BILL ANALYSIS �
AB 1308
Page 1
Date of Hearing: April 11, 2011
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
AB 1308 ( Miller) - As Introduced: February 18, 2011
SUBJECT : Highway Users Tax Account
SUMMARY : Provides that monies in the Highway Users Tax Account
(HUTA) are continuously appropriated and may be encumbered for
their constitutional and statutory purposes in any year in which
a Budget Act has not been enacted by July 1. Specifically, this
bill :
1)Specifies that all moneys in HUTA are continuously
appropriated and may be encumbered when a Budget Act has not
been enacted by July 1, until the Budget Act is enacted.
2)Limits the use of such funds for transportation purposes and
programs specified in law.
3)Authorizes the State Controller's Office to estimate
appropriations and apportionments of funds for the purpose of
making allocations and transfers that are necessary to
implement and administer use of the funds.
4)Limits the spending authority provided under this bill to only
those purposes for which an appropriation was granted in the
prior year's budget.
EXISTING LAW:
1)Requires revenue from the state excise tax on gasoline and
diesel fuel to be deposited into the HUTA and allocated by
formula, as follows:
a) Roughly one-third of the funds to cities and counties
for local streets and roads maintenance, repair, and
improvement; and,
b) Roughly two-thirds of the funds to the California
Department of Transportation (Caltrans), primarily for
maintenance and repair of the state highway system.
1)Limits the use of HUTA funds for the following:
AB 1308
Page 2
a) Research, planning, construction, improvement,
maintenance, and operation of public streets and highways;
b) Research, planning, construction, improvement, of public
mass transit guideways; and,
c) Payment of principal and interest on voter-approved
bonds issued for construction and improvement of public
mass transit guideways.
1)Explicitly prohibits the Legislature from borrowing funds from
HUTA.
2)Generally prohibits continuously appropriated funds from being
encumbered without a specific appropriation by the
Legislature.
FISCAL EFFECT : Unknown
COMMENTS : The intent of this bill is to allow for the continued
use of state excise tax revenues that have been collected and
deposited in HUTA, even when the state budget is not passed by
the statutory deadline. Statutory provisions require that the
funds (even continuously appropriated funds such as HUTA) be
specifically appropriated by the Legislature or be made
available through provisions that are renewed annually with each
budget.
The primary source of state funds for transportation is the
state excise tax on gasoline and diesel fuel, which generates
roughly $3 billion annually. Revenue from the excise tax is
deposited into HUTA then dispersed by formula monthly to cities
and counties and to Caltrans. Money dispersed to Caltrans is
deposited into the State Highway Account (SHA). During periods
in which there is no state budget, excise tax revenue is
collected and deposited into HUTA but is not dispersed to cities
and counties or to the SHA for Caltrans's use.
In years past, the SHA had sufficient cash so that the lack of
HUTA transfers did not pose much of a problem, at least for the
state. Transportation projects could continue unfettered
throughout a budget-less summer using cash reserves in the SHA.
For a number of reasons, however, the SHA no longer carries the
cash balance it once did. Consequently, when a budget impasse
effectively cuts off HUTA funds from locals and from the SHA,
AB 1308
Page 3
projects are in jeopardy of being shut down for lack of cash-all
the while cash is building up in the HUTA.
During budget delays earlier in the last decade, project
stoppages were avoided despite the lack of SHA cash because
local governments, and even contractors themselves, stepped
forward with loans to keep projects going until a state budget
was signed. However, with the current fiscal climate and
economic challenges facing the construction industry, lines of
credit are scarce. In the event of another budget impasse,
there would be little choice but to bring transportation
projects to a halt for lack of access to ready HUTA cash.
AB 1308 is meant to ensure transportation projects are not shut
down for lack of funding due to a budget impasse. This bill
would allow HUTA funds to continue to flow to cities and
counties and to Caltrans and to be encumbered against prior year
appropriations, until a budget is enacted.
Previous legislation: Substantially similar bills have been
introduced in each of the last three legislative sessions: AB
256 (Huff) of 2007, AB 697 (Oropeza) of 2005, and SB 1443
(Murray) of 2003. All of these bills were held in the Assembly
Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Southern California Contractors Association (sponsor)
AAA Northern California
Asphalt Pavement Association of California
Associated General Contractors
Automobile Club of Southern California
California-Nevada Conference of Operating Engineers
California State Council of Laborers
Engineering & Utility Contractors Association
Inyo County Local Transportation Commission
League of California Cities
State Build and Construction Trades Council of California
Opposition
None on file
AB 1308
Page 4
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093