BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1353


                                                                      Page  1





          ASSEMBLY THIRD READING


          AB  
          1353 (Patterson)


          As Introduced  February 27, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |----------------+------+---------------------+---------------------|
          |Transportation  |15-0  |Frazier, Achadjian,  |                     |
          |                |      |Baker, Bloom,        |                     |
          |                |      |Campos, Chu, Daly,   |                     |
          |                |      |Dodd, Eduardo        |                     |
          |                |      |Garcia, Kim, Linder, |                     |
          |                |      |Medina, Melendez,    |                     |
          |                |      |Nazarian, O'Donnell  |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,      |                     |
          |                |      |Bonta, Calderon,     |                     |
          |                |      |Chang, Daly, Eggman, |                     |
          |                |      |Gallagher,           |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |                |      |Eduardo Garcia,      |                     |
          |                |      |Gordon, Holden,      |                     |
          |                |      |Jones, Quirk,        |                     |
          |                |      |Rendon, Wagner,      |                     |
          |                |      |Weber, Wood          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 








                                                                      AB 1353


                                                                      Page  2







          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.  


          FISCAL EFFECT:  According to the Assembly Appropriations Committee  
          analysis, annual special fund costs of about $200,000 for Caltrans  
          to pay vending machine utility costs at the state's 30 roadside  
          rest areas. [State Highway Account]


          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  








                                                                      AB 1353


                                                                      Page  3





          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 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.  









                                                                      AB 1353


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          There is no opposition on file.


          There are 29 vending locations currently provided for in the  
          interagency agreement between the Department of Rehabilitation and  
          Caltrans, with an average of nine 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.  



          Please see the policy committee analysis for full discussion of  
          this bill.




          Analysis Prepared by:                                               
                          Janet Dawson / TRANS. / (916) 319-2093  FN:  
          0000633