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sr-052212-13bMay 22, 2012 CITY CLERK'S OFFICE - MEMORANDUM To: City Council From: Mayor Bloom, Mayor Pro Tem, Davis, Councilmember O'Connor Date: May 22, 2012 13 -13: Request of Mayor Bloom, Mayor Pro Tern Davis and Councilmember O'Connor to support AB 1446 that would enable voters to consider elimination of the Measure R expiration date in order to issue bonds to accelerate transportation projects in the LA County Metro adopted Measure R Expenditure Plan. This bill removes the sunset provision so that Metro can borrow funds against the Measure R revenues for the respective transportation, highway and transit projects. It would allow Metro to extend the existing transactions and use tax of 0.5% that was approved by the voters in 2008 beyond the existing 30 year period without a limitation as to its duration, subject to two- thirds voter approval. 13 -B May 22, 2012 May 10, 2012 TO: Maria Rychlicki CC: Director Pam O'Connor FROM: Mike Boh►ke SUBJECT: Background and general Recommendations regarding AB 1446 (Fuer) Recommendations The WSCC should support AB 1446, the state legislation that would enable voters of Los Angeles to consider eliminating the Measure R expiration date and issuing bonds to accelerate projects identified in the legislatively required update of the Metro - adopted Measure R Expenditure Plan. The issues of concern to the WSCCOG should be focused on providing input to Metro in its development of the Updated Expenditure Plan. The Measure R Expenditure Plan Update which should be adopted prior to committing to acceleration of any Measure R project should include: • transparent documentation of the anticipated changes in current Expenditure Plan capital project schedules and capital budgets that would be enabled by 35 -Year TIFIA loans and elimination of the 2039 Measure R expiration date • transparent documentation of the ongoing costs, funding needed, and projected funding sources for operations, maintenance, and capital rehabilitation of the current and projected Metro - owned - and - operated Transit and Highway elements once they are constructed • transparent documentation of any new commitments that would be enabled by the elimination of the 2039 Measure R expiration date once proposed acceleration commitments are met (e.g. a WeHo connection to a Crenshaw North). Justification: All elements of the Measure R Program, including both the transit and highway elements of Measure R are enhanced by the proposed extension that would eliminate the current 2039 expiration date and would make Measure R consistent with the other two Los Angeles County Sales Tax Measures (Proposition A and C); sales tax measures from all three sources would continue "... until voters rescind...." any of the Measures • With the 35 -year TIFIA loans and the extension of Measure R, additional bond revenues (in conjunction with the currently required 3% local contribution) would ostensibly allow the construction acceleration of the 12 Measure R transit projects, e.g. Westside Subway extension completion from 2036 to 2022. • Under the Extension, all Measure R programs will continue to receive the same percentage share as defined in the original legislation; e. g. in the areas of Operations (Rail) (5 %), Countywide Bus Operations — Metro and Municipal Operators (20 %), and Local Return (15 %) 1 • The Countywide acceleration benefits include the potential creation of approximately 525,000 new jobs related to completion of the Subway to Westwood.. Public Opinion polling completed in March 2012 indicates that approximately 83% of voters in the Westside cities would favor the extending of Measure R "until voters rescind..." The polling also suggests a strong level of support throughout the rest of Los Angeles County. Questions: 1. Why has Metro decided that this extension strategy should focus on the "Acceleration" of Projects rather than merely backfilling the estimated $413 Measure R revenue shortfall that has developed as a result of the extended recession? 2. How can Metro ensure that Metro's deferred maintenance and rehabilitation needs are met before additional Metro capital project commitments are made so that funding made possible by the Measure R extension, loans and bonding results in projects that are able to be operated, maintained and rehabilitated indefinitely into the future? 3. Why is Metro rushing to the November 2012 ballot before it has adoted an updated expenditure plan that balances acceleration while addressing life -cycle costs of current commitments? 4. What confidence does Metro have that it can deliver the projects on the accelerated schedules and simultaneously implement recovery programs addressing the deferred maintenance needs? Backaround from Metro documents: (On pages 2 and 3 of the Measure R Extension Board Memo staff states) "According to our analysis, the extension of Measure R is essential to any effort to accelerate all 12 transit projects consistent with the Board's "30/10 Initiative" policies and to accelerate the highway program." Specifically, a $4.0 billion need exists that could not be financed through various means, as follows: • A large ($4.0 billion) State or Federal grant is not currently available; • A very large, very low interest Federal loan ($8.4 billion at 2.17 %) is not available; • A series of TIFIA loans with a maximum term of 35 years totaling $4.7 billion may be available from the America Fast Forward Federal legislation. "When combined with two very large New Starts commitments and traditional Measure R financing, the 35 -year TIFIA loans would enable the completion of all 12 Measure R transit projects within 10 years instead of 28 years, a potential 24 year improvement. A similar 35 -year TIFIA loan strategy for Measure R highway projects could be employed to permit financing of up to $3.7 billion in highway projects not now possible during the next ten years. "Therefore there are several reasons we (Metro Staff) believe the extension of Measure R is an opportunity that the Board should seriously consider putting before the voters for approval. First, the accelerated Measure R highway and transit projects will provide congestion relief up to 24 years faster than is otherwise possible. Also, the projects will have an average useful life that exceeds the maximum 35 year loan term. Finally, it promotes job creation during the still slow economic recovery and at a time when construction firms are producing very competitive bids. P] The Extension: ➢ Facilitates a 30 -10 transit project acceleration schedule; and ➢ Helps close the 30 year $22.38 LRTP highway funding gap by $3.75 B in first 10 years.. ➢ Any Measure R Extension would mirror the same existing Expenditure Plan structure for all elements of Measure R Programs, including both Transit Projects and Highway Projects. On the Transit side, the Expenditure Plan would accomplish two things: A. Accelerate the "Funds Available' dates for 5 second and third decade projects from existing outer years to an earlier fiscal year, e.g. The LAX Airport extension would conceivably move from an existing FY 2028 to FY 2018 date. B. Measure R transit projects would be "accelerated to their optimal schedule" based on three (3) factors: 1. Defining the project to be built; 2. How to stay within budget; and 3. Environmental clearance Highway: The LRTP faces a 30 year $22 Billion Highway funding gap due to: a) failure of the State and Federal levels of Government to raise the Gas Tax accounting for $10.2238; b) Unmet Freight Program needs of $2.758B; and c) Tolls /3 -P program for $9.378 • AB1446 has passed through the Transit Committee with an 11 -1 vote in favor and now heads to Finance Committee. There is No opposition at this time. • The Metro Board will begin considering the issue of placing some form of a Measure R Extension (as defined under AB 1446) on the November, 2012 Ballot with an August deadline for any Measure to reach the Ballot. • Under AB 1446 the primary focus is to give Metro permission to accelerate (27 major) projects and give permission to "extend Measure R until voters "vote to end it" 3 0 Los Angeles County Metropolitan Transportation Authority etru- One Gateway Plaza 213.922.2000 Tel Los Angeles, CA 90012 -2952 metro.net EXECUTIVE MANAGEMENT COMMITTEE MAY 17, 2012 SUBJECT: MEASURE R EXTENSION ACTION: APPROVE PRINCIPLES AND BUDGET RECOMMENDATION A. Adopt the Measure R Extension Principles (Attachment A); B. Review and comment on the Draft Ordinance(Attachment B); C. Review and comment on the Draft Resolution requesting the Los Angeles County Board of Supervisors to place the Ordinance on the ballot for the November 6, 2012 countywide general election (Attachment C); D. Amend the FY13 budget to add $10 million to fund election.costs and public information; and E. Receive and file information on the key milestones for placing a measure on the ballot. ISSUE At the April 2012 Committee meetings, staff presented a status report on various Measure R project acceleration methodologies. The most promising methods being evaluated would extend the term of the Measure R sales tax beyond 2039. The Board requested additional information on what such an initiative would entail. This report provides key elements of an initiative to extend Measure R for the purpose of accelerating transit and highway project construction and implementation and providing ongoing operations, maintenance, and local return funding. This initiative could be placed on the November 2012 ballot. DISCUSSION Accelerate Projects In April 2010, the Board approved its support for the "30110 Initiative." The Board has also approved the Accelerated Highway program. Since April 2010, the "30/10 Initiative" focused on federal financing programs to accelerate its'Measure R /Long Range Transportation Plan (LRTP) transit and highway projects. This national legislative effort led by Metro is known as America Fast Forward. Both the House and the Senate have appointed conferees to consider their final reauthorization legislation. That final legislation will likely include an expanded Transportation Infrastructure Finance and Innovation Act ( TIFIA) program of direct US Treasury Loans for transportation projects. Additionally, staff have aggressively pursued the advancement of the Accelerated Highway Program. Key to this strategy is the advancement of a robust public private partnership (P3) program. This program has yielded positive results in that at least three of our major highway projects appear to be excellent candidates for P3 arrangements. One of the key challenges with all of the Measure R projects including the highway projects is that many still need additional federal or state funds. An extension of Measure R would allow us to provide certainty with respect to much of the funding for these projects while not relieving the federal or state governments of their obligations to fund these projects. An expanded TIFIA program will also assist the highway projects as the expanded TIFIA language allows highway projects to compete for these loans. The expanded TIFIA loans will have a maximum term of 35 years and can be used for up to 49% of total project cost. To take full advantage of the expanded federal TIFIA loan program to accelerate Measure R projects, it would be advantageous to extend Measure R by 20 years or more so that any "30/10 Initiative" loans taken during the later part of this decade could be repaid over 35 years instead of the 23 year maximum now possible if Measure R expires in 2039. This government -to- government 35 year loan strategy dramatically increases our ability to provide long term mobility improvements and jobs during the prolonged slow economic recovery. According to our analysis, the extension of Measure R is essential to any effort to accelerate all 12 transit projects consistent with the Board's "30/10 Initiative" policies and to accelerate the highway program. Specifically, a $4.0 billion need exists that could be financed through various means, as follows: • A large ($4.0 billion) State or Federal grant that is not currently available; • A very large, very low interest loan ($8.4 billion at 2.17 %), also not found to be available; or • A series of TIFIA loans with a maximum term of 35 years totaling $4.7 billion from the America Fast Forward legislation. When combined with two very large New Starts commitments and traditional Measure R financing, the 35 year TIFIA loans make the completion of all 12 Measure R transit Measure R Extension Page 2 projects within 10 years instead of 28 possible from a financial perspective, a potential 24 year improvement. A similar 35 year TIFIA loan strategy for Measure R highway projects could be employed to permit financing of up to $3.7 billion in highway projects not now possible over the next ten years. Therefore there are several reasons we believe the extension of Measure R is an opportunity that the Board should seriously consider putting before the voters for approval. First, the accelerated Measure R highway and transit projects will provide congestion relief up to 24 years faster than is otherwise possible. Also, the projects will have an average useful life that exceeds the maximum 35 year loan term. Finally, it promotes job creation during the still slow economic recovery and at a time when construction firms are producing very competitive bids. Public Support for Job Creation Since Measure R was passed in 2008, the economy has become an increasingly critical concern to the public now that the full impacts of the economic downturn have been realized. In March 2012, staff retained Fairbanks, Maslin, Metz and Maullin, a polling firm, to determine public support of a ballot measure to extend Measure R. Two focus groups were conducted first to identify whether enough support exists to justify spending resources on conducting a poll. The overwhelming response was strong support for such a measure because an accelerated public works construction program would provide a needed shot in the arm to the sluggish local economy. A poll was then conducted of approximately 1,400 county residents with representative samples of the five county subregions. Again the results found overwhelming support for a ballot measure extending Measure R ranging from 71 — 83% depending on the county subregion. The highest ranking reason respondents supported the measure was the fact that it would accelerate job creation in the near term. The Los Angeles County Economic Development Corporation projects that the Measure R construction program will generate over 410,000 direct and indirect jobs within the Southern California region, over 150,000 through transit project construction and over 250,000 through highway project construction. Authority to Extend Sales Tax Assembly Bill (AB) 1446 (Feuer) would authorize the Board to place an extension of Measure R on a future ballot. Specifically it would: • Eliminate the 30 year sunset date; • Allow Metro to bond against the sales tax revenues and use bond proceeds to accelerate the Measure R highway and transit projects; and • Require Metro to adopt a new Expenditure Plan which updates when funds are anticipated to be available for projects and when the projects are anticipated to be completed. As of the drafting of this report, AB 1446 has been approved by: the Assembly Committee on Local Government, the Assembly Committee on Transportation and the Measure R Extension Page 3 Assembly Committee on Appropriations. Attachment A contains a Draft Ordinance for Board review and comment that would implement the extension of Measure R. Outreach Staff has been in the process of reaching out to local jurisdictions to gain feedback on extending Measure R. The Chief Executive Officer is in the process of presenting the general goals and the impacts of extending Measure R to the Councils of Governments (COGs) to receive input. The presentation includes an overview of Measure R, the projects already underway, recent poll results, and the benefits of extending the measure. Staff will also reach out to other key stakeholders. A draft of the presentation is contained in Attachment D. Staff will report to the Board on the feedback received. Information Materials If the Board adopts an ordinance to extend Measure R, it is the responsibility of the agency to provide informational materials. Staff envisions that a brochure, web page and other informational materials will be developed to inform the public of the measure. All materials will be vetted by County Counsel to ensure there is no advocacy in the materials provided and every communication piece will be solely information in nature. A brief brochure presenting the goals of extending Measure R will be produced and sent to county residents. Given that the effort will modify only two key elements of Measure R (eliminating the sunset date and accelerating some project schedules) the brochure will be limited in scope. Consolidation for General Election If the Board chooses to put a measure before the voters in November 2012, several key actions must occur. Following are the filing requirements and related deadlines: Resolution July Board Consider Board adoption of Sales Tax Measure Ordinance and Meeting Resolution Requesting consolidation with the November General Election August 10 Last day to submit the Ordinance and Resolution to the County of Los Angeles Registrar - Recorder /County Clerk and the Board of Supervisors The adopted Resolution must to be submitted by August 10th and must include: 1) the purpose of the election (i.e. submitting a sales tax measure question to electors); 2) ballot measure text; 3) the vote requirement for measure passage (i.e. 2/3 votes cast); and 4) a statement that Metro will reimburse the County for costs incurred. The ballot measure text must not exceed 75 words including the title and must be clearly labeled and identified in the body of the "Resolution Calling the Election." This is the text that will be printed in the sample ballot. Withdrawal or Amendment August 15 Last day to submit a resolution requesting to amend or withdraw measure A request to amend or withdraw the measure may be submitted on or before August 15th. The request must also be in the form of a resolution similar to the initial request. Measure R Extension Page 4 Letter Desi nation August XX I Last day to request specific letter designation The Registrar Recorder /County Clerk will assign a letter designation to each measure in alphabetical order. Metro may request a specific letter designation by written correspondence. If it has not been assigned to another measure, the request will most likely be granted. The Registrar Recorder's office recommends submitting two alternate letter choices in the event the requested letter(s) have been assigned to another measure. Arguments & Rebuttals August 20 Last day to submit arguments for or against any ballot measure August 30 Last day to submit rebuttals by authors of arguments for or against a ballot measure Arguments for or against a measure or rebuttals must be submitted by August 20th and 30th respectively. Arguments may be no longer than 300 words in length. Rebuttals may be no longer than 250 words in length. Rebuttals must be signed by the original authors for the argument. Sample Ballot S1 —Oct. period that a sample ballot will be mailed to all voters 16 DETERMINATION OF SAFETY IMPACT A ballot measure to extend Measure R has no negative impact on system safety, and might have a significant positive impact on regional transportation system safety overall. In fact, since transit corridor projects would be accelerated by up to 24 years, the substantial safety benefits of transit travel versus highway travel for the period of accelerated service availability could be substantial, according to the National Safety Council website: "Injury Facts® compares four modes of transportation: scheduled airlines, railroad passenger trains (including Amtrak and commutation), buses, and light duty vehicles (includes passenger cars, light trucks, vans and sports utility vehicles regard less of wheelbase). In general, buses, trains and airlines have much lower death rates than light duty vehicles when the risk is expressed as passenger deaths per passenger mile of travel. (Light duty vehicle drivers are considered passengers but operators and crew of planes, trains and buses are not.) In 2009, the passenger death rate in light duty vehicles was 0.53 per 100 million passenger - miles. The rates for buses, trains and airlines were 0. 04, 0.02, and 0.01 respectively." For highway improvements, newer projects have modern safety features that may also have a net safety benefit for users. Measure R Extension Page 5 FINANCIAL IMPACT The financial impact of the staff recommendation is limited to the cost of putting the measure before the voters of Los Angeles County. The FY13 budget will be amended and the funding of $10 million for this effort will be reserved pending passage of AB 1446 (Feuer). The FY13 budgeted amount of $10 million will be under the direction of the CEO. Eight million dollars will be placed in Board Office Cost Center 1010, under the Governmental and Oversight Activities Project #100002, Election Costs task, and $2 million in the Executive Office Communications Cost Center 7010, under the Governmental and Oversight Activities Project 100002, Election Costs task. Impact to Bus and Rail Operating and Capital Budget The proposed source of funds for this action is State Repayment of Capital Project Loans Fund. These funds are available for use on bus and rail operating and capital projects. ALTERNATIVES CONSIDERED As discussed above, we considered and pursued large grants and loans for the "30/10 Initiative' and found them both not to be available in the amounts and rates necessary to make the Initiative possible. We also considered a fallback plan for use in the event that federal reauthorization legislation does not pass, but the Measure R extension does pass. That fallback plan found that far fewer TIFIA loan funds would be available for the transit and highway Measure R programs, making it necessary to defer at least one major transit project and eliminating approximately $1 billion of the $3.7 billion in accelerated highway funds forecasted to be available using our preferred strategy. Additionally we considered a shorter term extension of Measure R. While a shorter term extension might allow for limited acceleration of transit capital and highway projects, it would not allow us to address funding gaps in key projects and would not allow for the funding of future LRTP projects beyond those currently funded through Measure R. Finally, our LRTP also remains in place, should the Board or the voters themselves decide not to approve the extension of Measure R. NEXT STEPS Staff will continue to implement outreach to the COGS and other stakeholders through May and the beginning of June. Staff will present final Ordinance and Resolution language for approval at the June 2012 Board meeting. We will also continue to work with legislative staff to monitor the progress of AB 1446. Measure R Extension Page 6 ATTACHMENT A. Measure R Extension Principles B. Measure R Extension Draft Ordinance C. Measure R Extension Draft Resolution D. Outreach Presentation Prepared by: Matthew Raymond, Chief Communications Officer Cosette Stark, Director, Research and Development Michael Turner. State Affairs Director David Yale, Executive Officer, Countywide Planning and Development Measure R Extension Page 7 Paul C. Taylor Deputy Chief Executive Officer Arthur T. Leahy Chief Executive Officer Measure R Extension Page 8 ATTACHMENT A MEASURE R EXTENSION PRINCIPLES 1. Continue Measure R until Los Angeles County voters decide to eliminate the sales tax 2. Accelerate Measure R transit and highway project schedules, consistent with the "30/10" Board Initiative, and modify the Expenditure Plan dates accordingly 3. Preserve existing Measure R commitments including: a. funding for projects and program categories b. restrictions on transferring funds between projects and funding categories c. oversight 4. Preserve geographic equity 5. Allow Board to fund Long Range Transportation Plan Projects after Expenditure Plan Completion 6. Board must vote for specific financing plans for project acceleration Measure R Extension Page 9 ATTACHMENT B This attachment is not yet available. It will be sent by separate cover. Measure R Extension Page 10 ATTACHMENT C This attachment is not yet available. It will be sent by separate cover. Measure R Extension Page 11 AMENDED IN ASSEMBLY APRIL 26, 2012 AMENDED IN ASSEMBLY APRIL 17, 2012 AMENDED IN ASSEMBLY MARCH 29, 2012 CALIFORNIA LEGISLATURE- 2011 -12 REGULAR SESSION ASSEMBLY BILL No. 1446 Introduced by Assembly Member Feuer January 4, 2012 An act to amend Section 130350.5 of, and to add Section 130350.6 to, the Public Utilities Code, relating to transportation. LEGISLATIVE COUNSEL'S DIGEST AB 1446, as amended, Feuer. Los Angeles County Metropolitan Transportation Authority: transactions and use tax. Existing law authorizes the Los Angeles County Metropolitan Transportation Authority (MTA) to impose, in addition to any other tax that it is authorized to impose, a transactions and use tax at a rate of 0.5% for not more than 30 years for the funding of specified transportation- related purposes pursuant to an adopted expenditure plan, subject to voter approval. This bill would authorize MTA to impose that transactions and use tax without a limitation as to its duration, subject to voter approval. The bill would require MTA to secure bonded indebtedness payable from the proceeds of the tax imposed and would require that the proceeds from those bonds be used to accelerate the completion of specified projects and programs. The bill would require MTA to amend the expenditure plan in a specified manner and would make other related conforming changes. M. AB 1446 —2— Vote: majority. Appropriation: no. Fiscal committee: yes. State - mandated local program: no. The people of the State of California do enact as follows: 1 SECTION 1. The Legislature hereby finds and declares all of 2 the following: 3 (a) Section 130350.5 of the Public Utilities Code authorizes the 4 Los Angeles County Metropolitan Transportation Authority (MTA) 5 to propose for voter approval a 30- year'' /z cent sales and use tax 6 dedicated to the construction and operation of transportation- related 7 projects, to be enumerated in a local ballot measure. In November 8 2008, more than 67 percent of Los Angeles County voters approved 9 this tax pursuant to a ballot measure known as Measure R. 10 (b) The Measure R transit, highway, and other transportation 11 projects became part of the MTXs Long Range Transportation 12 Plan, along with an expenditure plan that spread the costs and 13 construction of the Measure R projects over the 30 -year duration 14 of the Y, cent sales and use tax. 15 (c) Since 2008, the nation and the State of California have 16 plunged into a recession. In Los Angeles County, 336,000 jobs 17 have been lost since 2007. An estimated 582,900 people were 18 unemployed in Los Angeles Coimty as of October 2011. The 19 construction industry has been hit particularly hard: more than 20 53,300 construction jobs have been lost since 2007, and some 21 estimates put the percentage of area construction workers who are 22 out of work as high as 40 percent. 23 (d) Traffic congestion is increasing throughout Los Angeles 24 County, and new, environmentally sound transit options are 25 desperately needed as alternatives to private vehicle trips and the 26 economic, environmental, and health impacts that result from them. 27 (e) Therefore, the Legislature intends to authorize the MTA to 28 seek voter approval to eliminate the sunset date for the imposition 29 of the Measure R sales and use tax authorization and allow the 30 MTA to bond against the proceeds from the tax and build the 31 Measure R projects and programs much sooner than originally 32 contemplated without relying on federal or state funding. Providing 33 for the imposition of this sales and use tax and for the accelerated 34 completion of Measure Rprojects and programs would create more 35 than 166,000 desperately needed jobs and dramatically improve 96 -3— AB 1446 1 the economy, environment, and public health of Los Angeles 2 County. 3 SEC. 2. Section 130350.5 of the Public Utilities Code is 4 amended to read: 5 130350.5. (a) In addition to any other tax that it is authorized 6 by law to impose, the Los Angeles County Metropolitan 7 Transportation Authority (MTA) may impose, in compliance with 8 subdivision (b) and Section 130350.6, a transactions and use tax 9 at a rate of 0.5 percent that is applicable in the incorporated and 10 unincorporated areas of the county. 11 (b) For purposes of the taxing authority set forth in subdivision 12 (a), all of the following apply: 13 (1) The tax shall be proposed in a transactions and use tax 14 ordinance, that conforms with Chapter 2 ( cormnencing with Section 15 7261) to Chapter 4 ( commnencing with Section 7275), inclusive, 16 of the Transactions and Use Tax Law (Part 1.6 (commencing with 17 Section 725 1) of Division 2 of the Revenue and Taxation Code), 18 and that is approved by a majority of the entire membership of the 19 authority. 20 (2) The tax may be imposed only if the proposing ordinance is 21 approved by two - thirds of the voters, in the manner as otherwise 22 required by law, voting on this measure, in an election held on 23 November 4, 2008, or at a subsequent election and, if so approved, 24 shall become operative as provided in Section 130352. 25 (3) The proposing ordinance shall specify, in addition to the 26 rate of tax and other matters as required by the Transactions and 27 Use Tax Law, that the net revenues derived from the tax are to be 28 administered by the MTA as provided in this section. Net revenues 29 shall be defined as all revenues derived from the tax less any 30 refunds, costs of administration by the State Board of Equalization, 31 and costs of administration by the MTA. Such costs of 32 administration by the MTA shall not exceed 1.5 percent of the 33 revenues derived from the tax. The MTA shall, during the period 34 in which the ordinance is operative, allocate 20 percent of all net 35 revenues derived from the tax for bus operations to all eligible and 36 included municipal transit operators in the County of Los Angeles 37 and to the MTA, in accordance with Section 99285. However, the 38 allocations to the MTA and eligible and included municipal 39 operators shall be made solely from revenues derived from a tax 40 imposed pursuant to this section, and not from local discretionary 96 AB 1446 —4— 1 sources. Funds allocated by MTA to itself pursuant to this section 2 shall be used for transit operations and shall not supplant funds 3 from any other source allocated by MTA to itself for public transit 4 operations. Funds allocated by MTA to the eligible and included 5 municipal operators pursuant to this section shall be used for transit 6 operations and shall not supplant any funds authorized by other 7 provisions of law and allocated by MTA to the eligible and 8 included municipal operators for public transit. In addition to this 9 amount, the MTA shall allocate 5 percent of all net revenues 10 derived from the tax, for rail operations. The MTA shall include 11 the projects and programs described in subparagraphs (A) and (B) 12 in the expenditure plan required under subdivision (f). The MTA 13 shall include all projects and programs described in the expenditure 14 plan required under subdivision (f) in its Long Range 15 Transportation Plan (LRTP). The priorities for projects and 16 programs described in subparagraphs (A) and (B) and in the 17 expenditure plan required under subdivision (f) shall be those set 18 forth in the expenditure plan. The funding amounts specified in 19 subparagraphs (A) and (B) are minimum amounts that shall be 20 allocated by the MTA from the net revenues derived from a tax 21 imposed pursuant to this section. Nothing in this section prohibits 22 the MTA from allocating additional net revenues derived from the 23 tax to these projects and programs. 24 (A) Capital Projects. 25 (i) Exposition Boulevard Light Rail Transit Project from 26 downtown Los Angeles to Santa Monica. The sum of nine hundred 27 twenty -five million dollars ($925,000,000). 28 (ii) Crenshaw Transit Corridor from Wilshire Boulevard to Los 29 Angeles International Airport along Crenshaw Boulevard. The 30 sum of two hundred thirty -five million five hundred thousand 31 dollars ($235,500,000). 32 (iii) San Fernando Valley North -South Rapidways. The sum of 33 one hundred rnillionfive hundred thousand dollars ($100,500,000). 34 (iv) Metro Gold Line (Pasadena to Claremont) Light Rail Transit 35 Extension. The sum of seven hundred thirty -five million dollars 36 ($735,000,000). 37 (v) Metro Regional Connector. The sum of one hundred sixty 38 million dollars ($160,000,000). 39 (vi) Metro Westside Subway Extension. The sum of nine 40 hundred million dollars ($900,000,000). 96 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -5— AB 1446 (vii) State Highway Route 5 Carmenita Road Interchange Improvement. The sum of one hundred thirty-eight million dollars ($138,000,000). (viii) State Highway Route 5 Capacity Enhancement (State Highway Route 134 to State Highway Route 170, including access improvement for Empire Avenue). The stun of two hundred seventy-one million five hundred thousand dollars ($271,500,000). (ix) State Highway Route 5 Capacity Enhancement (State Highway Route 605 to the Orange County line, including improvements to the Valley View Interchange). The sum of two hundred sixty -four million eight hundred thousand dollars ($264,800,000). (x) State Highway Route 5 /State Highway Route 14 Capacity Enhancement. The sum of ninety million eight hundred thousand dollars ($90,800,000). (xi) Capital Project Contingency Fund. The sum of one hundred seventy -three million dollars ($173,000,000). (B) Capital Programs. (i) Alameda Corridor East Grade Separations. The sun of two hundred million dollars ($200,000,000). (ii) MTA and Municipal Regional Clean Fuel Bus Capital (Facilities and Rolling Stock). The sum of one hundred fifty million dollars ($150,000,000). (iii) Countywide Soundwall Construction (MTA Regional List and Monterey ParldState Highway Route 60). The sum of two hundred fifty million dollars ($250,000,000). (iv) Local return for major street resurfacing, rehabilitation, and reconstruction. The sum of two hundred fifty million dollars ($250,000,000). (v) Metrolink Capital Improvements. The sum of seventy million dollars ($70,000,000). (vi) Eastside Light Rail Access. The sum of thirty million dollars ($30,000,000). (c) The MTA may incur bonded indebtedness payable from the proceeds of the tax provided by this section pursuant to the bond issuance provisions of Section 130500 et seq. of the Public Utilities Code, and any successor act. The MTA shall include in the expenditure plan, required under subdivision (f), the amount of net revenue specified for all projects and programs in subparagraphs (A) and (B) of paragraph (3) of subdivision (b) as 96 AB 1446 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 —6— a condition of the use and expenditure of the proceeds of the tax. The MTA shall maintain the current amount of any funding for the projects and programs specified in this section that has been previously programmed or received from sources other than the proceeds of the tax, and may not reallocate money that has been previously programmed or received for those projects and programs to other projects or uses. (d) Notwithstanding Section 725 1.1 of the Revenue and Taxation Code, the tax rate authorized by this section shall not be considered for purposes of the combined rate limit established by that section. (e) A jurisdiction or recipient is eligible to receive funds from the local return program, described in clause (iv) of subparagraph (B) of paragraph (3) of subdivision (b) of this section and in paragraph (1) of subdivision (b) of Section 130350.6, only if it continues to contribute to that program an amount that is equal to its existing' corrunitment of local funds or other available funds. The MTA may develop guidelines that, at a minimum, specify maintenance of effort requirements for the local return program, matching fiords, and administrative requirements for the recipients of revenue derived from the tax. (i) Prior to submitting the ordinance to the voters, the MTA shall adopt an expenditure plan for the net revenues derived from the tax. The expenditure plan shall include, in addition to other projects and programs identified by the MTA, the specified projects and programs listed in paragraph (3) of subdivision (b), the estimated total cost for each project and program, fiords other than the tax revenues that the MTA anticipates will be expended on the projects and programs, and the schedule during which the MTA anticipates fiords will be available for each project and program. The MTA shall also identify in its expenditure plan the expected completion dates for each project described in subparagraph (A) of paragraph (3) of subdivision (b). To be eligible to receive revenues derived from the tax, an agency sponsoring a capital project or capital program shall submit to the MTA an expenditure plan for its project or program containing the same elements as the expenditure plan that MTA is required by this subdivision to prepare. (g) The MTA shall establish and administer a sales tax revenue fiord. The net revenue derived from the tax, after payment of any debt services and related obligations, shall be credited to this fund. 96 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -7— AB 1446 The moneys in the fund shall be available to the MTA to meet expenditure and cashflow needs of the projects and programs described in the expenditure plan required under subdivision (f). In the event that there are net revenues in excess of the amount necessary to provide the amount of net revenues specified in the expenditure plan for the projects and programs described therein, the MTA may expend the excess net revenues on projects and programs in the expenditure plan or the LRTP. In the event that projects and programs in the expenditure plan are completed without the expenditure of the amount of net revenues specified, the MTA shall expend the excess net revenues on projects and programs in the expenditure plan or the LRTP within the same subregion as the project or program that is completed. For the purposes of this section, "subregion" shall be defined in the LRTP. (h) If other funds become available and are allocated to provide all or a portion of the amount of net revenues specified in the expenditure plan for the projects or programs described therein, the MTA may expend the surplus net revenues on other projects and programs in the expenditure plan or the LRTP. (i) (1) Notwithstanding subdivision (h), if a capital project or capital program described in clauses (i) to (x), inclusive, of subparagraph (A) of paragraph (3) of subdivision (b) and clauses (i) and (vi) of subparagraph (B) of paragraph (3) of subdivision (b), has been fully funded from other sources on or before December 31, 2008, the funds designated to the project or program in clauses (i) to (x), inclusive, of subparagraph (A) of paragraph (3) of subdivision (b) and clauses (i) and (vi) of subparagraph (B) of paragraph (3) of subdivision (b) shall remain in the subregion in which the project or program is located and shall be allocated to other projects or programs in the subregion prior to the expiration of the tax. (2) A capital projector capital program funded with reallocated Rinds pursuant to paragraph (1) shall be included in the adopted 2008 Long Range Transportation Plan or the successor plan and shall be of regional significance as determined by the MTA. For purposes of this subdivision, "subregions" means the subregions as defined in the LRTP in effect as of January 1, 2008. 0) Notwithstanding Section 130354, revenues raised under this section and Section 130350.6, may be used to facilitate the transportation of people and goods within Los Angeles County. M AB 1446 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 —8— The use of the revenues shall not be limited to public transit purposes. (lc) No later than 365 days prior to the adoption of an amendment described in paragraph (1) to an expenditure plan adopted pursuant to subdivision (f), including, but not limited to, the expenditure plan adopted by the MTA board as "Attachment A" in Ordinance #08 -01 adopted by the board on July 24, 2008, and in addition to any other notice requirements in the proposing ordinance, the board shall notify the Members of the Legislature representing the County of Los Angeles of all of the following: (1) A description of the proposed amendments to the adopted expenditure plan that would do any of the following: (A) Affect the amount of net revenues derived from the tax imposed pursuant to this act that is proposed to be expended on a capital project or projects identified in the adopted expenditure plan. (B) Delay the schedule for the availability of funds proposed to be expended on a capital project or projects identified in the adopted expenditure plan. (C) Delay the schedule for the estimated or expected completion date of a capital project or projects identified in the adopted expenditure plan. (2) The reason for the proposed amendment. (3) The estimated impact the proposed amendment will have on the schedule, cost, scope, or timely availability of funding for the capital project or projects contained in the adopted expenditure plan. (0 The notification required pursuant to subdivision (lc) shall be achieved by resolution adopted by the MTA board. (m) The MIA board shall provide prior written notice to the Members of the Legislature representing the County of Los Angeles of any proposed amendments to the adopted expenditure plan that would accelerate funding for a capital project or projects in the adopted expenditure plan. SEC. 3. Section 130350.6 is added to the Public Utilities Code, to read: 130350.6. (a) The tax authorized by Section 130350.5 may be imposed as set forth in paragraph (3) of subdivision (b) of Section 130350.5 in a transactions and use tax ordinance, or an amendment of the ordinance approved pursuant to paragraph (1) 96 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 -9— AB 1446 of subdivision (b) of Section 130350.5, that conforms with Chapter 2 (commencing with Section 7261) to Chapter 4 (conunencing with Section 7275), inclusive, of the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code), and that is approved by a majority of the entire membership of the authority. The tax may be imposed pursuant to this section only if the proposing ordinance, or amendment thereof, is approved by two - thirds of the voters, in the mariner as otherwise required by law, voting on this measure, in a special or general election and, if so approved, shall become operative as provided in Section 130352. The proposing ordinance shall specify that the net revenues derived from the tax are to be administered by the N! Los Angeles County Metropolitan Transportation Authority (MTA) as provided in this section. Net revenues shall be defined as all revenues derived from the tax less any refunds, costs of administration by the State Board of Equalization, and costs of administration by the MTA. Such costs of administration by the MTA shall not exceed 1.5 percent of the revenues derived from the tax. (b) (1) The MTA may incur bonded indebtedness payable from the proceeds of the tax authorized by this section pursuant to the bond issuance provisions of this chapter, and any successor act. Proceeds from those bonds shall be used to accelerate the completion of the projects and programs identified in s4paragraphs (A) and (B) paragraph (3) of subdivision (b) of Section 130350.5. (2) Upon completion of the projects and programs identified in paragraph (1), any funds remaining from the bonds described in paragraph (1) and any funds remaining from the proceeds of the tax authorized by this section, after payment of the bonded indebtedness, shall be subdivision (g) of Section 130350.5 expended by the MTA on projects and programs in the Long Range Transportation Plan or its successor plans. (c) Prior to submitting the ordinance described in subdivision (a) to the voters, the MTA shall amend the expenditure plan adopted pursuant to subdivision (t) of Section 130350.5. The amended plan shall update all of the following for the projects and programs listed in subdivision (b): the estimated total cost for each project or program, the schedule during which the MTA anticipates 96 AB 1446 —10— 1 funds will be available for each project or program, and the 2 expected completion dates for each projector program. 0 96 � • • � ' • �Ll > Half cent sales tax > For transportation improvements > Throughout Los Angeles County > 30 Years - Pay as You Go a) Metro 1 (D Metro "k Rail Expansion s - t Operating Improvements Local Improvements Metrolink d Rail Facilities Measure R Extension will maintain funding commitments 2 op Funding 12 transit projects ► • •, 6 highway •, • projects • Limiting reductions in transit service • Keeping fares low for students, seniors and the disabled a) Metro 3 > Expo Phase I > Expo Phase II > Gold Line Foothill Extension > Metro Orange Line Extension (Canoga) > Burlington Northern Santa Fe Grade Separations > Soundwalls > 1 -4057 1 -1107 1 -105, SR -91 Ramp Improvements > 1 -5 HOV from SR -134 to SR -170 > 1 -5 North /SR -14 Capacity Enhancement > 1- 5 /Carmenita Rd. Interchange > 1- 5/SR -14 HOV Connector > Arroyo Verdugo Operational Improvements > Las Virgenes /Malibu Operational Improvements 13 decide to eliminate it. Metro 14 IN IM40 M, 611=0 project schedules > Preserve existing Measure R funding commitments and restrictions • Ensure geographic equity • Create opportunities for new projects AVbk tu Metro 15 > 71 -76% support for the extension as written > Strong support from every region of County • 83% `yes' in Westside • 78% `yes' in South Bay • 77% `yes' in Central Los Angeles • 71% `yes' in San Gabriel Valley • 67% `yes' in San Fernando Valley • 68% `yes' in North County • 63% `yes' in Southeast Los Angeles County M,- Source: FM3 16 • Accelerate transit and highway construction • Create bonding capacity • Take advantage of lower interest rates an construction costs > Complete promised transit and highway expansion much sooner > Provide continued funding for: • Highway projects • Transit projects 0 • Local Return projects Metro M • More local jobs and a boost to local economy • Local dollars, local projects, local control • Improved traffic flow for drivers • More transportation options for generations to come • Safer streets, roads and highways • An affordable alternative to high gas prices n� M Orange Line Extension Exposition Transit Corridor Phase 2 West Santa Ana Transit Corridor Airport Metro Connector Eastside Transit 7 , a 7 nr i. �� snail, e 3 rx q Corridor Phase 2 South Bay Metro Green tine Extension Sepulveda Pass Transit Corridor ACCELERATED TIM EERAM E'^ > I ORIC(NA{"fiMEFRAMF.> 0 Metro 19 * State legislation Action by •' Board * 2/3 voter approval in November QD Metro 20 a) Metro 21