Chapter 4. Transactions And Use Tax of California Public Utilities Code >> Division 20. >> Chapter 4.

The Legislature, by the enactment of this chapter, intends the additional funds provided government agencies by this chapter to supplement existing local revenues being used for transportation purposes. The government agencies shall maintain their existing commitment of local funds for transportation purposes pursuant to an ordinance adopted by the commission to enforce this section. The commission may levy a retail transactions and use tax applicable in the incorporated and unincorporated territory of the county in accordance with this chapter and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code. The ordinance shall only become effective if adopted by a two-thirds vote of the commission and subsequently approved by two-thirds of the electors voting on the measure at a special election called for the purpose by the board of supervisors or at any regular election. The board of supervisors shall call the election upon being requested to do so by a resolution adopted by the commission, but not otherwise. The commission shall specify in the ordinance that not more than 1 percent of the annual amount of revenues raised by the tax may be used to fund the salaries and benefits of the staff of the commission in administering the programs funded from that tax. The ordinance shall take effect at the close of the polls on the day of election at which the proposition is adopted. The initial collection of the transactions and use tax shall take place in accordance with Section 190304. If the voters do not approve the ordinance, the board of supervisors may, at any time thereafter, submit the same, or a different, measure, if adopted by a two-thirds vote of the commission, to the voters in accordance with this division.

(a) The commission, in the ordinance, shall state the nature of the tax to be imposed, the tax rate or the maximum tax rate, the purposes for which the revenue derived from the tax will be used, and shall set a term during which the tax will be imposed.
  (b) The purposes for which the tax revenues may be used may include, but are not limited to, the administration of this division, including legal actions related thereto, the construction, capital acquisition, maintenance, and operation of streets, roads, and highways, including state highways. These purposes include expenditures for the planning, environmental reviews, engineering and design costs, and related right-of-way acquisition.
  (c) The ordinance shall contain an expenditure plan which shall include the allocation of revenues for the purposes authorized by this section and shall include, at a minimum, the following provisions:
  (1) The proportional distribution of the revenues among various purposes.
  (2) The specific projects to be funded under the state highway and freeway portion. Following adoption of the ordinance by the voters, the plan may only be amended, if required, by the following process:
  (A) Initiation of amendment by the commission, reciting findings of necessity.
  (B) Approval by the board of supervisors.
  (C) Approval by a majority of the cities constituting a majority of the incorporated population.
  (3) The formula for distribution of the city and the county portion, which may be amended by voter approval.
  (4) A requirement that the arterial portion be expended pursuant to a five-year project list to be adopted by the commission, extended annually for one year, available for public review, to be first adopted at least 30 days prior to the election held pursuant to Section 190301.
  (5) A requirement that the city and the county portions be expended pursuant to a five-year project list to be adopted by a resolution by each city and the board of supervisors, respectively, extended annually for one year, available for public review, to be first adopted at least 30 days prior to the election held pursuant to Section 190301.

(a) The county shall conduct an election called by the board of supervisors pursuant to Section 190301.
  (b) The election shall be called and conducted in the same manner as provided by law for the conduct of elections by a county.

(a) Any transactions and use tax ordinance adopted pursuant to this chapter shall be operative on the first day of the first calendar quarter commencing more than 120 days after adoption of the ordinance.
  (b) Prior to the operative date of the ordinance, the commission shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of the ordinance.

The revenues from the taxes imposed pursuant to this chapter shall be allocated by the commission for transportation purposes consistent with the adopted regional transportation improvement program and the regional transportation plan.

(a) The commission, subject to the approval of the voters, may impose a maximum tax rate of one-half of 1 percent under this division and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, and the commission may state the maximum tax rate in terms of not to exceed one-half of 1 percent, or any lesser percentage thereof. Neither this division nor the ordinance shall affect any tax otherwise authorized.
  (b) The tax rate adopted pursuant to this chapter, unless otherwise prohibited, may be increased by the commission by ordinance adopted in the manner and by the vote stated in Section 190301 and approved by a majority of the electors voting on the measure at an election called for that purpose by the commission.

The commission may reduce a tax rate to percentages lower than that approved by the voters and may further provide for an increase of the tax rate if it has previously been lowered. However, the tax rate may not be increased to a rate above the tax rate approved by the voters. Any reduced tax rate may be adopted only if the commission determines, by a two-thirds vote, that the proceeds of the taxes with the altered tax rate will be sufficient to provide for the payment of principal of, and interest on, any limited tax bonds and any other indebtedness incurred by the commission which was to be payable from the proceeds of the retail transactions and use tax.

Any increase or reduction in the tax rate adopted pursuant to Section 190306 or 190307 shall become effective on the first day of the calendar quarter which commences at least 120 days following the date of the commission's vote approving the increased or reduced rate.

(a) If requested to do so by the commission in its resolution calling for an election, the board of supervisors, as part of the ballot proposition to approve the imposition of a retail transactions and use tax, may seek authorization to issue bonds for capital outlay expenditures as may be provided for in the ordinance expenditure plan payable solely from the proceeds of the tax.
  (b) The maximum bonded indebtedness that may be outstanding at any one time shall be an amount equal to the sum of the principal of, and interest on, the bonds, but not to exceed the estimated proceeds of the tax, as determined by the plan. The amount of bonds outstanding at any one time does not include the amount of bonds, refunding bonds, or bond anticipation notes for which funds necessary for the payments thereof have been set aside for that purpose in a trust or escrow account.
  (c) The proposition shall set forth the actual percent of the tax.
  (d) The proposition shall set forth the duration of the tax if the plan specifies a time limit.
  (e) The proposition shall set forth the amount of bonds, if any, payable from the proceeds of the tax.
  (f) The proposition shall set forth the commission as the agency imposing the tax.
  (g) The proposition shall set forth the appropriations limit of the commission pursuant to Section 4 of Article XIII B of the California Constitution.
  (h) The sample ballot to be mailed to the voters, pursuant to Section 13303 of the Elections Code, shall be the full proposition, as set forth in the ordinance calling the election, and the voter information handbook shall include the entire ordinance expenditure plan.

(a) The bonds authorized by the voters concurrently with the approval of the retail transactions and use tax may be issued at any time by the commission and shall be payable from the proceeds of the tax. The bonds shall be referred to as "limited tax bonds." The bonds may be secured by a pledge of revenues from the proceeds of the tax.
  (b) The pledge of the tax to the limited tax bonds authorized under this chapter shall have priority over the use of any of the tax for "pay-as-you-go" financing, except to the extent that that priority is expressly restricted in the resolution authorizing the issuance of the bonds.

Limited tax bonds shall be issued pursuant to a resolution adopted at any time by a two-thirds vote of the commission. Each resolution shall provide for the issuance of bonds in the amounts as may be necessary, until the full amount of bonds authorized have been issued. The full amount of bonds may be divided into two or more series and different dates of payment fixed for the bonds of each series. A bond need not mature on its anniversary date.

(a) A resolution authorizing the issuance of bonds shall state all of the following:
  (1) The purposes for which the proposed debt is to be incurred, which may include all costs and estimated costs incidental to, or connected with, the accomplishment of those purposes, including, without limitation, engineering, inspection, legal, fiscal agents, financial consultant and other fees, bond and other reserve funds, working capital, bond interest estimated to accrue during the construction period and for a period not to exceed three years thereafter, and expenses of all proceedings for the authorization, issuance, and sale of the bonds.
  (2) The estimated cost of accomplishing those purposes.
  (3) The amount of the principal of the indebtedness.
  (4) The maximum term the bonds proposed to be issued shall run before maturity, which shall not be beyond the date of termination of the imposition of the retail transactions and use tax.
  (5) The maximum rate of interest to be paid, which shall not exceed the maximum allowable by law.
  (6) The denomination or denominations of the bonds, which shall not be less than five thousand dollars ($5,000).
  (7) The form of the bonds, including, without limitation, registered bonds and coupon bonds, to the extent permitted by federal law, and the form of any coupons to be attached thereto, the registration, conversion, and exchange privileges, if any, pertaining thereto, and the time when all of, or any part of, the principal becomes due and payable.
  (b) The resolution may also contain any other matters authorized by this chapter or any other law.

The bonds shall bear interest at a rate or rates not exceeding the maximum allowable by law, payable at intervals determined by the commission, except that the first interest payable on the bonds, or any series thereof, may be for any period not exceeding one year, as determined by the commission.

In the resolution authorizing the issuance of the bonds, the commission may also provide for the call and redemption of the bonds prior to maturity at the times and prices and upon other terms as specified. However, no bond is subject to call or redemption prior to maturity, unless it contains a recital to that effect or unless a statement to that effect is printed.

The principal of, and interest on, the bonds shall be payable in lawful money of the United States at the office of the treasurer of the commission, or at other places as may be designated, or at both the office and other places at the option of the holders of the bonds.

The bonds, or each series thereof, shall be dated and numbered consecutively and shall be signed by the chairperson or vice chairperson of the commission and the auditor-controller of the commission, and the official seal, if any, of the commission shall be attached. The interest coupons of the bonds shall be signed by the auditor-controller of the commission. All of the signatures and seal may be printed, lithographed, or mechanically reproduced. If any officer whose signature appears on the bonds or coupons ceases to be that officer before the delivery of the bonds, the officer's signature is as effective as if the officer had remained in office.

The bonds may be sold as the commission determines by resolution, and the bonds may be sold at a price below par, whether by negotiated or public sale.

Delivery of any bonds may be made at any place either inside or outside the state, and the purchase price may be received in cash or bank credits.

All accrued interest and premiums received on the sale of the bonds shall be placed in the fund to be used for the payment of the principal of, and interest on, the bonds, and the remainder of the proceeds of the bonds shall be placed in the treasury of the commission and applied to secure the bonds or for the purposes for which the debt was incurred. However, when the purposes have been accomplished, any money remaining shall be either (a) transferred to the fund to be used for the payment of principal of, and interest on, the bonds or (b) placed in a fund to be used for the purchase of the outstanding bonds in the open market at prices and in the manner, either at public or private sale or otherwise, as determined by the commission. Bonds so purchased shall be canceled immediately.

(a) The commission may provide for the issuance, sale, or exchange of refunding bonds to redeem or retire any bonds issued by the commission upon the terms, at the times and in the manner which it determines.
  (b) Refunding bonds may be issued in a principal amount sufficient to pay all, or any part of, the principal of the outstanding bonds, the premiums, if any, due upon call and redemption thereof prior to maturity, all expenses of the refunding, and either of the following:
  (1) The interest upon the refunding bonds from the date of sale thereof to the date of payment of the bonds to be refunded out of the proceeds of the sale of the refunding bonds or to the date upon which the bonds to be refunded will be paid pursuant to call or agreement with the holders of the bonds.
  (2) The interest upon the bonds to be refunded from the date of sale of the refunding bonds to the date of payment of the bonds to be refunded or to the date upon which the bonds to be refunded will be paid pursuant to call or agreement with the holder of the bonds.
  (c) The provisions of this chapter for the issuance and sale of bonds apply to the issuance and sale of refunding bonds.

(a) The commission may borrow money in anticipation of the sale of bonds which have been authorized pursuant to this chapter, but which have not been sold or delivered, and may issue negotiable bond anticipation notes therefor and may renew the bond anticipation notes from time to time. However, the maximum maturity of any bond anticipation notes, including the renewals thereof, shall not exceed five years from the date of delivery of the original bond anticipation notes.
  (b) The bond anticipation notes, and the interest thereon, may be paid from any money of the commission available therefor, including the revenues from the tax. If not previously otherwise paid, the bond anticipation notes, or any portion thereof, or the interest thereon, shall be paid from the proceeds of the next sale of the bonds of the commission in anticipation of which the notes were issued.
  (c) The bond anticipation notes shall not be issued in any amount in excess of the aggregate amount of the bonds which the commission has been authorized to issue, less the amount of any bonds of the authorized issue previously sold, and also less the amount of other bond anticipation notes therefor issued and then outstanding. The bond anticipation notes shall be issued and sold in the same manner as the bonds.
  (d) The bond anticipation notes and the resolutions authorizing them may contain any provisions, conditions, or limitations which a resolution of the commission may contain.

Any bonds issued under this chapter are legal investment for all trust funds; for the funds of insurance companies, commercial and savings banks, and trust companies; and for state school funds; and whenever any money or funds may, by any law now or hereafter enacted, be invested in bonds of cities, counties, school districts, or other districts within the state, that money or those funds may be invested in the bonds issued under this chapter, and whenever bonds of cities, counties, school districts, or other districts within the state may, by any law now or hereafter enacted, be used as security for the performance of any act or the deposit of any public money, the bonds issued under this chapter may be so used. The provisions of this chapter are in addition to all other laws relating to legal investments and shall be controlling as the latest expression of the Legislature with respect thereto.

Any action or proceeding wherein the validity of the adoption of the retail transactions and use tax ordinance provided for in this chapter or the issuance of any bonds thereunder or any of the proceedings in relation thereto is contested, questioned, or denied, shall be commenced within six months from the date of the election at which the ordinance is approved; otherwise, the bonds and all proceedings in relation thereto, including the adoption and approval of the ordinance, shall be held to be valid and in every respect legal and incontestable.

The commission has no power to impose any tax other than the transactions and use tax imposed upon approval of the voters in accordance with this division.