BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1077| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 1077 Author: DeSaulnier (D) Amended: 8/21/14 Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 4/29/14 AYES: DeSaulnier, Gaines, Beall, Galgiani, Hueso, Lara, Liu, Pavley, Roth NO VOTE RECORDED: Cannella, Wyland SENATE APPROPRIATIONS COMMITTEE : 6-1, 5/23/14 AYES: De León, Gaines, Hill, Lara, Padilla, Steinberg NOES: Walters SENATE FLOOR : 23-11, 5/27/14 AYES: Beall, Block, Corbett, De León, DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Lara, Leno, Lieu, Mitchell, Monning, Padilla, Pavley, Roth, Steinberg, Wolk NOES: Anderson, Cannella, Correa, Fuller, Gaines, Knight, Morrell, Nielsen, Vidak, Walters, Wyland NO VOTE RECORDED: Berryhill, Calderon, Liu, Torres, Wright, Yee ASSEMBLY FLOOR : 46-26, 8/25/14 - See last page for vote SUBJECT : Road usage charge pilot program SOURCE : Transportation California DIGEST : This bill creates a Road Usage Charge (RUC) Technical CONTINUED SB 1077 Page 2 Advisory Committee (Committee) to guide development and implementation of a pilot program to study the potential for RUC as an alternative to the gas tax. Assembly Amendments revise and recast the bill with a similar intent as it left the Senate and now authorize the Chair of the California Transportation Commission (CTC) to select Committee, as specified; require the California Transportation Agency (Agency) implement the Committee's recommended pilot program, as specified; require the Agency report to the Legislature; and add legislative intent language. ANALYSIS : The state derives its transportation funding primarily from a variety of excise and sales taxes on gasoline and diesel fuel. Existing law requires that the state spend the revenue from the base 18-cent-per-gallon fuel excise tax to maintain and operate the state highway system. Excise tax revenue from gasoline above the base revenue is used primarily for local streets and roads as well as new capacity projects. A statewide sales tax on diesel is dedicated to supporting transit operations in the state. In addition, existing law establishes in state government the Agency, which oversees and directs policy for a number of transportation-related departments, including the California Highway Patrol, the Department of Motor Vehicles, and the Department of Transportation (Caltrans). Section 1 of Article I of the California Constitution declares that all people have certain inalienable rights, including but not limited to the right to individual privacy. This bill: 1.Requires the Chair of the CTC to create, in consultation with the Secretary of the Transportation Agency, the Committee composed of 15 members. 2.Requires, when selecting the members of the Committee, the Chair consider individuals who are representative of the telecommunications industry, highway user groups, the data security and privacy industry, privacy rights advocacy organizations, regional transportation agencies, national research and policymaking bodies, including, but not limited CONTINUED SB 1077 Page 3 to, the Transportation Research Board and the American Association of State Highway and Transportation Officials, members of the Legislature, and other relevant stakeholders as determined by the Chair. 3.Provides the Committee may request Caltrans to perform such work as the Committee deems necessary to carry out its duties and responsibilities. 4.Requires Committee study RUC alternatives to the gas tax, gather public comment on issues and concerns related to the pilot program, and make recommendations to the Secretary on the design of a pilot program to test alternative RUC approaches and any evaluation of the program. 5.Requires the Committee consider the following: A. The availability, adaptability, reliability, and security of methods that might be used in recording and reporting highway use. B. The necessity of protecting all personally identifiable information used in reporting highway use. C. The ease and cost of recording and reporting highway use. D. The ease and cost of administering the collection of taxes and fees as an alternative to the current system of taxing highway use through motor vehicle fuel taxes. E. Effective methods of maintaining compliance. F. The ease of reidentifying location data, even when personally identifiable information has been removed from the data. G. Increased privacy concerns when location data is used in conjunction with other technologies. H. Public and private agency access, including law enforcement, to data collected and stored for purposes of the RUC to ensure individual privacy rights are protected. CONTINUED SB 1077 Page 4 1.Requires the Committee consult with highway users and transportation stakeholders, including representatives of vehicle users, vehicle manufacturers, and fuel distributors as part of its process. 2.Requires, based on the recommendations of the Committee, the Agency implement a pilot program to identify and evaluate issues related to the potential implementation of an RUC program in California by January 1, 2017. 3.Requires the pilot program accomplish all of the following: A. Analyze alternative means of collecting road usage data, including at least one alternative that does not rely on electronic vehicle location data. B. Collect a minimum amount of personal information including location tracking information, necessary to implement the RUC pilot program. C. Ensure that processes for collecting, managing, storing, transmitting, and destroying data are in place to protect the integrity of the data and safeguard the privacy of drivers. 1.Prohibits the Agency from disclosing information collected for the pilot program, except as specified. 2.Requires the Agency prepare and submit a report of its findings based on the results of the pilot program to the Committee, the CTC, and the appropriate policy and fiscal committees of the Legislature by no later than June 30, 2018, as specified. 3.Requires the CTC include its recommendations regarding the pilot program in its annual report to the Legislature. 4.Sunsets this bill on January 1, 2019. Background Why do we need to replace the fuel excise tax? The excise tax on fuels was originally created in the early 20th century to serve as a substitute user fee for the construction, CONTINUED SB 1077 Page 5 maintenance, and operation of the transportation system. At the time, it was technologically very difficult to track actual usage of the roadway by vehicle, but most vehicles on the road were very similar and experienced similar mileage. Therefore, a tax on fuels served as a suitable stand-in for usage. Today, a trifecta of circumstances is combining to undermine the sustainability of the fuel excise tax. First, the fuel excise tax is not indexed to inflation, and therefore its value erodes over time. The last increase to the base fuel excise tax was in 1994; due to inflation, a dollar in 1995 is only worth 55 cents today. Second, both state and federal governments have adopted policies requiring vehicles to become significantly more fuel efficient over time. Simply speaking, this means that as vehicles drive farther on less fuel, they do more damage to the roadway system per dollar available to maintain that system. Third, demographic trends and state policies are encouraging Californians to drive fewer miles per capita. With fewer miles driven in more fuel-efficient cars, less fuel is purchased. The dire result of this combination of factors is that government is left with dwindling resources to address growing transportation problems. Not only is the fuel excise tax unsustainable, but today's varied vehicle marketplace is leading to significant distortions in the market. Many drivers today travel exceedingly long distances on a gallon of fuel, or without purchasing any fuel at all, and therefore contribute little or nothing to the maintenance of the road system necessary for that travel. Further, nearly all of these highly efficient vehicles are new models and relatively expensive, suggesting that high-income individuals are more able to use public infrastructure without contributing requisite tax revenue. Meanwhile, many of the least efficient vehicles on the road are older, less-expensive models typically driven by lower-income individuals. This often means that those who can least afford to, are increasingly shouldering the burden of funding the maintenance and operation of the public roadway system. If the state were to increase the fuel excise tax to try and slow down the diminishing buying power of today's principle funding mechanism, it might only exacerbate this regressive tax situation. Due to technological advances, the state can address this downward pressure on the fuel excise tax by shifting to some CONTINUED SB 1077 Page 6 other fee that more accurately measures usage. Many states are exploring, and advocates argue, that some sort of RUC would effectively and fairly replace the fuel excise tax. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Assembly Appropriations Committee: One-time costs to support the committee will be about $350,000 for two positions. Additional costs to hold some committee meetings throughout the state will depend on the number of meetings, but may total in the low hundreds of thousands of dollars. One-time costs for the pilot project will depend in part on the number of vehicles and locations involved. Caltrans estimates a cost of anywhere from $1 million to $20 million. Given the significant impact that changing to a RUC system will have on the state, it is assumed the study should be as representative as possible, which implies a cost at the higher end of Caltrans' range. SUPPORT : (Verified 8/25/14) Transportation California (source) Alliance of Automobile Manufacturers American Council of Engineering Companies American Planning Association American Society of Civil Engineers Associated General Contractors Auto Club of Southern California California Asphalt Pavement Association California Association of Councils of Government Contra Costa Transportation Authority Greenbelt Alliance League of California Cities San Mateo County Transportation Authority Santa Clara Valley Transportation Authority Self Help Counties Coalition OPPOSITION : (Verified 8/25/14) Inland Empire Car Club Council Over the Hill Gang CONTINUED SB 1077 Page 7 ASSEMBLY FLOOR : 46-26, 8/25/14 AYES: Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Buchanan, Campos, Chau, Chesbro, Daly, Dickinson, Eggman, Fong, Garcia, Gatto, Gomez, Gonzalez, Gordon, Hall, Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Nestande, Pan, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Rendon, Ridley-Thomas, Skinner, Stone, Ting, Weber, Wieckowski, Wilk, Williams, Atkins NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Fox, Beth Gaines, Gorell, Gray, Grove, Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor, Melendez, Olsen, Patterson, Quirk-Silva, Salas, Wagner, Waldron NO VOTE RECORDED: Brown, Ian Calderon, Cooley, Dababneh, Frazier, Rodriguez, Yamada, Vacancy JA:e 8/25/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED