BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2411


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          ASSEMBLY THIRD READING


          AB  
          2411 (Frazier)


          As Amended  May 27, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Transportation  |16-0 |Frazier, Linder,      |                    |
          |                |     |Baker, Bloom, Brown,  |                    |
          |                |     |Chu, Daly, Dodd,      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Gomez, Kim, Mathis,   |                    |
          |                |     |Medina, Melendez,     |                    |
          |                |     |Nazarian, O'Donnell   |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |








                                                                    AB 2411


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          |                |     |                      |                    |
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          SUMMARY:  Beginning July 1, 2017, limits the use of  
          miscellaneous revenue, for example, from the sale of surplus  
          property, only to purposes authorized in California Constitution  
          Article XIX.  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 California Constitution Article XIX.


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


          4)Makes these provisions prospective, beginning July 1, 2017.


          EXISTING LAW: 


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








                                                                    AB 2411


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            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:  According to the Assembly Appropriations  
          Committee, miscellaneous revenues to the State Highway Account  
          have ranged from $60 million to $70 million annually in the last  
          four years.  This bill, beginning in Fiscal year 2017-18,  
          increases transportation funding by this amount and requires a  
          like amount of General Fund revenues to instead pay  
          transportation bond debt service.


          COMMENTS:  Caltrans gets the majority of its funding from gas  
          tax revenue.  This revenue is protected by California  
          Constitution Article XIX 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 California Constitution 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 Constitution were transferred away from  
          transportation and put to General Fund uses.  


          Today, this updated policy is statutorily established and  








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          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.  This bill 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.  


          Analysis Prepared by:                                             
          Janet Dawson / TRANS. / (916) 319-2093  FN: 0003189