BILL ANALYSIS �
AB 1602
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ASSEMBLY THIRD READING
AB 1602 (Patterson)
As Amended March 13, 2014
Majority vote
TRANSPORTATION 15-0 APPROPRIATIONS 17-0
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|Ayes:|Lowenthal, Linder, |Ayes:|Gatto, Bigelow, |
| |Achadjian, Ammiano, | |Bocanegra, Bradford, Ian |
| |Bloom, Bonta, Buchanan, | |Calderon, Campos, |
| |Daly, Frazier, Gatto, | |Donnelly, Eggman, Gomez, |
| |Holden, Wagner, Nazarian, | |Holden, Jones, Linder, |
| |Patterson, | |Pan, Quirk, |
| |Quirk-Silva | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Prohibits the California Department of Transportation
(Caltrans) from being reimbursed for utility costs of vending
facilities operated under the Business Enterprises Program for the
Blind (Business Enterprises Program) at safety roadside rest areas;
requires Caltrans to pay utility costs (e.g., fees for electricity,
water, and sewage services) associated with these vending
activities.
EXISTING LAW :
1)Establishes the Business Enterprises Program within the Department
of Rehabilitation to provide blind persons with remunerative
employment, to enlarge economic opportunities for the blind, and
to stimulate the blind to strive to make themselves
self-supporting.
2)Gives blind person's priority to vending facilities on any state
property including, for example, cafeterias, snack bars, and
automatic vending machines.
3)Directs Caltrans to allow the placement of vending facilities in
safety roadside rest areas, unless prohibited by federal law;
requires Caltrans to give priority for vending facilities to blind
vendors operating within Business Enterprises Program.
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4)Requires blind vendors to reimburse Caltrans for the costs of
maintenance, operations, design review, and other activities
related to the operation of vending machines in safety roadside
rest areas.
5)As set forth in Department of Rehabilitation regulations,
specifically requires blind vendors to be solely responsible for
payment of all rent or utility charges in accordance with the
terms and conditions of the vendor operating agreement, permit, or
contract.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
annual special fund costs in the range of $200,000 to $250,000 for
Caltrans to pay vending machine utility costs at the state's 29
roadside rest areas.
COMMENTS : The Business Enterprises Program is a food service
organization with operations in government facilities as well as in
private industry. Blind vendors receive ongoing support from the
Department of Rehabilitation as long as they remain in the program.
This support may include such benefits as financial assistance for
buying new appliances and equipment, various training opportunities,
upward mobility support, business counseling services, fiscal
oversight, and guidance to assist with their financial
responsibilities. Vendors pay up to 6% of their net sales to the
Department of Rehabilitation for deposit into a trust fund, which in
turn is used to pay for services provided in the program. Vendors
are required to secure all necessary business and health permits,
obtain required insurance policies, hire and supervise employees,
pay business and sales taxes, develop menus, and purchase
merchandise for sale.
The current interagency agreement between the Department of
Rehabilitation and Caltrans provides for vending machines in 29
safety roadside rest areas. Consistent with state law and
regulations, the interagency agreement requires vendors to pay for
utility costs at these sites. Ten of the sites have independent
electric meters. Plans are in the works to convert all vending
locations to independent meters. At these sites, vendors pay
utility costs directly to the electricity provider. At the
remaining sites, the interagency agreement requires vendors to pay
$200 per month per vending site for costs incurred by Caltrans for
electricity.
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Not all vendors in the Business Enterprises Program are required to
pay for utilities. For instance, vending facilities in state
buildings within the purview of the Department of General Services
do not pay utility costs. On the other hand, Caltrans is not alone
in charging for utilities. For example, facilities on county
government properties generally pay utility costs and a cursory
review of other state laws indicates that charging vendors in safety
roadside rest areas for utilities is not uncommon. Furthermore,
that practice is not inconsistent with the requirement that vendors
cover other operating costs like rent and utilities for use of
private property used to support their vending businesses, such as
warehouses used to store vending merchandise.
The author introduced this bill to remedy what he believes is an
inequity in the Business Enterprises Program with respect to
requirements that vendors pay utility costs. The author argues that
vendors operating vending machines in state buildings do not to pay
utility costs (because state agencies absorb the electricity costs)
while vendors that operate vending machines at safety roadside rest
areas do. The author introduced this bill to "ensure that all
participants in the Business Enterprises Program for the Blind are
treated equally."
Supporters of this bill are concerned that Caltrans' plans to
install independent electric meters at safety roadside rest areas
will put vendors out of business. They argue that this will
negatively affect motorists who rely on safety roadside rest area
vending facilities for refreshment during a break from driving.
There are 29 vending locations currently provided for in the
interagency agreement between the Department of Rehabilitation and
Caltrans, with an average of 9 vending machines at each safety
roadside rest area. According to the author's office, utility cost
estimates for existing vending facilities that have independent
electric meters range from a low of $350 a month in winter months to
a high of $900 in summer months.
Under this bill, Caltrans will be responsible for incurring all
utility costs associated with these vending machines. Caltrans
estimates that annual electricity costs for each of the 29 sites is
over $5,000 and that total utility costs for vending facilities
could reach or exceed $200,000 annually.
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093
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