BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: AB 2704 SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: gaines VERSION: 4/8/10 Analysis by: Art Bauer FISCAL: No Hearing date: June 15, 2010 SUBJECT: Local government streets and road funds DESCRIPTION: This bill continues the allocation of local snow removal funds. ANALYSIS: Existing law : 1) Imposes an excise tax of 18 cents per gallon on gasoline and diesel fuel. 2) Deposits the excise tax revenue in the Motor Vehicle Fuel Account and transfers the revenue to the Highway Users Tax Account (HUTA). 3) Allocates about 65 percent of the HUTA funds to the State Highway Account and about 35 percent to cities and counties for street and road purposes with disbursements made to cities and counties monthly according to various formulas. 4) Apportions HUTA funds annually to cover 80 percent of each county's cost of snow removal above $5,000 but not to exceed $7 million statewide. 5) Apportions HUTA funds to cover one-half of the cost of snow removal above $5,000 to each city and city and county that provides snow removal services. This bill requires the continuance of funding for local street AB 2704 (GAINES) Page 2 and road snow removal in the event HUTA funds are diverted for other purposes. COMMENTS: 1) Purpose . This bill is intended to prevent the diversion of HUTA for snow removal in the event the Legislature enacts legislation to divert HUTA funds for other purposes. 2) Background . Last year SB 4X 30 (Ducheny), passed the Senate. That bill contained a provision diverting HUTA funds to the state General Fund. The Assembly did not take this measure up for a vote, and so it failed to pass the Legislature. This year AB 8X 5 (Committee on the Budget), Chapter 1, Eighth Extraordinary Session, Statutes of 2010 delays HUTA payments to cities and counties for the months of July 2010 through March 2011. HUTA payments for these months will be made in one lump sum at the end of April 2011. Local agencies will receive no HUTA funds for snow removal until after the snow season. The supporters of this bill argue that snow removal is an imperative service as without it children cannot get to school, the risk of motor vehicles accidents increases, movement of emergency vehicles is inhibited, local economies that rely upon winter visitors to recreational sites are harmed. 3) Practical effect of bill is limited . This bill is a statement of policy. It does not stop the Legislature from suspending snow removal reimbursements in the event a decision is reached to divert HUTA funds for other purposes. Assembly Votes: Floor: 73-0 Trans: 11-0 POSITIONS: (Communicated to the Committee before noon on Wednesday, June 9, 2010) SUPPORT: California State Association of Counties Nevada County Board of Supervisors Regional Council of Rural Counties Siskiyou County Board of Supervisors Town of Mammoth Lakes AB 2704 (GAINES) Page 3 Town of Truckee OPPOSED: None received.