BILL NUMBER: SB 79 CHAPTERED 08/24/07 CHAPTER 173 FILED WITH SECRETARY OF STATE AUGUST 24, 2007 APPROVED BY GOVERNOR AUGUST 24, 2007 PASSED THE ASSEMBLY JULY 20, 2007 PASSED THE SENATE AUGUST 21, 2007 AMENDED IN ASSEMBLY JULY 19, 2007 AMENDED IN ASSEMBLY JULY 16, 2007 INTRODUCED BY Committee on Budget and Fiscal Review JANUARY 17, 2007 An act to add Chapter 9 (commencing with Section 16965) to Part 3 of Division 4 of Title 2 of the Government Code, to amend Section 99312 of, and to add Section 99655 to, the Public Utilities Code, to amend Sections 7102, 7105, and 7106 of, and to add Section 7103 to, the Revenue and Taxation Code, to amend Section 2106 of the Streets and Highways Code, to amend Sections 21101.4 and 34501.12 of the Vehicle Code, and to repeal Section 59 of Chapter 861 of the Statutes of 2000, relating to transportation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST To the Members of the California State Senate: I am signing Senate Bill 79 with the following objections: I am eliminating the two hundred million dollar ($200,000,000) appropriation for transfer from the Transportation Debt Service Fund to the General Fund in paragraph (2) of subdivision (b) of Section 16965 of the Government Code as added by this bill in Section 1. The language making this appropriation is technically deficient and does not conform to what I believe was Legislative intent and may not achieve the intended fiscal result. I am setting aside these funds for appropriation in subsequent legislation to achieve the intended purpose of offsetting General Fund debt service costs for public transportation-related bonds. I am eliminating the eighty-two million six hundred seventy-eight thousand dollar ($82,678,000) appropriation for transfer from the Mass Transportation Fund to the General Fund in subdivision (b) of Section 7103 of the Revenue and Taxation Code as added by this bill in Section 5. The language making this appropriation is technically deficient and does not conform to what I believe was Legislative intent and may not achieve the intended fiscal result. I am setting aside these funds for appropriation in subsequent legislation to achieve the intended purpose of offsetting General Fund debt service costs for public transportation-related bonds. I am also reducing the appropriation in paragraph (1) of subdivision (d) Section 99312 of the Public Utilities Code, as amended in Section 2 of this bill, from two hundred million dollars ($200,000,000) to one hundred million dollars ($100,000,000) and modifying the language in the paragraph accordingly as follows: " SEC. 2. Section 99312 of the Public Utilities Code is amended to read: 99312. From the funds transferred to the account pursuant to Section 7102 of the Revenue and Taxation Code, the Legislature shall appropriate funds for the following purposes: (a) To the department, 50 percent for purposes of Section 99315. (b) To the Controller, 25 percent for allocation to transportation planning agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board pursuant to Section 99314. (c) To the Controller, 25 percent for allocation to transportation agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board for purposes of Section 99313. (d) For the 2007-08 fiscal year, notwithstanding any other provision of this section, or any other provision of law, the allocations made pursuant to this section shall be adjusted as follows: (1) From the funds transferred to the account pursuant to paragraph (1) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, one hundred fifty million dollars ($100,000,000) ($50,000,000) shall be allocated pursuant to subdivision (b); one hundred fifty million dollars ($100,000,000) ($50,000,000) shall be allocated pursuant to subdivision (c); and the remainder of revenue shall remain in the Public Transportation Account to fund other state public transportation priorities. The Controller shall make these allocations in four equal quarterly amounts of twenty-five twelve and one-half million dollars ($25,000,000) ($12,500,000) , as achievable by the receipt of the specified revenue. (2) The amount appropriated in Item 2640-101-0046 of the Budget Act of 2006 for state transit assistance pursuant to subdivision (b) and (c) was greater than the amount of revenues received to support state transit assistance pursuant to Section 7102 of the Revenue and Taxation Code. Therefore, notwithstanding any other provision of law, the amount that would have otherwise been available for appropriation to state transit assistance in the 2007-08 fiscal year pursuant to paragraphs (2) and (3) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, shall be reduced by the excess amount that was appropriated to state transit assistance in the Budget Act of 2006, and that excess amount, as determined by the Department of Finance, shall instead remain in the Public Transportation Account to fund other state public transportation priorities. The Controller shall attempt to spread this adjustment equally over four quarterly payments, as achievable by revenue estimates. (e) For the 2008-09 fiscal year and thereafter, notwithstanding any other provision of this section, or any other provision of law, from the funds transferred to the account pursuant to paragraph (1) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, the Legislature shall appropriate funds for the following purposes: (1) To the department, 33.34 percent for purposes of Section 99315. (2) To the Controller, 33.33 percent for allocation to transportation planning agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board pursuant to Section 99314. (3) To the Controller, 33.33 percent for the allocation to transportation agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board for purposes of Section 99313." I am reducing this appropriation because the total of appropriations made in this account exceeds projected resources and would put the account into a deficit. The revenues funding this appropriation are from the spillover calculation, which has proven to be very unpredictable and volatile in the past. To protect the viability of the other appropriations from the account, in particular those for State Transportation Improvement Program projects, a prudent reserve is necessary. If sufficient revenues become available to provide this level of grants to local transit agencies, I would be willing to consider a supplemental appropriation later in the year. Another provision of this bill provides for substantial increase in these grants in 2008-09. While I am sustaining the language regarding the out-year funding for the State Transit Assistance program, future year appropriations will be reviewed in light of future budget needs, and therefore may be subject to future redirection. Schwarzenegger, Arnold SB 79, Committee on Budget and Fiscal Review. Transportation. (1) Existing law authorizes the issuance of $2.99 billion of voter-approved general obligation bonds for mass transit purposes pursuant to the Clean Air and Transportation Improvement Act of 1990 and the Passenger Rail and Clean Air Bond Act of 1990. Existing law authorizes the issuance of $2 billion of voter-approved general obligation bonds for seismic retrofit of state-owned highways and bridges pursuant to the Seismic Retrofit Bond Act of 1996. Debt service for these bond measures is required to be made from the General Fund. Existing law, pursuant to Proposition 116 of 1990, an initiative act, creates the Public Transportation Account as a trust fund in the State Transportation Fund, provides that revenues are to be deposited in the account from a specified portion of the sales taxes on gasoline and diesel fuel, and provides that moneys in the account are available for expenditure only for transportation planning and mass transportation purposes. Article XIX A of the California Constitution also imposes restrictions on loans of Public Transportation Account revenues to the General Fund. Existing law requires 50% of the fuel sales tax revenues in the account to be appropriated to the Department of Transportation for allocation to certain state mass transportation and transportation planning programs, and requires the remaining 50% of those revenues to be appropriated to the Controller, by 2 different formulas, for allocation to various local transit agencies for mass transportation purposes through the state transit assistance program. The bill would establish the Mass Transportation Fund in the State Treasury and would require the transfer of certain gasoline sales tax revenues that would otherwise be deposited in the Public Transportation Account to that fund each fiscal year, commencing with the 2007-08 fiscal year. The bill would specify that the eligible uses of money in the Mass Transportation Fund would include payment of debt service on transportation bonds, funding of home-to-school transportation, Small School District Transportation, and regional center transportation for the Department of Developmental Services, and reimbursement of the General Fund relative to specified past and current obligations. The bill would also establish the Transportation Debt Service Fund in the State Treasury and dedicate moneys in the fund to payment of debt service on bonds, including debt service on the 3 above-described bond acts. The bill would appropriate $339,289,345 from the moneys in the fund, derived from a specified portion of the gasoline sales tax revenues transferred from the Mass Transportation Fund, in the 2007-08 fiscal year for debt service on those bond acts. The bill would also transfer $200,000,000 from the moneys in the fund to the General Fund in the 2007-08 fiscal year as reimbursement for debt service payments made in prior fiscal years for public-transportation-related general obligation bond expenditures. The bill would provide that the amount of revenues in the Public Transportation Account available for appropriation in the 2007-08 fiscal year to the state transit assistance program shall be reduced by the amount of excess appropriations to that program in the 2006-07 fiscal year compared to actual revenues available in that year, with the amount of the excess to remain in the account to fund other state public transportation priorities. The bill, in the 2007-08 fiscal year, would adjust the allocations of the fuel sales tax revenues in the Public Transportation Account, as specified, and for each future fiscal year commencing with the 2008-09 fiscal year, would require that those revenues in the Public Transportation Account be appropriated according to different formulas than in current law, as specified. (2) Article XIX B of the California Constitution requires, commencing with the 2003-04 fiscal year, sales taxes on gasoline that are deposited in the General Fund to be transferred to the Transportation Investment Fund for allocation to various transportation purposes. Article XIX B authorizes the transfer of these revenues to be suspended in whole or in part for a fiscal year due to a severe state fiscal hardship, subject to certain conditions and requirements. Existing law requires an amount equivalent to the amount that would have been transferred in the absence of 2 suspensions enacted in the 2003-04 and 2004-05 fiscal years to be transferred by the Controller to the Transportation Deferred Investment Fund not later than June 30, 2008, or June 30, 2009, as applicable, for allocation to transportation purposes that would have been funded in the absence of a suspension, plus interest in certain cases. Article XIX B, as amended by Proposition 1A, approved by the voters at the November 7, 2006, statewide general election, requires full payment by June 30, 2016, of the amount that would have been transferred to the Transportation Investment Account in the absence of the suspension of transfer of revenues that occurred in the 2003-04 and 2004-05 fiscal years, and until that has occurred, requires the amount of transfer payments in each fiscal year to be at least 1/10 of the outstanding amount. This bill would revise the statutory provisions providing for transfers from the General Fund to the Transportation Deferred Investment Fund in that regard in order to provide for transfers in each fiscal year until June 30, 2016, of the minimum amount required by the California Constitution, plus interest, as specified, and would delete the requirement to make all payments by June 30, 2008, or June 30, 2009, as applicable. The bill would make other related changes. (3) Existing law, the Clean Air and Transportation Improvement Act of 1990 (Proposition 116), establishes the Clean Air and Transportation Improvement Fund, which is continuously appropriated to the California Transportation Commission for allocation to itself, the Department of Transportation, the Department of Parks and Recreation, and to local agencies for specified mass transportation projects. Existing law requires all funds allocated to an agency under the act to be programmed, encumbered, obligated, or spent prior to July 1, 2000, unless economically infeasible. With respect to those funds allocated to an agency that are not expended or encumbered prior to July 1, 2000, existing law authorizes the Legislature, by a statute passed in each house by a 2/3 vote, to reallocate those funds for another rail project within that agency's jurisdiction. The bill would identify certain unexpended funds allocated to the Department of Transportation under the act for specified state-sponsored passenger rail projects and would reallocate those funds to the department to be made available for expenditure by the High Speed Rail Authority for the state-sponsored high-speed rail project. (4) Existing law specifies the amounts apportioned monthly from the Highway Users Tax Account in the Transportation Tax Fund to cities and counties and the amounts transferred monthly to the Bicycle Transportation Account in the State Transportation Fund. Existing law requires the sum of $416,667 to be transferred monthly to the Bicycle Transportation Account from the Highway Users Tax Account. Existing law continuously appropriates the money in the Bicycle Transportation Account. This bill would instead, commencing July 31, 2007, require a monthly transfer of $600,000 to the Bicycle Transportation Account from the Highway Users Tax Account. Because this bill would increase the amount of revenue in the Bicycle Transportation Account, it would make an appropriation. (5) Existing law establishes the Biennial Inspection of Terminals program to ensure the safe operation of certain specified vehicles by a motor carrier through the inspection of these vehicles at the motor carrier's terminal by the Department of California Highway Patrol. The motor carrier is charged a nonrefundable initial and renewal fee for each terminal in the program. This bill would, instead, provide a fee schedule for a terminal inspection application based on the number of vehicles in the terminal and an initial terminal inspection fee for a terminal that was not previously inspected. The bill would also impose a delinquent fee if the motor carrier fails to pay the required fees within the appropriate timeframe. (6) Existing law authorizes a city or county to adopt rules and regulations, by ordinance or resolution, for temporarily closing to through traffic a highway under its jurisdiction when, after a public hearing, certain conditions are found to exist. Existing law prohibits the temporary closure from being more than 18 months, except that it may be extended for not more than 5 consecutive periods of not more than 18 months each if, prior to each extension, a public hearing is held and certain conditions are found to continue to exist. This bill would authorize the extension for not more than 8 additional consecutive periods, rather than 5 additional consecutive periods, of not more than 18 months each. (7) The Commercial Vehicle Registration Act of 2001 requires the Department of Motor Vehicles, in consultation with the Department of the California Highway Patrol, the Department of Transportation, the State Board of Equalization, and the commercial vehicle industry, to review and report to the Legislature its findings and, if applicable, make any recommendation as to the necessary adjustments in the fee schedule, to ensure that revenue neutrality is obtained and maintained for all affected entities and funds. This bill would repeal those requirements. (8) The bill would declare that it is to take effect immediately an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 9 (commencing with Section 16965) is added to Part 3 of Division 4 of Title 2 of the Government Code, to read: CHAPTER 9. TRANSPORTATION DEBT SERVICE FUND 16965. (a) The Transportation Debt Service Fund is hereby created in the State Treasury. Moneys in the fund shall, among other things, as provided in this section, be dedicated to payment of debt service on bonds including bonds issued pursuant to the Clean Air and Transportation Improvement Act of 1990 (Part 11.5 (commencing with Section 99600) of Division 10 of the Public Utilities Code), the Passenger Rail and Clean Air Bond Act of 1990 (Chapter 17 (commencing with Section 2700) of Division 3 of the Streets and Highways Code), and the Seismic Retrofit Bond Act of 1996 (Chapter 12.48 (commencing with Section 8879) of Division 1 of Title 2). If the moneys in the fund are insufficient to pay the balance of the debt consistent with existing obligations, the General Fund will be used to pay the balance of any debt service. (b) (1) From moneys transferred to the fund pursuant to subdivision (b) of Section 7103 of the Revenue and Taxation Code, the sum of three hundred thirty-nine million two hundred eighty-nine thousand three hundred forty-five dollars ($339,289,345) is hereby appropriated, for the purpose of paying the debt service in the 2007-08 fiscal year in the following amounts: (A) Clean Air and Transportation Improvement Act of 1990, one hundred twenty-three million nine hundred seventy-three thousand four hundred ninety-three dollars ($123,973,493). (B) Passenger Rail and Clean Air Bond Act of 1990, seventy million nine hundred eighty-three thousand three hundred sixty-three dollars ($70,983,363). (C) Seismic Retrofit Bond Act of 1996, one hundred forty-four million three hundred thirty-two thousand four hundred eighty-nine dollars ($144,332,489). (2) From moneys transferred to the fund pursuant to subdivision (b) of Section 7103 of the Revenue and Taxation Code, the sum of two hundred million dollars ($200,000,000) shall be transferred in the 2007-08 fiscal year to the General Fund as reimbursement for debt service payments made in prior fiscal years for public-transportation-related general obligation bond expenditures. SEC. 2. Section 99312 of the Public Utilities Code is amended to read: 99312. From the funds transferred to the account pursuant to Section 7102 of the Revenue and Taxation Code, the Legislature shall appropriate funds for the following purposes: (a) To the department, 50 percent for purposes of Section 99315. (b) To the Controller, 25 percent for allocation to transportation planning agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board pursuant to Section 99314. (c) To the Controller, 25 percent for allocation to transportation agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board for purposes of Section 99313. (d) For the 2007-08 fiscal year, notwithstanding any other provision of this section, or any other provision of law, the allocations made pursuant to this section shall be adjusted as follows: (1) From the funds transferred to the account pursuant to paragraph (1) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, one hundred million dollars ($100,000,000) shall be allocated pursuant to subdivision (b); one hundred million dollars ($100,000,000) shall be allocated pursuant to subdivision (c); and the remainder of revenue shall remain in the Public Transportation Account to fund other state public transportation priorities. The Controller shall make these allocations in four equal quarterly amounts of twenty-five million dollars ($25,000,000), as achievable by the receipt of the specified revenue. (2) The amount appropriated in Item 2640-101-0046 of the Budget Act of 2006 for state transit assistance pursuant to subdivision (b) and (c) was greater than the amount of revenues received to support state transit assistance pursuant to Section 7102 of the Revenue and Taxation Code. Therefore, notwithstanding any other provision of law, the amount that would have otherwise been available for appropriation to state transit assistance in the 2007-08 fiscal year pursuant to paragraphs (2) and (3) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, shall be reduced by the excess amount that was appropriated to state transit assistance in the Budget Act of 2006, and that excess amount, as determined by the Department of Finance, shall instead remain in the Public Transportation Account to fund other state public transportation priorities. The Controller shall attempt to spread this adjustment equally over four quarterly payments, as achievable by revenue estimates. (e) For the 2008-09 fiscal year and thereafter, notwithstanding any other provision of this section, or any other provision of law, from the funds transferred to the account pursuant to paragraph (1) of subdivision (a) of Section 7102 of the Revenue and Taxation Code, the Legislature shall appropriate funds for the following purposes: (1) To the department, 33.34 percent for purposes of Section 99315. (2) To the Controller, 33.33 percent for allocation to transportation planning agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board pursuant to Section 99314. (3) To the Controller, 33.33 percent for the allocation to transportation agencies, county transportation commissions, and the San Diego Metropolitan Transit Development Board for purposes of Section 99313. SEC. 3. Section 99655 is added to the Public Utilities Code, to read: 99655. As of June 30, 2007, fourteen million five hundred sixty-three thousand dollars ($14,563,000) allocated for the improvement of the Los Angeles-Fresno-San Francisco Bay Area passenger rail corridor in Section 99622 remains unexpended, and one million dollars ($1,000,000) allocated for rail right-of-way studies in former Section 99621 remains unexpended. Pursuant to subdivision (c) of Section 99684, the unexpended funds cited in this section are hereby reallocated to the department and shall be made available for expenditure by the High-Speed Rail Authority for the state-sponsored high-speed rail project. SEC. 4. Section 7102 of the Revenue and Taxation Code is amended to read: 7102. The money in the fund shall, upon order of the Controller, be drawn therefrom for refunds under this part, credits or refunds pursuant to Section 60202, and refunds pursuant to Section 1793.25 of the Civil Code, or be transferred in the following manner: (a) (1) All revenues, less refunds, derived under this part at the 43/4-percent rate, including the imposition of sales and use taxes with respect to the sale, storage, use, or other consumption of motor vehicle fuel which would not have been received if the sales and use tax rate had been 5 percent and if motor vehicle fuel, as defined for purposes of the Motor Vehicle Fuel License Tax Law (Part 2 (commencing with Section 7301)), had been exempt from sales and use taxes, shall be estimated by the State Board of Equalization, with the concurrence of the Department of Finance, and shall be transferred quarterly to the Public Transportation Account, a trust fund in the State Transportation Fund, except as modified as follows: (A) For the 2001-02 fiscal year, those transfers may not be more than eighty-one million dollars ($81,000,000) plus one-half of the amount computed pursuant to this paragraph that exceeds eighty-one million dollars ($81,000,000). (B) For the 2002-03 fiscal year, those transfers may not be more than thirty-seven million dollars ($37,000,000) plus one-half of the amount computed pursuant to this paragraph that exceeds thirty-seven million dollars ($37,000,000). (C) For the 2003-04 fiscal year, no transfers shall be made pursuant to this paragraph, except that if the amount to be otherwise transferred pursuant to this paragraph is in excess of eighty-seven million four hundred fifty thousand dollars ($87,450,000), then the amount of that excess shall be transferred. (D) For the 2004-05 fiscal year, no transfers shall be made pursuant to this paragraph, and of the amount that would otherwise have been transferred, one hundred forty million dollars ($140,000,000) shall instead be transferred to the Traffic Congestion Relief Fund as partial repayment of amounts owed by the General Fund pursuant to Item 2600-011-3007 of the Budget Act of 2002 (Chapter 379 of the Statutes of 2002). (E) For the 2005-06 fiscal year, no transfers shall be made pursuant to this paragraph. (F) For the 2006-07 fiscal year, the revenues estimated pursuant to this paragraph shall, notwithstanding any other provision of this paragraph or any other provision of law, be transferred and allocated as follows: (i) The first two hundred million dollars ($200,000,000) shall be transferred to the Transportation Deferred Investment Fund as partial repayment of the amounts owed by the General Fund to that fund pursuant to Section 7106. (ii) The next one hundred twenty-five million dollars ($125,000,000) shall be transferred to the Bay Area Toll Account for expenditure pursuant to Section 188.6 of the Streets and Highways Code. (iii) Of the remaining revenues, thirty-three million dollars ($33,000,000) shall be transferred to the Public Transportation Account to support appropriations from that account in the Budget Act of 2006. (iv) The remaining revenues shall be transferred to the Public Transportation Account for allocation as follows: (I) Twenty percent to the Department of Transportation for purposes of Section 99315 of the Public Utilities Code. (II) Forty percent to the Controller, for allocation pursuant to Section 99314 of the Public Utilities Code. (III) Forty percent to the Controller, for allocation pursuant to Section 99313 of the Public Utilities Code. (G) For the 2007-08 fiscal year, the first one hundred fifty-five million four hundred ninety-one thousand eight hundred thirty-seven dollars ($155,491,837) in revenue estimated pursuant to this paragraph each quarter shall, notwithstanding any other provision of this paragraph or any other provision of law, be transferred quarterly to the Mass Transportation Fund. If revenue in any quarter is less than that amount, the transfer in the subsequent quarter or quarters shall be increased so that the total transferred for the fiscal year is six hundred twenty-one million nine hundred sixty-seven thousand three hundred forty-eight dollars ($621,967,348). (H) For the 2008-09 fiscal year and every fiscal year thereafter, 50 percent of the revenue estimated pursuant to this paragraph each quarter shall, notwithstanding any other provision of this paragraph or any other provision of law, be transferred to the Mass Transportation Fund. (2) All revenues, less refunds, derived under this part at the 43/4-percent rate, resulting from increasing, after December 31, 1989, the rate of tax imposed pursuant to the Motor Vehicle Fuel License Tax Law on motor vehicle fuel, as defined for purposes of that law, shall be transferred quarterly to the Public Transportation Account, a trust fund in the State Transportation Fund. (3) All revenues, less refunds, derived under this part at the 43/4-percent rate from the imposition of sales and use taxes on fuel, as defined for purposes of the Use Fuel Tax Law (Part 3 (commencing with Section 8601)) and the Diesel Fuel Tax Law (Part 31 (commencing with Section 60001)), shall be estimated by the State Board of Equalization, with the concurrence of the Department of Finance, and shall be transferred quarterly to the Public Transportation Account, a trust fund in the State Transportation Fund. (4) All revenues, less refunds, derived under this part from the taxes imposed pursuant to Sections 6051.2 and 6201.2 shall be transferred to the Sales Tax Account of the Local Revenue Fund for allocation to cities and counties as prescribed by statute. (5) All revenues, less refunds, derived from the taxes imposed pursuant to Section 35 of Article XIII of the California Constitution shall be transferred to the Public Safety Account in the Local Public Safety Fund created in Section 30051 of the Government Code for allocation to counties as prescribed by statute. (b) The balance shall be transferred to the General Fund. (c) The estimates required by subdivision (a) shall be based on taxable transactions occurring during a calendar year, and the transfers required by subdivision (a) shall be made during the fiscal year that commences during that same calendar year. Transfers required by paragraphs (1), (2), and (3) of subdivision (a) shall be estimated by the State Board of Equalization, with the concurrence of the Department of Finance, and shall be made quarterly. (d) Notwithstanding the designation of the Public Transportation Account as a trust fund pursuant to subdivision (a), the Controller may use the Public Transportation Account for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. The loans shall be repaid with interest from the General Fund at the Pooled Money Investment Account rate. (e) The Legislature may amend this section, by statute passed in each house of the Legislature by rollcall vote entered in the journal, two-thirds of the membership concurring, if the statute is consistent with, and furthers the purposes of this section. SEC. 5. Section 7103 is added to the Revenue and Taxation Code, to read: 7103. (a) The Mass Transportation Fund is hereby created in the State Treasury. Upon appropriation by the Legislature, moneys in the Mass Transportation Fund may be used for, but shall not necessarily be limited to, the following transportation purposes: (1) Payment of debt service on transportation bonds, or reimbursement to the General Fund for past debt service payments on transportation bonds. (2) Funding of the Department of Developmental Services for regional center transportation. (3) Reimbursement to the General Fund for payments made by the General Fund pursuant to subdivision (f) of Section 1 of Article XIX B of the California Constitution. (4) Funding of home-to-school transportation, pursuant to Article 10 (commencing with Section 41850) of Chapter 5 of Part 24 of the Education Code, and Small School District Transportation, pursuant to Article 4.5 (commencing with Section 42290) of Chapter 7 of Part 24 of the Education Code. (b) From moneys transferred to the fund pursuant to subparagraph (G) of paragraph (1) of subdivision (a) of Section 7102 in the 2007-08 fiscal year, the sum of five hundred thirty-nine million two hundred eighty-nine thousand three hundred forty-eight dollars ($539,289,348) shall be transferred to the Transportation Debt Service Fund and eighty-two million six hundred seventy-eight thousand dollars ($82,678,000) shall be transferred to the General Fund as reimbursement for the payments made by the General Fund pursuant to subdivision (f) of Section 1 of Article XIX B of the California Constitution. SEC. 6. Section 7105 of the Revenue and Taxation Code is amended to read: 7105. (a) The Transportation Deferred Investment Fund is hereby created in the State Treasury. The Transportation Deferred Investment Fund is to be considered part of the Transportation Investment Fund, except as specifically required for accounting purposes, in order to facilitate the repayment and allocation of revenues consistent with paragraph (1) of subdivision (f) of Section 1 of Article XIX B of the California Constitution as provided in this section and Section 7106. (b) Pursuant to Section 14557 of the Government Code, the transfer of revenues from the General Fund to the Transportation Investment Fund that would have otherwise been required under subdivision (a) of Section 1 of Article XIX B of the California Constitution was partially suspended for the 2003-04 fiscal year. The amount of the transfer for the 2003-04 fiscal year was two hundred eighty-nine million dollars ($289,000,000). According to the State Board of Equalization calculations, with the concurrence of the Department of Finance, the amount of the transfer suspended for the 2003-04 fiscal year was eight hundred sixty-seven million five hundred sixty-eight thousand dollars ($867,568,000). On or before June 30 of each fiscal year until June 30, 2016, the Controller shall transfer an amount from the General Fund to the Transportation Deferred Investment Fund that is equal to the minimum repayment required by Article XIX B of the California Constitution. The repayment shall also include interest calculated at the Pooled Money Investment Account rate relative to the amounts that would otherwise have been available for the transportation programs described in paragraphs (2) to (5), inclusive, of subdivision (c) of Section 7104. The amount to be repaid by June 30, 2016, from the General Fund to the Transportation Deferred Investment Fund shall be reduced by the amount of any payment made to the Transportation Deferred Investment Fund from any funding source, excluding subdivision (d). The moneys deposited in the Transportation Deferred Investment Fund pursuant to this subdivision are continuously appropriated without regard to fiscal years for disbursement in the manner and for the purposes set forth in this section. (c) The Controller, from the moneys deposited in the Transportation Deferred Investment Fund pursuant to subdivision (b) and Article XIX B of the California Constitution, shall make transfers and apportionments of those funds in the same manner and amounts that would have been made in the 2003-04 fiscal year from the Transportation Investment Fund pursuant to Section 7104, as that section read on January 1, 2003, if the transfer of funds from the General Fund to the Transportation Investment Fund had not been partially suspended for the 2003-04 fiscal year pursuant to Section 14557 of the Government Code, except that in the 2007-08 fiscal year any remaining principle or interest owed to the Public Transportation Account shall be repaid first before any other transfers are made. However, in making those transfers and apportionments, the Controller shall take into account and deduct therefrom any transfers and apportionments that were made from the Transportation Investment Fund in the 2003-04 fiscal year from funds made available pursuant to subdivision (b) of Section 14557 of the Government Code. It is the intent of the Legislature that, upon completion of the transfer of funds pursuant to subdivision (b) from the General Fund to the Transportation Deferred Investment Fund, each of the transportation programs that was to have been funded during the 2003-04 fiscal year from the Transportation Investment Fund pursuant to Section 7104 of this code shall have received the amount of funding that the program would have received in the absence of the suspension of the transfer pursuant to Section 14557 of the Government Code. (d) The interest that is to be deposited in the Transportation Deferred Investment Fund pursuant to subdivision (b) shall be allocated proportionately to each program element in paragraphs (2) to (5), inclusive, of subdivision (c) of Section 7104, based on the amount that each program did not receive in the 2003-04 fiscal year due to suspension of the transfer pursuant to Section 14557 of the Government Code. (e) Four hundred ninety-five million dollars ($495,000,000) is hereby appropriated from the General Fund to the Transportation Deferred Investment Fund for the purpose of paying a portion of the amount required to be paid pursuant to subdivision (b). The Controller shall make the payment immediately upon enactment of the statute amending this section in the 2005-06 Regular Session. Notwithstanding subdivision (c), these funds, shall be distributed as follows: (1) The first one hundred ninety-two million dollars ($192,000,000) and any interest due pursuant to this section shall remain in the Transportation Deferred Investment Fund to be used for projects in the State Transportation Improvement Program pursuant to paragraph (3) of subdivision (c) of Section 7104. (2) The next one hundred ninety-two million dollars ($192,000,000) and any interest due pursuant to this section shall be distributed to cities and counties, as follows: (A) Ninety-six million dollars ($96,000,000) and any interest due pursuant to this section shall be transferred to cities for the purposes specified in Section 7104 pursuant to the formula in paragraph (5) of subdivision (c) of that section. (B) Ninety-six million dollars ($96,000,000) and any interest due pursuant to this section shall be transferred to counties for the purposes specified in Section 7104 pursuant to the formula in paragraph (4) of subdivision (c) of that section. (3) Ninety-six million dollars ($96,000,000) and any interest due pursuant to this section shall be transferred to the Public Transportation Account for allocation pursuant to Section 99312 of the Public Utilities Code. (4) Any funds remaining following the distributions required by paragraphs (1), (2), and (3) shall be transferred to the Traffic Congestion Relief Fund, and shall be deemed to be funds received by that fund in the 2003-04 fiscal year. (f) The Legislature finds and declares that continued investment in transportation is essential for the California economy. That investment reduces traffic congestion, assists in economic development, improves the condition of local streets and roads, and provides high-quality public transportation. (g) Notwithstanding any other provision of law, the Department of Finance may adjust the budgeting, accounting, and reporting system for the Transportation Deferred Investment Fund so that unliquidated encumbrances are not reflected in the fund balance or financial statement. SEC. 7. Section 7106 of the Revenue and Taxation Code is amended to read: 7106. (a) Pursuant to Section 14558 of the Government Code, the transfer of revenues from the General Fund to the Transportation Investment Fund that would have otherwise been required under subdivision (a) of Section 1 of Article XIX B of the California Constitution was suspended for the 2004-05 fiscal year. According to the State Board of Equalization calculations, with the concurrence of the Department of Finance, the amount of the transfer suspended for the 2004-05 fiscal year was one billion two hundred fifty-seven million nine hundred forty-six thousand dollars ($1,257,946,000). On or before June 30 of each fiscal year until June 30, 2016, the Controller shall transfer an amount from the General Fund to the Transportation Deferred Investment Fund that is equal to the minimum repayment required by Article XIX B of the California Constitution. The repayment shall also include interest calculated at the Pooled Money Investment Account rate relative to the amounts that would otherwise have been available for the transportation programs described in paragraphs (2) to (5), inclusive, of subdivision (c) of Section 7104. The amount to be repaid by June 30, 2016, from the General Fund to the Transportation Deferred Investment Fund shall be reduced by the amount of any payment made to the Transportation Deferred Investment Fund from any funding source. (b) The money deposited in the Transportation Deferred Investment Fund pursuant to this section is continuously appropriated without regard to fiscal years for disbursement in the manner and for the purposes set forth in this section. (c) The Controller, from the money deposited in the Transportation Deferred Investment Fund pursuant to subdivision (a) and Article XIX B of the California Constitution, shall make transfers and apportionments of those funds in the same manner and amounts that would have been made in the 2004-05 fiscal year from the Transportation Investment Fund pursuant to Section 7104, as that section read on January 1, 2003, if the transfer of funds from the General Fund to the Transportation Investment Fund had not been suspended for the 2004-05 fiscal year pursuant to Section 14558 of the Government Code. It is the intent of the Legislature that upon completion of the transfer of funds pursuant to subdivision (a) from the General Fund to the Transportation Deferred Investment Fund that each of the transportation programs that was to have been funded during the 2004-05 fiscal year from the Transportation Investment Fund pursuant to Section 7104 shall have received the amount of funding that the program would have received in the absence of the suspension of the transfer pursuant to Section 14558 of the Government Code. (d) The interest that is to be deposited in the Transportation Deferred Investment Fund pursuant to subdivision (a) shall be allocated proportionately to each program element in paragraphs (2) to (5), inclusive, of subdivision (c) of Section 7104, based on the amount that each program did not receive in the 2004-05 fiscal year due to suspension of the transfer pursuant to Section 14558 of the Government Code. (e) Seven hundred twenty million dollars ($720,000,000) is hereby appropriated from the General Fund to the Transportation Deferred Investment Fund for the purpose of paying a portion of the amount required to be paid pursuant to subdivision (a). The Controller shall make the payment immediately upon enactment of the statute amending this section in the 2005-06 Regular Session. In addition, two hundred million dollars ($200,000,000) transferred to the Transportation Deferred Investment Fund pursuant to subparagraph (F) of paragraph (1) of subdivision (a) of Section 7102 shall also be available for that purpose. Notwithstanding subdivision (c), these funds, totaling nine hundred twenty million dollars ($920,000,000), shall be distributed as follows: (1) The first two hundred thirty-two million dollars ($232,000,000) and any interest due pursuant to this section shall remain in the Transportation Deferred Investment Fund to be used for projects in the State Transportation Improvement Program pursuant to paragraph (3) of subdivision (c) of Section 7104. (2) The next two hundred thirty-two million dollars ($232,000,000) and any interest due pursuant to this section shall be distributed to cities and counties, as follows: (A) One hundred sixteen million dollars ($116,000,000) and any interest due pursuant to this section shall be transferred to cities for the purposes specified in Section 7104 pursuant to the formula in paragraph (5) of subdivision (c) of that section. (B) One hundred sixteen million dollars ($116,000,000) and any interest due pursuant to this section shall be transferred to counties for the purposes specified in Section 7104 pursuant to the formula in paragraph (4) of subdivision (c) of that section. (3) One hundred sixteen million dollars ($116,000,000) and any interest due pursuant to this section shall be transferred to the Public Transportation Account for allocation pursuant to Section 99312 of the Public Utilities Code. (4) Any funds remaining following the distributions required by paragraphs (1), (2), and (3) shall be transferred to the Traffic Congestion Relief Fund, and shall be deemed to be funds received by that fund in the 2004-05 fiscal year. It is estimated that the amount to be available under this subparagraph will be three hundred fifteen million dollars ($315,000,000). SEC. 8. Section 2106 of the Streets and Highways Code is amended to read: 2106. A sum equal to the net revenue derived from one and four one-hundredths cent ($0.0104) per gallon tax under the Motor Vehicle Fuel License Tax Law (Part 2 (commencing with Section 7301) of Division 2 of the Revenue and Taxation Code) shall be apportioned monthly from the Highway Users Tax Account in the Transportation Tax Fund among the counties and cities as follows: (a) Four hundred dollars ($400) per month shall be apportioned to each city and city and county and eight hundred dollars ($800) per month shall be apportioned to each county and city and county. (b) Commencing on July 31, 2007, and on the last day of each month after that date, the sum of six hundred thousand dollars ($600,000) per month shall be transferred to the Bicycle Transportation Account in the State Transportation Fund. (c) The balance shall be apportioned, as follows: (1) A base sum shall be computed for each county by using the same proportions of fee-paid and exempt vehicles as are established for purposes of apportionment of funds under subdivision (d) of Section 2104. (2) For each county, the percentage of the total assessed valuation of tangible property subject to local tax levies within the county which is represented by the assessed valuation of tangible property outside the incorporated cities of the county shall be applied to its base sum, and the resulting amount shall be apportioned to the county. The assessed valuation of taxable tangible property, for purposes of this computation, shall be that most recently used for countywide tax levies as reported to the Controller by the State Board of Equalization. If an incorporation or annexation is legally completed following the base sum computation, the new city's assessed valuation shall be deducted from the county's assessed valuation, the estimate of which may be provided by the State Board of Equalization. (3) The difference between the base sum for each county and the amount apportioned to the county shall be apportioned to the cities of that county in the proportion that the population of each city bears to the total population of all the cities in the county. Populations used for determining apportionment of money under Section 2107 are to be used for purposes of this section. SEC. 9. Section 21101.4 of the Vehicle Code is amended to read: 21101.4. (a) A local authority may, by ordinance or resolution, adopt rules and regulations for temporarily closing to through traffic a highway under its jurisdiction when all of the following conditions are, after a public hearing, found to exist: (1) The local authority finds and determines that there is serious and continual criminal activity in the portion of the highway recommended for temporary closure. This finding and determination shall be based upon the recommendation of the police department or, in the case of a highway in an unincorporated area, on the joint recommendation of the sheriff's department and the Department of the California Highway Patrol. (2) The highway is not designated as a through highway or arterial street. (3) Vehicular or pedestrian traffic on the highway contributes to the criminal activity. (4) The closure will not substantially adversely affect traffic flow, safety on the adjacent streets or in the surrounding neighborhoods, the operation of emergency vehicles, the performance of municipal or public utility services, or the delivery of freight by commercial vehicles in the area of the highway proposed to be temporarily closed. (b) A highway may be temporarily closed pursuant to subdivision (a) for not more than 18 months, except that this period may be extended for not more than eight additional consecutive periods of not more than 18 months each if, prior to each of those extensions, the local authority holds a public hearing and finds, by ordinance or resolution, that all of the following conditions exist: (1) Continuation of the temporary closure will assist in preventing the occurrence or reoccurrence of the serious and continual criminal activity found to exist when the immediately preceding temporary closure was authorized. This finding and determination shall be based upon the recommendation of the police department or, in the case of a highway in an unincorporated area, on the joint recommendation of the sheriff's department and the Department of the California Highway Patrol. (2) The highway is not designated as a through highway or arterial street. (3) Vehicular or pedestrian traffic on the highway contributes to the criminal activity. (4) The immediately preceding closure has not substantially adversely affected traffic flow, safety on the adjacent streets or in the surrounding neighborhoods, the operation of emergency vehicles, the performance of municipal or public utility services, or the delivery of freight by commercial vehicles in the area of the highway that was temporarily closed. (c) The local authority shall mail written notice of the public hearing required under subdivision (a) or (b) to all residents and owners, as shown on the last equalized assessment roll, of property adjacent to the portion of highway where a temporary closure or extension of temporary closure is proposed. SEC. 10. Section 34501.12 of the Vehicle Code is amended to read: 34501.12. (a) Notwithstanding Section 408, as used in this section and Sections 34505.5 and 34505.6, "motor carrier" means the registered owner of any vehicle described in subdivision (a), (b), (e), (f), or (g) of Section 34500, except in the following circumstances: (1) The registered owner leases the vehicle to another person for a term of more than four months. If the lease is for more than four months, the lessee is the motor carrier. (2) The registered owner operates the vehicle exclusively under the authority and direction of another person. If the operation is exclusively under the authority and direction of another person, that other person may assume the responsibilities as the motor carrier. If not so assumed, the registered owner is the motor carrier. A person who assumes the motor carrier responsibilities of another pursuant to subdivision (b) shall provide to that other person whose motor carrier responsibility is so assumed, a completed copy of a departmental form documenting that assumption, stating the period for which responsibility is assumed, and signed by an agent of the assuming person. A legible copy shall be carried in each vehicle or combination of vehicles operated on the highway during the period for which responsibility is assumed. That copy shall be presented upon request by any authorized employee of the department. The original completed departmental form documenting the assumption shall be provided to the department within 30 days of the assumption. If the assumption of responsibility is terminated, the person who had assumed responsibility shall so notify the department in writing within 30 days of the termination. (b) (1) A motor carrier may combine two or more terminals that are not subject to an unsatisfactory compliance rating within the last 36 months for purposes of the inspection required by subdivision (d) subject to all of the following conditions: (A) The carrier identifies to the department, in writing, each terminal proposed to be included in the combination of terminals for purposes of this subdivision prior to an inspection of the designated terminal pursuant to subdivision (d). (B) The carrier provides the department, prior to the inspection of the designated terminal pursuant to subdivision (d), a written listing of all its vehicles of a type subject to subdivision (a), (b), (e), (f), or (g) of Section 34500 that are based at each of the terminals combined for purposes of this subdivision. The listing shall specify the number of vehicles of each type at each terminal. (C) The carrier provides to the department at the designated terminal during the inspection all maintenance records and driver records and a representative sample of vehicles based at each of the terminals included within the combination of terminals. (2) If the carrier fails to provide the maintenance records, driver records, and representative sample of vehicles pursuant to subparagraph (C) of paragraph (1), the department shall assign the carrier an unsatisfactory terminal rating and require a reinspection to be conducted pursuant to subdivision (h). (3) For purposes of this subdivision, the following terms have the meanings given: (A) "Driver records" includes pull notice system records, driver proficiency records, and driver timekeeping records. (B) "Maintenance records" includes all required maintenance, lubrication, and repair records and drivers' daily vehicle condition reports. (C) "Representative sample" means the following, applied separately to the carrier's fleet of motortrucks and truck tractors and its fleet of trailers: Representative Fleet Size Sample 1 or 2 All 3 to 8 3 9 to 15 4 16 to 25 6 26 to 50 9 51 to 90 14 91 or more 20 (c) Each motor carrier who, in this state, directs the operation of, or maintains, any vehicle of a type described in subdivision (a) shall designate one or more terminals, as defined in Section 34515, in this state where vehicles can be inspected by the department pursuant to paragraph (4) of subdivision (a) of Section 34501 and where vehicle inspection and maintenance records and driver records will be made available for inspection. (d) (1) The department shall inspect, at least every 25 months, every terminal, as defined in Section 34515, of any motor carrier who, at any time, operates any vehicle described in subdivision (a). (2) The department shall place an inspection priority on those terminals operating vehicles listed in subdivision (g) of Section 34500. (3) As used in this section and in Sections 34505.5 and 34505.6, subdivision (f) of Section 34500 includes only those combinations where the gross vehicle weight rating (GVWR) of the towing vehicle exceeds 10,000 pounds, but does not include a pickup truck, and subdivision (g) of Section 34500 includes only those vehicles transporting hazardous material for which the display of placards is required pursuant to Section 27903, a license is required pursuant to Section 32000.5, or for which hazardous waste transporter registration is required pursuant to Section 25163 of the Health and Safety Code. Historical vehicles, as described in Section 5004, vehicles that display special identification plates in accordance with Section 5011, implements of husbandry and farm vehicles, as defined in Chapter 1 (commencing with Section 36000) of Division 16, and vehicles owned or operated by an agency of the federal government are not subject to this section or to Sections 34505.5 and 34505.6. (e) (1) It is the responsibility of the motor carrier to schedule with the department the inspection required by subdivision (d). The motor carrier shall submit an application form supplied by the department, accompanied by the required fee contained in paragraph (2), for each terminal the motor carrier operates. This fee shall be submitted within 30 days of establishing a terminal. All fees submitted under paragraph (2) are nonrefundable. (2) (A) The fee for each terminal is set forth in the following table: Terminal Required fee per terminal fleet size 1 $ 270 2 $ 375 3 to 8 $ 510 9 to 15 $ 615 16 to 25 $ 800 26 to 50 $1,040 51 to 90 $1,165 91 or more $1,870 (B) In addition to the fee specified in subparagraph (A), the motor carrier shall submit an additional fee of three hundred fifty dollars ($350) for each of its terminals not previously inspected under the section. (3) Except as provided in paragraph (5), the inspection term for each inspected terminal of a motor carrier shall expire 25 months from the date the terminal receives a satisfactory compliance rating, as specified in subdivision (h). Applications and fees for subsequent inspections shall be submitted not earlier than nine months and not later than seven months before the expiration of the motor carrier's then current inspection term. If the motor carrier has submitted the inspection application and the required accompanying fees, but the department is unable to complete the inspection within the 25-month inspection period, then no additional fee shall be required for the inspection requested in the original application. (4) All fees collected pursuant to this subdivision shall be deposited in the Motor Vehicle Account in the State Transportation Fund. An amount equal to the fees collected shall be available for appropriation by the Legislature from the Motor Vehicle Account to the department for the purpose of conducting truck terminal inspections and for the additional roadside safety inspections required by Section 34514. (5) To avoid the scheduling of a renewal terminal inspection pursuant to this section during a carrier's seasonal peak business periods, the current inspection term of a terminal that has paid all required fees and has been rated satisfactory in its last inspection may be reduced by not more than nine months if a written request is submitted by the carrier to the department at least four months prior to the desired inspection month, or at the time of payment of renewal inspection fees in compliance with paragraph (3), whichever date is earlier. A motor carrier may request this adjustment of the inspection term during any inspection cycle. A request made pursuant to this paragraph shall not result in a fee proration and does not relieve the carrier from the requirements of paragraph (3). (6) Failure to pay a fee required by this section, within the appropriate timeframe, shall result in additional delinquent fees as follows: (A) For a delinquency period of more than 30 days, the penalty is 60 percent of the required fee. (B) For a delinquency period of one to two years, the penalty is 80 percent of the required fee. (C) For a delinquency period of more than two years, the penalty is 160 percent of the required fee. (7) Federal, state, and local public entities are exempt from the fee requirement of this section. (f) It is unlawful for a motor carrier to operate a vehicle subject to this section without having submitted an inspection application and the required fees to the department as required by subdivision (e) or (h). (g) (1) It is unlawful for a motor carrier to operate a vehicle subject to this section after submitting an inspection application to the department, without the inspection described in subdivision (d) having been performed and a safety compliance report having been issued to the motor carrier within the 25-month inspection period or within 60 days immediately preceding the inspection period. (2) It is unlawful for a motor carrier to contract or subcontract with, or otherwise engage the services of, another motor carrier, subject to this section, unless the contracted motor carrier has complied with this section. A motor carrier shall not contract or subcontract with, or otherwise engage the services of, another motor carrier until the contracted motor carrier provides certification of compliance with this section. This certification shall be completed in writing by the contracted motor carrier. The certification, or a copy thereof, shall be maintained by each involved party for the duration of the contract or the period of service plus two years, and shall be presented for inspection immediately upon the request of an authorized employee of the department. (h) (1) An inspected terminal that receives an unsatisfactory compliance rating shall be reinspected within 120 days after the issuance of the unsatisfactory compliance rating. (2) A terminal's first required reinspection under this subdivision shall be without charge unless one or more of the following is established: (A) The motor carrier's operation presented an imminent danger to public safety. (B) The motor carrier was not in compliance with the requirement to enroll all drivers in the pull notice program pursuant to Section 1808.1. (C) The motor carrier failed to provide all required records and vehicles for a consolidated inspection pursuant to subdivision (b). (3) If the unsatisfactory rating was assigned for any of the reasons set forth in paragraph (2), the carrier shall submit the required fee as provided in paragraph (4). (4) Applications for reinspection pursuant to paragraph (3) or for second and subsequent consecutive reinspections under this subdivision shall be accompanied by the fee specified in paragraph (2) of subdivision (e) and shall be filed within 60 days of issuance of the unsatisfactory compliance rating. The reinspection fee is nonrefundable. (5) When a motor carrier's Motor Carrier of Property Permit or Public Utilities Commission operating authority is suspended as a result of an unsatisfactory compliance rating, the department shall conduct no reinspection for permit or authority reinstatement until requested to do so by the Department of Motor Vehicles or the Public Utilities Commission, as appropriate. (i) It is the intent of the Legislature that the department make its best efforts to inspect terminals within the resources provided. In the interest of the state, the Commissioner of the California Highway Patrol may extend for a period, not to exceed six months, the inspection terms beginning prior to July 1, 1990. (j) To encourage motor carriers to attain continuous satisfactory compliance ratings, the department may establish and implement an incentive program consisting of the following: (1) After the second consecutive satisfactory compliance rating assigned to a motor carrier terminal as a result of an inspection conducted pursuant to subdivision (d), and after each consecutive satisfactory compliance rating thereafter, an appropriate certificate, denoting the number of consecutive satisfactory ratings, shall be awarded to the terminal, unless the terminal has received an unsatisfactory compliance rating as a result of any inspection conducted in the interim between the consecutive inspections conducted under subdivision (d), or the motor carrier is rated unsatisfactory by the department following a controlled substances and alcohol testing program inspection. The certificate authorized under this paragraph shall not be awarded for performance in the administrative review authorized under paragraph (2). However, the certificate shall include a reference to any administrative reviews conducted during the period of consecutive satisfactory compliance ratings. (2) Unless the department's evaluation of the motor carrier's safety record indicates a declining level of compliance, a terminal that has attained two consecutive satisfactory compliance ratings assigned following inspections conducted pursuant to subdivision (d) is eligible for an administrative review in lieu of the next required inspection, unless the terminal has received an unsatisfactory compliance rating as a result of any inspection conducted in the interim between the consecutive inspections conducted under subdivision (d). An administrative review shall consist of all of the following: (A) A signed request by a terminal management representative requesting the administrative review in lieu of the required inspection containing a promise to continue to maintain a satisfactory level of compliance for the next 25-month inspection term. (B) A review with a terminal management representative of the carrier's record as contained in the department's files. If a terminal has been authorized a second consecutive administrative review, the review required under this subparagraph is optional, and may be omitted at the carrier's request. (C) Absent any cogent reasons to the contrary, upon completion of the requirements of subparagraphs (A) and (B), the safety compliance rating assigned during the last required inspection shall be extended for 25 months. (3) Not more than two administrative reviews may be conducted consecutively. At the completion of the 25-month inspection term following a second administrative review, a terminal inspection shall be conducted pursuant to subdivision (d). If this inspection results in a satisfactory compliance rating, the terminal shall again be eligible for an administrative review in lieu of the next required inspection. If the succession of satisfactory ratings is interrupted by any rating of other than satisfactory, irrespective of the reason for the inspection, the terminal shall again attain two consecutive satisfactory ratings to become eligible for an administrative review. (4) As a condition for receiving the administrative reviews authorized under this subdivision in lieu of inspections, and in order to ensure that compliance levels remain satisfactory, the motor carrier shall agree to accept random, unannounced inspections by the department. (k) This section shall be known and may be cited as the Biennial Inspection of Terminals Program or BIT. SEC. 11. Section 59 of Chapter 861 of the Statutes of 2000 is repealed. SEC. 12. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to enact statutory changes needed to implement the Budget Act of 2007, it is necessary that this act take effect immediately.