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[Source: Three Senate Committee legislative analyses most recently including Governance & Finance Committee legislative analysis ]

• Increases CA's gasoline excise tax by 6 cents per gallon on July 1, 2017 (plus 3 cents more on July 1, 2018 and 3 cents more cents on July 1, 2019)
• Increases a price-based gasoline excise tax by 7.5 cents
• Adds 20 cents per gallon in excise tax on diesel fuel
• Increases the diesel fuel sales and use surtax by 4%
• Increases the annual vehicle registration fee by $38
• Imposes a new $100 annual vehicle registration fee on zero-emission vehicles.

In addition, because Sacramento considers excise tax within the gross receipts/sales sum on which it imposes CA's current gasoline sales and use tax, raising the gasoline excise tax would increase the consumer tax burden of the gasoline sales/use tax.The bill's author, Senator Jim Beall (D, Campbell/San Jose area) explains SB 1's purpose as follows [Source: March 2 Senate Governance & Finance Committee Legislative Analysis]

[Quoting bill author Sen. Beall] SB 1 provides 25 million drivers with smoother, safer, stronger bridges and roads; a reliable transportation system that can withstand natural disasters. Businesses will benefit from improved transportation corridors that will cut down their shipping costs and bring more Pacific Rim tonnage through California ports, making them indispensable in a highly competitive race with Pacific Northwest ports. And, the bill pumps more funding into mass transit to reduce congestion and greenhouse gases. Just as important, the bill begins the process of repairs now -- 87 percent of California's roads are rated in fair or poor condition -- avoiding wasted billions spent in higher costs for deferred maintenance.

For the cost of $9.47 per month for an average driver -- a 6¢ per-gallon gas tax adjustment plus, restoring the price based excise tax, and a $38 increase in registration fees -- the state can restore and improve its transportation for the new century. SB 1, combined with my SB 3 which creates a $3 billion housing bond, can offset the effect of the policies of the new Administration by creating and sustaining nearly 600,000 jobs, many that will offer middle-class wages with medical benefits that can counterbalance proposed reductions to the Affordable Care Act. The injection of jobs will stimulate the economy, increase consumer spending, and stimulate the housing market to produce a new influx of tax dollars to reduce the impact of bond debt service. And for this spending, Californians will see tangible benefits.

Sponsor

Sponsor

The Committee's legislative analysis acknowledges that SB 1 "may disproportionately affect lower income individuals by increasing the price of fuel. The increase in tax is regressive, meaning that the incidence falls more on low-income individuals than high income individuals because they would be spending a greater percentage of their income on gasoline. While this may increase reliance on public transit as a more cost effective alternative, it may not a viable option in many areas."

Sponsor Computer Repair Long Beach

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SB 1 is written as an "urgency" measure, so it could take effect immediately when passed, signed and chaptered if approved by a 2/3 vote of each house of the Legislature. Its Dec. 5, 2016 introduction and rapid advance is an early consequence of the November 2016 election cycle in which CA Dems regained 2/3 majorities in Sacramento's state Senate and Assembly. The result gives Dem state lawmakers -- if they vote with the party's leadership without dissent -- the power to enact taxes, change political spending limits, put state constitutional amendments on the ballot and enact swiftly-implemented legislation (like SB 1) without Republican support. Senator Lara was re-elected in November 2016 without a Republican ballot challenger; a Libertarian opponent drew a little over 20% of the vote.

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On March 8, Senator Lara voted with the four other Governance and Finance Committee Dems (author Beall plus Hernandez, Hertzberg and McGuire) to send the measure to the Appropriations Committee that Senator Lara chair, where he could then advance the measure to a vote in the full Senate.

On March 8, Sen. John Moorloch (R., OC), one of only two Repubs given seats on the seven-member Committee, cast the sole Committee "no" vote; the other Committee Repub, Committee vice-chair State Senator Janet Nguyen (R, SE LB-west OC) was absent for the Committee meeting at which SB 1 was the only item on the agenda.

Sponsor

Sponsor

The Committee's legislative analysis indicates the bill includes the following provisions:

• The diesel excise tax increase funds goods movement projects through the existing Trade Corridor Improvement Program (TCIP). The diesel sales tax increase funds local transit operators through the State Transit Assistance Program (STA) and also provide funding for commuter and intercity passenger rail service;
• Outstanding loans made to the General Fund from the State Highway Account (SHA), the Motor Vehicle Fuel Account, the Highway Users Tax Account, and the Motor Vehicle Account shall be repaid over two years, half the amount per year. The outstanding loan amounts are estimated at about $706 million. These funds will also be used towards the road maintenance backlog at both the state and local level;
• New funds raised by this bill are allocated to both state and local projects. Initially, $200 million is set aside for local entities that have passed local sales and use taxes and/or developer fees for transportation purposes. The RMRA also provides funding for several transportation-related programs including Active Transportation, advance mitigation, and UC and CSU transportation research. The remainder is split 50/50 between state and local projects. The local project funding is allocated pursuant to an existing statutory formula, where 50% goes to cities based on population and 50% goes to counties based on a combination of the number of registered vehicles and the miles of county roads. To receive these funds, the city and county must maintain their historic commitment to funding street and highway purposes by annually expending not less than the average of its expenditures over a specified three year period (i.e. maintenance of effort requirement). The California Transportation Commission (CTC) shall annually evaluate each agency receiving funds to ensure that the funds are spent appropriately;
• The diesel fuel tax increase, resulting in about $600 million annually, must be deposited in the TCIF. These funds are allocated by the CTC for infrastructure improvements on corridors that have a high volume of freight movement; SB 1 (Beall) 1/26/17 Page 4 of 8
• Redirects half of the weight fees, currently being used to pay down transportation general obligation bonds to the SHA, over a five year period with the remaining half of weight fees continuing to be used for transportation debt service;
• 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, and;
• Increases the existing percentage of funding for the Cap and Trade’s Transit and Intercity Rail Capital Program, and the Low Carbon Transit Operations.
• Additionally, SB 1 specifies that the tax rates and fees specified in this bill are adjusted every every three years based on the Consumer Price Index.

According to Board of Equalization, SB 1 would result in an excise tax and sales and use tax revenue increase of $5.6 billion in FY 2019-20. With rate inflation increases, these revenues would increase to between $5.8 billion to $6.0 billion in FY 2020-21.

Prior to its March 8 Governance and Finance Committee 5-1 vote, SB 1 cleared the Environmental Quality Committee on a 4-2-1 vote (Yes: Hill, Lara, Skinner, Wieckowski; No: Bates, Stone; No vote recorded: Stern) and on Feb. 14 passed the Transportation Committee on an 8-3-2 vote (Yes: Allen, Atkins, Beall, McGuire, Mendoza, Skinner, Wieckowski, Wiener; No: Bates, Gaines, Morrell; no vote recorded: Cannella, Roth).

A similar measure was introduced in the Assembly, but it has remained basically dormant as SB 1 has advanced. AB 1 (Frazier) proposes a 0.5% lower sales and use tax on diesel fuel. Governor Brown's proposed 2017-18 budget would impose a $65 annual road improvement charge, change a current gasoline tax fuel tax swap, and increase the diesel excise tax by 11 cents a gallon.

In the alternative, state lawmakers could fund transportation infrastructure by increasing its amount of current General Fund spending, which could mean changing current programs/priorities, reducing other Sac'to spending ..or raising revenue in other ways.

The March 8 Committee analysis notes that as of Feb. 24, SB 1 had support and opposition as follows.

Support: (2/24/17) Support: Alameda Corridor-East Construction Authority; Alameda County Transportation Commission; Alameda-Contra Costa Transit District; American Council of Engineering Companies California; American Heart Association; American Stroke Association; American Subcontractors Association California, Inc.; Associated General Contractors; Associated General Contractors, San Diego Chapter; Association of Monterey Bay Area Governments; Bay Area Council; C.A. Rasmussen, Inc.; Caliagua; California Alliance For Jobs; California Asphalt Pavement Association; California Association of Councils of Governments/Self Help Counties Coalition; California Association of Professional Employees; California Chapters of the National Electric Contractors Association; California Construction and Industrial Materials; California Professional Firefighters; California State Association of Counties; California State Council of Laborers; California Teamsters Public Affairs Council; California Transit Association; California Transportation Commission; Caterpillar, Inc.; Cities Association of Santa Clara County; City of American Canyon; City of Arcata; City of Arroyo Grande; City of Azusa; City of Belvedere; City of Brentwood; City of Brisbane; City of Carpentaria; City of Cathedral City; City of Ceres; City of Cerritos; City of Chino; City of Colton; City of Concord; City of Crescent City; City of Culver City; City of Cupertino; City of Daly City; City of Davis; City of Del Mar; City of Diamond Bar; City of Dinuba; City of Dublin; City of El Centro; City of El Cerrito; City of Fort Bragg; City of Fremont; City of Goleta; City of Gonzales; City of Gustine; City of Hayward; City of Hercules; City of Hollister; City of Indio; City of La Mirada; City of Lafayette; City of Laguna Beach; City of Lakeport; City of Lakewood; City of Lemoore; City of Livermore; City of Lodi; City of Lompoc; City of Menifee; City of Mill Valley; City of Modesto; City of Monterey; City of Moorpark; City of Morro Bay; City of Mountain View; City of Novato; City of Ontario; City of Orland; City of Pacific Grove; City of Palos Verdes Estates; City of Pico Rivera; City of Pismo Beach; City of Point Arena; City of Pomona; City of Rancho Cucamonga; City of Riverbank; City of Rohnert Park; City of Sacramento; City of Salinas; City of San Carlos; City of San Gabriel; City of San Jose; City of San Leandro; City of San Luis Obispo; City of Santa Barbara; City of Santa Cruz; City of Santa Maria; City of Santa Monica; City of Santa Paula; City of Sausalito; City of Scotts Valley; City of Sebastopol; City of Stockton; City of Temecula; City of Thousand Oaks; City of Tulare; City of Turlock; City of Ukiah; City of Vallejo; City of Vernon; City of Walnut Creek; City of Waterford; City of Watsonville; City of Williams; City of Woodland; City of Yreka; City/County Association of Governments of San Mateo County; County of Alameda Board of Supervisors; County of Alameda’s Personnel, Administration and Legislation Committee; County of Amador Board of Supervisors; Council of San Benito County Governments; County of Alpine Board of Supervisors; County of Del Norte Board of Supervisors; County of Glenn Board of Supervisors; County of Humboldt Board of Supervisors; County of Imperial Board of Supervisors; County of Inyo Board of Supervisors; County of Los Angeles Board of Supervisors; County of Marin Board of Supervisors; County of Mariposa Board of Supervisors; County of Monterey Board of Supervisors; County of Napa Board of Supervisors; County of Nevada Board of Supervisors; County of Riverside Board of Supervisors; County of Sacramento Board of Supervisors; County of Santa Barbara Board of Supervisors; County of Santa Clara Board of Supervisors; County of Santa Cruz Board of Supervisors; County of Solano Board of Supervisors; County of Sonoma Board of Supervisors; County of Yolo Board of Supervisors; County of Yuba Board of Supervisors; East Bay Leadership Council; FEHR & PEERS; Fix Our Roads Coalition; Flasher Barricade Association; Gateway Cities Council of Governments; General Engineering Contractors; Gold Coast Transit District; Golden Empire Transit District in Bakersfield; Golden State Gateway Coalition; Granite Construction Incorporated; Humboldt County Association of Governments; International Longshore and Warehouse Union; International Longshore and Warehouse Union Local 13, Local 63, Local 94; Lake County/City Area Planning Council; League of California Cities; Los Angeles Area Chamber of Commerce; Los Angeles County Business Federation; Los Angeles County Division of the League of California Cities; Los Angeles County Metropolitan Transportation Authority Board of Directors; Marin County Council of Mayors and Councilmembers; Marina Landscape, Inc.; Merced County Association of Governments; Metropolitan Transportation Commission; Mill Valley Chamber of Commerce and Visitor Center; Monterey-Salinas Transit; Napa Valley Transportation Authority; North State Super Region; Northern California Carpenters Regional Council; NVTA; Operating Engineers Local 3; Orange County Business Council; Placer County Transportation Planning Agency; Professional Engineers in California Government; Riverside Transit Agency; Rural Counties Task Force; Sacramento Area Council of Governments; Sacramento Regional Transit District; San Gabriel Valley Economic Partnership; San Luis Obispo Council of Governments; San Francisco Bay Area Rapid Transit District; Santa Barbara County Association of Governments; Santa Clara Valley Transportation Authority; Santa Cruz County Business Council; Santa Cruz County Regional Transportation Commission; Santa Cruz Metropolitan Transit District; Self-Help Counties Coalition; Silicon Valley Leadership Group; Siskiyou County Local Transportation Commission; Skanska; Solano Transportation Authority; Solar Turbines; Sonoma County Transportation Authority Board of Directors; Sonoma-Marin Area Rail Transit District; South Bay Association of Chamber of Commerce; Southern California Association of Governments; Southern California Contractors Association; Southern California Partnership For Jobs; The Honorable Belia Ramos, Supervisor, Napa County Board of Supervisors; The Honorable Emily Lo, Mayor, City of Saratoga; The Honorable Eric Garcetti, Mayor, City of Los Angeles; The Honorable Gregorio Gomez, Councilmember, City of Farmersville; The Honorable Paul Boyer, Mayor, City of Farmersville; The Honorable Tom Butt, Mayor, City of Richmond; The Honorable Vito Chiesa, Chair, Stanislaus County Board of Supervisors; Torrance Area Chamber of Commerce; Town of Danville; Town of Los Gatos; Town of Moraga; Town of Windsor; Town of Yountville; Transportation Agency for Monterey County; Transportation California; Trinity County Departments of Transportation; United Contractors; Urban Counties of California; Ventura Council of Governments.

Opposition: A to Z Families for Safe Streets; Albany Strollers & Rollers; American Lung Association in California; Amigos de Los Rios; Asian Pacific Environmental Network; Automobile Club of Southern California; Bike East Bay; Bike San Gabriel Valley; Bike Santa Cruz County; Bike SLO County; Brightline Defense; California Bicycle Coalition; California Environmental Justice Alliance; California League of Conservation Voters; California PanEthnic Health Network; California Walks; Campaign for Sensible Transportation; Capital Region Organizing Project; Catholic Charities, Diocese of Stockton; Center for Climate Change and Health; Center for Community Action & Environmental Justice; Center for Environmental Health; Central California Asthma Collaborative; Centro la Familia; ChangeLab Solutions; Circulate San Diego; City Heights Community Development Corp.; Climate Action Campaign; Climate Resolve; ClimatePlan; Coalition for Clean Air; Coalition for Sustainable Transportation; Cultiva la Salud; East Yard Communities for Environmental Justice; Environmental Council of Sacramento; Environmental Health Coalition; Gamaliel of California; Genesis; Housing Leadership Council of San Mateo County; Howard Jarvis Taxpayers Association; Investing in Place; Justice Overcoming Boundaries; Leadership Counsel for Justice & Accountability; Los Angeles County Bicycle Coalition; Los Angeles Walks; Marin County Bicycle Coalition; Mission: Pedestrian; Move LA; Natural Resources Defense Council; North Bay Organizing Project; Pathways to Right-of-Way's Inc.; Planning & Conservation League; PolicyLink; Prevention Institute; Public Advocates Inc.; Rails-to-Trails Conservancy; Redwood Community Action Agency; Regional Asthma Management and Prevention; Safe Routes to School National Partnership; San Diego County Bicycle Coalition; San Francisco Bicycle Coalition; San Francisco Transit Riders; Santa Barbara Bicycle Coalition; Sequoia Riverlands Trust; Shasta Living Streets; Sierra Club California; Sonoma County Bicycle Coalition; Sunflower Alliance; The Arc of California; The Greenlining Institute; The Trust For Public Land; TransForm; Urban Habitat; Valley LEAP; Walk & Bike Mendocino; Walk Long Beach; Walk Oakland Bike Oakland; Walk San Francisco; WALK Sacramento; One individual.

Developing. Further to follow.