Amended in Senate September 1, 2015

Amended in Senate August 25, 2015

Amended in Senate July 14, 2015

California Legislature—2015–16 First Extraordinary Session

Senate BillNo. 1


Introduced by Senator Beall

June 22, 2015


An act to add Sections 14526.7, 14526.8, begin insert14528, 14528.1, end insertand 16321 to the Government Code, to amend Sections 7360 and 60050begin delete of, and to add Sections 7361.2, 7653.2, 60050.2, and 60201.4 to,end deletebegin insert ofend insert 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 roadbegin delete system. The bill would require the California Transportation Commission to adopt performance criteria to ensure efficient use of the funds available for the program.end deletebegin insert system and for other specified purposes.end insert 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 a $0.22 per gallon increase in the diesel fuel excise tax imposed by the bill, including an inflation adjustment, as provided,begin delete 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,end delete 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 thesebegin delete funds.end deletebegin insert funds and would require the California Transportation Commission to adopt performance criteria related to highway performance goals, greenhouse gas emissions, social equity impacts, and public health impacts, as specified. The bill would require the commission to annually evaluate the department and each city and county receiving these revenues to determine effectiveness in reducing deferred maintenance and improving roadway conditions, as well as in meeting the performance criteria. The bill would authorize the commission to withhold future allocations of funds or to reapportion funds to other agencies under certain conditions.end insert 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 taxbegin delete and revenues attributable to $0.12 of the $0.22 per gallon storage tax on diesel fuelend delete 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, beginningbegin delete Januaryend deletebegin insert Julyend insert 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 declinebegin delete andend deletebegin insert toend insert 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.

begin insert

(6) 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. Existing law provides for the programming of transportation capital improvement funds for other objectives through the State Transportation Improvement Program administered by the California Transportation Commission, which includes projects recommended by regional transportation planning agencies through adoption of a regional transportation improvement program and projects recommended by the department through adoption of an interregional transportation improvement program, as specified.

end insert
begin insert

This bill would require the department or any local agency, when undertaking any capital improvement project on a state highway or local street or highway funded through the State Highway Operation and Protection Program or the State Transportation Improvement Program, to include new bicycle and pedestrian safety, access, and mobility improvements, or improve existing facilities, as part of the project, consistent with the department’s adopted Strategic Management Plan 2015-2020, subject to certain exceptions.

end insert
begin insert

This bill would, to the maximum extent feasible, require all transportation projects funded through the State Highway Operation and Protection Program or the State Transportation Improvement Program to be implemented in a manner that reduces greenhouse gas emissions and positively benefits vulnerable or disadvantaged communities, as specified. The bill would require the commission to adopt performance criteria for these transportation projects relative to greenhouse gas emissions, social equity impacts, and public health impacts, and would require the lead agency for each project to report to the commission with documentation on those matters upon completion of the project. The bill would require the commission to evaluate the documentation to determine the effectiveness of each completed project in meeting the adopted performance criteria, and would authorize the commission to withhold future funding allocations from an applicant if it determines that previous use of funding by the applicant has not adequately furthered the state’s climate, equity, and health goals in tandem with the state’s highway and road system maintenance and preservation goals.

end insert
begin delete

(6)

end delete

begin insert(7)end insert This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

P5    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) Over the next 10 years, the state faces a $59 billion shortfall
4to adequately maintain the existing state highway system, in order
5to keep it in a basic state of good repair.

6(b) Similarly, cities and counties face a $78 billion shortfall
7over the next decade to adequately maintain the existing network
8of local streets and roads.

9(c) Statewide taxes and fees dedicated to the maintenance of
10the system have not been increased in more than 20 years, with
11those revenues losing more than 55 percent of their purchasing
12power, while costs to maintain the system have steadily increased
13and much of the underlying infrastructure has aged past its expected
14useful life.

P6    1(d) California motorists are spending $17 billion annually in
2extra maintenance and car repair bills, which is more than $700
3per driver, due to the state’s poorly maintained roads.

4(e) Failing to act now to address this growing problem means
5that more drastic measures will be required to maintain our system
6in the future, essentially passing the burden on to future generations
7instead of doing our job today.

8(f) A funding program will help address a portion of the
9maintenance backlog on the state’s road system and will stop the
10growth of the problem.

11(g) Modestly increasing various fees can spread the cost of road
12repairs broadly to all users and beneficiaries of the road network
13without overburdening any one group.

14(h) Improving the condition of the state’s road system will have
15a positive impact on the economy as it lowers the transportation
16costs of doing business, reduces congestion impacts for employees,
17and protects property values in the state.

18(i) The federal government estimates that increased spending
19on infrastructure creates more than 13,000 jobs per $1 billion spent.

20(j) Well-maintained roads benefit all users, not just drivers, as
21roads are used for all modes of transport, whether motor vehicles,
22transit, bicycles, or pedestrians.

23(k) Well-maintained roads additionally provide significant health
24benefits and prevent injuries and death due to crashes caused by
25poorly maintained infrastructure.

26

SEC. 2.  

Section 14526.7 is added to the Government Code, to
27read:

28

14526.7.  

(a) On and after February 1, 2017, an allocation by
29the commission of all capital and support costs for each project in
30the state highway operation and protection program shall be
31required.

32(b) For a project that experiences increases in capital or support
33costs above the amounts in the commission’s allocation pursuant
34to subdivision (a), a supplemental project allocation request shall
35be submitted by the department to the commission for approval.

36(c) The commission shall establish guidelines to provide
37exceptions to the requirement of subdivision (b) that the
38commission determines are necessary to ensure that projects are
39not unnecessarily delayed.

P7    1

SEC. 3.  

Section 14526.8 is added to the Government Code, to
2read:

3

14526.8.  

(a) On or before April 1, 2016, the department shall
4present to the commission a plan to increase department efficiency
5by up to 30 percent over the subsequent three years. The ongoing
6savings experienced through this increased efficiency shall result
7in increased capital expenditures in the department’s state highway
8operation and protection program or an increase in the department’s
9state highway maintenance program.

10(b) The commission shall consider the reasonableness of the
11proposal, and may approve the entire plan or reject all or portions
12of the plan. The commission’s feedback is intended to ensure that
13the department is achieving the savings in the most responsible
14way possible.

15(c) All future state highway operation and protection program
16documents shall identify the increased funding available to the
17program as a result of the efficiencies realized due to the
18implementation of the plan.

19begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 14528 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
20read:end insert

begin insert
21

begin insert14528.end insert  

(a) Except as provided in subdivisions (b) and (c), the
22department or any local agency, when undertaking any capital
23improvement project on a state highway or a local street or
24highway that is being funded through the State Highway Operation
25and Protection Program or the State Transportation Improvement
26Program, shall include new bicycle and pedestrian safety, access,
27and mobility improvements, or improve existing facilities, as part
28of the project, consistent with the department’s adopted Strategic
29Management Plan 2015-2020, as follows:

30(1) In transit priority areas and on streets and highways with
31average daily traffic of 20,000 vehicles or more and a speed limit
32over 25 miles per hour, well-lit facilities for bicyclists and
33pedestrians shall be provided that are physically separated from
34motor vehicles, either as Class I multiuse paths or Class IV
35bikeways with separate walkways. In addition, signals or other
36facilities shall be provided to enable bicyclists and pedestrians to
37safely cross the street or highway.

38(2) On streets or highways other than those described in
39paragraph (1), facilities for pedestrians and bicyclists shall be
40provided when feasible, and reduction of vehicle traffic lanes and
P8    1implementation of traffic calming improvements shall be
2considered.

3(b) This section does not apply to capital improvement projects
4on street and highway facilities that are closed, by law, to use by
5pedestrians, bicyclists, and other nonmotorized users.

6(c) The department or a local agency may exempt a capital
7improvement project from the requirements of this section through
8adoption of a resolution, after at least one public hearing, that
9documents that there is a demonstrated and verifiable absence of
10future need for active transportation facilities on the highway
11segment where the capital improvement project is to be
12implemented.

13(d) (1) As used in this section, “capital improvement project”
14includes, but is not limited to, a reconstruction, rehabilitation, or
15operational improvement project.

16(2) As used in this section, “transit priority area” means an
17area within one-half mile of an existing major transit stop, or a
18planned transit stop, if the planned stop is scheduled to be
19completed within the planning horizon included in the interregional
20transportation improvement program submitted pursuant to Section
2114526 or a regional transportation improvement program adopted
22submitted to Section 14527.

end insert
23begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 14528.1 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
24read:end insert

begin insert
25

begin insert14528.1.end insert  

(a) To the maximum extent feasible, all transportation
26projects funded through the State Highway Operation and
27Protection Program or the State Transportation Improvement
28Program shall be implemented in a manner that reduces
29greenhouse gas emissions and positively benefits vulnerable or
30disadvantaged communities pursuant to Assembly Bill 32 (Chapter
31488, Statutes of 2006), Senate Bill 375 (Chapter 728, Statutes of
322008), and Senate Bill 535 (Chapter 830, Statutes of 2012).

33(b) The commission shall adopt performance criteria for the
34transportation projects in subdivision (a) relative to greenhouse
35gas emissions, social equity impacts, and public health impacts.
36The lead agency on each transportation project shall report to the
37commission with documentation on each of the following upon
38completion of the project:

39(1) A description of and the location of the project.

40(2) The amount of funds expended on the project.

P9    1(3) The completion date.

2(4) The project’s estimated useful life.

3(5) The projected greenhouse gas emissions resulting from the
4project, including an analysis of induced demand and biological
5emissions.

6(6) A description of mobility benefits provided as a result of the
7project to transit, bicycling, and pedestrians.

8(7) An analysis of how mobility benefits of the project are
9accessible to low-income and disadvantaged community residents
10within the project area.

11(8) A description and, if feasible, a quantification of the public
12health and safety, economic, and environmental cobenefits
13resulting from the project. To the extent the performance criteria
14for each cobenefit category have not been met, documentation
15shall be provided that identifies any statutory or regulatory
16barriers, or alternatively, a demonstrated absence of need.

17(9) Levels of particulate matter (PM 2.5), oxides of nitrogen
18(NOx), and sulphur oxides (SOx) prior to completion of the project,
19and projected levels upon completion of the project.

20(10) An analysis of air pollution burden on low-income and
21disadvantaged community residents within the project area.

22(11) Impacts of the project on important habitat, water
23resources, and agricultural lands.

24(c) The commission shall evaluate the documentation provided
25pursuant to subdivision (b) to determine the effectiveness of each
26completed project on all of the following:

27(1) Reduction of deferred maintenance and improvement of
28roadway conditions on the state highway system or local road
29system.

30(2) Reduction of greenhouse gas emissions.

31(3) Improvement of public health and air quality.

32(4) Improvement of access and mobility for low-income and
33disadvantaged community residents.

34(5) Enhancement of wildlife connectivity.

35(6) Preservation of natural and working lands.

36(d) The commission may withhold future funding allocations
37from an applicant if it determines that previous use of funding by
38the applicant has not adequately furthered the state’s climate,
39equity, and health goals in tandem with the state’s highway and
40road system maintenance and preservation goals.

end insert
P10   1

begin deleteSEC. 4.end delete
2begin insertSEC. 6.end insert  

Section 16321 is added to the Government Code, to
3read:

4

16321.  

(a) Notwithstanding any other law, on or before March
51, 2016, the Department of Finance shall compute the amount of
6outstanding loans made from the State Highway Account, the
7Motor Vehicle Fuel Account, the Highway Users Tax Account,
8and the Motor Vehicle Account to the General Fund. The
9department shall prepare a loan repayment schedule, pursuant to
10which the outstanding loans shall be repaid to the accounts from
11which the loans were made, as follows:

12(1) On or before June 30, 2016, 33 percent of the outstanding
13loan amounts.

14(2) On or before June 30, 2017, 33 percent of the outstanding
15loan amounts.

16(3) On or before June 30, 2018, 34 percent of the outstanding
17loan amounts.

18(b) Notwithstanding any other provision of law, as the loans are
19repaid pursuant to this section, the repaid funds shall be transferred
20to the Road Maintenance and Rehabilitation Account created
21pursuant to Section 2031 of the Streets and Highways Code.

22(c) Funds for loan repayments pursuant to this section shall be
23appropriated from the Budget Stabilization Account pursuant to
24subclause (II) of clause (ii) of subparagraph (B) of paragraph (1)
25of subdivision (c) of Section 20 of Article XVI of the California
26Constitution.

27

begin deleteSEC. 5.end delete
28begin insertSEC. 7.end insert  

Section 7360 of the Revenue and Taxation Code is
29amended to read:

30

7360.  

(a) (1)  (A)  A tax of eighteen cents ($0.18) is hereby
31imposed upon each gallon of fuel subject to the tax in Sections
327362, 7363, and 7364.

33(B) In addition to the tax imposed pursuant to subparagraph
34(A), on and after thebegin delete 61stend deletebegin insert firstend insert daybegin insert of the first calendar quarter
35that occurs 90 daysend insert
after the effective date of the act adding this
36subparagraph, a tax of twelve cents ($0.12) is hereby imposed
37upon each gallon ofbegin delete fuelend deletebegin insert fuel, other than aviation gasoline,end insert subject
38to the tax in Sections 7362, 7363, and 7364.

39(2) If the federal fuel tax is reduced below the rate of nine cents
40($0.09) per gallon and federal financial allocations to this state for
P11   1highway and exclusive public mass transit guideway purposes are
2reduced or eliminated correspondingly, the tax rate imposed by
3subparagraph (A) of paragraph (1), on and after the date of the
4reduction, shall be recalculated by an amount so that the combined
5state rate under subparagraph (A) of paragraph (1) and the federal
6tax rate per gallon equal twenty-seven cents ($0.27).

7(3) If any person or entity is exempt or partially exempt from
8the federal fuel tax at the time of a reduction, the person or entity
9shall continue to be so exempt under this section.

10(b) On and after July 1, 2010, in addition to the tax imposed by
11subdivision (a), a tax is hereby imposed upon each gallon of motor
12vehicle fuel, other than aviation gasoline, subject to the tax in
13Sections 7362, 7363, and 7364 in an amount equal to seventeen
14and three-tenths cents ($0.173) per gallon.

15(c) Beginningbegin delete Januaryend deletebegin insert Julyend insert 1, 2019, and every third year
16thereafter, the State Board of Equalization shall recompute the
17rates of the taxes imposed by this section. That computation shall
18be made as follows:

19(1) The Department of Finance shall transmit to the State Board
20of Equalization the percentage change in the California Consumer
21Price Index for all items frombegin delete Juneend deletebegin insert Novemberend insert ofbegin delete threeend deletebegin insert fourend insert calendar
22years prior tobegin delete Juneend deletebegin insert Novemberend insert of thebegin delete currentend deletebegin insert priorend insert calendar year,
23no later thanbegin delete August 1, 2018,end deletebegin insert January 31, 2019,end insert andbegin delete August 1end delete
24begin insert January 31end insert of every third year thereafter.

25(2) The State Board of Equalization shall dobegin delete bothend deletebegin insert allend insert of the
26following:

27(A) Compute an inflation adjustment factor by adding 100
28percent to the percentage change figure that is furnished pursuant
29to paragraph (1) and dividing the result by 100.

30(B) Multiply the preceding tax rate per gallon by the inflation
31adjustment factor determined in subparagraph (A) and round off
32the resultingbegin delete productsend deletebegin insert productend insert to the nearest tenth of a cent.

begin insert

33(C) Make its determination of the new rate no later than March
341 of the same year as the effective date of the new rate.

end insert
begin delete
35

SEC. 6.  

Section 7361.2 is added to the Revenue and Taxation
36Code
, to read:

37

7361.2.  

(a) For the privilege of storing, for the purpose of sale,
38each supplier, wholesaler, and retailer owning 1,000 or more
39gallons of tax-paid motor vehicle fuel on the 61st day after the
40effective date of the act adding this section shall pay a storage tax
P12   1of twelve cents ($0.12) per gallon of tax-paid motor vehicle fuel
2in storage according to the volumetric measure thereof.

3(b) For purposes of this section:

4(1) “Owning” means having title to the motor vehicle fuel.

5(2) “Retailer” means any person who sells motor vehicle fuel
6in this state to a person who subsequently uses the motor vehicle
7fuel.

8(3) “Storing” includes the ownership or possession of tax-paid
9motor vehicle fuel outside of the bulk transfer/terminal system,
10including the holding of tax-paid motor vehicle fuel for sale at
11wholesale or retail locations stored in a container of any kind,
12including railroad tank cars and trucks or trailer cargo tanks.
13“Storing” also includes tax-paid motor vehicle fuel purchased from
14and invoiced by the seller, and tax-paid motor vehicle fuel removed
15from a terminal or entered into by a supplier, prior to the date
16specified in subdivision (a) and in transit on that date.

17(4) “Wholesaler” means any person who sells motor vehicle
18fuel in this state for resale to a retailer or to a person who is not a
19retailer and subsequently uses the motor vehicle fuel.

20

SEC. 7.  

Section 7653.2 is added to the Revenue and Taxation
21Code
, to read:

22

7653.2.  

On or before the 121st day after the effective date of
23the act adding this section, each person subject to the storage tax
24imposed under Section 7361.2 shall prepare and file with the board,
25in a form prescribed by the board, a return showing the total
26number of gallons of tax-paid motor vehicle fuel owned by the
27person on the 61st day after the effective date of the act adding
28this section, the amount of the storage tax, and any other
29information that the board deems necessary for the proper
30administration of this part. The return shall be accompanied by a
31remittance payable to the Controller in the amount of tax due.

end delete
32

SEC. 8.  

Section 60050 of the Revenue and Taxation Code is
33amended to read:

34

60050.  

(a) (1) A tax of thirteen cents ($0.13) is hereby
35imposed upon each gallon of diesel fuel subject to the tax in
36Sections 60051, 60052, and 60058.

37(2) If the federal fuel tax is reduced below the rate of fifteen
38cents ($0.15) per gallon and federal financial allocations to this
39state for highway and exclusive public mass transit guideway
40purposes are reduced or eliminated correspondingly, the tax rate
P13   1imposed by paragraph (1) shall be increased by an amount so that
2the combined state rate under paragraph (1) and the federal tax
3rate per gallon equal what it would have been in the absence of
4the federal reduction.

5(3) If any person or entity is exempt or partially exempt from
6the federal fuel tax at the time of a reduction, the person or entity
7shall continue to be exempt under this section.

8(b) In addition to the tax imposed pursuant to subdivision (a),
9on and after thebegin delete 61stend deletebegin insert firstend insert daybegin insert of the first calendar quarter that
10occurs 90 daysend insert
after the effective date of the act adding this
11subdivision, an additional tax of twenty-two cents ($0.22) is hereby
12imposed upon each gallon of diesel fuel subject to the tax in
13Sections 60051, 60052, and 60058.

14(c) Beginningbegin delete Januaryend deletebegin insert Julyend insert 1, 2019, and every third year
15thereafter, the State Board of Equalization shall recompute the
16rates of the taxes imposed by this section. That computation shall
17be made as follows:

18(1) The Department of Finance shall transmit to the State Board
19of Equalization the percentage change in the California Consumer
20Price Index for all items frombegin delete Juneend deletebegin insert Novemberend insert ofbegin delete threeend deletebegin insert fourend insert calendar
21years prior tobegin delete Juneend deletebegin insert Novemberend insert of thebegin delete currentend deletebegin insert priorend insert calendar year,
22no later thanbegin delete August 1, 2018,end deletebegin insert January 31, 2019,end insert andbegin delete August 1end delete
23begin insert January 31end insert of every third year thereafter.

24(2) The State Board of Equalization shall dobegin delete bothend deletebegin insert allend insert of the
25following:

26(A) Compute an inflation adjustment factor by adding 100
27percent to the percentage change figure that is furnished pursuant
28to paragraph (1) and dividing the result by 100.

29(B) Multiply the preceding tax rate per gallon by the inflation
30adjustment factor determined in subparagraph (A) and round off
31the resultingbegin delete productsend deletebegin insert productend insert to the nearest tenth of a cent.

begin insert

32(C) Make its determination of the new rate no later than March
331 of the same year as the effective date of the new rate.

end insert
begin delete
34

SEC. 9.  

Section 60050.2 is added to the Revenue and Taxation
35Code
, to read:

36

60050.2.  

(a) For the privilege of storing, for the purpose of
37sale, each supplier, wholesaler, and retailer owning 1,000 or more
38gallons of tax-paid diesel fuel on the 61st day after the effective
39date of the act adding this section shall pay a storage tax of
P14   1twenty-two cents ($0.22) per gallon of tax-paid diesel fuel in
2storage according to the volumetric measure thereof.

3(b) For purposes of this section:

4(1) “Owning” means having title to the diesel fuel.

5(2) “Retailer” means any person who sells diesel fuel in this
6state to a person who subsequently uses the diesel fuel.

7(3) “Storing” includes the ownership or possession of tax-paid
8diesel fuel outside of the bulk transfer/terminal system, including
9the holding of tax-paid diesel fuel for sale at wholesale or retail
10locations stored in a container of any kind, including railroad tank
11cars and trucks or trailer cargo tanks. “Storing” also includes
12tax-paid diesel fuel purchased from and invoiced by the seller, and
13tax-paid diesel fuel removed from a terminal or entered into by a
14supplier, prior to the date specified in subdivision (a) and in transit
15on that date.

16(4) “Wholesaler” means any person who sells diesel fuel in this
17state for resale to a retailer or to a person who is not a retailer and
18subsequently uses the diesel fuel.

19

SEC. 10.  

Section 60201.4 is added to the Revenue and Taxation
20Code
, to read:

21

60201.4.  

On or before the 121st day after the effective date of
22the act adding this section, each person subject to the storage tax
23imposed under Section 60050.2 shall prepare and file with the
24board, in a form prescribed by the board, a return showing the total
25number of gallons of tax-paid diesel fuel owned by the person on
26the 61st day after the effective date of the act adding this section,
27the amount of the storage tax, and any other information that the
28board deems necessary for the proper administration of this part.
29The return shall be accompanied by a remittance payable to the
30Controller in the amount of tax due.

end delete
31

begin deleteSEC. 11.end delete
32begin insertSEC. 9.end insert  

Article 8 (commencing with Section 228) is added to
33Chapter 1 of Division 1 of the Streets and Highways Code, to read:

34 

35Article 8.  Road Access Charge
36

 

37

228.  

(a) In addition to any other charge imposed on a vehicle
38by law, an annual road access charge is hereby imposed on each
39vehicle described in subdivision (c). The amount of the annual
40road access charge shall be thirty-five dollars ($35). The
P15   1Department of Motor Vehicles shall collect the charge at the same
2time and in the same manner as the department collects the vehicle
3registration fee pursuant to Section 9250.3 of the Vehicle Code.

4(b) Revenues from the charge, after deduction of the
5department’s administrative costs related to this section, shall be
6deposited in the Road Maintenance and Rehabilitation Account
7created pursuant to Section 2031.

8(c) As used in this section, “vehicle” means every vehicle subject
9to registration in this state. “Vehicle” does not mean either any
10vehicle exempted pursuant to the Vehicle Code from the payment
11of registration fees or any vehicle for which a certificate of
12nonoperation has been filed with the Department of Motor Vehicles
13pursuant to Section 4604 of the Vehicle Code during the period
14of time covered by the certificate.

15

begin deleteSEC. 12.end delete
16begin insertSEC. 10.end insert  

Chapter 2 (commencing with Section 2030) is added
17to Division 3 of the Streets and Highways Code, to read:

18 

19Chapter  2. Road Maintenance and Rehabilitation
20Program
21

 

22

2030.  

(a) The Road Maintenance and Rehabilitation Program
23is hereby created to address deferred maintenance on the state
24highway system and the local street and road system. Funds made
25available by the program shall be prioritized for expenditure on
26basic road maintenance and road rehabilitation projects, and on
27critical safety projects. The California Transportation Commission
28shall adopt performance criteriabegin insert pursuant to subdivision (b) of
29Section 2033end insert
to ensure efficient use of the funds available pursuant
30to this chapter for the program.

31(b) Funds made available by the program shall be used for
32projects that include, but are not limited to, the following:

33(1) Road maintenance and rehabilitation.

34(2) Safety projects.

35(3) Railroad grade separations.

36(4) Active transportation and pedestrian and bicycle safety
37projects in conjunction with any other allowable project.

begin insert

38(5) Wildlife crossings.

end insert

39(c) To the extent possible, the department and cities and counties
40receiving an apportionment of funds under the program shall use
P16   1advanced technologies and material recycling techniques that
2reduce the cost of maintaining and rehabilitating the streets and
3 highways.

4

2031.  

The following revenues shall be deposited in the Road
5Maintenance and Rehabilitation Account, which is hereby created
6in the State Transportation Fund:

7(a) begin delete(1)end deletebegin deleteend deleteThe revenues attributable to the increase in the motor
8vehicle fuel excise tax by twelve cents ($0.12) per gallon pursuant
9to subdivision (a) of Section 7360 of the Revenue and Taxation
10Code, as adjusted pursuant to subdivision (c) of that section, and
11the revenues attributable to ten cents ($0.10) per gallon of the
12increase in the diesel fuel excise tax by twenty-two cents ($0.22)
13per gallon, pursuant to subdivision (b) of Section 60050 of the
14Revenue and Taxation Code, as adjusted pursuant to subdivision
15(c) of that section, as provided in subdivision (a) of Section 2103.1.

begin delete

16(2) The revenues attributable to the storage tax imposed pursuant
17to Section 7361.2 of the Revenue and Taxation Code and the
18revenues attributable to ten cents ($0.10) of the storage tax per
19gallon of tax-paid diesel fuel imposed by Section 60050.2 of the
20Revenue and Taxation Code, as provided in subdivision (b) of
21Section 2103.1.

end delete

22(b) The revenues from the increase in the vehicle registration
23fee pursuant to Section 9250.3 of the Vehicle Code.

24(c) The revenues from the increase in the vehicle registration
25fee pursuant to Section 9250.6 of the Vehicle Code.

26(d) The revenues from the road access charge imposed pursuant
27to Section 228.

28(e) The revenues from repayment of loans made from the State
29Highway Account, the Motor Vehicle Fuel Account, the Highway
30Users Tax Account, and the Motor Vehicle Account to the General
31Fund, pursuant to the schedule set forth in Section 16321 of the
32Government Code.

33(f) Any other revenues designated for the program.

34

2031.5.  

Each fiscal year the annual Budget Act shall contain
35an appropriation from the Road Maintenance and Rehabilitation
36Account to the Controller for the costs of carrying out his or her
37duties pursuant to this chapter and to the California Transportation
38Commission for the costs of carrying out its duties pursuant to this
39chapter and Sections 14526.7 and 14526.8 of the Government
40Code.

P17   1

2032.  

(a) After deducting the amounts appropriated in the
2annual Budget Act as provided in Section 2031.5, 5 percent of the
3remaining revenues deposited in the Road Maintenance and
4Rehabilitation Account shall be set aside for counties in which
5voters approve, on or after July 1, 2015, a transactions and use tax
6for transportation purposes, and which counties did not, prior to
7that approval, impose a transactions and use tax for those purposes.
8The funds available under this subdivision in each fiscal year are
9hereby continuously appropriated for allocation to each eligible
10county and each city in the county for road maintenance and
11rehabilitation purposes pursuant to Section 2035. However, funds
12remaining unallocated under this subdivision in any fiscal year
13shall be reallocated on the last day of the fiscal year pursuant to
14subdivision (b).

15(b) The balance of the revenues deposited in the Road
16Maintenance and Rehabilitation Account, including the revenues
17reallocated for the purposes of this subdivision pursuant to
18subdivision (a), are hereby continuously appropriated as follows:

19(1) Fifty percent for allocation to the department for maintenance
20of the state highwaybegin delete system orend deletebegin insert system,end insert for purposes of the state
21highway operation and protectionbegin delete program.end deletebegin insert program, or for other
22eligible purposes pursuant to Section 2030.end insert

23(2) Fifty percent for apportionment to cities and counties by the
24Controller pursuant to the formula in subparagraph (C) of
25paragraph (3) of subdivision (a) of Section 2103 for the purposes
26authorized by this chapter, subject to subdivisionbegin delete (d)end deletebegin insert (e)end insert of Section
272033 and paragraph (2) of subdivision (a) of Section 2034.

28

2033.  

(a) The commission shall annually evaluate each city
29and county receiving funds pursuant to this chapter.

begin insert

30(b) In addition, the commission shall adopt performance criteria
31related to highway performance goals, greenhouse gas emissions,
32social equity impacts, and public health impacts. These criteria
33may include, but are not limited to, the following:

end insert
begin insert

34(1) Pavement condition, such as the Pavement Condition Index.

end insert
begin insert

35(2) Bridge condition, such as the state’s Bridge Health Index.

end insert
begin insert

36(3) Maintenance level of service, such as litter removal and
37graffiti abatement.

end insert
begin insert

38(4) Greenhouse gas emissions, including those resulting from
39induced demand, and biological emissions.

end insert
begin insert

P18   1(5) Measures of mobility benefits to transit, bicycles, and
2pedestrians.

end insert
begin insert

3(6) Quantification of the public health and safety, economic,
4and environmental cobenefits.

end insert
begin delete

5(b)

end delete

6begin insert(c)end insert For each fiscal year in which the department receives an
7allocation of funds pursuant to Section 2032, the department shall
8submit documentation to the commission that includes a description
9and the location of each completed project, the amount of funds
10expended on the project, the completion date, and the project’s
11estimated useful life. The commission shall evaluate the
12documentation to determine the effectiveness of the department
13in reducing deferred maintenance and improvingbegin delete roadend deletebegin insert roadwayend insert
14 conditions on the state highwaybegin delete system,end deletebegin insert system as well as meeting
15the performance criteria adopted pursuant to subdivision (b),end insert
and
16may withhold future funding from the department if it determines
17that program funds have not been appropriately spent.

begin delete

18(c)

end delete

19begin insert(d)end insert For each fiscal year in which a city or county receives an
20apportionment of funds pursuant to subdivision (a) or paragraph
21(2) of subdivision (b) of Section 2032, the commission shall
22evaluate the documentation submitted pursuant to subdivision (b)
23of Section 2034 to determine the effectiveness of the city or county
24in reducing deferred maintenance and improvingbegin delete roadend deletebegin insert roadwayend insert
25 conditionsbegin insert on highwaysend insert within itsbegin delete jurisdiction.end deletebegin insert jurisdiction as well
26as meeting the performance criteria adopted pursuant to
27subdivision (b).end insert

begin delete

28(d)

end delete

29begin insert(e)end insert If the commission determines, with respect to any given
30fiscal year, that a city or county has not appropriately spent its
31apportionment of funds, the commission shall direct the Controller
32to make that city or county ineligible to receive an apportionment
33during the next fiscal year. The Controller shall reapportion that
34city’s or county’s share of funds to all other eligible cities or
35counties pursuant to paragraph (2) of subdivision (b) of Section
362032.

begin delete

37(e)

end delete

38begin insert(f)end insert The commission shall include a discussion of its evaluations
39pursuant to this section in its annual report to the Legislature
40pursuant to Section 14535 of the Government Code.

begin insert

P19   1(g) As used in this section, “highways” includes streets and
2 roads.

end insert
3

2034.  

(a) (1) Prior to receiving an apportionment of funds
4under the program pursuant to paragraph (2) of subdivision (b) of
5Section 2032 from the Controller in a fiscal year, an eligible city
6or county shall submit to the commission a list of projects proposed
7to be funded with these funds pursuant to an adopted city or county
8budget. All projects proposed to receive funding shall be included
9in a city or county budget that is adopted by the applicable city
10council or county board of supervisors at a regular public meeting.
11The list of projects proposed to be funded with these funds shall
12include a description and the location of each proposed project, a
13proposed schedule for the project’s completion, and the estimated
14useful life of the improvement. The project list shall not limit the
15 flexibility of an eligible city or county to fund projects in
16accordance with local needs and priorities so long as the projects
17are consistent with subdivision (d).

18(2) The commission shall report to the Controller the cities and
19counties that have submitted a list of projects as described in this
20subdivision and that are therefore eligible to receive an
21apportionment of funds under the program for the applicable fiscal
22year. The Controller, upon receipt of the report, shall apportion
23funds to eligible cities and counties.

24(b) For each fiscal year, each city or county receiving an
25apportionment of funds shall, upon expending program funds,
26submit documentation to the commission that includes a description
27and location of each completed project, the amount of funds
28expended on the project, the completion date,begin delete andend delete the estimated
29useful life of thebegin delete improvement.end deletebegin insert improvement, and a description
30of how the project contributes to meeting the performance criteria
31adopted pursuant to subdivision (b) of Section 2033.end insert
The
32documentation shall also include a comparison of the projects the
33city or county would have completed without receiving funds under
34the program compared with the projects completed with these
35funds.

36(c) The documentation provided pursuant to subdivision (b)
37shall be forwarded by the commission to the department, in a
38manner and form approved by the department, at the end of each
39fiscal year as long as program funds remain available for
P20   1expenditure. The department may post the information contained
2in the documentation on its Internet Web site.

3(d) (1) Funds made available to a city or county under the
4program shall be used for improvements to transportation facilities
5that will assist in reducing further deterioration of the existing road
6system. These improvements may include, but need not be limited
7to, pavement maintenance, rehabilitation, installation, construction,
8and reconstruction of necessary associated facilities such as
9drainage and traffic control devices, or safety projects to reduce
10fatalities.

11(2) Funds made available under the program may also be used
12for the following purposes:

13(A) To satisfy the local match requirement in order to obtain
14state or federal transportation funds for similar purposes.

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

begin insert

17(C) Other eligible purposes consistent with Section 2030.

end insert
18

2035.  

(a) On or before July 1, 2016, the commission, in
19cooperation with the department, transportation planning agencies,
20county transportation commissions, and other local agencies, shall
21develop guidelines for the allocation of funds pursuant to
22subdivision (a) of Section 2032.

23(b) The guidelines shall be the complete and full statement of
24the policy, standards, and criteria that the commission intends to
25use to determine how these funds will be allocated.

26(c) The commission may amend the adopted guidelines after
27conducting at least one public hearing.

28

2036.  

(a) Cities and counties shall maintain their existing
29commitment of local funds for street, road, and highway purposes
30in order to remain eligible for an allocation or apportionment of
31funds pursuant to Section 2032.

32(b) In order to receive an allocation or apportionment pursuant
33to Section 2032, the city or county shall annually expend from its
34general fund for street, road, and highway purposes an amount not
35less than the annual average of its expenditures from its general
36fund during the 2009-10, 2010-11, and 2011-12 fiscal years, as
37reported to the Controller pursuant to Section 2151. For purposes
38of this subdivision, in calculating a city’s or county’s annual
39general fund expenditures and its average general fund expenditures
40for the 2009-10, 2010-11, and 2011-12 fiscal years, any
P21   1unrestricted funds that the city or county may expend at its
2discretion, including vehicle in-lieu tax revenues and revenues
3from fines and forfeitures, expended for street, road, and highway
4purposes shall be considered expenditures from the General Fund.
5One-time allocations that have been expended for street and
6highway purposes, but which may not be available on an ongoing
7basis, including revenue provided under the Teeter Plan Bond Law
8of 1994 (Chapter 6.6 (commencing with Section 54773) of Part 1
9of Division 2 of Title 5 of the Government Code), may not be
10considered when calculating a city’s or county’s annual general
11fund expenditures.

12(c) For any city incorporated after July 1, 2009, the Controller
13shall calculate an annual average of expenditure for the period
14between July 1, 2009, and December 31, 2015, inclusive, that the
15city was incorporated.

16(d) For purposes of subdivision (b), the Controller may request
17fiscal data from cities and counties in addition to data provided
18pursuant to Section 2151, for the 2009-10, 2010-11, and 2011-12
19fiscal years. Each city and county shall furnish the data to the
20Controller not later than 120 days after receiving the request. The
21Controller may withhold payment to cities and counties that do
22not comply with the request for information or that provide
23incomplete data.

24(e) The Controller may perform audits to ensure compliance
25with subdivision (b) when deemed necessary. Any city or county
26that has not complied with subdivision (b) shall reimburse the state
27for the funds it received during that fiscal year. Any funds withheld
28or returned as a result of a failure to comply with subdivision (b)
29shall be reapportioned to the other counties and cities whose
30expenditures are in compliance.

31(f) If a city or county fails to comply with the requirements of
32subdivision (b) in a particular fiscal year, the city or county may
33expend during that fiscal year and the following fiscal year a total
34amount that is not less than the total amount required to be
35expended for those fiscal years for purposes of complying with
36subdivision (b).

37

2037.  

A city or county may spend its apportionment of funds
38under the program on transportation priorities other than those
39allowable pursuant to this chapter if the city’s or county’s average
40Pavement Condition Index meets or exceeds 85.

P22   1

begin deleteSEC. 13.end delete
2begin insertSEC. 11.end insert  

Section 2103.1 is added to the Streets and Highways
3Code
, to read:

4

2103.1.  

begin delete(a)end deletebegin deleteend deleteNotwithstanding subdivision (b) of Section 2103,
5the portion of the revenues in the Highway Users Tax Account
6attributable to the increase in the tax rate on motor vehicle fuel by
7twelve cents ($0.12) per gallon pursuant to subdivision (a) of
8Section 7360 of the Revenue and Taxation Code, as adjusted
9pursuant to subdivision (c) of that section, and the increase in the
10tax rate on diesel fuel by twenty-two cents ($0.22) per gallon
11pursuant to subdivision (b) of Section 60050 of the Revenue and
12Taxation Code, as adjusted pursuant to subdivision (c) of that
13section, shall be deposited in the Road Maintenance and
14Rehabilitation Account created pursuant to Section 2031, except
15that the portion of the revenues attributable to twelve cents ($0.12)
16of that increase in the per gallon tax rate on diesel fuel, as adjusted,
17shall be deposited in the Trade Corridors Improvement Fund for
18expenditure pursuant to Section 2192.

begin delete

19(b) The portion of the revenues in the Highway Users Tax
20Account attributable to the storage tax imposed pursuant to Section
217361.2 of the Revenue and Taxation Code and the storage tax
22imposed pursuant to Section 60050.2 of the Revenue and Taxation
23Code shall be deposited in the Road Maintenance and
24Rehabilitation Account created pursuant to Section 2031, except
25that the portion of the revenues attributable to twelve cents ($0.12)
26of the storage tax per gallon of tax-paid diesel fuel imposed by
27Section 60050.2 of the Revenue and Taxation Code shall be
28deposited in the Trade Corridors Improvement Fund for
29expenditure pursuant to Section 2192.

end delete
30

begin deleteSEC. 14.end delete
31begin insertSEC. 12.end insert  

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

32

9250.3.  

(a) In addition to any other fees specified in this code,
33the Revenue and Taxation Code, or the Streets and Highways
34Code, commencing 120 days after the effective date of the act
35adding this section, a registration fee of thirty-five dollars ($35)
36shall be paid to the department for registration or renewal of
37registration of every vehicle subject to registration under this code,
38except those vehicles that are expressly exempted under this code
39from payment of registration fees.

P23   1(b) Revenues from the fee, after deduction of the department’s
2administrative costs related to this section, shall be deposited in
3the Road Maintenance and Rehabilitation Account created pursuant
4to Section 2031 of the Streets and Highways Code.

5

begin deleteSEC. 15.end delete
6begin insertSEC. 13.end insert  

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

7

9250.6.  

(a) In addition to any other fees specified in this code,
8the Revenue and Taxation Code, or the Streets and Highways
9Code, commencing 120 days after the effective date of the act
10adding this section, a registration fee of one hundred dollars ($100)
11shall be paid to the department for registration or renewal of
12registration of every zero-emission motor vehicle subject to
13registration under this code, except those motor vehicles that are
14expressly exempted under this code from payment of registration
15fees.

16(b) Revenues from the fee, after deduction of the department’s
17administrative costs related to this section, shall be deposited in
18the Road Maintenance and Rehabilitation Account created pursuant
19to Section 2031 of the Streets and Highways Code.

20(c) This section does not apply to a commercial motor vehicle
21subject to Section 9400.1.

22(d) For purposes of this section, “zero-emission motor vehicle”
23means a motor vehicle as described in subdivisions (c) and (d) of
24Section 44258 of the Health and Safety Code, or any other motor
25vehicle that is able to operate on any fuel other than gasoline or
26diesel fuel.

27

begin deleteSEC. 16.end delete
28begin insertSEC. 14.end insert  

This act is an urgency statute necessary for the
29immediate preservation of the public peace, health, or safety within
30the meaning of Article IV of the Constitution and shall go into
31immediate effect. The facts constituting the necessity are:

32In order to provide additional funding for road maintenance and
33rehabilitation purposes as quickly as possible, it is necessary for
34this act to take effect immediately.



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