Frazier-Beall Transportation Plan Released, Calls for 17-Cents Per Gallon Gas Tax Increase

A plan by Assemblyman Jim Frazier (D-Oakley) and Senator Jim Beall (D-San Jose) was released this week which calls for a 17-cents per gallon gas tax increase as part of a new transportation funding plan.

Under the Beall-Frazier package, it seeks to raise $7.4 billion in transportation funding to assist the states funding issues.

As part of the 17-cents per gallon tax, it would be indexed to inflation, but also includes the following:

A diesel tax increase of 30 cents per gallon, also indexed to inflation
An increase of $38 in the annual vehicle registration fee
$165 annual fee for zero-emission vehicles
The creation of an Office of Transportation inspector general to oversee state spending
Greater environmental streamlining for repairing existing transportation infrastructure

The joint proposal by Beall and Frazier calls for:

• $6.1 Billion Annually In Revenue Adjustments — Ends the Board of Equalization’s annual adjustment of the gas excise tax, restores the price-based gas excise tax rate to 17.3 cents. Enhances and indexes the base gas excise tax by an additional 17 cents to raise approximately $3.6 billion annually.

Adjusts the diesel excise tax by 30 cents and sales tax by 3.5 percent to generate an estimated $1.2 billion annually. The transportation bills package allocates 30 cents of the diesel excise tax, amounting to about $900 million annually, to improve the movement of goods through critically important trade corridors.

Includes additional revenue enhancement: an annual $165 fee for zero-emission vehicles, and a vehicle registration adjustment of $38 per vehicle.

• $1 Billion in Restoration of Weight Fees — Progressively shifts revenues to transportation by annually redirecting a portion of weight fee revenues in gradual amounts of $200 million over a five-year period until all weight fees are restored and used for transportation purposes. The fees are currently being used to pay transportation debt service.

• $300 Million in Increase Cap And Trade Allocation for Transit — Increases the existing percentage of funding for Cap and Trade’s Transit and Intercity Rail Capital Program from the current 10 percent allocation to 20 percent and the Low Carbon Transit Operations Program from the current 5 percent to 10 percent to increase transit services that reduce greenhouse gas emissions.

• Projected $70 Million in Caltrans Reforms And Efficiency Improvements — Directs Caltrans to generate up to $70 million in department efficiencies. The revenue generated through the efficiencies will be allocated to the Active Transportation Program.

• One-Time Revenue of $706 Mllion in Accelerated General Fund Loan Repayment Obligations –Provides that approximately $1 billion in outstanding loans made to the General Fund from the State Highway Account, the Motor Vehicle Fuel Account, the Highway Users Tax Account, and the Motor Vehicle Account will be repaid over a two-year period.

Under the $7.3 billion proposal, the city of Los Angeles is projected to receive $153.3 million; the city and county of San Francisco, $18.4 million; San Jose. $39.3 million; the city of San Diego, $53 million; Sacramento, $18.6 million; Anaheim, $13.6 million; and the city of Fresno, $20.1 million..

Here is a copy of the Press Release by Assemblyman Jim Frazier’s Office

Sacramento, CA – Today, Assemblymember Jim Frazier (D – Oakley) and Senator Jim Beall (D – San Jose) introduced companion bills – ABX1 26 and SBX1 1 – in the 1st Extraordinary Session to address California’s transportation funding crisis.

“Over the past year, I’ve worked with my colleagues, local communities and industry experts to develop an all-inclusive plan that makes necessary improvements to our transportation system. These conversations resulted in ABX1 26,” stated Frazier. “The package that Senator Jim Beall and I put forth provides vital tools to ensure California remains economically competitive. By strengthening our trade corridors and accelerating the movement of goods, this proposal keeps business in California while simultaneously creating jobs through the advancement of crucial road maintenance and enhancement projects.”

The joint proposal provides an additional $7.4 billion annually across California’s transportation system: highways, local streets, transit, bikes and pedestrians. The plan utilizes a portfolio approach in addressing a multitude of funding needs, ensuring that everyone benefitting from California’s transportation infrastructure contributes to its continual maintenance and improvement. Additionally, important systemic reforms are included to ensure transparency and accountability in the use of funds.

“Assemblymember Jim Frazier and I have met with scores of legislators and stakeholders to craft an equitable solution that calls for everyone who drives to pay their fair share toward repairing California’s crumbling roads, bridges and trade corridors,” said Senator Jim Beall, chairman of the Senate Transportation Committee. “Our plan includes bipartisan recommendations to increase efficiency and accountability to taxpayers. By choosing to repair our transportation system now, we will have smoother and safer roads, generate jobs, and also save billions of dollars in future maintenance and construction costs.’’

The breakdown of new annual funding includes $2.9 billion for state highway maintenance, $2.5 billion for the upkeep of local streets and roads, $534 million to help regions restore cuts to the State Transportation Improvement Program, $516 million for transit capital projects and operations, $900 million to enhance goods movement, $80 million for active transportation projects and up to $150 million possible through Caltrans efficiencies for bicycle and pedestrian projects.

“This new proposal demonstrates real progress in the fight to secure needed transportation funding,” stated Bob Alvarado, Executive Officer of the Northern California Carpenters Regional Council. “Many in the labor community are already supportive of these efforts and look forward to helping secure the success of a funding package so we can put people to work.”

The 1st Extraordinary Session was called by the Governor in June of 2015. The bills have until November 30th to be taken up for a vote before the session expires.

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Assemblymember Frazier represents the 11th Assembly District, which includes the communities of Antioch, Bethel Island, Birds Landing, Brentwood, Byron, Collinsville, Discovery Bay, Fairfield, Isleton, Knightsen, Locke, Oakley, Pittsburg (partial), Rio Vista, Suisun City, Travis AFB, Vacaville and Walnut Grove.

LEGISLATIVE COUNSEL’S DIGEST

AB 26, as introduced, Frazier. 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 road system. The bill would require the California Transportation Commission to adopt performance criteria, consistent with a specified asset management plan, to ensure efficient use of certain funds available for the program. 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 $0.17 per gallon increase in the motor vehicle fuel (gasoline) tax imposed by the bill with an inflation adjustment, as provided, an increase of $38 in the annual vehicle registration fee with an inflation adjustment, as provided, a new $165 annual vehicle registration fee with an inflation adjustment, as provided, applicable to zero-emission motor vehicles, as defined, and certain miscellaneous revenues described in (7) below that are not restricted as to expenditure by Article XIX of the California Constitution.

This bill would annually set aside $200,000,000 of the funds available for the program to fund road maintenance and rehabilitation purposes in counties that have sought and received voter approval of taxes or that have imposed fees, including uniform developer fees, as defined, which taxes or fees are dedicated solely to transportation improvements. These funds would be continuously appropriated for allocation pursuant to guidelines to be developed by the California Transportation Commission in consultation with local agencies. The bill would require $80,000,000 of the funds available for the program to be annually transferred to the State Highway Account for expenditure on the Active Transportation Program. The bill would require $30,000,000 of the funds available for the program in each of 4 fiscal years beginning in 2017–18 to be transferred to the Advance Mitigation Fund created by the bill pursuant to (12) below. The bill would continuously appropriate $2,000,000 annually of the funds available for the program to the California State University for the purpose of conducting transportation research and transportation-related workforce education, training, and development. The bill would require the remaining funds available for the program 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 the department and agencies receiving these funds. 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 80.

The bill would also require the department to annually identify savings achieved through efficiencies implemented at the department and to propose, from the identified savings, an appropriation to be included in the annual Budget Act of up to $70,000,000 from the State Highway Account for expenditure on the Active Transportation Program.

(2) Existing law establishes in state government the Transportation Agency, which includes various departments and state entities, including the California Transportation Commission. Existing law vests the California Transportation Commission with specified powers, duties, and functions relative to transportation matters. Existing law requires the commission to retain independent authority to perform the duties and functions prescribed to it under any provision of law.

This bill would exclude the California Transportation Commission from the Transportation Agency, establish it as an entity in state government, and require it to act in an independent oversight role. The bill would also make conforming changes.

(3) Existing law creates various state agencies, including the Department of Transportation, the High-Speed Rail Authority, the Department of the California Highway Patrol, the Department of Motor Vehicles, and the State Air Resources Board, with specified powers and duties. Existing law provides for the allocation of state transportation funds to various transportation purposes.

This bill would create the Office of the Transportation Inspector General in state government, as an independent office that would not be a subdivision of any other government entity, to ensure that all of the above-referenced state agencies and all other state agencies expending state transportation funds are operating efficiently, effectively, and in compliance with federal and state laws. The bill would provide for the Governor to appoint the Transportation Inspector General for a 6-year term, subject to confirmation by the Senate, and would provide that the Transportation Inspector General may not be removed from office during the term except for good cause. The bill would specify the duties and responsibilities of the Transportation Inspector General and would require an annual report to the Legislature and Governor.

This bill would require the department to update the Highway Design Manual to incorporate the “complete streets” design concept by January 1, 2017.

(4) Existing law provides for loans of revenues from various transportation funds and accounts to the General Fund, with various repayment dates specified.

This bill would require the Department of Finance, on or before September 1, 2016, to compute the amount of outstanding loans made from specified transportation funds. The bill would require the Department of Transportation to prepare a loan repayment schedule and would require the outstanding loans to be repaid pursuant to that schedule, as prescribed. The bill would appropriate funds for that purpose from the Budget Stabilization Account. The bill would require the repaid funds to be transferred, pursuant to a specified formula, to cities and counties and to the department for maintenance of the state highway system and for purposes of the state highway operation and protection program.

(5) 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 for 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.

This bill would deposit the revenues attributable to a $0.30 per gallon increase in the diesel fuel excise tax imposed by the bill into the Trade Corridors Improvement Fund. The bill would require revenues apportioned to the state from the national highway freight program established by the federal Fixing America’s Surface Transportation Act to be allocated for trade corridor improvement projects approved pursuant to these provisions.

Existing law requires the commission, in determining projects eligible for funding, to consult various state freight and regional infrastructure and goods movement plans and the statewide port master plan.

This bill would delete consideration of the State Air Resources Board’s Sustainable Freight Strategy and the statewide port master plan and would instead include consideration of the applicable port master plan when determining eligible projects for funding. The bill would also expand eligible projects to include rail landside access improvements, landside freight access improvements to airports, and certain capital and operational improvements.

(6) Existing law requires all moneys, except for fines and penalties, collected by the State Air Resources Board from the auction or sale of allowances as part of a market-based compliance mechanism relative to reduction of greenhouse gas emissions to be deposited in the Greenhouse Gas Reduction Fund. Existing law continuously appropriates 10% of the annual proceeds of the fund to the Transit and Intercity Rail Capital Program and 5% of the annual proceeds of the fund to the Low Carbon Transit Operations Program.

This bill would, beginning in the 2016–17 fiscal year, instead continuously appropriate 20% of those annual proceeds to the Transit and Intercity Rail Capital Program and 10% of those annual proceeds to the Low Carbon Transit Operations Program, thereby making an appropriation.

(7) Article XIX of the California Constitution restricts the expenditure of revenues from taxes imposed by the state on fuels used in motor vehicles upon public streets and highways to street and highway and certain mass transit purposes. Existing law requires certain miscellaneous revenues deposited in the State Highway Account that are not restricted as to expenditure by Article XIX of the California Constitution to be transferred to the Transportation Debt Service Fund in the State Transportation Fund, as specified, and requires the Controller to transfer from the fund to the General Fund an amount of those revenues necessary to offset the current year debt service made from the General Fund on general obligation transportation bonds issued pursuant to Proposition 116 of 1990.

This bill would delete the transfer of these miscellaneous revenues to the Transportation Debt Service Fund, thereby eliminating the offsetting transfer to the General Fund for debt service on general obligation transportation bonds issued pursuant to Proposition 116 of 1990. The bill, subject to a specified exception, would instead require the miscellaneous revenues to be retained in the State Highway Account and to be deposited in the Road Maintenance and Rehabilitation Account.

(8) Article XIX of the California Constitution requires gasoline excise tax revenues from motor vehicles traveling upon public streets and highways to be deposited in the Highway Users Tax Account, for allocation to city, county, and state transportation purposes. Existing law generally provides for statutory allocation of gasoline excise tax revenues attributable to other modes of transportation, including aviation, boats, agricultural vehicles, and off-highway vehicles, to particular accounts and funds for expenditure on purposes associated with those other modes, except that a specified portion of these gasoline excise tax revenues is deposited in the General Fund. Expenditure of the gasoline excise tax revenues attributable to those other modes is not restricted by Article XIX of the California Constitution.

This bill, commencing July 1, 2016, would instead transfer to the Highway Users Tax Account for allocation to state and local transportation purposes under a specified formula the portion of gasoline excise tax revenues currently being deposited in the General Fund that are attributable to boats, agricultural vehicles, and off-highway vehicles. Because that account is continuously appropriated, the bill would make an appropriation.

(9) 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 and would reimpose the higher gasoline excise tax rate that was in effect on July 1, 2010, in addition to the increase in the rate described in paragraph (1).

Existing law, beyond the sales and use tax rate generally applicable, imposes an additional sales and use tax on diesel fuel at the rate of 1.75%, subject to certain exemptions, and provides for the net revenues collected from the additional tax to be transferred to the Public Transportation Account. Existing law continuously appropriates these revenues to the Controller for allocation by formula to transportation agencies for public transit purposes.

This bill would increase the additional sales and use tax on diesel fuel by an additional 3.5%. By increasing the revenues deposited in a continuously appropriated fund, the bill would thereby make an appropriation. The bill would restrict expenditures of revenues from this increase in the sales and use tax on diesel fuel to transit capital purposes and certain transit services and would require a recipient transit agency to comply with certain requirements, including submitting a list of proposed projects to the Department of Transportation, as a condition of receiving a portion of these funds. The bill would require an existing required audit of transit operator finances to verify that these new revenues have been expended in conformance with these specific restrictions and all other generally applicable requirements.

This bill would, beginning July 1, 2019, and every 3rd year thereafter, require the State Board of Equalization to recompute the gasoline and diesel excise tax rates and the additional sales and use tax rate on diesel fuel based upon the percentage change in the California Consumer Price Index transmitted to the board by the Department of Finance, as prescribed.

(10) 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 decline and adopt the program if it determines that the program is not sufficiently consistent with the asset management plan.

This bill would add to the program capital projects relative to the operation of those state highways and bridges. The bill would require the commission, as part of its review of the program, to hold at least one hearing in northern California and one hearing in southern California regarding the proposed program. The bill would require the department to submit any change to a programmed project as an amendment to the commission for its approval.

This bill, on and after February 1, 2017, would also 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.

(11) Existing law imposes weight fees on the registration of commercial motor vehicles and provides for the deposit of net weight fee revenues into the State Highway Account. Existing law provides for the transfer of certain weight fee revenues from the State Highway Account to the Transportation Debt Service Fund to reimburse the General Fund for payment of debt service on general obligation bonds issued for transportation purposes. Existing law also provides for the transfer of certain weight fee revenues to the Transportation Bond Direct Payment Account for direct payment of debt service on designated bonds, which are defined to be certain transportation general obligation bonds issued pursuant to Proposition 1B of 2006. Existing law also provides for loans of weight fee revenues to the General Fund to the extent the revenues are not needed for bond debt service purposes, with the loans to be repaid when the revenues are later needed for those purposes, as specified.

This bill, notwithstanding these provisions or any other law, would only authorize specified percentages of weight fee revenues to be transferred from the State Highway Account to the Transportation Debt Service Fund, the Transportation Bond Direct Payment Account, or any other fund or account for the purpose of payment of the debt service on transportation general obligation bonds in accordance with a prescribed schedule and would prohibit the transfer of weight fee revenues from the State Highway Account after the 2020–21 fiscal year. The bill would also prohibit loans of weight fee revenues to the General Fund.

(12) The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.

CEQA, until January 1, 2020, exempts a project or an activity to repair, maintain, or make minor alterations to an existing roadway, as defined, other than a state roadway, if the project or activity is carried out by a city or county with a population of less than 100,000 persons to improve public safety and meets other specified requirements.

This bill would extend the above-referenced exemption indefinitely and delete the limitation of the exemption to projects or activities in cities and counties with a population of less than 100,000 persons. The bill would also expand the exemption to include state roadways.

This bill would also establish the Advance Mitigation Program in the Department of Transportation. The bill would authorize the department to undertake mitigation measures in advance of construction of a planned transportation project. The bill would require the department to establish a steering committee to advise the department on advance mitigation measures and related matters. The bill would create the Advance Mitigation Fund as a continuously appropriated revolving fund, to be funded initially from the Road Maintenance and Rehabilitation Program pursuant to (1) above. The bill would provide for reimbursement of the revolving fund at the time a planned transportation project benefiting from advance mitigation is constructed.

(13) Existing federal law requires the United States Secretary of Transportation to carry out a surface transportation project delivery program, under which the participating states assume certain responsibilities for environmental review and clearance of transportation projects that would otherwise be the responsibility of the federal government. Existing law, until January 1, 2017, provides that the State of California consents to the jurisdiction of the federal courts with regard to the compliance, discharge, or enforcement of the responsibilities the Department of Transportation assumed as a participant in this program.

This bill would delete the January 1, 2017, repeal date, thereby extending these provisions indefinitely.

3 comments

Mike Aug 28, 2016 - 7:47 am

Another fat politician trying to screw over the working class. Thirty cent increase in diesel will drive up the price of everything!!
Jim Frazier you need a dose of reality! This idiot needs to find a real job! Im ashamed he is from Oakley!!!!!

Ray Aug 28, 2016 - 1:24 pm

ARE THEY F’ING CRAZY????!!!!
WORTHLESS DEMORATS!
YES, RATS!
NO, THAT WON’T DRIVE THE PRICE OF EVERYTHING UP! REALLY?
CAN’T WAIT TO GET OUT OF TAXAFORNIA!

Phule Me Twice Aug 28, 2016 - 5:20 pm

Please don’t let the door hit you on your way out. The state is already full. Peace be with you.

Ray Aug 28, 2016 - 1:27 pm

WE ARE TAXED ENOUGH!
WHERE DID THAT MONEY GO????
FANCY SUITS AND HOOKERS FOR THESE FOOLS?

Dave Aug 28, 2016 - 3:38 pm

Wish the was a strong candidate running against this Sh@thead. Frazier has sold us all out. His tag still says “Oakley” but in reality he is long gone.

Never voted for him and never will vote for him.

Comments are closed.

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