BILL ANALYSIS �
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THIRD READING
Bill No: AB 105
Author: Assembly Budget Committee
Amended: 3/16/11 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE BUDGET & FISCAL REVIEW COMMITTEE : 11-5, 3/16/11
AYES: Leno, Alquist, DeSaulnier, Evans, Liu, Lowenthal,
Rubio, Simitian, Wright, Hancock, Wolk
NOES: Huff, Emmerson, Fuller, Anderson, La Malfa
SENATE FLOOR: 39-0, 3/16/11
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De Le�n, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Runner, Simitian, Steinberg, Strickland, Vargas, Wolk,
Wright, Wyland, Yee
NO VOTE RECORDED: Walters
ASSEMBLY FLOOR: 69-4, 3/16/11 - See last page for vote
SUBJECT : Budget Act of 2011: Transportation
SOURCE : Author
DIGEST : This bill makes statutory changes that are
necessary to implement transportation portions of the
CONTINUED
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2011-12 Budget Act.
Senate Floor Amendments of 3/14/11 delete the prior version
of the bill which expressed the intent of the Legislature
to enact statutory changes relating to the 2011 Budget Act.
ANALYSIS : This is the transportation budget trailer
bill. It contains provisions necessary to modify the
2010-11 budget and implement the 2011 Budget Act. Major
changes include the following:
1. General Fund Relief and Transportation Protection .
Provides General Fund relief of $1.7 billion through
the use of truck weight fees and other transportation
revenues for bond debt service and loans to the General
Fund. Provides protection to safeguard billions of
dollars of transportation revenues by re-enacting the
fuel tax swap. Both of these components are discussed
in more detail in the following two items.
2. Re-enact Fuel Tax Swap . Re-enacts the fuel tax swap,
which was originally enacted in early 2010 by AB X8 6
and SB 70. The 2010 tax swap was revenue neutral
overall, but increased some taxes and reduced others.
Proposition 26 on the November 2010 ballot was approved
by voters, and amended the Constitution to require a
two-thirds vote for such tax neutral measures. Prop 26
voids any conflicting measure enacted after January 1,
2010, effective 12 months after the election. Since AB
X8 6 and SB 70 were enacted after January 1, 2010, with
a simple majority vote, this bill would re-enact these
provisions with a two-thirds vote to ensure the fuel
tax swap meets the new constitutional requirements.
The re-enacted fuel tax swap includes four main tax
adjustments:
Exempts gasoline from the State 6.0 percent
sales tax on July 1, 2010.
Increases the excise tax on gasoline by
17.3 cents per gallon, to a total of 35.3 cents
per gallon, on July 1, 2010.
Increases the sales tax applied to diesel
fuel by 1.87 percent on July 1, 2011.
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Decreases the excise tax on diesel by 5.0
cents per gallon, to 13.0 cents per gallon on July
1, 2011.
The re-enacted swap is similar to last year's swap, but
some of the diesel rates have changed a small amount to
address the requirements of Proposition 22, which was
also approved by voters on the November 2010 ballot,
and to address changes in the forecast of quantity and
price of diesel fuel. As before, the tax swap is
revenue neutral and an out-year adjustment is made each
July 1, to maintain the tax-neutrality.
The re-enacted swap excludes off-road users, such as
railroads, farm equipment, and aviation gasoline from
the certain provisions of the swap to maintain the tax
neutrality for those users that already enjoy certain
exemptions.
The tax swap was not enacted to increase revenue, but
rather to allow the use of more existing transportation
revenue for highway purposes, including General
Obligation bond debt service (GO bond debt), where that
debt service was related to transportation projects.
Prop 22 placed new restrictions on the use of fuel
excise taxes for bond debt, but the fuel tax revenue in
this bill would backfill the other highway funds used
to reimburse bond debt.
1. Truck Weight Fees . Directs truck weight fee revenue,
which totals approximately $900 million per year, to
fund GO bond debt for transportation-related bonds and
for loans to the General Fund. Over 2010-11 and
2011-12, total General Fund relief is $1.6 billion.
Truck weight fees are paid by the owners of heavy
vehicles and compensate the state for the damage large
trucks do to roadways. This new use of truck weight
fees is related to prohibitions placed on gasoline
excise revenues by Proposition 22, approved by voters
in November 2010. Under Prop 22, gasoline excise
revenues can no longer be used for loans to the General
Fund, and the use of these revenues for GO debt is more
limited. However, truck weight fees can be used for
these purposes. The applicable gasoline excise revenue
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is instead directed into the State Highway Account to
hold harmless transportation programs that would
otherwise receive the weight fee revenue.
2. Non-Article XIX Revenues . Provides General Fund relief
of $78 million by directing non-Article XIX revenue to
the payment of transportation-related GO bond debt.
Each year, the Department of Transportation receives
about $78 million in revenue from the sale of state
property, as well as rental revenue and other
miscellaneous revenues. These revenues are not
restricted in use by Article XIX of Constitution and
are more flexible in expenditure.
3. Transit Operations : Maintains annual ongoing funding
for local transit operations at approximately $350
million. The 2010 fuel tax swap package of
legislation, specifically AB X8 9, included the
restoration of state funding for local transit
operations. Proposition 22 placed new restrictions on
the base diesel sales tax that resulted in a loss of
funding for transit operations. This bill would shift
all of the new sales tax on diesel revenue to transit
operations to maintain funding levels near the level
planned in last year's fuel tax swap.
4. Outstanding Transportation Loans to the General Fund :
Defers payment of a $135 million loan made from the
State Highway Account to the General Fund in the 2009
Budget Act. The loan will be repaid in 2012-13 instead
of in 2011-12. Specifies that this 2009-10 loan was
made from truck weight fee revenue. Specifies that a
$328 million loan from the fuel excise revenues to the
General Fund in the 2010 Budget Act be held in reverse
for future appropriation by the Legislature when repaid
in 2012-13.
5. Proposition 1B - Transportation Corridor Improvement
Funds . Requires the California Transportation
Commission (CTC) to report to the Legislature
semiannually on the expenditure of Transportation
Corridor Improvement Funds (TCIF) for railroad
projects. Additionally, requires the CTC to report
and provide a copy of any memorandum of understanding
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executed between a railroad company and any state or
local transportation agency where TCIF funds are a
funding source for the project.
6. Proposition 1B - Water Transit . For recipients of Prop
1B bond funds for regional public waterborne transit,
extends the expenditure period from three years to four
years for any funds allocated prior to June 30, 2011.
Proposition 1B provides $250 million to Regional public
waterborne transit agencies. The funds are available
to build ferry terminals, among other uses.
7. Proposition 1B - Local Streets and Roads . Provides
cities and counties a one-year extension to expend
Proposition 1B Local Streets and Roads funds for any
year in which Highway Users Tax Account (HUTA) funds
for local transportation projects are borrowed,
deferred, or shifted.
8. Inter-fund Transportation Cashflow Loans . Extends the
sunset from June 30, 2011 to June 30, 2014, for
cashflow borrowing among transportation special funds.
The transportation special funds that are eligible for
cashflow borrowing are the State Highway Account, and
the Traffic Congestion Relief Fund.
9. High-Speed Rail Authority - Exempt Positions .
Authorizes the Governor to appoint six management level
exempt positions to the High Speed Rail Authority
(HSRA) upon the recommendation of the executive
director. Compensation for these positions shall not
exceed the highest comparable compensation for a
position of that type, as established through a salary
survey, and shall require approval of the Department of
Personnel Administration.
10. High-Speed Rail Authority - Reporting . Requires the
HSRA to report by February 14, 2011, on the following:
community outreach; the HSRA strategic plan as required
by the State Administrative Manual; the performance of
the program-manager contractor; and actions of the HSRA
related to the Bureau of State Audits report. Requires
the HSRA to report by October 14, 2011, on a complete
legal analysis of the revenue guarantee and the updated
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financial plan for the project. In both cases, for
each applicable fiscal year, twenty-five percent of the
budgeted funding for the HSRA is contingent on
completion of the reporting requirements.
11. Caltrans - Capital Outlay Support Budget Request .
Requires the Department of Transportation (Caltrans) to
report annually to the Legislature with supplemental
information on the Capital Outlay Support budget
request, including anticipated and realized project
costs and schedules for the Capital Outlay Support
Program.
12. Local Transportation Subventions and Maintenance of
Effort . Provides additional clarification that local
governments are not subject to the same
maintenance-of-effort and other requirements under
Proposition 42 when they are apportioned fuel excise
tax revenues.
13. DMV - Veterans' Benefits . Requires the Department of
Motor Vehicles (DMV) to update application forms to
provide a space for an applicant to indicate whether
they served in the armed forces. Data collected from
willing veterans will be shared with the Department of
Veteran's affairs in order to identify if they are
eligible for federal benefits.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 69-4, 3/16/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Cook, Davis, Dickinson, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hall, Harkey,
Hayashi, Roger Hern�ndez, Hill, Huber, Hueso, Huffman,
Jeffries, Lara, Logue, Bonnie Lowenthal, Ma, Mendoza,
Mitchell, Monning, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Skinner, Smyth,
Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski,
Williams, Yamada, John A. P�rez
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NOES: Donnelly, Knight, Miller, Morrell
NO VOTE RECORDED: Conway, Hagman, Halderman, Jones,
Mansoor, Silva, Vacancy
JA:nl 3/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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