BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                 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  
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          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  

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            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.


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          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,  

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          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  

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          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

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           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

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