BILL ANALYSIS Ó
AB 1353
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Date of Hearing: April 6, 2015
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 1353
(Patterson) - As Introduced February 27, 2015
SUBJECT: Highway rest areas: vending machines: utility costs
SUMMARY: Prohibits the California Department of Transportation
(Caltrans) from being reimbursed for utility costs of vending
facilities operated under the Business Enterprises Program for
the Blind at safety roadside rest areas; requires Caltrans to
pay utility costs (e.g., fees for electricity, water, and sewage
services) associated with these vending activities.
EXISTING LAW:
1)Establishes the Business Enterprises Program within the
Department of Rehabilitation to provide blind persons with
remunerative employment, to enlarge economic opportunities for
the blind, and to stimulate the blind to strive to make
themselves self-supporting.
2)Gives blind persons priority to vending facilities on any
state property including, for example, cafeterias, snack bars,
and automatic vending machines.
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3)Prohibits the Department of Rehabilitation from allowing the
placement of a blind vendor in a vending facility unless the
director first determines that the facility produces or is
likely to produce an adequate net income for a blind vendor.
4)Directs Caltrans to allow the placement of vending facilities
in safety roadside rest areas, unless prohibited by federal
law; requires Caltrans to give priority for vending facilities
to blind vendors operating within the Business Enterprises
Program.
5)Requires blind vendors to reimburse Caltrans for the costs of
maintenance, operations, design review, and other activities
related to the operation of vending machines in safety
roadside rest areas.
6)As set forth in Department of Rehabilitation regulations,
specifically requires blind vendors to be solely responsible
for payment of all rent or utility charges in accordance with
the terms and conditions of the vendor operating agreement,
permit, or contract.
7)As set forth in federal regulations, permits vending machines
in safety roadside rest areas, under certain conditions,
including that states must give priority to operate vending
machine to blind persons. Federal regulations also
specifically provide that costs of installation, operation,
and maintenance of all vending machines are not eligible for
federal reimbursement.
FISCAL EFFECT: The Assembly Appropriations Committee analysis
of last year's AB 1602 (Patterson), an identical bill, estimated
annual costs in the range of $200,000 to $250,000 for Caltrans
to pay vending machine utility costs at the state's 29 roadside
rest areas.
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COMMENTS: The Business Enterprises Program is a food service
organization with operations in government facilities as well as
in private industry. Blind vendors receive ongoing support from
the Department of Rehabilitation as long as they remain in the
program. This support may include such benefits as financial
assistance for buying new appliances and equipment, various
training opportunities, upward mobility support, business
counseling services, fiscal oversight, and guidance to assist
with their financial responsibilities. Vendors pay up to 6% of
their net sales to the Department of Rehabilitation for deposit
into a trust fund, which in turn is used to pay for services
provided in the program. Vendors are required to secure all
necessary business and health permits, obtain required insurance
policies, hire and supervise employees, pay business and sales
taxes, develop menus, and purchase merchandise for sale.
The current interagency agreement between the Department of
Rehabilitation and Caltrans provides for vending machines in 29
safety roadside rest areas. Consistent with state law and
regulations, the interagency agreement requires vendors to pay
for utility costs at these sites. Ten of the sites have
independent electric meters. Plans are in the works to convert
all vending locations to independent meters. At these sites,
vendors pay utility costs directly to the electricity provider.
At the remaining sites, the interagency agreement requires
vendors to pay $200 per month per vending site for costs
incurred by Caltrans for electricity.
Not all vendors in the Business Enterprises Program are required
to pay for utilities. For instance, vending facilities in state
buildings within the purview of the Department of General
Services do not pay utility costs. On the other hand, Caltrans
is not alone in charging for utilities. For example, facilities
on county government properties generally pay utility costs and
a cursory review of other state laws indicates that charging
vendors in safety roadside rest areas for utilities is not
uncommon. Furthermore, that practice is not inconsistent with
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the requirement that vendors cover other operating costs like
rent and utilities for use of private property used to support
their vending businesses, such as warehouses used to store
vending merchandise.
The author introduced this bill to remedy what he believes is an
inequity in the Business Enterprises Program with respect to
requirements that vendors pay utility costs. The author argues
that vendors operating vending machines in state buildings do
not to pay utility costs (because state agencies absorb the
electricity costs) while vendors that operate vending machines
at safety roadside rest areas do. The author introduced this
bill to "ensure that all participants in the Business
Enterprises Program for the Blind are treated equally."
Supporters of this bill are concerned that Caltrans' plans to
install independent electric meters at safety roadside rest
areas will put vendors out of business. They argue that this
will negatively affect motorists who rely on safety roadside
rest area vending facilities for refreshment during a break from
driving.
There are 29 vending locations currently provided for in the
interagency agreement between the Department of Rehabilitation
and Caltrans, with an average of 9 vending machines at each
safety roadside rest area. According to the author's office,
utility cost estimates for existing vending facilities that have
independent electric meters range from a low of $350 a month in
winter months to a high of $900 in summer months. Under this
bill, Caltrans will be responsible for incurring all utility
costs associated with these vending machines.
Previous legislation: The author introduced an identical bill
last year, AB 1602 (Patterson).
AB 1602 passed out of the Assembly with no "NO" votes but was
ultimately held in the Senate Appropriations Committee on the
suspense file.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Council for the Blind
Resources for Independence
26 private citizens
Opposition
None on file
Analysis Prepared by:Janet Dawson / TRANS. / (916) 319-2093
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