BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1602 (Patterson) - Vending machines: business enterprises for
the blind.
Amended: March 13, 2014 Policy Vote: T&H 11-0
Urgency: No Mandate: No
Hearing Date: June 30, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1602 would require the Department of
Transportation (Caltrans) to pay for all utility costs
associated with vending machines at roadside rest areas
operating under the Business Enterprise Program for the Blind
(BEP).
Fiscal Impact: Estimated ongoing costs of approximately $200,000
to $250,000 annually for Caltrans to pay vending machine utility
costs at all roadside rest areas (State Highway Account).
Background: Existing law requires Caltrans to authorize the
placement of vending machines at roadside rest areas and to give
preference for vending facilities to vendors operating under the
BEP. Existing law requires vendors to reimburse Caltrans from
vending machine revenues for the costs of maintenance,
operations, design review, and other activities related to the
operation of the machines.
According to a 2013 Department of Rehabilitation (DOR) annual
report on the BEP, 17 blind vendors operated vending facilities
at 30 locations along interstate highways in California, selling
sell items such as refrigerated soft drinks, snacks, ice cream,
and hot beverages from these machines. The vending machine
receipts at these sights totaled over $850,000 in 2013.
Proposed Law: AB 1602 would prohibit Caltrans from being
reimbursed for utility costs incurred by vendors operating under
the BEP and instead require Caltrans to pay for those utility
costs using state funds. Utility costs include fees incurred
for providing electricity, water, sewage, and other similar
services.
AB 1602 (Patterson)
Page 1
Staff Comments: The current interagency agreement between DOR
and Caltrans requires vendors to pay for utility costs at
roadside rest areas. Monthly utility costs depend primarily on
the number and type of vending machine, whether the machines
require refrigeration or heating, whether the machines are
indoor or outdoor, utility rates at each site, the season, and
the climate of the region in which the rest area is located.
According to the author, electricity costs can range from about
$350 to $900 per month, depending on these factors.
Caltrans has completed installation of electric meters at 10 of
the sites at a cost of about $600,000, and the vendors operating
at these locations 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 and DOR
reimburses Caltrans for the balance of electricity costs. Plans
to convert all vending locations to independent meters are in
process. Under this bill, Caltrans would be required to pay
utility costs associated with vending machines at all roadside
rest areas. These costs are estimated to be in the range of
$200,000 to $250,000 annually. The bill would result in a
substantial increase in profit for vendors, as a percentage of
sales, at the expense of the state.