Chapter 3 - Retail Transactions and Use Tax

California Public Utilities Code — §§ 131100-131122

Sections (23)

Amended by Stats. 2005, Ch. 83, Sec. 2. Effective July 19, 2005.

(a)The Legislature, by the enactment of this chapter intends a county transportation authority or the commission, pursuant to a county transportation expenditure plan adopted pursuant to Section 131055, to use any additional funds provided by this chapter to supplement existing local revenues being used for public transportation purposes listed in the plan. The Legislature further intends that the funds provided pursuant to this chapter shall not replace funds previously provided by property tax revenues for public transportation purposes. The nine-county San Francisco Bay area is further encouraged to maintain its existing commitment of local funds for public transportation purposes.

(b)Any tax revenue generated pursuant to this chapter shall be expended in the county of origin, except that tax revenue generated may be expended within and outside the county of origin if so provided in the adopted county transportation expenditure plan. However, the tax revenues may be exchanged for federal or state funds available to another county or local government for transportation purposes if the exchange will benefit the county of origin.

(c)(1) In order to receive funds from the Counties of Alameda and Contra Costa and the City and County of San Francisco pursuant to this chapter, the San Francisco Bay Area Rapid Transit District shall agree to match from federal, state, or other funds available to the district, at least as much as it receives from the additional funds provided by this chapter from those counties.

(2)The funds the district received pursuant to this chapter, and its matching funds therefor, shall be used only for capital expenditures.

§ 131101

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

All allocations of revenues derived from the adoption of a retail transactions and use tax ordinance in a county shall be consistent with the priorities established by its county transportation expenditure plan.

§ 131102

Amended by Stats. 2025, Ch. 740, Sec. 5. (SB 63) Effective January 1, 2026.

(a)(1) A retail transactions and use tax ordinance for a tax of either one-half of 1 percent or 1 percent applicable in the incorporated and unincorporated territory of a county, except as provided in paragraph (2), may be imposed by a county transportation authority or the commission in the manner prescribed in Section 131103 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, if two-thirds of the electors voting on the measure vote to approve its imposition at an election which shall be called for this purpose by the board of supervisors within one year after the adoption of a county transportation expenditure plan.

(2)The authority to impose a tax under paragraph (1) shall apply to the incorporated

and unincorporated territory of the County of San Mateo and the City and County of San Francisco only until December 31, 2025. The elimination of the authority pursuant to this paragraph to impose a tax shall not affect the validity or operation of a tax approved before December 31, 2025, in the incorporated and unincorporated territory of the County of San Mateo or the City and County of San Francisco pursuant to paragraph (1).

(b)Commencing January 1, 2026, a retail transactions and use tax ordinance for a tax of1/8of 1 percent or multiple thereof, up to 1 percent, applicable in the territory of the City and County of San Francisco may be imposed by the county transportation authority or the commission in the manner prescribed in Section 131103 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code, if

two-thirds of the electors voting on the measure vote to approve its imposition at an election which shall be called for this purpose by the board of supervisors within one year after the adoption of a county transportation expenditure plan. The combined rate of taxes in the territory of the City and County of San Francisco imposed pursuant to this subdivision and paragraph (1) of subdivision (a) shall not exceed 1 percent.

(c)Commencing January 1, 2026, a retail transactions and use tax ordinance for a tax of1/8of 1 percent or multiple thereof, up to 1 percent, applicable in the incorporated and unincorporated territory of the County of San Mateo may be imposed by the county transportation authority or the commission in the manner prescribed in Section 131103 and Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and

Taxation Code, if two-thirds of the electors voting on the measure vote to approve its imposition at an election which shall be called for this purpose by the board of supervisors within one year after the adoption of a county transportation expenditure plan. The combined rate of taxes in the incorporated and unincorporated territory of the County of San Mateo imposed pursuant to this subdivision and paragraph (1) of subdivision (a) shall not exceed 1 percent.

(d)The ordinance shall take effect at the close of the polls on the day of the election at which the proposition, as set forth in Section 131108, is adopted. The ordinance shall specify the period, as determined by the adopted county transportation expenditure plan during which the tax will be imposed. The tax may be terminated earlier if the projects in the adopted plan are completed and any bonds outstanding issued pursuant to this division are

redeemed.

§ 131103

Amended by Stats. 2005, Ch. 83, Sec. 3. Effective July 19, 2005.

The county, in the retail transactions and use tax ordinance, shall state the nature of the tax to be imposed and shall specify the purposes for which the revenues derived from the tax will be used, and may state the membership of the county transportation authority.

§ 131104

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(a)The county shall conduct the election called by the board of supervisors pursuant to Section 131102, and the county shall bear the cost in conducting the election, but shall be reimbursed from the proceeds of the tax by the agency imposing the tax if the tax is approved pursuant to Section 131102.

(b)The election shall be called and conducted in the same manner as provided by law for the conduct of elections by a county.

§ 131105

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(a)Any 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, a county transportation authority or the commission, as the case may be, shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of the ordinance.

§ 131106

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

The net revenues derived from the taxes imposed pursuant to this chapter, after deduction for expenses pursuant to Section 131107, shall be allocated by the agency imposing the tax for the transportation purposes as set forth in the adopted county transportation expenditure plan.

§ 131107

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

In an adopted county transportation expenditure plan that provides for the imposition of a retail transactions and use tax, not more than 1 percent of the annual net amount of revenues raised by the tax may be used to fund the salaries and benefits of the staff of the commission or the county transportation authority, as the case may be, in administering the plan and the retail transactions and use tax ordinance.

All other funds, after reimbursement to the county for the cost of conducting the election as provided for in Section 131104, shall be used for the planning, design, construction, and operation of the traffic and transportation projects as set forth in the adopted plan, and shall be allocated according to eligible sponsoring agencies.

§ 131108

Amended by Stats. 1994, Ch. 923, Sec. 214. Effective January 1, 1995.

(a)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 as may be provided for in the adopted county transportation expenditure plan payable solely from the proceeds of the tax.

(b)The maximum bonded indebtedness which may be authorized 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.

(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 either a county transportation authority or the commission as the agency imposing the tax.

(g)For an entity formed after 1978 which does not have an appropriations limit, the proposition shall include a limit pursuant to Article XIII B of the 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 adopted county transportation expenditure plan.

§ 131109

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(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 agency imposing the tax and shall be payable solely from the proceeds of the tax. The bonds shall be referred to as “limited tax bonds.”

(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.

§ 131110

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

Limited tax bonds shall be issued pursuant to a resolution adopted at any time of a two-thirds vote by the agency imposing the retail transactions and use tax. 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.

§ 131111

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(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.

§ 131112

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

The bonds shall bear interest at a rate or rates not exceeding the maximum allowable by law, payable semiannually, 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 agency imposing the retail transactions and use tax.

§ 131113

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

In the resolution authorizing the issuance of the bonds, the agency imposing the retail transactions and use tax 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.

§ 131114

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

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 agency imposing the retail transactions and use tax, 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.

§ 131115

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

The bonds, or each series thereof, shall be dated and numbered consecutively and shall be signed by the chairperson or vice chairperson of the agency imposing the retail transactions and use tax and the auditor-controller of the agency, and the official seal, if any, of the agency shall be attached.

The interest coupons of the bonds shall be signed by the auditor-controller of the agency. All of the signatures and seal may be printed, lithographed, or mechanically reproduced, except that one of the signatures shall be manually affixed.

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.

§ 131116

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

The bonds may be sold as the agency imposing the retail transactions and use tax determines by resolution, and the bonds may be sold at a price below par, whether by negotiated or public sale.

§ 131117

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

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.

§ 131118

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

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 agency imposing the retail transactions and use tax 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 agency. Bonds so purchased shall be canceled immediately.

§ 131119

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(a)The agency imposing the retail transactions and use tax may provide for the issuance, sale, or exchange of refunding bonds to redeem or retire any bonds issued by the agency 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.

§ 131120

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

(a)The agency imposing the retail transactions and use tax 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 agency 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 agency 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 agency 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 agency may contain.

§ 131121

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

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 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.

§ 131122

Added by Stats. 1986, Ch. 301, Sec. 3. Effective July 14, 1986.

Any action or proceedings 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.