   2. All members appointed from the board of supervisors.
10. Specifies that the governing board shall determine the area to which the TUT would apply before the electors vote on the measure. If the TUT only applies to a portion of the county, all of the following shall apply:
    1. The incorporated area of a city within the county shall either be wholly included or wholly excluded from the area to be taxed.
    2. The unincorporated area of the county shall either be wholly included or wholly excluded from the area to be taxed.
    3. The area to be to be taxed shall include at least the incorporated area from two cities or the incorporated area from one city and the unincorporated area from the county.
11. Provides that the revenues derived from the TUT shall be spent within, or for the benefit of, the portion of the county to which the tax applies. Any revenues derived from the TUT shall supplement, and not supplant, other transportation revenues available to the portion of the county to which the TUT applies.
12. Specifies that an expenditure plan applicable to a portion of the county shall not be adopted until it has received the approval of the board of supervisors and of the city councils representing both a majority of the cities included within the area subject to the TUT and a majority of the population residing in the unincorporated areas subject to the TUT.
13. Provides that, unless otherwise stated in this bill, the other provisions in existing law that apply to an ordinance and expenditure plan shall also apply to an ordinance and expenditure plan applicable to a portion of the county, including the authority to issue bonds.
14. Specifies that the term “district”, as defined, shall not be interpreted to preclude STA from imposing a TUT in accordance with TUT law and in an area that comprises less than the total geographic area that comprises less than the total geographic jurisdiction of STA, so long as all other applicable requirements of that law are complied with.

EXISTING LAW:

1. Authorizes a county board of supervisors to create a local transportation authority (authority) to operate within the county [Public Utilities Code (PUC) § 180050].
2. Provides that a county that chooses to create an entirely new entity as an authority shall determine the membership of the authority with the concurrence of a majority of the cities having a majority of the population in the incorporated area of the county and provides for the board membership of the authority. (PUC § 180051).
3. Requires an authority to prepare and adopt an annual report each year on progress made to achieve the objective of improving transportation conditions related to priority highway operation and local transportation needs (PUC § 180111).
4. Authorizes an authority to impose a retail TUT ordinance applicable in the incorporated and unincorporated territory of a county if the tax ordinance is adopted by a two-thirds vote of the authority and imposition of the tax is subsequently approved by the electors voting on the measure, or by any otherwise applicable voter approval requirement, at a special election called for that purpose by the board of supervisors, at the request of the authority, and a specified county transportation expenditure plan is adopted (PUC §180201).
5. Requires the authority, in the ordinance, to state the nature of the tax to be imposed, to provide the tax rate or the maximum tax rate, to specify the period during which the tax will be imposed, and to specify the purposes for which the revenue derived from the tax will be used. The tax rate may be in .25% increments and shall not exceed a maximum rate of 1% (PUC § 180202).
6. Provides election procedures for the adoption of the ordinance in 4), above (PUC § 180203).
7. Authorizes the revenues from an imposed tax to be allocated by the authority for construction and improvement of state highways, the construction, maintenance, improvement, and operation of local streets, roads, and highways, and the construction, improvement, and operation of public transit systems (PUC § 180205).
8. Requires a county transportation expenditure plan to be prepared for the expenditure of the revenues expected to be derived from the tax, together with other federal, state, and local funds expected to be available for transportation improvements, for the period during which the tax is to be imposed. A county transportation expenditure plan shall not be adopted until it has received the approval of the board of supervisors and the city council representing both a majority of the cities in the county and a majority of the population residing in the incorporated areas of the county. The expenditure plan shall be adopted prior to the call of the election (PUC § 180206).
9. Authorizes the authority to annually review and propose amendments to the expenditure plan to provide for the use of additional federal, state, and local funds, to account for unexpected revenues, or to take into consideration unforeseen circumstances (PUC § 180207).
10. Provides that, as part of the ballot proposition to approve the imposition of a retail TUT, authorization may be sought to issue bonds to finance capital outlay expenditures as may be provided for in the adopted county transportation expenditure plan, payable from the proceeds of the tax, and provides for further requirements related to issuing bonds (PUC §§ 180250-180264).
11. Authorizes an RTA, as defined, to apply to the CTC to develop and operate high-occupancy toll lands or other toll lanes, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight, and establishes a process for review and approval by the CTC. [Streets and Highways Code (SHC) § 149.7]

FISCAL EFFECT: This bill is keyed fiscal.

COMMENTS:

1. Local Transportation Authorities. District taxes dedicated to transportation originated in 1970, when the Legislature authorized several counties served by the Bay Area Rapid Transit District (BART) to impose a regional sales tax. The Legislature subsequently authorized district taxes for individual counties or local entities, including Los Angeles, San Diego, Santa Clara, Fresno, and Sacramento, among others. In 1987, the Legislature enacted the Local Transportation Authority and Improvement Act (LTAIA) [SB 142 (Deddeh), Chapter 786, Statutes of 1987] which provided a process for individual counties to create a local transportation authority and implement local sales taxes of up to 1% for transportation purposes, upon the adoption of a specified expenditure plan and approval of a ballot proposition by county voters. Today, as many as 25 counties impose a transportation tax.
   
2. Sacramento Transportation Authority. STA was created in 1988 when Sacramento County voters approved Measure A, a half-cent sales tax for transportation improvements. According to STA, more than 75% of voters subsequently approved a 30-year extension to Measure A, continuing the tax through 2039. STA is accountable for the administration of the funding provided by Measure A, which has provided local transportation funding for the following:
   
   1. Reduce traffic congestion.
      
   2. Improve air quality.
      
   3. Maintain and strengthen the county’s road and transportation systems.
      
   4. Enhance Sacramento County’s ability to secure state and federal funding by providing local matching funds.
      
   5. Preserve unique, natural amenities.
      
   6. Preserve agricultural land.

STA explains that, “STA developed an expenditure plan by incorporating feedback from multiple stakeholders, such as the general public, local governments, and transportation experts. Officially titled, ‘The Measure A Ordinance and Transportation Expenditure Plan,’ eligible expenditures were required to be incorporated into the ballot measure. STA distributes funding per the Measure A Ordinance and Transportation Expenditure Plan to the various partner agencies based on the identified formula and/or percentages for its intended purpose.”

STA’s board consists of 16 members: five from the Sacramento County Board of Supervisors, five Sacramento City Councilmembers, two Elk Grove City Councilmembers, one from the city councils of Citrus Heights, Folsom, and Rancho Cordova, and one combined seat from the Galt and Isleton City Councils.

1. Metropolitan Planning Organizations. The Federal-Aid Highway Act of 1962 required that a regional entity, known as a Metropolitan Planning Organization (MPO), guide and maintain transportation planning in any urbanized area with a population of 50,000 or more. MPOs are usually called councils of governments (COGs), and are directed by boards comprised of representatives from local governments and transportation agencies. Counties can establish a local transportation fund in the county treasury, and contract with the California Department of Tax and Fee Administration (CDTFA) to deposit moneys from district taxes dedicated to transportation into this fund. There are 18 MPOs and 26 Regional Transportation Planning Agencies (RTPAs) in California.

Existing federal and state law requires each of California’s MPOs and RTPAs to prepare a long-range (20-year) plan. This plan, known as the regional transportation plan (RTP), identifies the region’s vision and goals and how to implement them. The RTP also supports the state’s goals for transportation, environmental quality, economic growth, and social equity. Federal law requires that they be updated at least every four years, and state law requires that these plans be updated every four years. California Air Resources Board (CARB) publishes a schedule for updates of each of these RTPs.

Existing law requires coordination of transportation and land use planning to help achieve the state’s climate action goals by requiring that each RTP include a sustainable communities strategy (SCS). The SCS demonstrates how the region will meet its GHG emissions reduction targets through land use, housing, and transportation strategies. CARB must review the adopted SCS to confirm that it will indeed meet the regional GHG targets. If not, the MPO must prepare an alternative planning strategy, separate from the RTP.

1. Sacramento Area Council of Governments. SACOG consists of 28 member cities and counties in the Sacramento Region. According to SACOG, it is designated by the Federal government as the MPO and oversees the RTP for the Sacramento region, updated every four years in collaboration with local governments. As designated by the state, Placer and El Dorado counties serve as RTPAs, responsible for their state-level transportation plans. SACOG, functioning as the RTPA for Sacramento, Sutter, Yolo, and Yuba counties, collaborates with Placer County Transportation Planning Agency and El Dorado County Transportation Commission to maintain consistency across county plans and the broader regional framework.

SACOG recently launched a program called “Green Means Go”, described as a regional effort to accelerate infill development, which will lower GHG emissions and revitalize existing communities in the six-county Sacramento Area. According to SACOG, “Green means Go” is a key implementation activity to build a connected region with transportation options, affordable housing, and equitable investments. “Green Means Go” is intended to contribute to SACOG’s 2025 Blueprint with the following:

• 1. 32% of planned regional housing growth, creating an estimated 84,000 new homes.
  2. 40% of planned employment growth, or about 100,000 new jobs.
  3. 16% reduction of VMT per capita in Green Zones, double the regional reduction per capita of 8%.
  4. Reducing the number of homes in high fire risk areas by 10,000 units over 20 years.

Every jurisdiction in the region has supported Green Means Go, and 26 of the 28 have adopted Green Zones, which are areas that have infill capacity yet currently face market or other barriers to development.

While this bill does not directly reference the “Green Means Go” program, it would specifically require STA to include projects that support infill or transit-oriented development and would reduce VMT, including utility related projects, in an expenditure plan. According to the author, the provisions of this bill that expand the allowable projects STA can impose a TUT for “...include active transportation, passenger rail, shared mobility, environmental mitigation, and infrastructure that supports infill and transit-oriented development, reflecting the region’s goals around sustainability and reduced vehicle miles traveled.” It is not clear if any other authority created under the LTAIA currently provide financing for similar types of projects.

1. Toll Lanes. AB 194 (Frazier) Chapter 687, Statutes of 2015, granted the CTC broad, indefinite authority to review and approve toll facility applications submitted by RTAs and by Caltrans.

Current statue allows a RTA, or Caltrans, to apply to the CTC to develop and operate high-occupancy toll lanes or other toll facilities, including the administration and operation of a value pricing program and exclusive or preferential lane facilities for public transit or freight. Eligibility criteria for an application includes, and is not limited to: 1) a demonstration that the proposed toll facility will improve the corridor’s performance especially for those traveling by carpool, vanpool, and transit; 2) a requirement that the proposed toll facility is contained in the constrained portion of a conforming RTP; 3) evidence of cooperation between the applicable RTA and Caltrans; and 4) a demonstration that a complete funding plan has been prepared, among other provisions related to reimbursable costs, and law enforcement matters.

Existing law defines RTA for the purposes of AB 194 as the following:

• 1. Specified transportation planning agencies.
  2. A county transportation commission, as specified.
  3. Any other local or regional transportation entity that is designated by statutes as a RTA.
  4. A joint powers authority (JPA) with the consent of a transportation planning agency or a county transportation commission for the jurisdiction in which the transportation project will be developed.
  5. The Santa Clara Valley Transportation Authority.

1. Sacramento Region Toll Lanes. The Capital Area regional Tolling Authority (CARTA) was created as a JPA in January 2024 to develop and operate toll facilities in the Sacramento Region. CARTA’s membership includes the SACOG, the Yolo Transportation District (YoloTD), and Caltrans District 3 and includes non-voting directors from STA, the Placer County Transportation Planning Agency, and the El Dorado County Transportation Commission. CARTA has five directors on its governing board: two appointed by YoloTD, two appointed by SACOG, and one appointed by Caltrans District 3.

According to the YoloTD, “YoloTD and the California Department of Transportation (Caltrans) have joined forces for a freeway expansion initiative aimed at enhancing traffic flow within the I-80 corridor on the west side of the Sacramento-Yolo metropolitan area. This comprehensive project encompasses multiple components, including the introduction of approximately 17 miles of tolled managed lanes, new lane construction, intelligent transportation system (ITS) enhancements, and improvements to cycling and pedestrian facilities.

CARTA explains that, “As an integral component of the long-range plan for the Sacramento region, toll lanes are anticipated to be built over the next 20 years on the most congested portions of Interstate 80 (I-80), Interstate 5 (I-5), State Route 99, State Route 65, and Highway 50. Two toll lane projects are currently being developed: the first on I-80 from Davis to West Sacramento in Yolo County, and the second on I-5 from the Sacramento International Airport to downtown in Sacramento County. Both projects are currently in the environmental phase and are being developed with input from residents, drivers, and elected officials.”

1. Sales and Use Taxes. State law imposes the sales tax on every retailer “engaged in business in this state” that sells tangible personal property, and requires them to register with the CDTFA, as well as collect the appropriate tax at purchase and remit the amount to CDFTA. Sales tax applies whenever a retail sale occurs, which is generally any sale other than one for resale in the regular course of business. The current rate is 7.25% as shown in the table below.

Unless the purchaser pays the sales tax to the retailer, he or she is liable for the use tax, which the law imposes on any person consuming tangible personal property in the state. The use tax is the same rate as the sales tax, and also like the sales tax, must be remitted on or before the last day of the month following the quarterly period in which the person made the purchase.

1. Transactions and Use Taxes. The California Constitution states that taxes levied by local governments are either general taxes, subject to majority approval of its voters, or special taxes, subject to 2/3 vote (Article XIII C). Proposition 13 (1978) required a 2/3 vote of each house of the Legislature for state tax increases, and a 2/3 vote for local special taxes. Proposition 62 (1986) prohibited local agencies from imposing general taxes without majority approval of local voters, and a 2/3 vote for special taxes. Proposition 218 (1996) extended those vote thresholds to charter cities, and limited local agencies' powers to levy new assessments, fees, and taxes. Local agencies generally propose to increase taxes by adopting an ordinance or a resolution at a public hearing.

State law allows cities, counties, and specified special districts to increase the sales and use tax applicable in their jurisdiction, also known as district taxes or TUTs. Generally, the combined TUT tax rate imposed within a local jurisdiction cannot exceed 2%. To determine whether a county has reached this rate limitation, all countywide taxes and the highest combined rate imposed by a city within the county are counted towards the county's rate limit. For example, if a county imposes three 0.5% countywide taxes and two cities within the county each impose a 0.5% tax, the combined rate in those two cities would be 2%. In such a circumstance, the two cities could not impose another TUT, and the county could not impose another countywide TUT, absent special authority to exceed the rate limitation.

Prior to 2003, cities lacked the ability to place TUTs 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, which imposed the uniform 2% countywide cap.

AB 464 (Mullin) of 2015 would have increased the maximum combined rate of all TUTs that may be levied by authorized entities within a county from 2% to 3%. This bill was vetoed by Governor Brown 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."

State law allows cities, counties, and specified special districts to increase the sales and use tax applicable in their jurisdiction, also known as district or transactions and use taxes. As of April 1, 2025, local agencies impose 478 district taxes for general or special purposes: 401 imposed citywide, 71 imposed countywide, and six imposed in unincorporated county areas. Generally, local agencies impose these taxes throughout the entire area of a single county, the entire unincorporated area within a single county, or a single incorporated city. However, three transportation operators in the Bay Area have regional district taxes:

• 1. BART, which covers Alameda, Contra Costa, and San Francisco.
     
  2. The Peninsula Corridor Joint Powers Board (CalTrain), which covers San Francisco, San Mateo, and Santa Clara counties.
     
  3. The Sonoma-Marin Rail Transit District, which includes Sonoma and Marin counties.

1. AB 1413 and AB 1052. AB 1413 (Gloria), Chapter 758, Statutes of 2019, authorized local transportation authorities in Placer, Solano, and San Diego Counties to levy a TUT in a portion of its jurisdiction with voter approval. Specifically, AB 1413 did the following:
   1. Authorized the Placer County Transportation Planning Agency to impose a TUT applicable to the entirety, or a portion, of the County of Placer in conformity with TUT Law at a rate of no more than 1% if certain requirements are met, including a requirement that the ordinance proposing the TUT be submitted to, and approved by, the voters.
   2. Provided the same abovementioned TUT authority to the Solano Transportation Improvement Agency for certain portions of Solano County.
   3. Authorized the San Diego Regional Transportation Commission, San Diego Association of Governments, San Diego Metropolitan Transit System and the North County Transit District to levy a TUT in a portion of their jurisdictions, with voter approval, and required revenues derived from the TUT to be spent only on transportation and transit infrastructure and services.

A similar bill, AB 1324 (Gloria) of 2018 would have authorized a local transportation authority, which has existing TUT authority, to levy a TUT in any portion of its jurisdiction, with voter approval. This bill was held on the Assembly Floor.

AB 1052 (McCarty), Chapter 674, Statutes of 2023, provided similar TUT authority to the Sacramento Regional Transit District. To date, the authority provided by AB 1413 and AB 1052 have not be successfully used by the respective agencies.

1. Author’s Statement. According to the author, “AB 1223 gives communities in Sacramento County the ability to take control of their transportation future. Right now, the Sacramento Transportation Authority (STA) can only propose sales tax measures for the entire county, even when just one part of the county is ready to move forward. This bill changes that. It gives the Authority the flexibility to propose transportation funding measures in specific areas, and ensures that revenue stays in the communities that vote for it.

“This district bill is about making government more responsive. It allows local leaders and residents to make transportation investments that reflect their priorities, whether that’s safer streets, better bike and pedestrian infrastructure, or projects that reduce traffic and improve air quality.

“AB 1223 also updates STA’s authority so it can support more modern solutions, like shared mobility, reducing environmental impact, and transit-oriented development. These are the kinds of projects that help us meet sustainability goals while improving everyday quality of life.”

1. Bill Summary. This bill would designate STA as a RTA and authorize it to submit an application to the CTC to develop and operate high-occupancy toll lanes or other toll facilities. This bill would also specify that allowable expenditure categories for STA must include projects that support infill or transit-oriented development and would reduce VMT, including active transportation projects and projects related to utility facilities and infrastructure, among others. Lastly, this bill would give STA the authority to impose a TUT in a geographic area that comprises less than the total area of Sacramento County, including its cities, as specified. STA is the sponsor of this bill.
2. Policy Considerations. The Committee may wish to consider the following:
   1. Pick and Choose. Cities, counties, and special districts generally apply taxes evenly across their jurisdictions. This bill departs from this principle to allow STA to impose taxes on some residents, but not others. Two-thirds voter approval can be difficult to obtain in some areas, especially when including citizens in unincorporated areas who generally rely mostly on cars for transportation. However, transportation needs do not necessarily align evenly with jurisdictional boundaries. While the bill requires STA to spend resulting tax revenues within the area subject to the tax, the Committee may wish to consider if residents in untaxed areas may unfairly benefit from taxes collected in other areas.
   2. Tolling Authority. CARTA was created in 2024 to oversee and regulate toll lanes in the Sacramento Region. As currently written, this bill would allow STA to apply to the CTC to also develop and operate high-occupancy toll lanes or other toll facilities. Given a regional JPA already exists to manage toll lanes in the region, the Committee may wish to consider if the same authority should also be given to STA, potentially allowing it to develop and manage toll lanes only within Sacramento County, or if this could lead to overlapping and potentially conflicting authorities.
3. Committee Amendments. In order to respond to the policy consideration in b), above, the Committee may wish to amend this bill as follows:

180302. For purposes of this chapter, unless the context requires otherwise, the following definitions apply:

(a) “Active transportation” means infrastructure facilities or services that encourage increased use of active modes of transportation, such as biking and walking.

(b) “Authority” means the Sacramento Transportation Authority created in 1988 pursuant to Chapter 2 (commencing with Section 180050).

(c) “CARTA” means the Capital Area Regional Tolling Authority.

(c) “Expenditure plan” means a county transportation expenditure plan adopted in connection with a transactions and use tax ordinance pursuant to Section 180206.

(d) “Governing board” means the governing board of the authority.

(e) “Member” or “member of the governing board” means an individual county supervisor or city council member who has been appointed to the governing board, or their alternate.

(f) “Ordinance” means a transactions and use tax ordinance authorized pursuant to Chapter 5 (commencing with Section 180200).

180303.(a) The authority is hereby designated as a “regional transportation agency” for purposes of subdivision (k) of Section 149.7 of the Streets and Highways Code.

(b) If submitting an application to the California Transportation Commission to develop and operate high-occupancy toll lanes or other toll facilities pursuant to Section 149.7 of the Streets and Highways Code, the authority shall include in its application information from other regional transportation agencies in the County of Sacramento regarding existing or planned high-occupancy toll lanes or other toll facilities.

180303 (a) The Authority is authorized to issue bonds to finance costs of high-occupancy toll lanes or other toll facilities within Sacramento County approved by the California Transportation Commission pursuant to Section 149.7 of the Streets and Highways Code, including without limitation working capital costs, costs of issuance and credit enhancement, capitalized interest and all reserves and other fees or costs related to the bonds, which bonds may be payable from toll revenue or any other funds lawfully available to the  Authority for such purposes, including sales tax revenue, development impact fees, or state and federal grant funds.

(b) Before the authority issues bonds payable from toll revenue for a toll facility operated by CARTA, both of the following shall occur:

(1) The authority shall enter into an agreement with CARTA regarding the application of toll revenue to pay for bonds issued by the authority.

(2) The governing board of CARTA shall review and approve a toll facility expenditure plan.

(c) The bonds may be sold pursuant to the terms and conditions set forth in a resolution adopted by the governing board of the Sacramento Transportation Authority. Bonds shall be issued pursuant to a resolution adopted by a two-thirds vote of the governing board, which resolution shall state the maximum principal amount of the bonds, the maximum term of the bonds and the maximum rate of interest to be paid on the bonds, not to exceed the maximum rate permitted by law.  Any bond issued pursuant to this paragraph shall not constitute a debt or liability of the state and shall contain on its face a statement to the following effect:

“Neither the full faith and credit nor the taxing power of the State of California is pledged to the payment of principal or interest of this bond.”

(d) The maximum rate of interest payable upon the bonds shall not exceed the maximum rate specified in Section 53531 of the Government Code. The rate may be either fixed or variable and shall be payable at the times and in the manner specified in the resolution.

1. Arguments in Support. According to STA, “This bill is a crucial step toward modernizing the Sacramento Transportation Authority (STA) by establishing a distinct code section for our agency within the Public Utilities Code. AB 1223 will provide the necessary flexibility to address modern transportation priorities and funding mechanisms in the Sacramento region.

“Since the passage of Measure A in 1988, STA has operated under the Local Transportation Authority and Improvement Act (LTAIA), which has remained largely unchanged since its enactment in 1987. As a result, STA faces several limitations in meeting today’s evolving transportation demands. The current law primarily focuses on traditional roadway infrastructure, leaving little room for innovative and sustainable solutions such as passenger rail, complete streets, active transportation, bikeways, and Intelligent Transportation Systems.

“AB 1223 directly addresses these challenges by creating a separate statutory section for STA, allowing the Authority to:

• 1. Expand funding options for diverse transportation solutions, including sustainable and active transportation projects.
     
  2. Adapt its statutory authority over time to respond to emerging transportation needs and technologies.
     
  3. Clarify implied powers within the LTAIA to improve operational efficiency and coordination with regional transportation initiatives.
     
  4. Enhance its ability to leverage toll financing as a complementary funding source alongside sales tax revenues.

“The modernization of STA’s statutory framework is essential to ensure that Sacramento can effectively address congestion, mobility, and sustainability goals. By supporting AB 1223, the Legislature will empower STA to develop a more flexible, innovative, and forward-thinking transportation network that benefits residents, businesses, and visitors alike.”

1. Arguments in Opposition. According to the Howard Jarvis Taxpayers Association, “AB 1223 would empower the Sacramento Transportation Authority (STA) to develop and operate toll facilities in addition to its existing power to impose a transactions and use tax for transportation purposes, subject to voter approval. Further, AB 1223 would expand the allowable expenditure categories for revenues from such a tax to widely sweep in “infrastructure” and infill development needs that could even include costly stormwater and wastewater facilities, placing demands on the revenue for projects that go far beyond core transportation needs.
   
   AB 1223 would also allow STA to impose a transactions and use tax in a geographic area of its choosing that is less than the total area of the County of Sacramento. This potentially allows for the intentional disenfranchisement of county residents who are likely to oppose the tax, but who will have to pay it when they make purchases in the nearby geographic area. Sacramento County residents, like all Californians, are struggling with the high cost of living and would be further harmed by costly tolls and higher taxes.
2. Double-Referral. This bill is double-referred to the Assembly Committee on Transportation.

REGISTERED SUPPORT / OPPOSITION:

Support

Sacramento Transportation Authority [SPONSOR]

Sacramento County

Sacramento Regional Transit District

Opposition

Howard Jarvis Taxpayers Association

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958