BILL ANALYSIS Ó
AB 2094
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Date of Hearing: April 11, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
AB 2094
(Obernolte) - As Amended March 18, 2016
SUBJECT: Transportation: Greenhouse Gas Reduction Fund: state
and local transportation funds
SUMMARY: Transfers $1 billion annually from the Greenhouse Gas
Reduction Fund (GGRF) to the Retail Sales Tax Fund to allocate
to regional and local transportation agencies as part of the
existing Transportation Development Act (TDA) process, and then
allocates an equivalent $1 billion from the Retail Sales Tax
Fund to the state and local governments for road improvements.
Specifically, this bill:
1)Declares that this bill complies with Article XIX of the
California Constitution which prohibits loans from local
transportation funds and prohibits the expenditure of money in
a local transportation fund for purposes for which it was not
authorized.
2)Declares that this bill does not change the current collection
level and allocation of the sales and use tax to local
transportation funds.
3)Requires $1 billion from the GGRF be transferred to the Retail
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Sales Tax Fund if:
a) $1 billion is available from the GGRF after the required
60% continuous appropriations for affordable housing and
sustainable communities, transit, and high-speed rail; and,
b) The amount of taxes collected for local transportation
funds equals or exceeds $1 billion.
4)Requires $1 billion be allocated from the Retail Sales Tax
Fund be continuously appropriated with:
a) 50% to the California Department of Transportation
(Caltrans) for maintenance projects or the State Highway
Operations and Protection Program (SHOPP); and,
b) 50% to cities and counties based on existing
distribution formulas for local streets and road
maintenance.
5)Declares that GGRF funds transferred to the Retail Sales Tax
Fund shall be considered part of the revenues allocated to
local transportation funds.
EXISTING LAW:
1)Protects local transportation funds from being transferred,
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diverted, appropriated, borrowed or loaned for other purposes.
2)Provides state funding through the Local Transportation Fund
(LTF) of the TDA, which is derived from a 1/4-cent of the
general sales tax collected statewide. These funds are
distributed to each county according to the amount of tax
collected in that county. LTF funds a wide variety of
transportation programs, including planning and program
activities, pedestrian and bicycle facilities, community
transit services, public transportation, and bus and rail
projects. In limited cases, counties may also use LTF moneys
for local streets and roads construction and maintenance.
3)Requires the California Air Resources Board (ARB), pursuant to
AB 32 (Núñez), Chapter 488, Statutes of 2006, to develop a
plan of how to reduce statewide greenhouse gas emissions to
1990 levels by 2020. Under AB 32, ARB is authorized to
include the use of market-based mechanisms to comply with
these regulations (cap and trade).
4)Establishes the GGRF in the State Treasury and requires all
money collected pursuant to cap and trade, with limited
exceptions, be deposited into the fund and makes the GGRF
funds available for appropriation by the Legislature.
5)Established the Affordable Housing and Sustainable
Communities, the Low Carbon Transportation, and the Low Carbon
Transit Operations programs and continuously appropriates 60%
of GGRF fund proceeds, beginning in the 2015-16 fiscal year,
for transit, affordable housing and sustainable communities
programs, and high-speed rail.
6)Requires, pursuant to SB 535 (de León), Chapter 830, Statutes
of 2012, that a minimum of 25% of the moneys available in GGRF
be used to benefits disadvantaged communities.
FISCAL EFFECT: Unknown
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COMMENTS: This bill would essentially "swap" $1 billion derived
from the state's cap and trade program with $1 billion of funds
collected for the LTF. This bill would then require that the
cap and trade funds be expended for the existing purposes of the
LTF, including local planning and transit programs, and the $1
billion of LTF funded that have been "swapped" be allocated to
Caltrans and local governments for road maintenance.
The author states that "California roads are in a serious state
of disrepair and the funding situation is just as bleak." He
states that according to a February 2016 report by the
Legislative Analyst (LAO), the state has significant ongoing
maintenance needs including an annual funding shortfall of $2
billion in maintenance and the State Highway Operation and
Protection Program (SHOPP).
The Legislature and the Administration continue to discuss state
and local transportation needs for deferred maintenance and
funding solutions for the problem. Governor Brown identified
the $59 billion backlog of maintenance on the state highway
system as a priority in his State of the State address in both
2014 and 2015. Additionally, in June 2015, the Governor called
a Special Legislative Session on transportation directing the
Legislature to act on a permanent, sustainable funding source
for state and local transportation infrastructure.
Local governments are also facing a nearly $80 billion shortfall
in funding for local streets and roads. Additionally, the loss
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of funding for the State Transportation Improvement Program
(STIP), which received a $754 million cut this year by the
California Transportation Commission due to reductions in the
gasoline excise tax, has caused projects to be delayed or
cancelled.
The author states that infrastructure is a core function of
government and California's economy and residents deserve
better. Adding that it is crucial that the Legislature identify
ways to improve funding for deteriorating state highways and
local roads. He contends that this bill would help address these
funding needs by redirecting the 0.25% sales tax that is
currently going to fund local transit projects back to state and
local roads.
Currently, a 1/4-cent sales tax collected statewide is deposited
in LTF in the Retail Sales Tax Account and funding is
distributed to each county according to the amount of tax
collected in that county. The funding is used for
transportation activities authorized by the TDA which was
enacted in the early 1970's. Regional transportation planning
agencies, transit agencies and cities and counties utilize LTF
funds a wide variety of transportation programs, including
planning and programming, pedestrian and bicycle facilities,
community transit services, public transportation, and bus and
rail projects. Additionally, some counties, usually in rural
areas, may also use LTF moneys for local streets and roads
construction and maintenance.
Committee Concerns: Although the need is great and funding
discussions have yet to yield a solution, AB 2049 is likely not
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constitutional and also raises numerous concerns for the use of
funds and for the agencies that would be affected.
Specifically, Article XIX of the California Constitution
protects local transportation fund revenues from being
transferred, diverted, loaned or borrowed for any purposes other
than those authorized in the TDA. Additionally, Article XIII
prohibits any change in distributing the Bradley-Burns Uniform
Local Sales and Use Tax Law, which authorizes collection of the
1/4 cent statewide sales tax. Also, current law does not allow
funds from the GGRF to be used for any programs that do not have
a clear nexus to greenhouse gas emissions reductions as required
by AB 32.
Although the author contends that the "swap" would not violate
law and would also provide a nexus to AB 32 due to LTF funds
being used on transit, which is questionable and does not
accurately reflect how LTF funds are currently used. LTF funds
are currently used for planning and programming activities by
regional transportation agencies and in some areas, after a
finding of no unmet transits needs, counties can use their LTF
funds for local streets and roads. In commenting on this bill,
the Rural Counties Task Force (RCTF), who represent 28 rural
county transportation planning agencies and local transportation
commissions, noted that they are concerned that any swap of
greenhouse gas funds for LTF will open the door to possible
restrictions on the current eligible uses of LTF funds that are
critical to regional transportation planning agencies functions
and transit operators statewide. RCTF added a concern that
current LTF funds that are used for local street and road
maintenance which may not be an eligible use for greenhouse gas
funds.
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Additionally, if funds from the GGRF were "swapped," the
receiving regional and local agencies would be responsible for
all spending and reporting requirements that accompany this
funding source including documenting greenhouse gas reductions
and directing 25% of funds to benefit disadvantaged communities.
Double referral: This bill will be referred to the Assembly
Local Government Committee should it pass out of this committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Howard Jarvis Taxpayer Association
Opposition
California Chamber of Commerce
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Analysis Prepared by:Melissa White / TRANS. / (916) 319-2093