BILL ANALYSIS Ó
AB 105
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 105 (Budget Committee)
As Amended March 16, 2011
2/3 vote. Urgency
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|ASSEMBLY: | |(February 22, |SENATE: |39-0 |(March 16, |
| | |2011) | | |2011) |
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(vote not relevant)
SUMMARY : This is the transportation budget trailer bill for the
2011-12 Budget. It contains provisions necessary to modify the
2010-11 Budget and implement the 2011 Budget Act.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Provide General Fund (GF) relief of $1.7 billion through the
use of truck weight fees and other transportation revenues for
bond debt service and loans to the GF. Provides protection to
safeguard billions of dollars of transportation revenues by
re-enacting the fuel tax swap.
2)Re-enact the fuel tax swap, which was originally enacted in
early 2010 as AB 6 X8 (Budget Committee), Chapter 11, Statutes
of 2010 Eighth Extraordinary Session and SB 70 (Budget and
Fiscal Review Committee), Chapter 9, Statutes of 2010. The
2010 tax swap was revenue neutral overall, but increased some
taxes and reduced others. Proposition (Prop) 26 on the
November 2010 ballot was approved by voters, and amended the
Constitution to require a two-thirds vote for such tax neutral
measures. Prop 26 voids any conflicting measure enacted after
January 1, 2010, effective 12 months after the election.
Since AB 6 X8 (Budget Committee) and SB 70 (Budget and Fiscal
Review Committee) were enacted after January 1, 2010, with a
simple majority vote, this bill would re-enact these
provisions with a two-thirds vote to ensure the fuel tax swap
meets the new constitutional requirements. The re-enacted
fuel tax swap includes four main tax adjustments:
a) Exempt gasoline from the state 6.0% sales tax on July 1,
2010;
b) Increase the excise tax on gasoline by 17.3 cents per
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gallon, to a total of 35.3 cents per gallon, on July 1,
2010;
c) Increase the sales tax applied to diesel fuel by 1.87%
on July 1, 2011; and,
d) Decrease the excise tax on diesel by 6.2 cents per
gallon, to 13 cents per gallon on July 1, 2011.
The re-enacted swap is similar to last year's swap, but some of
the diesel rates have changed a small amount to address the
requirements of Prop 22, which was also approved by voters on
the November 2010 ballot, and to address changes in the forecast
of quantity and price of diesel fuel. As before, the tax swap
is revenue neutral and an out-year adjustment is made each July
1, to maintain the tax-neutrality.
The re-enacted swap excludes off-road users, such as railroads,
farm equipment, and aviation gasoline from the certain
provisions of the swap to maintain the tax neutrality for those
users that already enjoy certain exemptions.
The tax swap was not enacted to increase revenue, but rather to
allow the use of more existing transportation revenue for
highway purposes, including General Obligation bond debt service
(GO bond debt), where that debt service was related to
transportation projects. Prop 22 placed new restrictions on the
use of fuel excise taxes for bond debt, but this fuel tax
revenue in this bill would backfill the other highway funds used
to reimburse bond debt.
3)Direct truck weight fee revenue, which totals approximately
$900 million per year, to fund GO bond debt for
transportation-related bonds and for loans to the GF. Over
2010-11 and 2011-12, total GF relief is $1.6 billion. Truck
weight fees are paid by the owners of heavy vehicles and
compensate the state for the damage large trucks do to
roadways. This new use of truck weight fees is related to
prohibitions placed on gasoline excise revenues by Prop 22,
approved by voters in November 2010. Under Prop 22, gasoline
excise revenues can no longer be used for loans to the GF, and
the use of these revenues for GO debt is more limited.
However, truck weight fees can be used for these purposes.
The applicable gasoline excise revenue is instead directed
into the State Highway Account to hold harmless transportation
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programs that would otherwise receive the weight fee revenue.
4)Provide GF relief of $78 million by directing non-Article XIX
revenue to the payment of transportation-related GO bond debt.
Each year, the Department of Transportation (Caltrans)
receives about $78 million in revenue from the sale of state
property, as well as rental revenue and other miscellaneous
revenues. These revenues are not restricted in use by Article
XIX of Constitution and are more flexible in expenditure.
5)Maintain annual ongoing funding for local transit operations
at approximately $350 million. The 2010 fuel tax swap package
of legislation, specifically AB 9 X8 (Budget Committee),
Chapter 12, Statutes of 2010, Eighth Extraordinary Session,
included the restoration of state funding for local transit
operations. Prop 22 placed new restrictions on the base
diesel sales tax that resulted in a loss of funding for
transit operations. This bill would shift all of the new
sales tax on diesel revenue to transit operations to maintain
funding levels near the level planned in last year's fuel tax
swap.
6)Defer payment of a $135 million loan made from the State
Highway Account to the GF in the 2009 Budget Act. The loan
will be repaid in 2012-13 instead of in 2011-12. Specifies
that this 2009-10 loan was made from truck weight fee revenue.
Specifies that a $328 million loan from the fuel excise
revenues to the GF in the 2010 Budget Act be held in reverse
for future appropriation by the Legislature when repaid in
2012-13.
7)Require the California Transportation Commission (CTC) to
report to the Legislature semiannually on the expenditure of
Transportation Corridor Improvement Funds (TCIF) for railroad
projects. Additionally, requires the CTC to report and
provide a copy of any memorandum of understanding executed
between a railroad company and any state or local
transportation agency where TCIF funds are a funding source
for the project.
8)Extend, for recipients of Prop 1B bond funds for regional
public waterborne transit, the expenditure period from three
years to four years for any funds allocated prior to June 30,
2011. Prop 1B provides $250 million to regional public
waterborne transit agencies. The funds are available to build
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ferry terminals, among other uses.
9)Provide cities and counties a one-year extension to expend
Prop 1B Local Streets and Roads funds for any year in which
Highway Users Tax Account (HUTA) funds for local
transportation projects are borrowed, deferred, or shifted.
10)Extend the sunset from June 30, 2011 to June 30, 2014, for
cashflow borrowing among transportation special funds. The
transportation special funds that are eligible for cashflow
borrowing are the State Highway Account, and the Traffic
Congestion Relief Fund.
11)Authorize the Governor to appoint six management level exempt
positions to the High Speed Rail Authority (HSRA) upon the
recommendation of the executive director. Compensation for
these positions shall not exceed the highest comparable
compensation for a position of that type, as established
through a salary survey, and shall require approval of the
Department of Personnel Administration.
12)Require the HSRA to report by February 14, 2011, on the
following: community outreach; the HSRA strategic plan as
required by the State Administrative Manual; the performance
of the program-manager contractor; and actions of the HSRA
related to the Bureau of State Audits report. Requires the
HSRA to report by October 14, 2011, on a complete legal
analysis of the revenue guarantee and the updated financial
plan for the project. In both cases, for each applicable
fiscal year, 25% of the budgeted funding for the HSRA is
contingent on completion of the reporting requirements.
13)Require Caltrans to report annually to the Legislature with
supplemental information on the Capital Outlay Support budget
request, including anticipated and realized project costs and
schedules for the Capital Outlay Support Program.
14)Provide additional clarification that local governments are
not subject to the same maintenance-of-effort and other
requirements under Prop 42 when they are apportioned fuel
excise tax revenues.
15)Require the Department of Motor Vehicles (DMV) to update
application forms to provide a space for an applicant to
indicate whether they served in the armed forces. Data
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collected from willing veterans will be shared with the
Department of Veteran's Affairs in order to identify if they
are eligible for federal benefits.
16)Add an urgency clause allowing this bill to take effect
immediately upon enactment.
AS PASSED BY THE ASSEMBLY , this bill expressed the intent of the
Legislature to enact statutory changes relating to the 2011
Budget Act.
FISCAL EFFECT : Enactment of this bill results in over $1
billion in GF solutions, as assumed in the 2011-12 Budget Bill.
COMMENTS : The contents of this bill are identical to SB 81
(Budget and Fiscal Review Committee), except that this bill DOES
NOT include:
1)Provisions regarding the interaction of the fuel tax swap with
the calculation of Test 1 for Proposition 98; and,
2)Language that would temporarily allow DMV to make changes
vehicle license fee billing and due date timelines.
Analysis Prepared by : Christian Griffith / BUDGET / (916)
319-2099
FN: 0000089