BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2175


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          Date of Hearing:  April 18, 2016


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 2175  
          (Jones) - As Amended March 18, 2016


          SUBJECT:  Fuel taxes:  Off-Highway Vehicle Trust Fund


          SUMMARY:  Eliminates the transfer of $10 million per year from  
          the Off-Highway Vehicle (OHV) Trust Fund to the General Fund.  


          EXISTING LAW:  


          1)Establishes the OHV trust fund administered by the California  
            Department of Parks and Recreation (Parks) to fund the  
            maintenance, operations and enforcement of State Vehicular  
            Recreation Areas (SVRA) and other state and federal lands  
            allowable for OHV use.  


          2)Provides for the imposition and collection of OHV registration  
            fees and SVRA entrance fees to be deposited in the OHV trust  
            fund. 


          3)Provides for the transfers of fuels taxes attractable to OHV  
            and off-highway motor vehicle activity from the Motor Vehicle  
            Fuel Account to the OHV trust fund.









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          4)Requires the Controller to withhold $833,000 per month from  
            the Motor Vehicles Fuel Account transfer to the OHV trust fund  
            and transfer that amount to the General Fund.  


          FISCAL EFFECT:  Unknown


          COMMENTS:  As part of the 2011-12 budget act, $833,000 per  
          month, or $10 million annually, was redirected from the OHV  
          Trust Fund to the state General Fund as part of numerous loans  
          and diversions from various special funds to help balance the  
          state's budget.  According to the author, since that time, the  
          OHV trust fund has lost $50 million that would have otherwise  
          been used to maintain critical infrastructure and services to  
          the OHV recreation community that is responsible for generating  
          user-fee revenues.  Further, he states that AB 2175 will stop  
          the inappropriate diversion of transportation-generated revenues  
          to unrelated purposes. 


          The OHV program was created in 1971 and is managed by Department  
          of Parks and Recreation and overseen by California Off-Highway  
          Motor Vehicle Recreation Commission.  The program is funded by a  
          combination of proceeds derived from the $52 biennial  
          registration fee on OHVs, commonly referred to as the "green  
          sticker" program; taxes on motor vehicle fuels, both those  
          consumed by OHVs and those attributable to vehicle use off of  
          the public highways; and entrance fees collected at SVRAs.   
          Since the passage of SB 742 (Steinberg), Chapter 541, Statutes  
          of 2007, the amount of motor fuels transferred to the OHV trust  
          fund are based on the percentage of fuel taxes transferred in  
          2007.  Prior to 2007, the amount of funds attributable to OHV  
          use was determined based on statewide studies that estimated the  
          total gallons of gasoline burned in the course of OHV  
          recreation.  In fact, as part of the 2014-15 budget, the  
          Department of Transportation, Parks and the Department of Motor  
          Vehicles (DMV) are required to do a study to determine the  








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          appropriate level of funds to transfer to the OHV trust fund  
          based upon estimated fuel use by off highway vehicles and  
          activities.  The study is not yet complete.


          Funding from the OHV trust fund is used for grants to local,  
          state and federal entities, Native American tribes, educational  
          institutions and non-profit organizations.  The grants are split  
          into function areas with 50% for operations and maintenance of  
          trails and facilities, 25% for restoration or repair to habitat  
          damaged by OHV use, 20% for law enforcement, and 5% for  
          education and safety programs.


          In writing in support of AB 2175, the California Off-Road  
          Vehicle Association (CORVA) notes that as a result of diversion  
          of funds from the OHV trust fund, the OHV program is now unable  
          to fully fund their program and many rural local government OHV  
          grants are only getting funded at a fraction of the needs to  
          provide law enforcement, safety, trail maintenance, and  
          environmental restoration on lands within their jurisdictions.   
          The American Sand Association adds that the loss of $10 million  
          each year is creating serious delays in providing badly needed  
          maintenance to OHV trails and areas throughout California and  
          will increase the costs of finally dealing with these  
          maintenance issues.  


          To help solve the budget crisis of the Great Recession, numerous  
          loans and diversions have been made from the OHV trust fund to  
          help support the state parks budget and the state General Fund.   
          The General Fund in no longer in crisis.  Many of these loans  
          are in the process on being repaid, including in the Governor's  
          2016-17 budget proposal.  AB 2175 is consistent with these  
          actions.  


          Previous legislation: SB 853 (Committee on Budget and Fiscal  
          Review), Chapter 27, Statutes of 2014), requires the Department  








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          of Transportation, in consultation with Parks and DMV, to do a  
          study to determine the appropriate level of funds transferred to  
          the OHV trust fund based on estimated taxes attributable to OHV  
          use and activities.  The study is due to the Legislature no  
          later than January 1, 2016.


          SB 742 (Steinberg), Chapter 541, Statutes of 2007, reauthorized  
          the OHV program, created the OHV Recreation Commission and  
          changed the baseline for future funding for OHVs.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          American Sand Association (Sponsor)


          California Off Road Vehicle Association (Sponsor) 


          San Diego Off-Road Coalition (Sponsor)


          Imperial County Board of Supervisors


          Motorcycle Industry Council


          Specialty Vehicle Institute of America


          Recreational Off-Highway Vehicle Association








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          Opposition


          None on file




          Analysis Prepared by:Melissa White / TRANS. / (916) 319-2093