AMENDED IN ASSEMBLY MARCH 24, 2026
california legislature—2025–26 regular session
ASSEMBLY BILL No. 2484
Introduced by Assembly Member Alvarez
(Coauthor: Assembly Member Ward)
February 20, 2026
An act to amend Sections 120480, 120481, 120485, and 120486 of, and to repeal Section 120482 of, the Public Utilities Code, relating to transportation.
legislative counsel’s digest
AB 2484, as amended, Alvarez. San Die go Metropolitan Transit System: transactions and use tax: voter initiatives.
The Mills-Deddeh Transit Development Act establishes the San Diego Metropolitan Transit Development Board, also known as the San Diego Metropolitan Transit System (MTS), governed by a 15-member board with specified powers and duties related to the operation of public transit services in the southern portion of the County of San Die go. The act authorizes MTS to impose a transactions and use tax of up to 0.5% for public transit purposes within its jurisdiction, or a portion of its jurisdiction, pursuant to the Transactions and Use Tax Law and subject to voter approval and various other requirements.
This bill would also authorize those taxes to be imposed by a qualified voter initiati ve. To the e xtent that the bill w ould impose additional duties on a county elections official, the bill w ould impose a state-mandated local program.
The Transactions and Use Tax Law limits the combined rate of all taxes that may be imposed in accordance with that la w in any county to 2%.
98 This bill w ould prohibit the tax rate of 0.5% described abo ve that may be imposed by MTS or a qualified v oter initiative from being considered for purposes of the combined rate limit under the Transactions and Use Tax Law.
The California Constitution requires the state to reimb urse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. The Le gislature finds and declar es all of the line 2 following:
line 3 (a) The San Diego Metropolitan Transit System, also r eferred line 4 to as MTS, provides public transit services to the urbanized areas line 5 of the County of San Die go, including 10 cities and a portion of line 6 the unincorpor ated areas of the county , serving appr oximately line 7 3,000,000 people in the County of San Diego.
line 8 (b) MTS connects to other local and r egional transportation line 9 systems in southern California.
line 10 (c) The MTS tr ansit network is a critical component of the line 11 overall transportation network in the County of San Die go, and line 12 as such MTS has aggressively taken steps to improve and optimize line 13 public tr ansportation for the benefit of all communities in the line 14 County of San Diego.
line 15 (d) Through these impr ovements, MTS has r ealized a str ong line 16 transit ridership recovery, having recovered more than 95 percent line 17 of its ridership compared to pre-COVID-19 levels and recording line 18 81.1 million trips in the 2025–26 fiscal year.
line 19 (e) MTS has prioritized rider ship r ecovery lost fr om the line 20 COVID-19 pandemic, rising eight spots nationwide to the 13th line 21 ranked system on ridership as of the 2025–26 fiscal year. line 22 (f) While MTS has seen success and ridership growth since the line 23 COVID-19 pandemic, it is still e xperiencing a structur al deficit 98 — 2 — AB 2484
line 1 and approaching what is commonly known as the tr ansit fiscal line 2 cliff in 2030.
line 3 (g) Since the COVID-19 pandemic, MTS has seen the onset of line 4 a fiscal cliff due to reasons such as regaining lost ridership from line 5 the pandemic, rising workforce costs, higher operating expenses, line 6 flat sales tax revenues, and limited local funding. line 7 (h) MTS has developed a comprehensive financial sustainability line 8 strategy to delay its fiscal clif f to the 2030–31 fiscal year . This line 9 includes delaying noncritical infrastructure improvements, finding line 10 more sources of nonfare revenue, such as advertising and property line 11 leases, extending timelines for pension bond payments, exploring line 12 fare increase opportunities, and more.
line 13 (i) Also, as part of the financial sustainability strategy, MTS is line 14 pursuing a Comprehensive Operational Analysis to analyze MTS line 15 services and to pr ovide str ategic data necessary for making line 16 decisions on major network changes, while also exploring viability line 17 of a local revenue measure in 2028.
line 18 (j) The County of San Die go is at the for efront of housing line 19 expansion and leads the state in housing pr oduction per capita. line 20 MTS has contributed to regional housing goals in the County of line 21 San Diego with its own Transit-Oriented Development Program line 22 with a focus on affordable housing. MTS has built 476 homes since line 23 2019, is under construction on 79 homes, has 147 homes at the line 24 permitting and financing sta ge, and has 929 homes in the line 25 negotiation stage.
line 26 (k) Continuing this housing gr owth r equires r obust tr ansit line 27 service to matc h and ultimately gr ow with the r egion to sustain line 28 the needs of its r esidents, particularly those who ar e tr ansit line 29 dependent, of which 78 percent of MTS ridership is classified. line 30 (l) Public transit is of regional and local benefit, serving both line 31 regional and local trips for r esidents of all income le vels. As of line 32 the most recent customer survey, more than two-thirds of current line 33 MTS riders are using bus and trolley services primarily to access line 34 jobs or education.
line 35 (m) MTS plays a vital r ole in tr ansportation access to major line 36 events, conventions, and sports and entertainment venues in the line 37 San Diego region, including Comic-Con, Snapdr agon Stadium, line 38 and Petco Park, enabling residents, workers, and visitors to attend line 39 sporting events and other lar ge-scale gatherings while r educing line 40 traffic congestion, parking demand, and greenhouse gas emissions. 98 AB 2484 — 3 —
line 1 In the 2025–26 fiscal year, MTS provided roughly over 1,000,000 line 2 trips to special events in the San Diego region. line 3 (n) The County of San Die go needs a world-class, r eliable, line 4 affordable, and connected transportation network that meets the line 5 needs of San Diego residents, businesses, and visitors while also line 6 helping combat the climate crisis. Furthermore, MTS serves as a line 7 critical binational economic connector between the United States line 8 and Me xico at the b usiest land port of entry in the Western line 9 Hemisphere. MTS carries mor e than one-half of the pedestrians line 10 crossing every day at the Otay Mesa and San Ysidro ports of entry. line 11 (o) The County of San Diego needs a public transit network that line 12 offers safe , clean, fr equent, accessible , easy-to-navigate , and line 13 reliable service that gets transit riders where they want and need line 14 to go safely, affordably, quickly, and seamlessly. line 15 (p) Preserving, impr oving, and e xpanding public tr ansit to line 16 ensure a world-class transit network is critical to enhance access line 17 to opportunity, lower emissions of gr eenhouse gases, strengthen line 18 the region’s economy, support increased housing production, and line 19 improve quality of life.
line 20 (q) To achieve these goals, local funding is critical to sustaining line 21 and improving public transit service in the County of San Die go line 22 for future generations to come.
line 23 (r) This act is critical to ensur e ample time for planning and line 24 preparation in advance of a local funding initiative effort. line 25 SECTION 1.
line 26 SEC. 2. Section 120480 of the Public Utilities Code is amended line 27 to read:
line 28 120480. (a) (1) A retail transactions and use tax ordinance line 29 applicable to the entirety of, or a portion of, the incorporated and line 30 unincorporated territory within the area of the board pursuant to line 31 Section 120054 shall be imposed by the board in accordance with line 32 Section 120485, the Transactions and Use Tax La w (P art 1.6 line 33 (commencing with Section 7251) of Di vision 2 of the Re venue line 34 and Taxation Code), and Section 2 of Article XIII C of the line 35 California Constitution. The county shall conduct an election called line 36 by the board pursuant to this paragraph in the same manner as line 37 provided by law for the conduct of elections by a county. line 38 (2) Notwithstanding Section 9300 of the Elections Code or any line 39 other law, the retail transactions and use tax ordinance described line 40 in paragraph (1) may also be imposed by a qualified voter initiative 98 — 4 — AB 2484
line 1 pursuant to Chapter 4 (commencing with Section 9300) of Division line 2 9 of the Elections Code and in accordance with Section 120485 line 3 and the Transactions and Use Tax Law (Part 1.6 (commencing line 4 with Section 7251) of Di vision 2 of the Re venue and Taxation line 5 Code).
line 6 (b) The tax ordinance shall take effect at the close of the polls line 7 on the day of election at which the proposition is adopted. The line 8 initial collection of the transactions and use tax shall take place in line 9 accordance with Section 120483.
line 10 (c) If, at any time, the voters do not approve the imposition of line 11 the transactions and use tax, this chapter remains in full force and line 12 effect. At any time thereafter , the same, or a dif ferent, measure line 13 may be submitted to the v oters by the board or a qualified v oter line 14 initiative in accordance with this chapter.
line 15 (d) The portion of the area of the board to which the tax would line 16 apply shall be determined by the board or the qualified v oter line 17 initiative, as applicable, before the electors vote on the measure. line 18 (e) If the tax only applies to a portion of an area of the board, line 19 both of the following shall apply:
line 20 (1) (A) The incorporated area of each city and of contiguous line 21 cities within the area of the board shall be either wholly included line 22 within that portion or wholly e xcluded from that portion. F or line 23 purposes of this subparagraph, “contiguous cities” means tw o or line 24 more cities with shared borders.
line 25 (B) The entire unincorporated area of the board shall either be line 26 wholly included within that portion or wholly excluded from that line 27 portion.
line 28 (2) (A) The board shall not enter into a construction contract line 29 over one million dollars ($1,000,000) that w ould be in part or line 30 wholly financed through the tax with an y entity unless the entity line 31 provides to the board an enforceable commitment that the entity line 32 and its subcontractors at e very tier will use a skilled and trained line 33 workforce to perform all w ork on the project or a contract that line 34 falls within an apprenticeship occupation in the b uilding and line 35 construction trades in accordance with Chapter 2.9 (commencing line 36 with Section 2600) of Part 1 of Division 2 of the Public Contract line 37 Code.
line 38 (B) This paragraph shall not apply if an y of the follo wing line 39 requirements are met:
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line 1 (i) The board has entered into a project labor agreement that line 2 will bind all contractors and subcontractors performing w ork on line 3 the project.
line 4 (ii) The board has contracted to use a skilled and trained line 5 workforce and the entity has agreed to be bound by that project line 6 labor agreement.
line 7 (iii) The project or contract is being performed under the line 8 extension or renewal of a project labor agreement that was entered line 9 into by the board before January 1, 2019.
line 10 (iv) The entity has entered into a project labor agreement that line 11 will bind the entity and all its subcontractors at e very tier line 12 performing the project or the entity has contracted to use a skilled line 13 and trained workforce.
line 14 (C) For purposes of this paragraph, “project labor agreement” line 15 has the same meaning as defined in paragraph (1) of subdi vision line 16 (b) of Section 2500 of the Public Contract Code. line 17 (f) The revenues derived from the tax shall be spent within, or line 18 for the benefit of, the portion of the area of the board to which the line 19 tax applies, and shall be spent only on transportation and transit line 20 infrastructure and services.
line 21 (g) Any revenues derived from the tax shall supplement, and line 22 not supplant, other transportation revenues available to the portion line 23 of the area of the board to which the tax applies. line 24 SEC. 2.
line 25 SEC. 3. Section 120481 of the Public Utilities Code is amended line 26 to read:
line 27 120481. (a) The ordinance shall state the nature of the tax to line 28 be imposed, the tax rate or the maximum tax rate, the purposes for line 29 which the revenue derived from the tax will be used, the portion line 30 of the area of the board to which the tax would apply, and may set line 31 a term during which the tax will be imposed. The purposes for line 32 which the tax re venues may be used shall be limited to public line 33 transit purposes serving the area of jurisdiction of the board, line 34 including the administration of this di vision and le gal actions line 35 related thereto. These purposes include expenditures for planning, line 36 environmental reviews, engineering and design costs, and related line 37 right-of-way acquisition. The ordinance shall contain an line 38 expenditure plan that shall include the allocation of re venues for line 39 the purposes authorized by this section.
98 — 6 — AB 2484
line 1 (b) As used in this section, “public transit purposes” includes line 2 the public transit responsibilities under the jurisdiction of the board line 3 and any repair, redesign, or ongoing maintenance of a right-of-way line 4 upon which transit is intended to tra vel, or any bikeway, bicycle line 5 path, sidewalk, trail, pedestrian access, or pedestrian accessway. line 6 SEC. 3.
line 7 SEC. 4. Section 120482 of the Public Utilities Code is repealed. line 8 SEC. 4.
line 9 SEC. 5. Section 120485 of the Public Utilities Code is amended line 10 to read:
line 11 120485. (a) Subject to the appro val of the v oters within the line 12 portion of the county to which the tax w ould apply, a maximum line 13 tax rate of one-half of 1 percent may be imposed under this article line 14 and the Transactions and Use Tax Law (Part 1.6 (commencing line 15 with Section 7251) of Di vision 2 of the Re venue and Taxation line 16 Code). The tax at a rate other than one-half or one-fourth of 1 line 17 percent shall not be le vied unless specifically authorized by the line 18 Legislature.
line 19 (b) A retail transactions and use tax may be imposed pursuant line 20 to subdivision (a) that, in combination with all tax es imposed in line 21 accordance with P art 1.6 (commencing with Section 7251) of line 22 Division 2 of the Re venue and Taxation Code, exceeds the limit line 23 established in Section 7251.1 of the Revenue and Taxation Code. line 24 (c) Notwithstanding Section 7251.1 of the Revenue and Taxation line 25 Code, the tax rate authorized pursuant to this section shall not be line 26 considered for purposes of the combined rate limit established by line 27 Section 7251.1 of the Revenue and Taxation Code. line 28 SEC. 5.
line 29 SEC. 6. Section 120486 of the Public Utilities Code is amended line 30 to read:
line 31 120486. The board or a qualified voter initiative, as part of the line 32 ballot proposition to approve the imposition of a retail transactions line 33 and use tax, may seek authorization to issue bonds payable from line 34 the proceeds of the tax.
line 35 SEC. 6.
line 36 SEC. 7. If the Commission on State Mandates determines that line 37 this act contains costs mandated by the state, reimb ursement to line 38 local agencies and school districts for those costs shall be made 98 AB 2484 — 7 —
line 1 pursuant to Part 7 (commencing with Section 17500) of Division line 2 4 of Title 2 of the Government Code.
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98 — 8 — AB 2484