CC SR 20190604 D - SB 732RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 06/04/2019
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
Consideration and possible action to receive and file a report on SB 732, which would enable
the South Coast Air Quality Management District to place a sales tax increase of up to 1 percent
on the ballot for voter approval
RECOMMENDED COUNCIL ACTION:
(1) Receive and file a report on SB 732
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Megan Barnes, Senior Administrative Analyst
REVIEWED BY: Gabriella Yap, Deputy City Manager
APPROVED BY: Doug Willmore, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. SB 732 as amended April 30, 2019 (page A-1)
B. Draft legislative proposal from the minutes of the Feb. 12, 2018 SCAQMD Legislative
Committee meeting (B-1)
BACKGROUND AND DISCUSSION:
The South Coast Air Quality Management District, which sets regulations to mitigate air pollution
in Los Angeles, Orange, Riverside and San Bernardino counties, is pursuing a potential sales
tax measure to fund incentives to replace heavy-duty diesel trucks on the region’s roadways
with green technologies.
According to SCAQMD, a quarter-cent sales tax increase would generate $700 million a year
toward the $1 billion the agency determined it needs annually to meet federal pollution reduction
standards over 15 years, as outlined in its most recent Air Quality Management Plan. A half-
cent sales tax could generate $1.4 billion a year. SCAQMD says if these reductions are not met,
it could face federal sanctions and a potential takeover by the Environmental Protection Agency.
In April 2018, SCAQMD released the results of a public survey that found that a majority of
respondents would support the proposed quarter-cent sales tax measure. Another survey in
January 2019 also found majority support for a quarter-cent measure and a half-cent measure.
SCAQMD’s Governing Board does not have the authority to put a sales tax measure on the
ballot, so it is pursuing legislation to change that.
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Senator Ben Allen (D-Santa Monica) introduced the proposed legislation, Senate Bill 732, as an
empty placeholder bill in February 2019 and language was added in March.
The legislation would create a new tax district within SCAQMD’s boundaries and allow a sales
tax increase of up to 1 percent to be placed on the ballot by either a majority vote of the
Governing Board or a voter-led initiative. It remains unresolved whether the tax measure would
require a simple majority or two-thirds voter approval to pass.
The tax increase would be exempt from the local sales tax limit, meaning cities would be
allowed to exceed the state’s 10.25% sales tax cap and existing cap space would be preserved
for other local governments to pursue their own measures. Funds generated by the tax would
be used “for financial incentives and programs to implement the south coast district’s adopted
plans to achieve state and federal ambient air quality standards,” namely, offering local
companies and public agencies grants and other incentives to switch their fleets to cleaner
vehicles.
SB 732 has been met with criticism and mixed feedback from local governments and
transportation agencies, as well as calls for the need for a taxpayer oversight committee and
more public transit incentives. As a result, SCAQMD requested Senator Allen pull the bill from
the Senate Governance and Finance Committee in April. Senator Allen declined to withdraw the
bill, citing the urgency of the issue. The bill passed the committee, but Senator Allen went on to
hold it in the Appropriations Committee in May. This means SB 732 is now a two-year bill and
won’t return for final consideration until January 2020. SCAQMD plans to use the time to work
out further revisions.
The League of California Cities has not taken a stance on SB 732, but is watching it. The
California Contract Cities Association Legislative Committee recently voted to oppose SB 732,
noting that although the organization supports reducing air pollution, using a sales tax measure
is problematic and puts responsibility on taxpayers instead of pollution-generating industries.
Rancho Palos Verdes has a sales tax rate of 9.5%. If SB 732 is signed into law and voters
approve a tax measure, the City’s sales tax rate would rise to 9.75% if it were a quarter-cent
increase, or 10% if it were a half-cent increase. Cites in SCAQMD’s boundaries that have
already hit the state’s sales cap would exceed it.
If the City Council wishes to take a stance on SB 732, Staff can prepare a letter to Senator Allen
for the Mayor to sign. Staff will continue to monitor this bill and report back to the City Council.
ALTERNATIVES:
In addition to the Staff recommendation(s), the following alternative action(s) is/are
available for the City Council’s consideration:
1. Direct Staff to prepare a position letter on SB 732
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AMENDED IN SENATE APRIL 30, 2019
AMENDED IN SENATE MARCH 27, 2019
SENATE BILL No. 732
Introduced by Senator Allen
February 22, 2019
An act to amend Section 317 of, and to add Section 9314.5 to, the
Elections Code, to add Article 9 (commencing with Section 40560) to
Chapter 5.5 of Part 3 of Division 26 of the Health and Safety Code, and
to add Section 7252.3 to the Revenue and Taxation Code, relating to
tax.
legislative counsel’s digest
SB 732, as amended, Allen. Transactions and use tax: South Coast
Air Quality Management District.
(1) Existing law establishes the South Coast Air Quality Management
District vested with the authority to regulate air emissions from
stationary sources located in the South Coast Air Basin and establishes
a district board to govern the district.
This bill would authorize the south coast district board to impose a
transactions and use tax within the boundaries of the south coast district,
as specified, with the moneys generated from the transactions and use
tax to be used to supplement existing revenues being used for south
coast district purposes, as specified.
(2) This bill would make legislative findings and declarations as to
the necessity of a special statute for the South Coast Air Quality
Management District.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
97 A-1
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 317 of the Elections Code is amended to
line 2 read:
line 3 317. (a) “District,” for purposes of initiative and referendum
line 4 under Chapter 4 (commencing with Section 9300) of Division 9,
line 5 includes any regional agency that has the power to tax, to regulate
line 6 land use, or to condemn and purchase land.
line 7 (b) “District,” for purposes of Section 1405 and initiative under
line 8 Article 1 (commencing with Section 9300) of Chapter 4 of Division
line 9 9, includes the South Coast Air Quality Management District.
line 10 SEC. 2. Section 9314.5 is added to the Elections Code, to read:
line 11 9314.5. (a) For purposes of this section, the following terms
line 12 have the following meanings:
line 13 (1) “Legal counsel for the south coast district” means the
line 14 attorney designated under the south coast district’s conflict of
line 15 interest code as its legal officer pursuant to Article 3 (commencing
line 16 with Section 87300) of Chapter 7 of Title 9 of the Government
line 17 Code.
line 18 (2) “South coast district” means the South Coast Air Quality
line 19 Management District, established pursuant to Section 40410 of
line 20 the Health and Safety Code.
line 21 (b) (1) Whenever a south coast district measure is submitted
line 22 to the voters of the south coast district, the south coast district
line 23 elections official shall transmit a copy of the measure to the legal
line 24 counsel for the south coast district. Except as otherwise provided
line 25 in subdivision (c), the legal counsel for the south coast district
line 26 shall prepare an impartial analysis of the measure that does all of
line 27 the following:
line 28 (A) Shows the effect of the measure on the existing law.
line 29 (B) Shows the operation of the measure.
line 30 (C) Includes a statement indicating whether the measure was
line 31 placed on the ballot by a petition signed by the requisite number
line 32 of voters or by the governing body of the south coast district.
line 33 (D) Is printed preceding the arguments for and against the
line 34 measure.
line 35 (E) Does not exceed 500 words in length.
line 36 (2) If the entire text of the measure is neither printed on the
line 37 ballot nor in the voter information guide, there shall be printed in
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line 1 no less than 10-point bold type immediately below the impartial
line 2 analysis a legend that reads substantially as follows:
line 3
line 4 “The above statement is an impartial analysis of Ordinance or
line 5 Measure ____. If you desire a copy of the ordinance or measure,
line 6 please call the south coast district elections official’s office at
line 7 (insert telephone number) and a copy will be mailed at no cost to
line 8 you.”
line 9
line 10 SEC. 3. Article 9 (commencing with Section 40560) is added
line 11 to Chapter 5.5 of Part 3 of Division 26 of the Health and Safety
line 12 Code, to read:
line 13
line 14 Article 9. Ballot Measure Elections for Transactions and Use
line 15 Taxes
line 16
line 17 40560. (a) An ordinance to levy, increase, or extend a
line 18 transactions and use tax authorized pursuant to this article, Article
line 19 1 (commencing with Section 9300) of Chapter 4 of Division 9 of
line 20 the Elections Code, and the Transactions and Use Tax Law (Part
line 21 1.6 (commencing with Section 7251) of Division 2 of the Revenue
line 22 and Taxation Code) may be enacted in the south coast district at
line 23 a rate of 0.25 percent, or a multiple of that percentage not to exceed
line 24 a maximum of 1 percent, through either of the following:
line 25 (1) Approval by a majority of vote the south coast district board
line 26 and placement on the ballot for subsequent approval by the south
line 27 coast district’s electorate in conformance with other applicable
line 28 statutory requirements and Article XIIIC of the California
line 29 Constitution.
line 30 (2) Placement on the ballot by a voter initiative for subsequent
line 31 approval by the south coast district’s electorate in compliance with
line 32 other applicable statutory requirements and Article XIIIC of the
line 33 California Constitution.
line 34 (b) The south coast district board may levy, increase, or extend
line 35 more than one transactions and use tax pursuant to this section if
line 36 the adoption of the transaction and use tax conforms with both of
line 37 the following:
line 38 (1) The requirements of this article.
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SB 732 — 3 — A-3
line 1 (2) The requirements of the Transactions and Use Tax Law (Part
line 2 1.6 (commencing with Section 7251) of Division 2 of the Revenue
line 3 and Taxation Code).
line 4 (c) An ordinance that is not for the adoption, modification, or
line 5 amendment of a transactions and use tax shall not be enacted in
line 6 the south coast district.
line 7 40562. (a) Notwithstanding For purposes of this section, “GIS
line 8 mapping system” means a geographical information system that
line 9 will collect, store, retrieve, analyze, and display geographical
line 10 data.
line 11 (b) Notwithstanding Section 7251.1 of the Revenue and Taxation
line 12 Code, a transactions and use tax ordinance applicable within the
line 13 boundaries of the south coast district adopted pursuant to Section
line 14 40560 may exceed the combined tax rate limit of Section 7251.1
line 15 of the Revenue and Taxation Code.
line 16 (b)
line 17 (c) A transactions and use tax ordinance adopted pursuant to
line 18 this article shall be operative on the first day of the first calendar
line 19 quarter commencing more than 150 days after the adoption of the
line 20 ordinance by the electorate in compliance with any applicable
line 21 constitutional or statutory requirements.
line 22 (c)
line 23 (d) (1) Prior to the operative date of the transactions and use
line 24 tax ordinance, the south coast district shall contract with the
line 25 California Department of Tax and Fee Administration, or other
line 26 state agency provided for by law, to perform all functions related
line 27 to the administration and operation of the transactions and use tax
line 28 ordinance.
line 29 (2) Notwithstanding Section 7272 of the Revenue and Taxation
line 30 Code, both of the following apply:
line 31 (A) The costs to be covered by the contract required pursuant
line 32 to this subdivision may include the services described in Section
line 33 7272 of the Revenue and Taxation Code for preparatory work up
line 34 to the operative date of the ordinance. A dispute as to the amount
line 35 of the costs shall be resolved in the same manner as provided for
line 36 in Section 7272 of the Revenue and Taxation Code.
line 37 (B) The maximum amount of preparatory costs incurred may
line 38 exceed those costs as described in paragraph (1) if the increased
line 39 amount reflects necessary preparatory costs. The maximum amount
line 40 of all preparatory costs to be paid by the south coast district to the
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line 1 California Department of Tax and Fee Administration shall not
line 2 exceed ____ dollars ($____).
line 3 (3) (A) Within 45 days from the date a transactions and use tax
line 4 ordinance is adopted pursuant to this article, the south coast district
line 5 shall provide the California Department of Tax and Fee
line 6 Administration with both of the following: a GIS mapping system
line 7 of the south coast district boundaries, as set forth in Section 40410.
line 8 (i) A list of the ZIP Codes that are located within the boundaries
line 9 of the south coast district but are located in areas noncoterminous
line 10 with city or county borders of the south coast district.
line 11 (ii) A list of ZIP Codes of areas that are located partly within
line 12 and partly outside of the boundaries of the south coast district.
line 13 (B) The south coast district shall maintain the ZIP Code lists
line 14 specified in subparagraph (A) on its internet website.
line 15 (C) For those ZIP Codes that are located partly within the
line 16 boundaries of the south coast district, the California Department
line 17 of Tax and Fee Administration may, as necessary, provide to the
line 18 south coast district a list of any addresses for which the California
line 19 Department of Tax and Fee Administration requires a determination
line 20 as to whether the address is located or is not located within the
line 21 boundaries of the south coast district. The south coast district shall
line 22 respond to the California Department of Tax and Fee
line 23 Administration within 30 days of the request.
line 24 40564. (a) The south coast district shall use any moneys
line 25 received by the south coast district pursuant to this article to
line 26 supplement existing revenues being used for south coast district
line 27 purposes.
line 28 (b) All moneys received by the south coast district pursuant to
line 29 this article shall be used for financial incentives and programs to
line 30 implement the south coast district’s adopted plans to achieve state
line 31 and federal ambient air quality standards and to accelerate the
line 32 deployment of all of the following:
line 33 (1) Zero-emission, near-zero-emission, or cleanest commercially
line 34 available mobile and stationary equipment that reasonably meets
line 35 the needs of the operators of that equipment.
line 36 (2) Alternative fueling and charging infrastructure.
line 37 (c) No more than 6.25 percent of the total revenues received
line 38 pursuant to this article may be used for administrative costs in
line 39 implementing the programs authorized pursuant to this article.
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SB 732 — 5 — A-5
line 1 (d) Beginning the year after the first calendar year in which
line 2 moneys from the transactions and use tax ordinance are made
line 3 available to the south coast district pursuant to this article, the
line 4 south coast district shall include in its annual report to the
line 5 Legislature required pursuant to Section 40452 both of the
line 6 following:
line 7 (1) A report of the projects funded from moneys from the
line 8 transactions and use tax ordinance for the prior calendar year.
line 9 (2) The expected emissions reductions to be obtained from
line 10 projects funded from moneys from the transactions and use tax
line 11 ordinance.
line 12 40568. (a) (1) The south coast district board may appoint a
line 13 district elections official for the purposes of overseeing,
line 14 supervising, or conducting an election required pursuant to Section
line 15 40560.
line 16 (2) The south coast district’s elections official shall oversee,
line 17 supervise, or conduct an election required pursuant to Section
line 18 40560 and the applicable procedures set forth in Article 1
line 19 (commencing with Section 9300) of Chapter 4 of Division 9 of
line 20 the Elections Code.
line 21 (b) (1) The south coast district board may submit a resolution
line 22 to the board of supervisors of a county that is entirely or partly
line 23 located within the boundaries of the south coast district to provide
line 24 services that are reasonable and necessary to conduct an election
line 25 in the south coast district. Upon the presentation of that resolution
line 26 by the south coast district board, the applicable county elections
line 27 official shall provide those services to the south coast district, and
line 28 those services shall be performed by the county elections official
line 29 in coordination and consultation with the south coast district’s
line 30 elections official.
line 31 (2) No later than 61 days before an election on the transactions
line 32 and use tax ordinance authorized pursuant to this article, the county
line 33 elections official shall work with the south coast district’s elections
line 34 official to set and finalize a list of precincts or consolidated
line 35 precincts, as applicable.
line 36 (3) The south coast district shall reimburse in full each county
line 37 that is located entirely or partly within the boundaries of the south
line 38 coast district for the reasonable cost of the services performed by
line 39 the county elections official at the request of the south coast district
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— 6 — SB 732 A-6
line 1 or by agreement upon the presentation of a bill to the south coast
line 2 district.
line 3 (4) Unless otherwise provided by law, election and
line 4 election-related services shall be conducted by each county as
line 5 provided by the Elections Code for districts.
line 6 (c) The regular election date for the south coast district shall be
line 7 the date of the statewide general election as provided for in Section
line 8 1200 of the Elections Code.
line 9 SEC. 4. Section 7252.3 is added to the Revenue and Taxation
line 10 Code, to read:
line 11 7252.3. “District,” as used in this part, also means the South
line 12 Coast Air Quality Management District if authorized to impose
line 13 transactions and use taxes pursuant to this part and Article 9
line 14 (commencing with Section 40560) of Chapter 5.5 of Part 3 of
line 15 Division 26 of the Health and Safety Code.
line 16 SEC. 5. The Legislature finds and declares that a special statute
line 17 is necessary and that a general statute cannot be made applicable
line 18 within the meaning of Section 16 of Article IV of the California
line 19 Constitution because of the unique nature of the air quality problem
line 20 in the South Coast Air Quality Management District, which has
line 21 the worst ozone levels in the nation.
O
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SB 732 — 7 — A-7
SCAQMD Draft Legislative Proposal to Authorize a
Potential Local Sales Tax Increase Ballot Measure in the South Coast Air District
Problem: The South Coast Air Basin has among the worst air quality in the nation and is in extreme
nonattainment for ozone, based on federal air quality standards. Our 2016 Air Quality Management
Plan (AQMP) addresses this daunting problem, however, it requires substantial and sustainable funding
over the next 15 years in order to improve air quality to levels that meet federal air quality standards
and reduce the existing significant public health risk.
Summary: This bill proposal would seek authorization from the Legislature, to, either through South
Coast Board direction or through the voter initiative process, put a quarter-cent sales tax increase
proposal on the ballot within the South Coast Air District, for voter approval, in order to raise funds to
facilitate the significant reduction of air pollution in the South Coast region, in support of the 2016
AQMP.
This would only be an authorization bill to allow either SCAQMD Governing Board action or a voter
driven petition ballot initiative to put this proposal on the ballot. This bill would not directly create a
ballot measure.
The key focus of this proposal would be to help raise the needed funds, $1 billion per year for the next
15 years, required to support the 2016 AQMP. It is still being explored as to whether this proposal could
be expanded to include other large local air districts throughout the state as well.
This proposal could generate up to $700 million on an annual basis for air pollution reduction within the
South Coast region, which would go a long way towards solving the air pollution problem. A large
portion of this funding would go to providing incentives to businesses to promote the development and
deployment of clean technology and facilitate fleet turnover from dirty, heavy-duty diesel trucks and
other vehicles to cleaner alternatives.
The goal would be for this proposal to go on the ballot in 2020.
ATTACHMENT 2
B-1