Amended in Senate August 25, 2015

Amended in Senate July 14, 2015

California Legislature—2015–16 First Extraordinary Session

Senate Bill No. 1

Introduced by Senator Beall

June 22, 2015

An act to add Sections 14526.7, 14526.8, and 16321 to the Government Code, to amend Sections 7360 and 60050 of, and to add Sections 7361.2, 7653.2, 60050.2, and 60201.4 to, the Revenue and Taxation Code, to add Section 2103.1 to, to add Article 8 (commencing with Section 228) to Chapter 1 of Division 1 of, and to add Chapter 2 (commencing with Section 2030) to Division 3 of, the Streets and Highways Code, and to add Sections 9250.3 and 9250.6 to the Vehicle Code, relating to transportation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 1, as amended, Beall. Transportation funding.

(1) Existing law provides various sources of funding for transportation purposes, including funding for the state highway system and the local street and road system. These funding sources include, among others, fuel excise taxes, commercial vehicle weight fees, local transactions and use taxes, and federal funds. Existing law imposes certain registration fees on vehicles, with revenues from these fees deposited in the Motor Vehicle Account and used to fund the Department of Motor Vehicles and the Department of the California Highway Patrol. Existing law provides for the monthly transfer of excess balances in the Motor Vehicle Account to the State Highway Account.

This bill would create the Road Maintenance and Rehabilitation Program to address deferred maintenance on the state highway system and the local street and road system. The bill would require the California Transportation Commission to adopt performance criteria to ensure efficient use of the funds available for the program. The bill would provide for the deposit of various funds for the program in the Road Maintenance and Rehabilitation Account, which the bill would create in the State Transportation Fund, including revenues attributable to a $0.12 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill and $0.10 of begin delete the end delete begin insert a end insert $0.22 per gallon increase in the diesel fuel excise tax imposed by the bill, begin insert including an inflation adjustment, as provided, end insert a $0.12 per gallon storage tax on motor vehicle fuel and $0.10 of the $0.22 per gallon storage tax on diesel fuel imposed by the bill, an increase of $35 in the annual vehicle registration fee, a new $100 annual vehicle registration fee applicable to zero-emission motor vehicles, as defined, a new annual road access charge on each vehicle, as defined, of $35, and repayment, over a 3-year period, of outstanding loans made in previous years from certain transportation funds to the General Fund.

The bill would continuously appropriate the funds in the account for road maintenance and rehabilitation purposes and would allocate 5% of available funds to counties that approve a transactions and use tax on or after July 1, 2015, with the remaining funds to be allocated 50% for maintenance of the state highway system or to the state highway operation and protection program, and 50% to cities and counties pursuant to a specified formula. The bill would impose various requirements on agencies receiving these funds. The bill would authorize a city or county to spend its apportionment of funds under the program on transportation priorities other than those allowable pursuant to the program if the city’s or county’s average Pavement Condition Index meets or exceeds 85.

(2) The Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Proposition 1B) created the Trade Corridors Improvement Fund and provided for allocation by the California Transportation Commission of $2 billion in bond funds for infrastructure improvements on highway and rail corridors that have a high volume of freight movement, and specified categories of projects eligible to receive these funds. Existing law continues the Trade Corridors Improvement Fund in existence in order to receive revenues from sources other than the bond act for these purposes.

The bill would transfer revenues attributable to $0.12 of the $0.22 increase in the diesel fuel excise tax and revenues attributable to $0.12 of the $0.22 per gallon storage tax on diesel fuel to the Trade Corridors Improvement Fund for expenditure on eligible projects.

(3) Existing law, as of July 1, 2011, increases the sales and use tax on diesel and decreases the excise tax, as provided. Existing law requires the State Board of Equalization to annually modify both the gasoline and diesel excise tax rates on a going-forward basis so that the various changes in the taxes imposed on gasoline and diesel are revenue neutral.

This bill would eliminate the annual rate adjustment to maintain revenue neutrality for the gasoline and diesel excise tax rates. This bill would, beginning January 1, 2019, and every 3rd year thereafter, require the board to recompute the gasoline and diesel excise tax rates based upon the percentage change in the California Consumer Price Index transmitted to the board by the Department of Finance, as prescribed.

(4) Existing law requires the Department of Transportation to prepare a state highway operation and protection program every other year for the expenditure of transportation capital improvement funds for projects that are necessary to preserve and protect the state highway system, excluding projects that add new traffic lanes. The program is required to be based on an asset management plan, as specified. Existing law requires the department to specify, for each project in the program, the capital and support budget and projected delivery date for various components of the project. Existing law provides for the California Transportation Commission to review and adopt the program, and authorizes the commission to decline and adopt the program if it determines that the program is not sufficiently consistent with the asset management plan.

This bill, on and after February 1, 2017, would require the commission to make an allocation of all capital and support costs for each project in the program, and would require the department to submit a supplemental project allocation request to the commission for each project that experiences cost increases above the amounts in its allocation. The bill would require the commission to establish guidelines to provide exceptions to the requirement for a supplemental project allocation requirement that the commission determines are necessary to ensure that projects are not unnecessarily delayed.

(5) Existing law requires the Department of Transportation to prepare and submit to the Governor a proposed budget and to develop budgeting, accounting, fiscal control, and management information systems to provide budget oversight.

This bill, by April 1, 2016, would require the department to present to the California Transportation Commission a plan to increase department efficiency by up to 30% over the subsequent 3 years, with the ongoing savings to result in increased capital expenditures in the state highway operation and protection program or an increase in the state highway maintenance program.

(6) begin insert   end insert This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) Over the next 10 years, the state faces a $59 billion shortfall
to adequately maintain the existing state highway system, in order
to keep it in a basic state of good repair.

(b) Similarly, cities and counties face a $78 billion shortfall
over the next decade to adequately maintain the existing network
of local streets and roads.

(c) Statewide taxes and fees dedicated to the maintenance of
the system have not been increased in more than 20 years, with
those revenues losing more than 55 percent of their purchasing
power, while costs to maintain the system have steadily increased
and much of the underlying infrastructure has aged past its expected
useful life.

(d) California motorists are spending $17 billion annually in
extra maintenance and car repair bills, which is more than $700
per driver, due to the state’s poorly maintained roads.

(e) Failing to act now to address this growing problem means
that more drastic measures will be required to maintain our system
in the future, essentially passing the burden on to future generations
instead of doing our job today.

(f) A funding program will help address a portion of the
maintenance backlog on the state’s road system and will stop the
growth of the problem.

(g) Modestly increasing various fees can spread the cost of road
repairs broadly to all users and beneficiaries of the road network
without overburdening any one group.

(h) Improving the condition of the state’s road system will have
a positive impact on the economy as it lowers the transportation
costs of doing business, reduces congestion impacts for employees,
and protects property values in the state.

(i) The federal government estimates that increased spending
on infrastructure creates more than 13,000 jobs per $1 billion spent.

(j) Well-maintained roads benefit all users, not just drivers, as
roads are used for all modes of transport, whether motor vehicles,
transit, bicycles, or pedestrians.

(k) Well-maintained roads additionally provide significant health
benefits and prevent injuries and death due to crashes caused by
poorly maintained infrastructure.

SEC. 2.  

Section 14526.7 is added to the Government Code, to
read:

14526.7.  

(a) On and after February 1, 2017, an allocation by
the commission of all capital and support costs for each project in
the state highway operation and protection program shall be
required.

(b) For a project that experiences increases in capital or support
costs above the amounts in the commission’s allocation pursuant
to subdivision (a), a supplemental project allocation request shall
be submitted by the department to the commission for approval.

(c) The commission shall establish guidelines to provide
exceptions to the requirement of subdivision (b) that the
commission determines are necessary to ensure that projects are
not unnecessarily delayed.

SEC. 3.  

Section 14526.8 is added to the Government Code, to
read:

14526.8.  

(a) On or before April 1, 2016, the department shall
present to the commission a plan to increase department efficiency
by up to 30 percent over the subsequent three years. The ongoing
savings experienced through this increased efficiency shall result
in increased capital expenditures in the department’s state highway
operation and protection program or an increase in the department’s
state highway maintenance program.

(b) The commission shall consider the reasonableness of the
proposal, and may approve the entire plan or reject all or portions
of the plan. The commission’s feedback is intended to ensure that
the department is achieving the savings in the most responsible
way possible.

(c) All future state highway operation and protection program
documents shall identify the increased funding available to the
program as a result of the efficiencies realized due to the
implementation of the plan.

SEC. 4.  

Section 16321 is added to the Government Code, to
read:

16321.  

(a) Notwithstanding any other law, on or before March
1, 2016, the Department of Finance shall compute the amount of
outstanding loans made from the State Highway Account, the
Motor Vehicle Fuel Account, the Highway Users Tax Account,
and the Motor Vehicle Account to the General Fund. The
department shall prepare a loan repayment schedule, pursuant to
which the outstanding loans shall be repaid to the accounts from
which the loans were made, as follows:

(1) On or before June 30, 2016, 33 percent of the outstanding
loan amounts.

(2) On or before June 30, 2017, 33 percent of the outstanding
loan amounts.

(3) On or before June 30, 2018, 34 percent of the outstanding
loan amounts.

(b) Notwithstanding any other provision of law, as the loans are
repaid pursuant to this section, the repaid funds shall be transferred
to the Road Maintenance and Rehabilitation Account created
pursuant to Section 2031 of the Streets and Highways Code.

(c) Funds for loan repayments pursuant to this section shall be
appropriated from the Budget Stabilization Account pursuant to
subclause (II) of clause (ii) of subparagraph (B) of paragraph (1)
of subdivision (c) of Section 20 of Article XVI of the California
Constitution.

SEC. 5.  

Section 7360 of the Revenue and Taxation Code is
amended to read:

7360.  

(a) (1)  (A)  A tax of eighteen cents ($0.18) is hereby
imposed upon each gallon of fuel subject to the tax in Sections
7362, 7363, and 7364.

(B) In addition to the tax imposed pursuant to subparagraph
(A), on and after the 61st day after the effective date of the act
adding this subparagraph, a tax of twelve cents ($0.12) is hereby
imposed upon each gallon of fuel subject to the tax in Sections
7362, 7363, and 7364.

(2) If the federal fuel tax is reduced below the rate of nine cents
($0.09) per gallon and federal financial allocations to this state for
highway and exclusive public mass transit guideway purposes are
reduced or eliminated correspondingly, the tax rate imposed by
subparagraph (A) of paragraph (1), on and after the date of the
reduction, shall be recalculated by an amount so that the combined
state rate under subparagraph (A) of paragraph (1) and the federal
tax rate per gallon equal twenty-seven cents ($0.27).

(3) If any person or entity is exempt or partially exempt from
the federal fuel tax at the time of a reduction, the person or entity
shall continue to be so exempt under this section.

(b) On and after July 1, 2010, in addition to the tax imposed by
subdivision (a), a tax is hereby imposed upon each gallon of motor
vehicle fuel, other than aviation gasoline, subject to the tax in
Sections 7362, 7363, and 7364 in an amount equal to seventeen
and three-tenths cents ($0.173) per gallon.

(c) Beginning January 1, 2019, and every third year thereafter,
the State Board of Equalization shall recompute the rates of the
taxes imposed by this section. That computation shall be made as
follows:

(1) The Department of Finance shall transmit to the State Board
of Equalization the percentage change in the California Consumer
Price Index for all items from June of three calendar years prior
to June of the current calendar year, no later than August 1, 2018,
and August 1 of every third year thereafter.

(2) The State Board of Equalization shall do both of the
following:

(A) Compute an inflation adjustment factor by adding 100
percent to the percentage change figure that is furnished pursuant
to paragraph (1) and dividing the result by 100.

(B) Multiply the preceding tax rate per gallon by the inflation
adjustment factor determined in subparagraph (A) and round off
the resulting products to the nearest tenth of a cent.

SEC. 6.  

Section 7361.2 is added to the Revenue and Taxation
Code, to read:

7361.2.  

(a) For the privilege of storing, for the purpose of sale,
each supplier, wholesaler, and retailer owning 1,000 or more
gallons of tax-paid motor vehicle fuel on the 61st day after the
effective date of the act adding this section shall pay a storage tax
of twelve cents ($0.12) per gallon of tax-paid motor vehicle fuel
in storage according to the volumetric measure thereof.

(b) For purposes of this section:

(1) “Owning” means having title to the motor vehicle fuel.

(2) “Retailer” means any person who sells motor vehicle fuel
in this state to a person who subsequently uses the motor vehicle
fuel.

(3) “Storing” includes the ownership or possession of tax-paid
motor vehicle fuel outside of the bulk transfer/terminal system,
including the holding of tax-paid motor vehicle fuel for sale at
wholesale or retail locations stored in a container of any kind,
including railroad tank cars and trucks or trailer cargo tanks.
“Storing” also includes tax-paid motor vehicle fuel purchased from
and invoiced by the seller, and tax-paid motor vehicle fuel removed
from a terminal or entered into by a supplier, prior to the date
specified in subdivision (a) and in transit on that date.

(4) “Wholesaler” means any person who sells motor vehicle
fuel in this state for resale to a retailer or to a person who is not a
retailer and subsequently uses the motor vehicle fuel.

SEC. 7.  

Section 7653.2 is added to the Revenue and Taxation
Code, to read:

7653.2.  

On or before the 121st day after the effective date of
the act adding this section, each person subject to the storage tax
imposed under Section 7361.2 shall prepare and file with the board,
in a form prescribed by the board, a return showing the total
number of gallons of tax-paid motor vehicle fuel owned by the
person on the 61st day after the effective date of the act adding
this section, the amount of the storage tax, and any other
information that the board deems necessary for the proper
administration of this part. The return shall be accompanied by a
remittance payable to the Controller in the amount of tax due.

SEC. 8.  

Section 60050 of the Revenue and Taxation Code is
amended to read:

60050.  

(a) (1) A tax of thirteen cents ($0.13) is hereby
imposed upon each gallon of diesel fuel subject to the tax in
Sections 60051, 60052, and 60058.

(2) If the federal fuel tax is reduced below the rate of fifteen
cents ($0.15) per gallon and federal financial allocations to this
state for highway and exclusive public mass transit guideway
purposes are reduced or eliminated correspondingly, the tax rate
imposed by paragraph (1) shall be increased by an amount so that
the combined state rate under paragraph (1) and the federal tax
rate per gallon equal what it would have been in the absence of
the federal reduction.

(3) If any person or entity is exempt or partially exempt from
the federal fuel tax at the time of a reduction, the person or entity
shall continue to be exempt under this section.

(b) In addition to the tax imposed pursuant to subdivision (a),
on and after the 61st day after the effective date of the act adding
this subdivision, an additional tax of twenty-two cents ($0.22) is
hereby imposed upon each gallon of diesel fuel subject to the tax
in Sections 60051, 60052, and 60058.

(c) Beginning January 1, 2019, and every third year thereafter,
the State Board of Equalization shall recompute the rates of the
taxes imposed by this section. That computation shall be made as
follows:

(1) The Department of Finance shall transmit to the State Board
of Equalization the percentage change in the California Consumer
Price Index for all items from June of three calendar years prior
to June of the current calendar year, no later than August 1, 2018,
and August 1 of every third year thereafter.

(2) The State Board of Equalization shall do both of the
following:

(A) Compute an inflation adjustment factor by adding 100
percent to the percentage change figure that is furnished pursuant
to paragraph (1) and dividing the result by 100.

(B) Multiply the preceding tax rate per gallon by the inflation
adjustment factor determined in subparagraph (A) and round off
the resulting products to the nearest tenth of a cent.

SEC. 9.  

Section 60050.2 is added to the Revenue and Taxation
Code, to read:

60050.2.  

(a) For the privilege of storing, for the purpose of
sale, each supplier, wholesaler, and retailer owning 1,000 or more
gallons of tax-paid diesel fuel on the 61st day after the effective
date of the act adding this section shall pay a storage tax of
twenty-two cents ($0.22) per gallon of tax-paid diesel fuel in
storage according to the volumetric measure thereof.

(b) For purposes of this section:

(1) “Owning” means having title to the diesel fuel.

(2) “Retailer” means any person who sells diesel fuel in this
state to a person who subsequently uses the diesel fuel.

(3) “Storing” includes the ownership or possession of tax-paid
diesel fuel outside of the bulk transfer/terminal system, including
the holding of tax-paid diesel fuel for sale at wholesale or retail
locations stored in a container of any kind, including railroad tank
cars and trucks or trailer cargo tanks. “Storing” also includes
tax-paid diesel fuel purchased from and invoiced by the seller, and
tax-paid diesel fuel removed from a terminal or entered into by a
supplier, prior to the date specified in subdivision (a) and in transit
on that date.

(4) “Wholesaler” means any person who sells diesel fuel in this
state for resale to a retailer or to a person who is not a retailer and
subsequently uses the diesel fuel.

SEC. 10.  

Section 60201.4 is added to the Revenue and Taxation
Code, to read:

60201.4.  

On or before the 121st day after the effective date of
the act adding this section, each person subject to the storage tax
imposed under Section 60050.2 shall prepare and file with the
board, in a form prescribed by the board, a return showing the total
number of gallons of tax-paid diesel fuel owned by the person on
the 61st day after the effective date of the act adding this section,
the amount of the storage tax, and any other information that the
board deems necessary for the proper administration of this part.
The return shall be accompanied by a remittance payable to the
Controller in the amount of tax due.

SEC. 11.  

Article 8 (commencing with Section 228) is added
to Chapter 1 of Division 1 of the Streets and Highways Code, to
read:

 

Article 8.  Road Access Charge

 

228.  

(a) In addition to any other charge imposed on a vehicle
by law, an annual road access charge is hereby imposed on each
vehicle described in subdivision (c). The amount of the annual
road access charge shall be thirty-five dollars ($35). The
Department of Motor Vehicles shall collect the charge at the same
time and in the same manner as the department collects the vehicle
registration fee pursuant to Section 9250.3 of the Vehicle Code.

(b) Revenues from the charge, after deduction of the
department’s administrative costs related to this section, shall be
deposited in the Road Maintenance and Rehabilitation Account
created pursuant to Section 2031.

(c) As used in this section, “vehicle” means every vehicle subject
to registration in this state. “Vehicle” does not mean either any
vehicle exempted pursuant to the Vehicle Code from the payment
of registration fees or any vehicle for which a certificate of
nonoperation has been filed with the Department of Motor Vehicles
pursuant to Section 4604 of the Vehicle Code during the period
of time covered by the certificate.

SEC. 12.  

Chapter 2 (commencing with Section 2030) is added
to Division 3 of the Streets and Highways Code, to read:

 

Chapter  2. Road Maintenance and Rehabilitation
Program

 

2030.  

(a) The Road Maintenance and Rehabilitation Program
is hereby created to address deferred maintenance on the state
highway system and the local street and road system. Funds made
available by the program shall be prioritized for expenditure on
basic road maintenance and road rehabilitation projects, and on
critical safety projects. The California Transportation Commission
shall adopt performance criteria to ensure efficient use of the funds
available pursuant to this chapter for the program.

(b) Funds made available by the program shall be used for
projects that include, but are not limited to, the following:

(1) Road maintenance and rehabilitation.

(2) Safety projects.

(3) Railroad grade separations.

(4) Active transportation and pedestrian and bicycle safety
projects in conjunction with any other allowable project.

(c) To the extent possible, the department and cities and counties
receiving an apportionment of funds under the program shall use
advanced technologies and material recycling techniques that
reduce the cost of maintaining and rehabilitating the streets and
highways.

2031.  

The following revenues shall be deposited in the Road
Maintenance and Rehabilitation Account, which is hereby created
in the State Transportation Fund:

(a) (1) The revenues attributable to the increase in the motor
vehicle fuel excise tax by twelve cents ($0.12) per gallon begin insert pursuant
to subdivision (a) of Section 7360 of the Revenue and Taxation
Code, as adjusted pursuant to subdivision (c) of that section, end insert and
the revenues attributable to ten cents ($0.10) per gallon of the
increase in the diesel fuel excise tax by twenty-two cents ($0.22)
per gallon, begin insert pursuant to subdivision (b) of Section 60050 of the
Revenue and Taxation Code, as adjusted pursuant to subdivision
(c) of that section, end insert as provided in begin insert subdivision (a) of end insert Section 2103.1.

(2) The revenues attributable to the storage tax imposed pursuant
to Section 7361.2 of the Revenue and Taxation Code and the
revenues attributable to ten cents ($0.10) of the storage tax per
gallon of tax-paid diesel fuel imposed by Section 60050.2 of the
Revenue and Taxation Code, as provided in begin insert subdivision (b) of end insert
Section 2103.1.

(b) The revenues from the increase in the vehicle registration
fee pursuant to Section 9250.3 of the Vehicle Code.

(c) The revenues from the increase in the vehicle registration
fee pursuant to Section 9250.6 of the Vehicle Code.

(d) The revenues from the road access charge imposed pursuant
to Section 228.

(e) The revenues from repayment of loans made from the State
Highway Account, the Motor Vehicle Fuel Account, the Highway
Users Tax Account, and the Motor Vehicle Account to the General
Fund, pursuant to the schedule set forth in Section 16321 of the
Government Code.

(f) Any other revenues designated for the program.

2031.5.  

Each fiscal year the annual Budget Act shall contain
an appropriation from the Road Maintenance and Rehabilitation
Account to the Controller for the costs of carrying out his or her
duties pursuant to this chapter and to the California Transportation
Commission for the costs of carrying out its duties pursuant to this
chapter and Sections 14526.7 and 14526.8 of the Government
Code.

2032.  

(a) After deducting the amounts appropriated in the
annual Budget Act as provided in Section 2031.5, 5 percent of the
remaining revenues deposited in the Road Maintenance and
Rehabilitation Account shall be set aside for counties in which
voters approve, on or after July 1, 2015, a transactions and use tax
for transportation purposes, and which counties did not, prior to
that approval, impose a transactions and use tax for those purposes.
The funds available under this subdivision in each fiscal year are
hereby continuously appropriated for allocation to each eligible
county and each city in the county for road maintenance and
rehabilitation purposes pursuant to Section 2035. However, funds
remaining unallocated under this subdivision in any fiscal year
shall be reallocated on the last day of the fiscal year pursuant to
subdivision (b).

(b) The balance of the revenues deposited in the Road
Maintenance and Rehabilitation Account, including the revenues
reallocated for the purposes of this subdivision pursuant to
subdivision (a), are hereby continuously appropriated as follows:

(1) Fifty percent for allocation to the department for maintenance
of the state highway system or for purposes of the state highway
operation and protection program.

(2) Fifty percent for apportionment to cities and counties by the
Controller pursuant to the formula in subparagraph (C) of
paragraph (3) of subdivision (a) of Section 2103 for the purposes
authorized by this chapter, subject to subdivision (d) of Section
2033 and paragraph (2) of subdivision (a) of Section 2034.

2033.  

(a) The commission shall annually evaluate each city
and county receiving funds pursuant to this chapter.

(b) For each fiscal year in which the department receives an
allocation of funds pursuant to Section 2032, the department shall
submit documentation to the commission that includes a description
and the location of each completed project, the amount of funds
expended on the project, the completion date, and the project’s
estimated useful life. The commission shall evaluate the
documentation to determine the effectiveness of the department
in reducing deferred maintenance and improving road conditions
on the state highway system, and may withhold future funding
from the department if it determines that program funds have not
been appropriately spent.

(c) For each fiscal year in which a city or county receives an
apportionment of funds pursuant to subdivision (a) or paragraph
(2) of subdivision (b) of Section 2032, the commission shall
evaluate the documentation submitted pursuant to subdivision (b)
of Section 2034 to determine the effectiveness of the city or county
in reducing deferred maintenance and improving road conditions
within its jurisdiction.

(d) If the commission determines, with respect to any given
fiscal year, that a city or county has not appropriately spent its
apportionment of funds, the commission shall direct the Controller
to make that city or county ineligible to receive an apportionment
during the next fiscal year. The Controller shall reapportion that
city’s or county’s share of funds to all other eligible cities or
counties pursuant to paragraph (2) of subdivision (b) of Section
2032.

(e) The commission shall include a discussion of its evaluations
pursuant to this section in its annual report to the Legislature
pursuant to Section 14535 of the Government Code.

2034.  

(a) (1) Prior to receiving an apportionment of funds
under the program pursuant to paragraph (2) of subdivision (b) of
Section 2032 from the Controller in a fiscal year, an eligible city
or county shall submit to the commission a list of projects proposed
to be funded with these funds pursuant to an adopted city or county
budget. All projects proposed to receive funding shall be included
in a city or county budget that is adopted by the applicable city
council or county board of supervisors at a regular public meeting.
The list of projects proposed to be funded with these funds shall
include a description and the location of each proposed project, a
proposed schedule for the project’s completion, and the estimated
useful life of the improvement. The project list shall not limit the
flexibility of an eligible city or county to fund projects in
accordance with local needs and priorities so long as the projects
are consistent with subdivision (d).

(2) The commission shall report to the Controller the cities and
counties that have submitted a list of projects as described in this
subdivision and that are therefore eligible to receive an
apportionment of funds under the program for the applicable fiscal
year. The Controller, upon receipt of the report, shall apportion
funds to eligible cities and counties.

(b) For each fiscal year, each city or county receiving an
apportionment of funds shall, upon expending program funds,
submit documentation to the commission that includes a description
and location of each completed project, the amount of funds
expended on the project, the completion date, and the estimated
useful life of the improvement. The documentation shall also
include a comparison of the projects the city or county would have
completed without receiving funds under the program compared
with the projects completed with these funds.

(c) The documentation provided pursuant to subdivision (b)
shall be forwarded by the commission to the department, in a
manner and form approved by the department, at the end of each
fiscal year as long as program funds remain available for
expenditure. The department may post the information contained
in the documentation on its Internet Web site.

(d) (1) Funds made available to a city or county under the
program shall be used for improvements to transportation facilities
that will assist in reducing further deterioration of the existing road
system. These improvements may include, but need not be limited
to, pavement maintenance, rehabilitation, installation, construction,
and reconstruction of necessary associated facilities such as
drainage and traffic control devices, or safety projects to reduce
fatalities.

(2) Funds made available under the program may also be used
for the following purposes:

(A) To satisfy the local match requirement in order to obtain
state or federal transportation funds for similar purposes.

(B) Active transportation and pedestrian and bicycle safety
projects in conjunction with any other allowable project.

2035.  

(a) On or before July 1, 2016, the commission, in
cooperation with the department, transportation planning agencies,
county transportation commissions, and other local agencies, shall
develop guidelines for the allocation of funds pursuant to
subdivision (a) of Section 2032.

(b) The guidelines shall be the complete and full statement of
the policy, standards, and criteria that the commission intends to
use to determine how these funds will be allocated.

(c) The commission may amend the adopted guidelines after
conducting at least one public hearing.

2036.  

(a) Cities and counties shall maintain their existing
commitment of local funds for street, road, and highway purposes
in order to remain eligible for an allocation or apportionment of
funds pursuant to Section 2032.

(b) In order to receive an allocation or apportionment pursuant
to Section 2032, the city or county shall annually expend from its
general fund for street, road, and highway purposes an amount not
less than the annual average of its expenditures from its general
fund during the 2009-10, 2010-11, and 2011-12 fiscal years, as
reported to the Controller pursuant to Section 2151. For purposes
of this subdivision, in calculating a city’s or county’s annual
general fund expenditures and its average general fund expenditures
for the 2009-10, 2010-11, and 2011-12 fiscal years, any
unrestricted funds that the city or county may expend at its
discretion, including vehicle in-lieu tax revenues and revenues
from fines and forfeitures, expended for street, road, and highway
purposes shall be considered expenditures from the general fund.
One-time allocations that have been expended for street and
highway purposes, but which may not be available on an ongoing
basis, including revenue provided under the Teeter Plan Bond Law
of 1994 (Chapter 6.6 (commencing with Section 54773) of Part 1
of Division 2 of Title 5 of the Government Code), may not be
considered when calculating a city’s or county’s annual general
fund expenditures.

(c) For any city incorporated after July 1, 2009, the Controller
shall calculate an annual average of expenditure for the period
between July 1, 2009, and December 31, 2015, inclusive, that the
city was incorporated.

(d) For purposes of subdivision (b), the Controller may request
fiscal data from cities and counties in addition to data provided
pursuant to Section 2151, for the 2009-10, 2010-11, and 2011-12
fiscal years. Each city and county shall furnish the data to the
Controller not later than 120 days after receiving the request. The
Controller may withhold payment to cities and counties that do
not comply with the request for information or that provide
incomplete data.

(e) The Controller may perform audits to ensure compliance
with subdivision (b) when deemed necessary. Any city or county
that has not complied with subdivision (b) shall reimburse the state
for the funds it received during that fiscal year. Any funds withheld
or returned as a result of a failure to comply with subdivision (b)
shall be reapportioned to the other counties and cities whose
expenditures are in compliance.

(f) If a city or county fails to comply with the requirements of
subdivision (b) in a particular fiscal year, the city or county may
expend during that fiscal year and the following fiscal year a total
amount that is not less than the total amount required to be
expended for those fiscal years for purposes of complying with
subdivision (b).

2037.  

A city or county may spend its apportionment of funds
under the program on transportation priorities other than those
allowable pursuant to this chapter if the city’s or county’s average
Pavement Condition Index meets or exceeds 85.

SEC. 13.  

Section 2103.1 is added to the Streets and Highways
Code, to read:

2103.1.  

(a) Notwithstanding subdivision (b) of Section 2103,
the portion of the revenues in the Highway Users Tax Account
attributable to the increase in the tax rate on motor vehicle fuel by
twelve cents ($0.12) per gallon pursuant to subdivision (a) of
Section 7360 of the Revenue and Taxation Code, as adjusted
pursuant to subdivision (c) of that section, and the increase in the
tax rate on diesel fuel by twenty-two cents ($0.22) per gallon
pursuant to subdivision (b) of Section 60050 of the Revenue and
Taxation Code, begin insert as end insert adjusted pursuant to subdivision (c) of that
section, shall be deposited in the Road Maintenance and
Rehabilitation Account created pursuant to Section 2031, except
that the portion of the revenues attributable to twelve cents ($0.12)
of that increase in the per gallon tax rate on diesel fuel, as adjusted,
shall be deposited in the Trade Corridors Improvement Fund for
expenditure pursuant to Section 2192.

(b) The portion of the revenues in the Highway Users Tax
Account attributable to the storage tax imposed pursuant to Section
7361.2 of the Revenue and Taxation Code and the storage tax
imposed pursuant to Section 60050.2 of the Revenue and Taxation
Code shall be deposited in the Road Maintenance and
Rehabilitation Account created pursuant to Section 2031, except
that the portion of the revenues attributable to twelve cents ($0.12)
of the storage tax per gallon of tax-paid diesel fuel imposed by
Section 60050.2 of the Revenue and Taxation Code shall be
deposited in the Trade Corridors Improvement Fund for
expenditure pursuant to Section 2192.

SEC. 14.  

Section 9250.3 is added to the Vehicle Code, to read:

9250.3.  

(a) In addition to any other fees specified in this code,
the Revenue and Taxation Code, or the Streets and Highways
Code, commencing 120 days after the effective date of the act
adding this section, a registration fee of thirty-five dollars ($35)
shall be paid to the department for registration or renewal of
registration of every vehicle subject to registration under this code,
except those vehicles that are expressly exempted under this code
from payment of registration fees.

(b) Revenues from the fee, after deduction of the department’s
administrative costs related to this section, shall be deposited in
the Road Maintenance and Rehabilitation Account created pursuant
to Section 2031 of the Streets and Highways Code.

SEC. 15.  

Section 9250.6 is added to the Vehicle Code, to read:

9250.6.  

(a) In addition to any other fees specified in this code,
the Revenue and Taxation Code, or the Streets and Highways
Code, commencing 120 days after the effective date of the act
adding this section, a registration fee of one hundred dollars ($100)
shall be paid to the department for registration or renewal of
registration of every zero-emission motor vehicle subject to
registration under this code, except those motor vehicles that are
expressly exempted under this code from payment of registration
fees.

(b) Revenues from the fee, after deduction of the department’s
administrative costs related to this section, shall be deposited in
the Road Maintenance and Rehabilitation Account created pursuant
to Section 2031 of the Streets and Highways Code.

(c) This section does not apply to a commercial motor vehicle
subject to Section 9400.1.

(d) For purposes of this section, “zero-emission motor vehicle”
means a motor vehicle as described in subdivisions (c) and (d) of
Section 44258 of the Health and Safety Code, or any other motor
vehicle that is able to operate on any fuel other than gasoline or
diesel fuel.

SEC. 16.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to provide additional funding for road maintenance and
rehabilitation purposes as quickly as possible, it is necessary for
this act to take effect immediately.