BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2411


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          Date of Hearing: April 4, 2016  


                        ASSEMBLY COMMITTEE ON TRANSPORTATION


                                 Jim Frazier, Chair


          AB 2411  
          (Frazier) - As Introduced February 19, 2016


          SUBJECT:  Transportation revenues


          SUMMARY:  Limits the use of miscellaneous revenue, for example,  
          from the sale of surplus property, only to purposes authorized  
          in Article XIX of the California Constitution.  Specifically,  
          this bill:  


          1)Deletes the transfer of miscellaneous revenues from the State  
            Highway Account to the Transportation Debt Service Fund.


          2)Instead, requires the miscellaneous revenues to be retained in  
            the State Highway Account and to be used solely for purposes  
            delineated in Article XIX of the California Constitution.


          3)Exempts proceeds from the sale of properties in the State  
            Route 710 corridor from these provisions.


          EXISTING LAW: 


          1)Provided for in the Constitution of California, restricts the  








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            use of revenues from taxes imposed by the state on motor  
            vehicle fuels to the research, planning, construction,  
            improvement, maintenance, and operation of public streets and  
            highways and exclusive public mass transit guideways,  
            including mitigation of their environmental effects.


          2)Requires miscellaneous revenue deposited into the State  
            Highway Account, for example, from the sale of documents,  
            rental of state property, or sale of state property (except  
            for the sale of property along the State Route 710 corridor)  
            to be transferred from the State Highway Account to the  
            Transportation Debt Service Fund to pay debt service on  
            general obligation bonds authorized by passage of Proposition  
            116 in 1990, the Clean Air and Transportation Improvement of  
            1990.


          3)Creates the State Route 710 Rehabilitation Account and  
            requires the California Department of Transportation  
            (Caltrans) to deposit proceeds from sales of properties it  
            owns within the State Route 710 corridor into the account to  
            be used for allocation by the California Transportation  
            Commission exclusively to fund projects located in the that  
            corridor.

          FISCAL EFFECT:  Revenue derived from miscellaneous income  
          sources amounts to approximately $70 million annually.


          COMMENTS:  Caltrans gets the majority of its funding from gas  
          tax revenue.  This revenue is protected by Article XIX of the  
          State Constitution for specific transportation uses.   
          Long-standing policy held that any money generated by Caltrans,  
          for example, from document sales, property rentals, or surplus  
          property sales, was similarly Article XIX protected.  This  
          policy began to degrade over time as the State's General Fund  
          began needing support.  Increasingly, miscellaneous revenue  
          sources that were not specifically identified in the  








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          Constitution were transferred away from transportation and put  
          to General Fund uses.  


          Today, this updated policy is statutorily established and  
          revenue derived from these miscellaneous income sources,  
          approximately $70 million annually, is used to provide General  
          Fund relief by paying debt service on transportation-related  
          general obligation bonds, specifically on bonds authorized by  
          passage of Proposition 116 in 1990, the Clean Air and  
          Transportation Improvement of 1990.  

          The General Fund is no longer in crisis.  Funding for  
          transportation, however, is.  The Governor declared a $6 billion  
          annual unfunded need for state highways alone and local streets  
          and roads needs are greater still.  AB 2411 stops the transfer  
          of miscellaneous revenue from the State Highway Account to the  
          Transportation Debt Service Fund for General Fund relief.  At a  
          time when the Legislature is considering major transportation  
          funding proposals, the diversion of transportation revenue to  
          the General Fund seems appropriate.  

          REGISTERED SUPPORT / OPPOSITION:


          Support


          Automobile Club of Southern California




          Opposition


          None on file










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