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TO:
FROM:
BY:
SUBJECT:
AGENDA
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Staff Report
THE HONORABLE CITY COUNCIL
JOSE E. PULIDO, CITY MANAGE
LAURA VALDIVIA, EXECUTIVE ASSISTANT TO THE CITY MANAGE
DATE: SEPTEMBER 21, 2010
RESOLUTION IN SUPPORT OF PROPOSITION 22 "THE LOCAL
TAXPAYER, PUBLIC SAFETY AND TRANSPORTATION PROTECTION
ACT OF 2010", APPEARING ON THE NOVEMBER 2010 STATEWIDE
BALLOT
SUMMARY
The City Council is requested to adopt the attached Resolution supporting Proposition
22, the Local Taxpayer, Public Safety and Transportation Protection Act of 2010, and
direct staff to forward the Resolution to the League of California Cities.
BACKGROUND
1. In 2004 and 2006, California voters amended the Constitution to limit the State's
authority to use local funds to balance the State's budget; however, it did not
eliminate the State's authority to temporarily borrow or redirect city, county or
special district funds.
2. In FY 2009-10, the Legislature borrowed $2 billion in property taxes from local
,governments; $2.05 billion Statewide in local redevelopment funds; and shifted $1
billion in transit funding away from transit agencies.
3. In FY 2009-10, approximately $534,422 in property taxes was borrowed from the
City of Temple City and $330,160 was taken from the Temple City Community
Redevelopment Agency (CRA). It is anticipated that an additional $67,910 will be
taken in CRA funds in FY 2010-11.
4. In October 2009, the Local Taxpayer, Public Safety, and Transportation Act of
2010 was filed with the California Attorney General for placement on the California
November 2010 Statewide ballot.
5. In April 2010, 1.1 million signatures were submitted to county elections offices
Statewide to qualify the measure for the November 2010 ballot.
6. In July 2010, it was announced by the Secretary of State that the measure had
qualified for the November 2010 ballot and would appear as Proposition 22.
City Council
September 21, 2010
Page 2
ANALYSIS
The State of California is once again facing a significant fiscal shortfall. The State has
and will most likely continue to rely on the borrowing and taking of monies from local
governments unless an action is taken to further limit the State's ability to redirect local
funds for purposes of balancing California's budget.
In 2004 and 2006, California's voters amended the Constitution to limit the State's
authority to use local funds to balance the State's budget. These new provisions in the
Constitution, however, did not eliminate State authority to temporarily borrow or redirect
some city, county, and special district funds. In addition, these earlier propositions did
not eliminate the State's authority to redirect local redevelopment agency revenues.
In FY 2009-10, the Legislature borrowed approximately $2 billion in property taxes from
local governments, despite no clear path to repay these funds; Statewide it took $2.05
billion in local redevelopment funds; and shifted $1 billion in transit funding away from
local transit agencies. The courts have since ruled the transit shift unconstitutional.
However, the "gas -tax swap" in the FY 2010-2011 budget could result in the annual loss
of $600 million of transit funding.
According to the League of California Cities, the State Legislature borrowed $534,422
in property taxes from the City of Temple City during FY 2009-10. In addition, the State
took $330,160 from the Temple City Community Redevelopment Agency (CRA) in FY
2009-10 and plans to take another $67,910 in FY 2010-11. Unless the California
Constitution is amended, it is conceivable that the State could continue to raid City of
Temple City funding sources for years to come.
In October 2009, a coalition of local government, transportation, and transit advocates
filed the Local Taxpayer, Public Safety, and Transportation Act of 2010 with the
California Attorney General for potential placement on California's November 2010
Statewide ballot. In April 2010, the coalition submitted approximately 1.1 million
signatures to county elections offices throughout the State to qualify the measure for
the November ballot. In July, it was announced by Secretary of State Debra Bowen
that the Local Taxpayer, Public Safety, and Transportation Act of 2010 would appear on
the California November 2010 Statewide ballot as Proposition 22.
Specifically, Proposition 22, the Local Taxpayer, Public Safety, and Transportation Act
of 2010, covers the following provisions:
• Protects Locally Imposed Taxes such as Utility Users Tax, Transient Occupancy, and
Sales Taxes: The measure prevents the Legislature from taking or directing how
these local taxes may be spent.
i Property Tax Borrowing: The measure repeals the State's authority to borrow local
property taxes.
City Council
September 21, 2010
Page 3
• Reallocation of Property Tax or Vehicle License Fees: The measure prohibits the
State's ability to reallocate these revenues to pay off State mandates.
• Borrowing or Stealing Local Highway User Tax Act (HUTAJ: The measure provides
protection to local highway user taxes and requires hearings and study before State
and local shares are changed.
• Borrowing or Stealing Proposition 42 Gas Tax: The measure also provides the same
protection as HUTA taxes.
• Borrowing or Stealing Public Transit Account (PTA) Funds: The measure restricts
the use of PTA funds only for transportation planning and mass transportation
purposes and requires "Spillover" sales tax to be deposited in transit accounts.
• Redevelopment Agency (RDA) funds: The measure prohibits taking, borrowing, or
directing the spending of RDA funds.
• Enforcement: The measure provides a remedy requiring the State to re -pay funds
taken illegally if a court so finds.
CONCLUSION
A substantial number of cities, local government organizations, public safety
organizations, transportation and transit organizations, labor organizations, water
agencies, environmental, taxpayer, and community, and business groups have already
pledged support for this initiative.
The City Council's adoption of a resolution in support of Proposition 22, the Local
Taxpayer, Public Safety, and Transportation Act of 2010, and voter approval of this
ballot initiative will further prevent State politicians from seizing, diverting, shifting,
borrowing, transferring, suspending, or otherwise taking or interfering with tax revenues
dedicated to funding local government services provided by municipalities, counties and
special districts.
FISCAL IMPACT
No fiscal impact.
ATTACHMENT(S)
1. Resolution in Support of Proposition 22
2. Ballot Measure Text
ATTACHMENT 1
RESOLUTION NO. 10-4697
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMPLE
CITY CALIFORNIA, IN SUPPORT OF THE LOCAL TAXPAYER,
PUBLIC SAFETY, AND TRANSPORTATION PROTECTION ACT OF
2010
THE CITY COUNCIL OF THE CITY OF TEMPLE CITY DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
WHEREAS, California voters have repeatedly and overwhelmingly passed separate ballot measures to
stop State raids of local government funds, and to dedicate the taxes on gasoline to fund transportation
improvement projects; and
WHEREAS, these local government funds are critical to provide the police and fire, emergency
response, parks, libraries, and other vital local services that residents rely upon every day, and gas tax funds are
vital to maintain and improve local streets and roads, to make road safety improvements, relieve traffic
congestion, and provide mass transit; and
WHEREAS, despite the fact that voters have repeatedly passed measures to prevent the State from
taking these revenues dedicated to funding local government services and transportation improvement projects,
the State Legislature has seized and borrowed billions of dollars in local government and transportation funds in
the past few years; and
WHEREAS, this year's borrowing and raids of local government, redevelopment and transit funds, as well
as previous, ongoing raids of local government and transportation funds, have led to severe consequences, such
as layoffs of police, fire and paramedic first responders, fire station closures, stalled economic development,
healthcare cutbacks, delays in road safety improvements, public transit fare increases and cutbacks in public
transit services; and
WHEREAS, the State has continued to ignore the will of the voters, and current law provides no
penalties when state politicians take or borrow these dedicated funds; and
WHEREAS, a coalition of local government, transportation and transit advocates recently filed a
constitutional amendment with the California Attorney General, called the Local Taxpayer, Public Safety, and
Transportation Protection Act of 2010, for potential placement on California's November 2010 statewide ballot;
and
WHEREAS, approval of this ballot initiative would close loopholes and change the Constitution to further
prevent the State from seizing, diverting, shifting, borrowing, transferring, suspending or otherwise taking or
interfering with tax revenues dedicated to funding local government services, including redevelopment, or
dedicated to transportation improvement projects and mass transit,
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF TEMPLE CITY:
SECTION 1. formally endorses Proposition 22, the Local Taxpayer, Public Safety, and Transportation
Protection Act of 2010 a proposed constitutional amendment; and
SECTION 2. authorizes the listing of the City of Temple City in support of the Local Taxpayer, Public
Safety, and Transportation Protection Act of 2010; and
SECTION 3. instruct staff to fax a copy of this resolution to campaign offices at (916) 442-3510.
SECTION 4. The City Clerk shall certify to the passage and adoption of this Resolution and shall enter
the same in the Book of Original Resolutions.
Resolution No. 10-4697
Page 2
PASSED, APPROVED AND ADOPTED on this 21st day of September 2010.
Mayor
ATTEST:
City Clerk
I hereby certify that the foregoing resolution, Resolution No. 10-4697, was adopted by the City Council of
the City of Temple City at a regular meeting held on the 21St day of September 2010 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
City Clerk
ATTACHMENT 2
October 26, 2009
VIA PERSONAL DELIVERY
The Honorable Edmund G. Brown, Jr.
Attorney General
1300 I Street
Sacramento, CA 95814
Attention: Krystal Paris, Initiative Coordinator
0 9 -0 0 63
;Arndt. #t Ns
.(xECEI1/
OCT 2 6 2009
INITIATIVE COORDINATOR
ATTORNEY GENERAL'S OFFICE
Re: Request to Make Non -Substantive Amendments to Initiative No. 09-0063
Dear Mr. Brown:
Attached are two Amendments to Initiative No. 09-0063, filed October 20, 2009.
First, the Initiative designates two sections, the Findings and Declarations and
Statement of Purpose, as "Section Two." The first amendment renumbers the
Statement of Purpose as "Section Two and One -Half." Second, in Section 7 of the
Initiative, the numbering of the subdivisions in Cal. Const. Art. XIX B, section 2 jumps
from "(d)" to "(f)" without including a subdivision "(e)." The second amendment
renumbers subdivisions (f) through (i) of section 2 of Article XIX B as subdivisions (e)
through (h) so that a subdivision (e) is included between subdivisions (d) and (f). The
proponents believe these changes are non -substantive.
Thank you for your assistance.
Enclosure: Proposed Initiative
PROPONENTS:
Joshua Shaw
Christopher K.
Jaynes N. Earp
McKenzie
Sincerely,
.09-0063
Arndt. id -NS
Section One. Title.
This act shall be known and may be cited as the "Local Taxpayer, Public Safety, and
Transportation Protection Act of 2010."
Section Two. Findings and Declarations.
The people of the State of California find and declare that:
(a) In order to maintain local control over local taxpayer funds and protect vital services
like local fire protection and 9-1-1 emergency response, law enforcement, emergency room
care, public transit, and transportation improvements, California voters have repeatedly and
overwhelmingly voted to restrict state politicians in Sacramento from taking revenues
dedicated to funding local government services and dedicated to funding transportation
improvement projects and services.
(b) By taking these actions, voters have acknowledged the critical importance of
preventing State raids of revenues dedicated to funding vital local government services and
transportation improvement projects and services.
(c) Despite the fact that voters have repeatedly passed measures to prevent the State
from taking these revenues dedicated to funding local government services and transportation
improvement projects and services, state politicians in,Sacramento have seized and borrowed
billions of dollars in local government and transportation funds.
(d) In recent years, state politicians in Sacramento have specifically:
(1) Borrowed billions of dollars in local property tax revenues that would otherwise be
used to fund local police, fire and paramedic response and other vital local services;
(2) Sought to take and borrow billions of dollars in gas tax revenues that voters have
dedicated to on -going transportation projects and tried to use them for non -transportation
purposes;
(3) Taken local community redevelopment funds on numerous occasions and used them
for unrelated purposes;
(4) Taken billions of dollars from local public transit like bus, shuttle, light -rail and
regional commuter rail, and used these funds for unrelated state purposes.
(e) The continued raiding and borrowing of revenues dedicated to funding local
government services and dedicated to funding transportation improvement projects can cause
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severe consequences, such as layoffs of police, fire and paramedic first responders, fire station
closures, healthcare cutbacks, delays in road safety improvements, public transit fare increases
and cutbacks in public transit services.
(f) State politicians in Sacramento have continued to ignore the will of the voters, and
current law provides no penalties when state politicians take or borrow these dedicated funds.
(g) It is hereby resolved, that with approval of this ballot initiative, state politicians in
Sacramento shall be prohibited from seizing, diverting, shifting, borrowing, transferring,
suspending or otherwise taking or interfering with tax revenues dedicated to funding local
government services or dedicated to transportation improvement projects and services.
Section Two and One -Half. Statement of Purpose.
The purpose of this measure is to conclusively and completely prohibit state politicians
in Sacramento from seizing, diverting, shifting, borrowing, transferring, suspending or
otherwise taking or interfering with revenues that are dedicated to funding services provided
by local government or funds dedicated to transportation improvement projects and services.
Section Three. Section 24 of Article XIII of the California Constitution is hereby amended to
read as follows:
(a) The Legislature may not impose taxes for local purposes but may authorize local
governments to impose them,
(b) The Legislature may not reallocate, transfer, borrow, appropriate, restrict the use
of, or otherwise use the proceeds of any tax imposed or levied by a local government solely for
the local government's purposes.
(c) Money appropriated from state funds to a local government for its local purposes
may be used as provided by law.
jj Money subvened to a local government under Section 25 may be used for state or
local purposes.
Section Four. Section 25.5 of Article XIII of the California Constitution is hereby amended to
read as follows:
SEC. 25.5. (a) On or after November 3, 2004, the Legislature shall not enact a statute to
do any of the following:
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(1) (A) Except as otherwise provided in subparagraph (B), modify the manner in which
ad valorem property tax revenues are allocated in accordance with subdivision (a) of Section 1
of Article XIII A so as to reduce for any fiscal year the percentage of the total amount of ad
valorem property tax revenues in a county that is allocated among all of the local agencies in
that county below the percentage of the total amount of those revenues that would be
allocated among those agencies for the same fiscal year under the statutes in effect on
November 3, 2004. For purposes of this subparagraph, "percentage" does not include any
property tax revenues referenced in paragraph (2).
(B)-Begicming with the 2008 09 In the 2009-10 fiscal year only, and except as otherwise
provided in subparagraph (C), subparagraph (A) may be suspended for a that fiscal year if all of
the following conditions are met:
(i) The Governor issues a proclamation that declares that, due to a severe state fiscal
hardship, the suspension of subparagraph (A) is necessary.
(ii) The Legislature enacts an urgency statute, pursuant to a bill passed in each house of
the Legislature by rollcall vote entered in the journal, two-thirds of the membership concurring,
that contains a suspension of subparagraph (A) for that fiscal year and does not contain any
other provision.
(iii) No later than the effective date of the statute described in clause (11), a statute is
enacted that provides for the full repayment to local agencies of the total amount of revenue
losses, including interest as provided by law, resulting from the modification of ad valorem
property tax revenue allocations to local agencies. This full repayment shall be made not later
than the end of the third fiscal year immediately following the fiscal year to which the
modification applies.
period of 10 consecutive fi , ins with the first fiscal y ar for which
subparagraph (A) is suspended.
(ii) Subparagraph (A) shall net be suspended during any fiscal year if the full repayment
raph (B) has not yet
been completed.
amount that
the nevenuc and Taxation rode as that section read on November 3, 200'1, has not been paid
Blau o (ii) of subparagraph (Bi
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(C) A suspension of subparagraph (A) shall not result in a total ad valorem property
tax revenue loss to all local agencies within a county that exceeds 8 percent of the total amount
of ad valorem property tax revenues that were allocated among all local agencies within that
county for the fiscal year immediately preceding the fiscal year for which subparagraph (A) is
suspended.
(2)(A) Except as otherwise provided in subparagraphs (B) and (C), restrict the authority
of a city, county, or city and county to impose a tax rate under, or change the method of
distributing revenues derived under, the Bradley -Burns Uniform Local Sales and Use Tax Law set
forth in Part 1.5 (commencing with Section 7200) of Division 2 of the Revenue and Taxation
Code, as that law read on November 3, 2004. The restriction imposed by this subparagraph also
applies to the entitlement of a city, county, or city and county to the change in tax rate
resulting from the end of the revenue exchange period, as defined in Section 7203.1 of the
Revenue and Taxation Code as that section read on November 3, 2004.
(B) The Legislature may change by statute the method of distributing the revenues
derived under a use tax imposed pursuant to the Bradley -Burns Uniform Local Sales and Use
Tax Law to allow the State to participate in an interstate compact or to comply with federal law.
(C) The Legislature may authorize by statute two or more specifically identified local
agencies within a county, with the approval of the governing body of each of those agencies, to
enter into a contract to exchange allocations of ad valorem property tax revenues for revenues
derived from a tax rate imposed under the Bradley -Burns Uniform Local Sales and Use Tax Law.
The exchange under this subparagraph of revenues derived from a tax rate imposed under that
law shall not require voter approval for the continued imposition of any portion of an existing
tax rate from which those revenues are derived.
(3) Except as otherwise provided in subparagraph (C) of paragraph (2), change for any
fiscal year the pro rata shares in which ad valorem property tax revenues are allocated among
local agencies in a county other than pursuant to a bill passed in each house of the Legislature
by roll call vote entered in the journal, two-thirds of the membership concurring. The
Legislature shall not change the pro rata shares of ad valorem property tax pursuant to this
paragraph, nor change the allocation of the revenues described in Section 15 of Article XI, to
reimburse a local government when the Legislature or any state agency mandates a new
program or higher level of service on that local government.
(4) Extend beyond the revenue exchange period, as defined in Section 7203.1 of the
Revenue and Taxation Code as that section read on November 3, 2004, the suspension of the
authority, set forth in that section on that date, of a city, county, or city and county to impose a
sales and use tax rate under the Bradley -Burns Uniform Local Sales and Use Tax Law.
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(5) Reduce, during any period in which the rate authority suspension described in
paragraph (4) is operative, the payments to a city, county, or city and county that are required
by Section 97.68 of the Revenue and Taxation Code, as that section read on November 3, 2004.
(6) Restrict the authority of a local entity to impose a transactions and use tax rate in
accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of
Division 2 of the Revenue and Taxation Code), or change the method for distributing revenues
derived under a transaction and use tax rate imposed under that law, as it read on November 3,
2004.
(7) Require a community redevelopment agency (A) to pay, remit, loan or otherwise
transfer, directly or indirectly, taxes on ad valorem real property and tangible personal property
allocated to the agency pursuant to Section 16 of Article XVI to or for the benefit of the State,
any agency of the State, or any jurisdiction; or (B) to use, restrict, or assign a particular purpose
for such taxes for the benefit of the State, any agency of the State, or any jurisdiction, other
than (i) for making payments to affected taxing agencies pursuant to Sections 33607.5 and
33607.7 of Health and Safety Code or similar statutes requiring such payments, as those
statutes read on January 1, 2008; or (ii) for the purpose of increasing, improving, and preserving
the supply of low and moderate income housing available at affordable housing cost.
(b) For purposes of this section, the following definitions apply:
(1) "Ad valorem property tax revenues" means all revenues derived from the tax
collected by a county under subdivision (a) of Section 1 of Article XIII A, regardless of any of this
revenue being otherwise classified by statute.
(2) "Local agency" has the same meaning as specified in Section 95 of the Revenue and
Taxation Code as that section read on November 3, 2004.
(3) "Jurisdiction" has the same meaning as specified in Section 95 of the Revenue and
Taxation Code as that section read on November 3, 2004.
Section Five. Article XIX of the California Constitution is hereby amended to read as follows:
SECTION 1. The Legislature shall not borrow revenue from the Highway Users Tax
Account, or its successor, and shall not use these revenues for purposes, or in ways, other than
those specifically permitted by this article.
SEC. 2. Revenues from taxes imposed by the State on motor vehicle fuels for use in
motor vehicles upon public streets and highways, over and above the costs of collection and
any refunds authorized by law, shall be deposited into the Highway Users Tax Account (Section
2100 of the Streets and Highways Code) or its successor, which is hereby declared to be a trust
5
fund, and shall be allocated monthly in accordance with Section 4, and shall used solely for the
following purposes:
(a) The research, planning, construction, improvement, maintenance, and operation
of public streets and highways (and their related public facilities for nonmotorized traffic),
including the mitigation of their environmental effects, the payment for property taken or
damaged for such purposes, and the administrative costs necessarily incurred in the foregoing
purposes.
(b) The research, planning, construction, and improvement of exclusive public mass
transit guideways (and their related fixed facilities), including the mitigation of their
environmental effects, the payment for property taken or damaged for such purposes, the
administrative costs necessarily incurred in the foregoing purposes, and the maintenance of the
structures and the immediate right-of-way for the public mass transit guideways, but excluding
the maintenance and operating costs for mass transit power systems and mass transit
passenger facilities, vehicles, equipment, and services.
SEC. 2. SEC. 3. Revenues from fees and taxes imposed by the State upon vehicles or
their use or operation, over and above the costs of collection and any refunds authorized by
law, shall be used for the following purposes:
(a) The state administration and enforcement of laws regulating the use, operation, or
registration of vehicles used upon the public streets and highways of this State, including the
enforcement of traffic and vehicle laws by state agencies and the mitigation of the
environmental effects of motor vehicle operation due to air and sound emissions.
(b) The purposes specified in Section 1 2 of this article.
SEC. 3. SEC. 4. (a) Except as provided in subdivision (b), Tthe Legislature sh rl provide
for the allocation of the rcvcn-ues to be used for the purposes specified in Section 1 of this
article in a manner which enures the continuance of existing statutoryallacatien formulas in
effect on June 30, 2009 which allocate the revenues described in Section 2 to fe-r cities,
counties, and areas of the State shall remain in effect.
(b) The Legislature shall not modify the statutory allocations in effect on June 30, 2009
unless and until both of the following have occurred:
(1) it The Legislature determines in accordance with this subdivision that another basis
for an equitable, geographical, and jurisdictional distribution exists; provided that, until :such
ti-eteRzhi-aatioe is made, any use of such revenues for pur-poses specified in subdivision (b) of
Section 1 of th-i-c a-r-t-i-cie by er in a city, ce ty, or ar-ea of the State shall be included within the
ex.ssting_stat, story allocations to, or for nditure in, that city, county, or ar a. Any future
statutory revisions shall (A) provide for the allocation of these revenues, together with other
6
similar revenues, in a manner which gives equal consideration to the transportation needs of all
areas of the State and all segments of the population; and (B) be consistent with the orderly
achievement of the adopted local, regional, and statewide goals for ground transportation in
local general plans, regional transportation plans, and the California Transportation Plan.TT
(2) The process described in subdivision (c) has been completed.
(c)The Legislature shall not modify the statutory allocation pursuant to subdivision (b)
until all of the following have occurred:
(1) The California Transportation Commission has held no less than four public
hearings in different parts of the State to receive public input about the local and regional goals
for ground transportation in that part of the Statei
(2) The California Transportation Commission has published a report describing the
input received at the public hearings and how the modification to the statutory allocation is
consistent with the orderly achievement of local, regional, and statewide goals for ground
transportation in local general plans, regional transportation plans, and the California
Transportation Plan; and
(3) Ninety days have passed since the publication of the report by the California
Transportation Commission.
(d) A statute enacted by the Legislature modifying the statutory allocations must be by
a bill passed in each house of the Legislature by roll call vote entered in the journal, two-thirds
of the membership concurring, provided that the bill does not contain any other unrelated
provision.
(e) The revenues allocated by statute to cities, counties, and areas of the State
pursuant to this article may be used solely by the entity to which they are allocated, and solely
for the purposes described in Sections 2, 5, or 6 of this article.
(f) The Legislature may not take any action which permanently or temporarily does
any of the following: (1) changes the status of the Highway Users Tax Account as a trust fund;
(2) borrows, diverts, or appropriates these revenues for purposes other than those described
in subdivision (e); or (3) delays, defers, suspends, or otherwise interrupts the payment,
allocation, distribution, disbursal, or transfer of revenues from taxes described in Section 2 to
cities, counties, and areas of the State pursuant to the procedures in effect on June 30, 2009.
SEC. 1. SEC. 5. Revenues allocated pursuant to Section 4 4 may not be expended for
the purposes specified in subdivision (b) of Section -I 2, except for research and planning, until
such use is approved by a majority of the votes cast on the proposition authorizing such use of
7
such revenues in an election held throughout the county or counties, or a specified area of a
county or counties, within which the revenues are to be expended. The Legislature may
authorize the revenues approved for allocation or expenditure under this section to be pledged
or used for the payment of principal and interest on voter -approved bonds issued for the
purposes specified in subdivision (b) of Section 1 2.
SEC. 5. SEC. 6. j The Legislature may aIIuho ize Uu+p to 25 percent of the revenues
available for expenditure ay an y city or_c—o nT r by the State, allocated to the State pursuant
to Section 4 for the purposes specified in subdivision (a) of Section 12 of this article may be
pledged or used by the State, upon approval by the voters and appropriation by the Legislature,
for the payment of principal and interest on voter -approved bonds for such purposes issued ty
the State on and after November 2, 2010 for such purposes.
(b) Up to 25 percent of the revenues allocated to any city or county pursuant to
Section 4 for the purposes specified in subdivision (a) of Section 2 of this article may be pledged
or used only by any city or county for the payment of principal and interest on voter -approved
bonds issued by that city or county for such purposes.
SEC. 6. The tax revenues designated under this article may be loaned to the General
rnd only if one of the following conditions is imposed:
(a) That any amount loaned is to be repaid in full to the fund from which it was
bar -roved during the sane fiscal year in which the loan was made, except that repayment may
e d lay d , ali-1 ^ elate not m „ tc n -30 d -,y after th„ date of enactment of the budget bill for
the subs cgucnt fiscal
borrowed within three fiscal years from the date on wh}c ," l n mad„ -,rd o ie-of the
following has occurred:
(1) The Governor has proclaimed a state of emergency and declares that the
emergency will result in a significant negative fiscal impact to the General Fund.
submitted by the Governor pursuant to Section 12 of Article lV in the current fiscal year.
(c) Nothing in this section prohibits the Legislature from authorizing, by statute, loans
to local transportation agencies, cities, counties, or cities and counties, from funds that are
}ectt to this article, for the purposes authorized under this article. Any loan authorized as
8
described by this subdivision shall be repaid, with interest at the rate paid on money in the
pool; d Mon`y-k vestment Account cessor to that account, during the period of time
af-er_the dateof which the to n ,. .. .,d.
SEC. 7. lithe Legislature reduces or repeals the taxes described in Section 2 and
adopts an alternative source of revenue to replace the moneys derived from those taxes, the
replacement revenue shall be deposited into the Highway Users Tax Account, dedicated to the
purposes listed in Section 2, and allocated to cities, counties, and areas of the State pursuant to
Section 4. All other provisions of this article shall apply to any revenues adopted by the
Legislature to replace the moneys derived from the taxes described in Section 2.
SEC. 7. SEC. 8. This article shall not affect or apply to fees or taxes imposed pursuant
to the Sales and Use Tax Law or the Vehicle License Fee Law, and all amendments and additions
now or hereafter made to such statutes.
SEC. 8. SEC. 9. Notwithstanding Sections 1 and 2 and 3 of this article, any real
property acquired by the expenditure of the designated tax revenues by an entity other than
the State for the purposes authorized in those sections, but no longer required for such
purposes, may be used for local public park and recreational purposes.
SEC. 9. SEC. 10. Notwithstanding any other provision of this Constitution, the
Legislature, by statute, with respect to surplus state property acquired by the expenditure of
tax revenues designated in Sections 1 and 2 and 3 and located in the coastal zone, may
authorize the transfer of such property, for a consideration at least equal to the acquisition cost
paid by the sState to acquire the property, to the Department of Parks and Recreation for state
park purposes, or to the Department of Fish and Game for the protection and preservation of
fish and wildlife habitat, or to the Wildlife Conservation Board for purposes of the Wildlife
Conservation Law of 1947, or to the State Coastal Conservancy for the preservation of
agricultural lands.
As used in this section, "coastal zone" means "coastal zone" as defined by Section
30103 of the Public Resources Code as such zone is described on January 1, 1977.
Section Six. Article XIX A of the California Constitution is hereby amended to read as follows:
SECTION 1. (a) The Legislature shall not borrow revenues from the Public
Transportation Account, or any successor account, and shall not use these revenues for
purposes, or in ways, other than those specifically permitted by this article.
j The funds in the Public Transportation Account in the State Transportation Fund,
or any successor account, is a trust fund. The Legislature may not change the status of the
Public Transportation Account as a trust fund. Funds in the Public Transportation Account may
9
not be loaned or otherwise transferred to the General Fund or any other fund or account in the
State Treasury. may be loaned to the General Fund only if one of the followir.g.conditens s
imposed:
(c) All revenues specified in paragraphs (1) through (3), inclusive, of subdivision (a) of
Section 7102 of the Revenue and Taxation Code, as that section read an June 1, 2001, shall be
deposited no less than quarterly into the Public Transportation Account (Section 99310 of the
Public Utilities Code), or its successor. The Legislature may not take any action which
temporarily or permanently diverts or appropriates these revenues for purposes other than
those described in subdivision (d), or delays, defers, suspends, or otherwise interrupts the
quarterly deposit of these funds into the Public Transportation Account.
(d) Funds in the Public Transportation Account may only be used for transportation
planning and mass transportation purposes. The revenues described in subdivision (c) are
hereby continuously appropriated to the Controller without regard to fiscal years for allocation
as follows:
(1) Fifty percent pursuant to 5ubclivisions (a) through (f), inclusive, of Section 99315 of
the Public Utilities Code, as that section read on July 30, 2009.
(2) Twenty-five percent pursuant to subdivision (b) of Section 99312 of the Public
Utilities Code, as that section read on July 30, 2009.
(3) Twenty-five percent pursuant to subdivision (c) of Section 99312 of the Public
Utilities Code, as that section read on July 30, 2009.
(a) That any amount loaned is to be repaid in full to the account dur
y or in which thc loan was made, except that repayment may be delayed until a date not more
than 30 days after the date of enactment of the budget bill for the subsequent fiscal year.
(b) That any amount loaned is to be repaid in full to the account within three fiscal years
f the dat-e-e-n wFh+ch the loan was made and one of the following has occurred:
{1) The-Gover-ner has poclai-med a state of-em and declares that the emergency
projected by the Governor in a report to the Legislature in May of the-e-Brent-fiseal-year, is less
than the aggregate amount of General Fund revenues fer he prev'
in thc budget submitted by the Governor pursuant to Section 12 of Article IV in the current
fiscal year.
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(e) For purposes of paragraph (1) of subdivision (d), "transportation planning" means
only the purposes described in subdivisions c throw h ff inclusive of Section 99315 of the
Public Utilities Code, as that section read on July 30, 2009.
(f) For purposes of this article, "mass transportation," "public transit," and "mass
transit" have the same meaning as "public transportation." "Public transportation" means:
(1)(AI Surface transportation service provided to the general public, complementary
paratransit service provided to persons with disabilities as required by 42 U.S.C. 12143, or
similar transportation provided to people with disabilities or the elderly; (B) operated by bus,
rail, ferry, or other conveyance on a fixed route, demand response, or otherwise regularly
available basis; (C) generally for which a fare is charged; and (D) provided by any transit district,
included transit district, municipal operator, included municipal operator, eligible municipal
operator, or transit development board, as those terms were defined in Article 1 of Chapter 4
of Part 11 of Division 10 of the Public Utilities Code on January 1, 2009, a joint powers authority
formed to provide mass transportation services, an agency described in subdivision (f) of
Section 15975 of the Government Code, as that section read on January 1, 2009, any recipient
of funds under Sections 99260, 99260.7, 99275, or subdivision (c) of Section 99400 of the Public
Utilities Code, as those sections read on January 1, 2009, or a consolidated agency as defined in
Section 132353.1 of the Public Utilities Code, as that section read on January 1, 2009.
(2) Surface transportation service provided by the Department of Transportation
pursuant to subdivision (a) of Section 99315 of the Public Utilities Code, as that section read on
July 30, 2009.
(3) Public transit capital improvement projects, including those identified in subdivision
(b) of Section 99315 of the Public Utilities Code, as that section read on July 30, 2009.
SEC. 2. (a) As used in this section, a "local transportation fund" is a fund created under
Section 29530 of the Government Code, or any successor to that statute.
(b) All local transportation funds are hereby designated trust funds. The Legislature
may not change the status of local transportation funds as trust funds.
(c) A local transportation fund that has been created pursuant to law may not be
abolished.
(d) Money in a local transportation fund shall be allocated only by the local
government that created the fund, and only for the purposes authorized under Article 11
(commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code
and Chapter 4 (commencing with Section 99200) of Part 11 of Division 10 of the Public Utilities
Code, as those provisions existed on October 1, 1997. Neither the county nor the Legislature
11
may authorize the expenditure of money in a local transportation fund for purposes other than
those specified in this subdivision.
(e) This section constitutes the sole method of allocating, distributing, and using the
revenues in a local transportation fund. The purposes described in subdivision (d) are the sole
purposes for which the revenues in a local transportation fund may be used. The Legislature
may not enact a statute or take any other action which, permanently or temporarily, does any
of the following:
(1) Transfers, diverts, or appropriates the revenues in a local transportation fund for any
other purpose than those described in subdivision (d);
(2) Authorizes the expenditures of the revenue in a local transportation fund for any
other purpose than those described in subdivision (d);
(3) Borrows or loans the revenues in a local transportation fund, regardless of whether
these revenues remain in the Retail Sales Tax Fund in the State Treasury or are transferred to
another fund or account.
(f) The percentage of the tax imposed pursuant to section 7202 of the Revenue and
Taxation Code allocated to local transportation funds shall not be reduced below the
percentage that was transmitted to such funds during the 2008 calendar year. Revenues
allocated to local transportation funds shall be transmitted in accordance with Section 7204 of
the Revenue and Taxation Code and deposited into local transportation funds in accordance
with Section 29530 of the Government Code, as those sections read on June 30, 2009.
Section Seven. Article XIX B of the California Constitution is hereby amended to read as
follows:
SECTION 1. The Legislature shall not borrow revenues from the Transportation
Investment Fund, or its successor, and shall not use these revenues for purposes, or in ways,
other than those specifically permitted by this article.
SEC. 2. (a) For the 2003-04 fiscal year and each fiscal year thereafter, all monos
revenues that are collected during the fiscal year from taxes under the Sales and Use Tax Law
(Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code), or
any successor to that law, upon the sale, storage, use, or other consumption in this State of
motor vehicle fuel, as defined for purposes of the Motor Vehicle Fuel License Tax Law (Part 2
(commencing with Section 7301) of Division 2 of the Revenue and Taxation Code), and that are
al Fund of the State pursuant to that law, shall be transferred to
deposited into the Transportation Investment Fund or its successor, which is hereby created in
12
the State Treasury and which is hereby declared to be a trust fund. The Legislature may not
change the status of the Transportation Investment Fund as a trust fund.
(b)(1) For the 2003-04 to 2007-08 fiscal years, inclusive, moneys in the Transportation
Investment Fund shall be allocated, upon appropriation by the Legislature, in accordance with
Section 7104 of the Revenue and Taxation Code as that section read on March 6, 2002.
(2) For the 2008-09 fiscal year and each fiscal year thereafter, moneys in the
Transportation Investment Fund shall be allocated solely for the following purposes:
(A) Public transit and mass transportation. Moneys appropriated for public transit and
mass transportation shall be allocated as follows: (i) Twenty-five percent pursuant to
subdivision (b) of Section 99312 of the Public Utilities Code, as that section read on July 30,
2009; (ii) Twenty-five percent pursuant to subdivision (e) of Section 99312 of the Public Utilities
Code, as that section read on July 30, 2009; and (iii) Fifty percent for the purposes of
subdivisions (a) and (b) of Section 99315 of the Public Utilities Code, as that section read on July
30, 2009.
(B) Transportation capital improvement projects, subject to the laws governing the State
Transportation Improvement Program, or any successor to that program.
(C) Street and highway maintenance, rehabilitation, reconstruction, or storm damage
repair conducted by cities, including a city and county.
(D) Street and highway maintenance, rehabilitation, reconstruction, or storm damage
repair conducted by counties, including a city and county.
(c) For the 2008-09 fiscal year and each fiscal year thereafter, moneys in the
Transportation Investment Fund are hereby continuously appropriated to the Controller
without regard to fiscal years, which shall be allocated, upon appropriation by the Legislature,
as follows:
(A) Twenty percent of the moneys for the purposes set forth in subparagraph (A) of
paragraph (2) of subdivision (b).
(B) Forty percent of the moneys for the purposes set forth in subparagraph (B) of
paragraph (2) of subdivision (b).
(C) Twenty percent of the moneys for the purposes set forth in subparagraph (C) of
paragraph (2) of subdivision (b).
(D) Twenty percent of the moneys for the purposes set forth in subparagraph (0) of
paragraph (2) of subdivision (b).
13
(d) (1) Except as otherwise provided by paragraph (2), the transfer of revenues from the
pursuant to subdivision (a)
may b -e suspendd, in whole or in part, fora fiscal year if all -of the following conditions arc met:
4) The Goycrrior prochm-.i ion tha+declares that, due to a severe state file -al
hardship, the suspension of the transfer of revenues required by subdivision (a) is necessary.
(B) The Legis ,
Legislature by rolicall vote entered in tl-e journal, two thirds of the membership concurring, a
suspension for that fiscal year of the transfer of revenues required by subdivision (a) and the
bill docs not contain any other unrelated pro, iar
• orate statute is enacted that provides for the full repayment to the Transportation
investment Fund of the total amount of revenue that was not transferred to that fund as a
Fesult-e-f-th-e-suppen-s-i-e-rF,—i-h-el-u-el-i-Fig-i-nterest-aw provided by law. This full repayment shall be
made -n -et later than t -he end of the third fiscal year immediately following the fiscal year to
which the ;uspcnsion applies.
{2) (A) The transfer required by subdivision (a) shall not b -c suspended for ire than
two fiscal years during any period of 10 consecutive fiscal years, which period begins with the
first fiscal }tear co-mmencing on or after July 1, 2907, fer which the transfer required by
subdivision (a) is suspended.
if a full repayment required by a statute enacted in accordance with subparagraph (C) of
paragraph (1) has not yet bccn completed.
(e) (di The Legislature may not enact a statute that modifies the percentage shares set
forth in subdivision (c) by a bill passed in each house of the Legislature by rollcall vote entered
journal, two thirds of ,
any other unrelated provisio
colely for the purposes set forth in paragraph (2) of subdivision (b) until all of the following have
occurred:
(1) The California Transportation Commission has held no less than four public hearings
in different parts of the State to receive public input about the need for public transit, mass
transportation, transportation capital improvement projects, and street and highway
maintenance;
(2) The California Transportation Commission has published a report describing the
input received at the public hearings and how the modification to the statutory allocation is
14
consistent with the orderly achievement of local, regional and statewide goals for public transit,
mass transportation, transportation capital improvements, and street and highway
maintenance in a manner that is consistent with local general plans, regional transportation
plans, and the California Transportation Plan;
(3) Ninety days have passed since the publication of the report by the California
Transportation Commission.
(4) The statute enacted by the Legislature pursuant to this subdivision must be by a bill
passed in each house of the Legislature by roll call vote entered in the journal, two-thirds of the
membership concurring, provided that the bill does not contain any other unrelated provision
and that the revenues described in subdivision (a) are expended solely for the purposes set
forth in paragraph (2) of subdivision (b).
(f) .(g1(1) An amount equivalent to the total amount of revenues that were not
transferred from the General Fund of the State to the Transportation Investment Fund, as of
July 1, 2007, because of a suspension of transfer of revenues pursuant to this section as it read
on January 1, 2006, but excluding the amount to be paid to the Transportation Deferred
Investment Fund pursuant to Section 63048.65 of the Government Code, shall be transferred
from the General Fund to the Transportation Investment Fund no later than June 30, 2016.
Until this total amount has been transferred, the amount of transfer payments to be made in
each fiscal year shall not be less than one -tenth of the total amount required to be transferred
by June 30, 2016. The transferred revenues shall be allocated solely for the purposes set forth
in this section as if they had been received in the absence of a suspension of transfer of
revenues.
(2) The Legislature may provide by statute for the issuance of bonds by the state or local
agencies, as applicable, that are secured by the minimum transfer payments required by
paragraph (1). Proceeds from the sale of those bonds shall be allocated solely for the purposes
set forth in this section as if they were revenues subject to allocation pursuant to paragraph (2)
of subdivision (b).
(f) This section constitutes the sole method of allocating, distributing, and using the
revenues described in subdivision (a). The purposes described in paragraph (2) of subdivision
(b) are the sole purposes for which the revenues described in subdivision (a) may be used. The
Legislature may not enact a statute or take any other action which, permanently or temporarily,
does any of the following:
(1) Transfers, diverts, or appropriates the revenues described in subdivision (a) for any
other purposes than those described in paragraph (2) of subdivision (b);
15
(2) Authorizes the expenditures of the revenues described in subdivision (a) for any
other purposes than those described in paragraph (2) of subdivision (b) or;
(3) Borrows or loans the revenues described in subdivision (a), regardless of whether
these revenues remain in the Transportation Investment Fund or are transferred to another
fund or account such as the Public Transportation Account, a trust fund in the State
Transportation Fund.
(g) For purposes of this article, "mass transportation," "public transit" and "mass
transit" have the same meanings as "public transportation." "Public transportation" means:
(1)(A) Surface transportation service provided to the general public, complementary
paratransit service provided to persons with disabilities as required by 42 U.S.C. 12143, or
similar transportation provided to people with disabilities or the elderly; (B) operated by bus,
rail, ferry, or other conveyance on a fixed route, demand response, or otherwise regularly
available basis; (C) generally for which a fare is charged; and (D) provided by any transit district,
included transit district, municipal operator, included municipal operator, eligible municipal
operator, or transit development board, as those terms were defined in Article 1 of Chapter 4
of Part 11 of Division 10 of the Public Utilities Code on January 1, 2009, a joint powers authority
formed to provide mass transportation services, an agency described in subdivision (f) of
Section 15975 of the Government Code, as that section read on January 1, 2009, any recipient
of funds under Sections 99260, 99260.7, 99275, or subdivision (c) of Section 99400 of the Public
Utilities Code, as those sections read on January 1, 2009, or a consolidated agency as defined in
Section 132353.1 of the Public Utilities Code, as that section read on January 1, 2009.
(2) Surface transportation service provided by the Department of Transportation
pursuant to subdivision (a) of Section 99315 of the Public Utilities Code, as that section read an
July 30, 2009.
(3) Public transit capital improvement projects, including those identified in subdivision
(b) of Section 99315 of the Public Utilities Code, as that section read on July 30, 2009.
(h) lithe Legislature reduces or repeals the taxes described in subdivision (a) and adopts
an alternative source of revenue to replace the moneys derived from those taxes, the
replacement revenue shall be deposited into the Transportation Investment Fund, dedicated to
the purposes listed in paragraph (2) of subdivision (b), and allocated pursuant to subdivision (c).
All other provisions of this article shall apply to any revenues adopted by the Legislature to
replace the moneys derived from the taxes described in subdivision (a).
Section Eight. Article XIX C is hereby added to the Constitution to read as follows:
16
SECTION 1. If any challenge to invalidate an action that violates Articles XIX, XIX A, or
XIX B of the California Constitution is successful either by way of a final judgment, settlement,
or resolution by administrative or legislative action, there is hereby continuously appropriated
from the General Fund to the Controller, without regard to fiscal years, that amount of revenue
necessary to restore the fund or account from which the revenues were unlawfully taken or
diverted to its financial status had the unlawful action not been taken.
SEC. 2. If any challenge to invalidate an action that violates Section 24 or Section 25.5 of
Article XIII of this Constitution is successful either by way of a final judgment, settlement, or
resolution by administrative or legislative action, there is hereby continuously appropriated
from the General Fund to the local government an amount of revenue equal to the amount of
revenue unlawfully taken or diverted.
SEC. 3. Interest calculated at the Pooled Money Investment Fund rate from the date or
dates the revenues were unlawfully taken or diverted shall accrue to the amounts required to
be restored pursuant to this section. Within thirty days from the date a challenge is successful,
the Controller shall make the transfer required by the continuous appropriation and issue a
notice to the parties that the transfer has been completed.
SEC. 4. If in any challenge brought pursuant to this section a restraining order or
preliminary injunction is issued, the plaintiffs or petitioners shall not be required to post a bond
obligating the plaintiffs or petitioners to indemnify the government defendants or the State of
California for any damage the restraining order or preliminary injunction may cause.
Section Nine.
Section 16 of Article XVI of the Constitution requires that a specified portion of the
taxes levied upon the taxable property in a redevelopment project each year be allocated to
the redevelopment agency to repay indebtedness incurred for the purpose of eliminating blight
within the redevelopment project area. Section 16 of Article XVI prohibits the Legislature from
reallocating some or that entire specified portion of the taxes to the State, an agency of the
State, or any other taxing jurisdiction, instead of to the redevelopment agency. The Legislature
has been illegally circumventing Section 16 of Article XVI in recent years by requiring
redevelopment agencies to transfer a portion of those taxes for purposes other than the
financing of redevelopment projects. A purpose of the amendments made by this measure is to
prohibit the Legislature from requiring, after the taxes have been allocated to a redevelopment
agency, that the redevelopment agency transfer some or all of those taxes to the State, an
agency of the State, or a jurisdiction; or use some or all of those taxes for the benefit of the
State, an agency of the State, or a jurisdiction.
Section Ten. Continuous Appropriations.
17
The provisions of Sections 6, 7, and 8 of this Act that require a continuous appropriation
to the Controller without regard to fiscal year are intended to be "appropriations made by law"
within the meaning of Section 7 of Article XVI of the California Constitution.
Section Eleven. Liberal Construction.
The provisions of this Act shall be liberally construed in order to effectuate its purposes.
Section Twelve. Conflicting Statutes.
Any statute passed by the Legislature between October 21, 2009 and the effective date
of this measure, that would have been prohibited if this measure were in effect on the date it
was enacted, is hereby repealed.
Section Thirteen. Conflicting Ballot Measures.
In the event that this measure and another measure or measures relating to the
direction or redirection of revenues dedicated to funding services provided by local
governments and/or transportation projects or services appear on the same statewide election
ballot, the provisions of the other measure or measures shall be deemed to be in conflict with
this measure. In the event that this measure shall receive a greater number of affirmative
votes, the provisions of this measure shall prevail in their entirety, and the provisions of the
other measure or measures shall be null and void.
Section Fourteen. Severability.
It is the intent of the People that the provisions of this Act are severable and that if any
provision of this Act or the application thereof to any person or circumstance, is held invalid,
such invalidity shall not affect any other provision or application of this Act which can be given
effect without the invalid provision or application.
18