BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 1353 Hearing Date: 6/23/2015
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|Author: |Patterson |
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|Version: |2/27/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Randy Chinn |
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SUBJECT: Highway rest areas: vending machines: utility costs
DIGEST: This bill exempts blind vendors from having to pay
utility costs for their vending machines operating in roadside
rest areas.
ANALYSIS:
Existing law:
1)Establishes the Business Enterprises Program for the Blind
(BEPB) within the Department of Rehabilitation (DOR) to
provide blind persons with employment, economic opportunities,
and the means to be self-sufficient.
2)Gives priority to blind persons to operate vending businesses
on state properties, including roadside rest areas.
3)Requires blind vendors to reimburse Caltrans for costs of
maintenance, operations, design review, and other activities
related to operating vending machines in state roadside rest
areas.
4)Requires the hosting agency to pay for the cost of utilities
for vending machines operated by blind vendors under the BEPB
in state buildings.
AB 1353 (Patterson) Page 2 of ?
This bill exempts blind vendors from having to pay for utility
costs (e.g., electricity, water, sewer) incurred by their
vending machines operating at roadside rest areas under the BEPB
and requires Caltrans to pay for those utility costs using state
funds.
COMMENTS:
1)Purpose. The author believes that "this bill is needed to
bring equity into how the state treats blind vendors that
service state buildings and those that service state rest stop
areas. Furthermore, the discrepancy is inconsistent with the
intent of the BEPB because it threatens the viability and
livelihood of many California small business owners who are
blind vendors."
Supporters note that blind vendors already pay the DOR 6% of
their sales for maintenance and support. Having these vendors
which operate at rest stops also pay for utility service seems
inequitable to them and financially hazardous.
2)Background. According to a 2013 annual report of the DOR's
BEPB, 17 blind vendors operated vending facilities at 29
roadside rest areas along interstate highways in California,
averaging just over $50,000 in annual income per vendor.
Vendors sell items from automated vending machines, including
refrigerated soft drinks, snacks, ice cream, and hot
beverages. A single vendor conducts business at each rest
stop (and for some vendors more than one rest stop), operating
between seven and 11 vending machines per site. Monthly
utility costs depend on the number and type of vending machine
(and the need for refrigeration or heating, in particular) and
the climate, season, and placement of machines (indoor vs.
outdoor). According to the author, electricity costs range
from around $350 per month to $700-$900 per month depending on
these factors. Using these figures, a ballpark estimate of
the total subsidy provided by this bill is about $200,000
annually.
A current interagency agreement between the DOR and Caltrans
requires vendors to pay for utility costs at the roadside rest
areas. In the 13 facilities in which meters are installed,
vendors pay utility costs directly to the electricity
AB 1353 (Patterson) Page 3 of ?
provider. At the remaining sites, the interagency agreement
requires vendors to pay $200 per month per vending site and
DOR reimburses Caltrans for the balance of electricity costs.
3)What's fair? Utility rates are increasing, so naturally
utility bills for vending machines are rising. These can be
expensive to operate, as many involve refrigeration or
heating, which are energy-intensive activities, particularly
for machines which are open to the elements 24/7. As Caltrans
installs meters at the rest stops, the vendors' cost of
utility service will double or more. It seems likely that
these increasing costs jeopardize the self-sufficiency which
the BEPB is supposed to facilitate. However, should it be
demonstrated that blind vendors under BEPB are operating very
profitably, there would be less justification for this public
subsidy.
Related Legislation:
AB 1602 (Patterson, 2014) - exempts blind vendors from having to
pay for utility costs for their vending machines operating in
roadside rest areas. This bill was held in the Senate
Appropriations Committee.
Assembly Vote:
Floor: 78-0
Appr: 17-0
Trans: 15-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 17, 2015.)
SUPPORT:
California Council of the Blind
Resources for Independence Central Valley
15 individuals
OPPOSITION:
AB 1353 (Patterson) Page 4 of ?
None received
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