Bill Tracker

AB 1 (Frazier) Transportation Funding

Status:Policy Committees

A package of revenues and reforms that raise $6 billion annually (plus $706 million in one-time loan repayments) to repair and maintain state and local roads, improve trade corridors, support transit, and fund active transportation.  It also adds provisions to streamline projects and increase accountability.

Summary of New Revenues

  • $3.1 billion for a new Road Maintenance and Rehabilitation Account (RMRA) from an increase in the gas tax by 12 cents per gallon, a $38 increase in annual vehicle registration fee, and a $165 registration fee for zero emission vehicles.  After set-asides, the funds are split evenly (50-50) for maintenance funding for the state highway system (including the SHOPP) and Local Streets and Roads.  The California Transportation Commission would adopt performance criteria to ensure efficient use of funds.  Local agencies must spend the funds consistent with the performance criteria unless their average pavement condition meets or exceeds a score of 80 (then the funds could be spent for other transportation purposes).  The set-asides total $315 million and include $200 million to counties that have fees or taxes dedicated to transportation; $80 million to the Active Transportation Program; $5 million for research, and (for the first four years only) $30 million to the Advanced Mitigation Program. 

  • $600 million for the Trade Corridors Improvement Fund (TCIF) a 20-cent increase in the diesel fuel excise tax.  Also requires FAST Act formula freight program revenues to be allocated for trade corridor improvement projects.  Also makes changes to the programming of projects by amending the list of plans that must be consulted by the commission and expanding eligibility to landside access and other improvements. 

  • Raises $300 million (assuming $2 billion in cap and trade auctions) from an increase the continuous appropriation of cap and trade funds to the Transit and Intercity Rail Capital Program (from 10% to 20%) and Low Carbon Transit Operations Program (from 5% to 10%). 

  • Restores $1.1 billion million to the State Highway Account by eliminating the fuel tax swap, thereby resetting what is now the price based excise tax at 18 cents. 

  • Transfers $185 million to the HUTA the revenues attributable to boats, agricultural vehicles and off-highway vehicles that are currently being deposited in the General Fund. 

  • Raises $263 million from an increase the additional sales and use tax on diesel fuel by an additional 3.5% that are deposited in the Public Transportation Account for transit capital purposes and certain transit services.  Transit agency must submit a list of proposed projects to the Department of Transportation as a condition of receiving a portion of these funds.  The Controller would quarterly publish proposed allocations for each eligible recipient agency under the State Transit Assistance Program.

  • Reclaims $100 million in weight fees for deposit in the state highway account and increases the amount reclaimed by $100 million each year until the total amount deposited in the State Highway Account in FY 2021-22 is $500 million.

  • Would repay $706 million in loans made from various transportation accounts to the general fund over the next two years.  All repaid funds would be deposited into the RMRA. 

  • Starting in 2019, and every 3rd year thereafter, require the State Board of Equalization to recomputed the gas and diesel excise tax rates and the sales and use tax rate on diesel fuel based upon the change in the Consumer Price Index.

Reforms and Streamlining Provisions

  • CTC Independence.  Excludes the California Transportation Commission from the Transportation Agency. 

  • Inspector General.  Creates the independent Office of the Transportation Inspector General to ensure all state agencies expending state transportation funds are operating efficiently, effectively, and comply with federal and state law.  The Inspector would be appointed by the Governor for six year terms.

  • Complete Streets.  Update the state Highway Design Manual to incorporate the “complete streets” design concept by July 1, 2017. 

  • Department Savings & ATP Funding.  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 (an additional amount up to $80 million per year would be made available to the ATP program). 

  • SHOPP Oversight.  Increases CTC’s oversight over the SHOPP and asset management plan by requiring commission approval of the plan (after hearings) and commission allocation of all capital and support costs for each project in the program consistent with adopted guidelines.

  • Waiver of Immunity (NEPA).  Extends the waiver of immunity to continue the state’s participation in the federal NEPA delegation pilot program for transportation projects.  (See also, AB 28)

  • CEQA Exemption for Repairs.  Permanently extends the CEQA exemption indefinitely to repair, maintain, or make minor alterations to an existing roadway and expand the exemption to the state system and to cities and counties with a population greater than 100,000.

  • Advanced Mitigation.  Establishes the Advance Mitigation Program at the Department to provide mitigation in advance of project construction.  The program would receive a continuous appropriation, beginning with $30 million for four years from RMRA.  Constitutional Protections • Introduce a constitutional measure on the ballot to lower the voter threshold for sales and use taxes dedicated to transportation to 55% • Introduce a constitutional measure on the ballot to protect transportation revenues to guarantee that they are spent for transportation purposes.
More Info:Legislative Website Info
Last Updated:May 1, 2017