ARTICLE 9. Transaction and Use Taxes in the County of Orange [130400. - 130442.]

Cal. Public Utilities Code - PUC 9.

in effect

Cal. Public Utilities Code - PUC § 130400. Section 130400.

As used in this article: (a) “Commission” means the county transportation commission created in Orange County pursuant to Section 130000. (b) “County” means the County of Orange. (c) “Transit operations” means all activities related to operating a transit system other than the purchase, construction, and maintenance of equipment, vehicles, and facilities for public transit purposes.

Cal. Public Utilities Code - PUC § 130400.5. Section 130400.5.

The Legislature, by the enactment of this article, intends the county and cities therein to use any additional funds provided them by this article to supplement existing local revenues being used for public transportation purposes. The county and the cities therein are further encouraged to maintain their existing commitment of local funds for public transportation purposes.

Cal. Public Utilities Code - PUC § 130401. Section 130401.

A retail transactions and use tax ordinance applicable in the incorporated and unincorporated territory of the county may be adopted by the commission in accordance with Section 130410 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 a special election called for that purpose by the commission and an expenditure plan is adopted pursuant to Section 130406.

Cal. Public Utilities Code - PUC § 130402. Section 130402.

The commission, in the ordinance, shall state the nature of the tax to be imposed, shall provide the tax rate or rates or the maximum tax rate or rates, and shall specify the purposes for which the revenue derived from the tax will be used.

Cal. Public Utilities Code - PUC § 130403. Section 130403.

(a) The County of Orange shall conduct the special election called by the commission pursuant to Section 130401, and the commission shall reimburse the county for its cost in conducting the special election. (b) The special election shall be called and conducted in the same manner as provided by law for the conduct of special elections by a county.

Cal. Public Utilities Code - PUC § 130404. Section 130404.

(a) Any transactions and use tax ordinance adopted pursuant to this article 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.

Cal. Public Utilities Code - PUC § 130405. Section 130405.

The revenues from the taxes imposed pursuant to this article may be allocated by the commission for public transportation purposes, including, but not limited to, construction, maintenance, and operation of streets, roads, and highways, and the construction and maintenance of public transit systems, including exclusive public mass transit guideway systems, available now or hereafter. The revenues may also be used for improvements to the state highway system in the manner otherwise provided by law. However, the revenues shall not be allocated for transit operations.

Cal. Public Utilities Code - PUC § 130406. Section 130406.

(a) If the commission decides to adopt a retail transactions and use tax pursuant to this article, the commission shall review and assess the needs for the public transportation purposes specified in Section 130405. As part of this review and assessment, the commission shall solicit proposals for public transportation purposes from the Department of Transportation, the county, and the cities therein, and all public transit operators within the county. The commission shall adopt a procedure for evaluating these proposals in consultation with the Department of Transportation, the county, and the cities therein, and all public transit operators within the county. (b) Based on the evaluation, the commission shall prepare a plan for the expenditure of the revenues expected to be derived from the tax provided for in this article, together with other federal, state, and local funds expected to be available for transportation improvements, for a period of 15 years. (c) The expenditure plan shall include projections of revenues and expenditures for capital, maintenance, and operations purposes for categories of transportation facilities, including, but not limited to, freeways, arterial roads, local streets and roads, and transit. (d) The commission shall not adopt the expenditure plan until it has received the approval of the board of supervisors and the city councils representing both a majority of the cities in the county and a majority of the population residing in incorporated areas of the county. Before adoption of an expenditure plan, the commission shall also conduct public hearings on that plan. (e) The expenditure plan shall be finally adopted prior to the call of the election provided for in Section 130401. An amendment to the expenditure plan subject to protest pursuant to paragraph (3) of subdivision (c) of Section 130407 shall be finally adopted by the commission after approval of the board of supervisors and the cities as specified in this section and public hearings on the amendments, and the amendment is effective upon that final adoption by the commission.

Cal. Public Utilities Code - PUC § 130407. Section 130407.

(a) The commission may annually review and propose amendments to the expenditure plan adopted pursuant to Section 130406 to provide for the use of additional federal, state, and local funds, to account for unexpected revenues, or to take into consideration unforeseen circumstances. (b) The commission shall notify the board of supervisors and the city council of each city in the county and provide them with a copy of the proposed amendments. (c) The proposed amendments shall become effective 45 days after notice is given pursuant to subdivision (b) except as follows: (1) If the proposed amendment deletes a project which is included in the original adopted expenditure plan and which is located entirely within a city, the proposed amendment shall become effective only if the city council of the affected city, by resolution, concurs with the deletion of the project. (2) If the proposed amendment deletes a project which is included in the original adopted expenditure plan and which is located entirely in the unincorporated area of the county, the proposed amendment shall become effective only if the board of supervisors, by resolution, concurs with the deletion of the project. (3) In all cases other than those set forth in paragraphs (1) and (2), the proposed amendment shall become effective unless the board of supervisors, or city councils representing 25 percent of the cities in the county, adopt a resolution protesting the proposed amendments. If protested, the proposed amendments shall become effective only if the commission follows the approval procedure in subdivision (d) of Section 130406.

Cal. Public Utilities Code - PUC § 130408. Section 130408.

The expenditure plan adopted pursuant to Section 130406, and any amendment adopted pursuant to Section 130407, shall include a provision for an annual allocation of funds to the county and the cities therein for public transportation purposes. In making annual allocations to the county and the cities therein, the commission may allocate the proceeds of any limited tax bonds authorized by the voters pursuant to Section 130412.

Cal. Public Utilities Code - PUC § 130409. Section 130409.

An amended expenditure plan adopted pursuant to Section 130407 may include a provision to 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; but the tax rate may not be increased to a rate above the tax rate approved by the voters. Any revised 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 and interest of 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.

Cal. Public Utilities Code - PUC § 130409.5. Section 130409.5.

If a retail transactions and use tax is adopted pursuant to this article, the commission shall prepare and submit a report to the Department of Transportation, to the board of supervisors, to the city council of each city in the county, and to each public transit operator within the county on or before January 1 of the year following the end of the first full fiscal year after the date that the taxes are imposed pursuant to this article and annually thereafter. The report shall evaluate, and report the progress made in, the implementation of the expenditure plan in the preceding fiscal year.

Cal. Public Utilities Code - PUC § 130410. Section 130410.

(a) The commission is authorized to impose a maximum tax rate of 1 percent under this article 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 1 percent, or any lesser percentage thereof. The commission shall not levy the tax at a rate other than 1 percent or 3 4 , 1 2 , or 1 4 of 1 percent, unless specifically authorized by the Legislature. (b) The commission, in the ordinance, shall provide for limitations upon the time when the tax shall be in effect. Any tax rate or maximum tax rate adopted pursuant to this article, unless otherwise prohibited, may be increased when authorized by the commission by ordinance adopted in the manner and by the vote stated in Section 130401 and approved by a majority of the electors voting on the measure at an election called for that purpose by the commission.

Cal. Public Utilities Code - PUC § 130411. Section 130411.

(a) The actual wording of the proposition on any short form of ballot card, label, or other device, regardless of the system of voting used, shall read as follows: TRANSPORTATION—ORANGE COUNTY TRANSPORTATION COMMISSION To improve, expand, construct, maintain, and operate the transportation system in the county, this proposition authorizes the Orange County Transportation Commission to adopt a _____ percent sales tax solely for transportation purposes. YES NO (b) The proposition shall set forth the actual percent of the transactions and use tax upon which the electors are voting. (c) The sample ballot to be mailed to the voters, under Section 13303 of the Elections Code, shall be the full proposition as set forth in the ordinance calling the election.

Cal. Public Utilities Code - PUC § 130412. Section 130412.

The commission may, as part of the same ballot proposition to approve the imposition of a retail transactions and use tax, seek authorization to issue bonds payable solely from the proceeds of the retail transactions and use tax. The maximum bonded indebtedness which may be authorized shall be an amount equal to the sum of the principal and interest on the bonds not to exceed the estimated proceeds of the retail transactions and use tax for a period of 30 years. The actual wording of the proposition on any short form of ballot card, label, or other device, regardless of the system of voting used, shall read as follows: TRANSPORTATION—ORANGE COUNTY TRANSPORTATION COMMISSION To improve, expand, construct, maintain, and operate the transportation system in the county, this proposition authorizes the Orange County Transportation Commission to adopt a ____ percent sales tax solely for transportation purposes and/or to issue bonds payable from the proceeds of that sales tax. YES NO

Cal. Public Utilities Code - PUC § 130413. Section 130413.

The commission may further, as part of the same proposition, submit to the voters a proposal to increase any appropriations limits heretofore imposed upon the commission by the amount of the proceeds of the sales tax not entitled to an exemption from those limits as debt service. In this case, the ballot proposition shall, in addition to the language set forth in Sections 130411 and 130412, further include the following words: “and increases the appropriations limit.”

Cal. Public Utilities Code - PUC § 130420. Section 130420.

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

Cal. Public Utilities Code - PUC § 130421. Section 130421.

(a) Limited tax bonds shall be issued pursuant to a resolution adopted at any time, and from time to time, by the commission by a two-thirds vote of all members of the commission. Each resolution shall provide for the issuance of bonds in such amounts as the necessity therefor may appear, until the full amount of the bonds authorized shall 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. (b) A resolution providing for 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 the 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 exceed 31 years from the date thereof or the date of each series thereof. (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 the whole or any part of the principal shall become due and payable. (c) The resolution may also contain any other matters authorized by this article or any other law.

Cal. Public Utilities Code - PUC § 130422. Section 130422.

(a) 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 commission. (b) In the resolution or resolutions providing for the issuance of the bonds, the commission may also provide for call and redemption of the bonds prior to maturity at such times and prices and upon such other terms as it may specify, provided that no bond shall be 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 thereon. (c) 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 County of Orange or at such other place or places as may be designated, or at either place or places at the option of the holders of the bonds. (d) The bonds, or each series thereof, shall be dated and numbered consecutively and shall be signed by the chairman or vice chairman of the commission and the auditor-controller of the County of Orange, and the official seal of the commission attached. The interest coupons of such bonds shall be signed by the auditor-controller of the County of Orange. All of the signatures and seal may be printed, lithographed, or mechanically reproduced, except that one of the signatures on the bonds shall be manually affixed. If any officer whose signature appears on bonds or coupons ceases to be such an officer before the delivery of the bonds, the officer’s signature is as effective as if the officer had remained in office.

Cal. Public Utilities Code - PUC § 130423. Section 130423.

(a) The bonds may be sold as the commission determines by resolution. The commission may sell the bonds at a price below par; provided, however, that the discount on any bonds so sold shall not exceed 5 percent of the par value thereof. (b) Before selling the bonds, or any part thereof, the commission shall give notice inviting sealed bids in any manner as it may prescribe. If satisfactory bids are received, the bonds offered for sale shall be awarded to the highest responsible bidder. If no bids are received, or if the commission determines that the bids received are not satisfactory as to price or responsibility of the bidders, the commission may reject all bids received, if any, and either readvertise or sell the bonds at private sale.

Cal. Public Utilities Code - PUC § 130424. Section 130424.

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.

Cal. Public Utilities Code - PUC § 130425. Section 130425.

All accrued interest and premiums received on the sale of bonds shall be placed in the fund to be used for the payment of 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; provided, however, that when the purposes have been accomplished, any moneys 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 outstanding bonds of the commission from time to time in the open market at such prices and in such manner, either at public or private sale or otherwise, as the commission may determine. Bonds so purchased shall be canceled immediately.

Cal. Public Utilities Code - PUC § 130430. Section 130430.

(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 (a) 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 such bonds or (b) 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 holders of the bonds. (c) The provisions of this article for the issuance and sale of bonds apply to the issuance and sale of refunding bonds.

Cal. Public Utilities Code - PUC § 130435. Section 130435.

(a) The commission may borrow money in anticipation of the sale of bonds which have been authorized pursuant to this article, but which have not been sold and delivered, and may issue negotiable bond anticipation notes therefor and may renew the bond anticipation notes from time to time, but 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 moneys of the commission available therefor, including the revenues from the retail transactions and use taxes imposed pursuant to this article. 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 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 resolution or resolutions authorizing them may contain any provisions, conditions, or limitations which a resolution of the commission authorizing the issuance of bonds may contain.

Cal. Public Utilities Code - PUC § 130440. Section 130440.

Any bonds which shall be issued under the provisions of this article shall be 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, cities and counties, counties, school districts, or other districts within the state, that money or funds may be invested in the bonds issued under this article, and whenever bonds of cities, cities and counties, counties, school districts, or other districts within this 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 moneys, the bonds issued under this article may be so used. The provisions of this article shall be in addition to all other laws relating to legal investments and shall be controlling as the latest expression of the Legislature with respect thereto.

Cal. Public Utilities Code - PUC § 130441. Section 130441.

Any action or proceeding wherein the validity of the adoption of the retail transactions and use tax ordinance provided for in this article 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.

Cal. Public Utilities Code - PUC § 130442. Section 130442.

If the measure to adopt the transaction and use tax pursuant to Section 130401 is not submitted to the electors on or before December 31, 1985, then this article shall remain in effect only until January 1, 1986, and as of that date is repealed unless a later enacted statute, which is chaptered before January 1, 1986, repeals or extends that date.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026