After two years of negotiations, the California Legislature passed a 10-year, $52 billion transportation funding bill, SB 1 (Beall), on April 6th, which will raise $5.2 billion annually to fix the state’s roads and highways. While the bulk of this money will come from diesel and gas tax increases, UCMCS is pleased to let you know there are a few good things for the trucking industry that made it into the deal as concessions to the sector.
The package is funded through a variety of new revenues, most notably for the towing industry, a 20-cent diesel excise tax increase (adjusted every 3 years for inflation) and a 5.75% diesel sales tax increase. Additionally, it includes a gas excise tax increase of 12 cents, a new “transportation improvement fee” ranging from $25-$175 depending on the vehicle’s value, a new $100 Zero Emission Vehicle Fee starting in 2020, and loan repayments from the General Fund.
Despite loud opposition from environmentalists, as concessions to the trucking industry, the following two provisions were added:
- As of 2020, all trucks must be CARB-compliant in order to register the vehicle with the DMV. This language is identical to SB 174 (Lara), which was another bill introduced this year that UCMCS voted to support.
- A new law that states that a commercial motor vehicle would not have to be replaced, retired, or retrofitted for at least 13 years, but not more than 18 years (or 800,000 miles whichever is earlier). It wouldn’t apply to any rule enacted prior to January 1, 2017, so it wouldn’t undue any of the requirements of the current CARB rule. However, this is a preemptive effort to avoid a new CARB rule when the current one expires in 2023.
We note that in the final days leading up to the vote on the bill, environmentalists were working hard to remove these trucking concessions, arguing that “this dirty truck provision came out of nowhere” and “exempting trucks from clean air rules has no place in a package that’s about fixing roads and improving transit,” however, ultimately the final deal was passed with them included.
Because it included tax increases, the bill constitutionally required a 2/3’s vote of the Legislature. While Democrats alone have a 2/3’s supermajority in both houses and could have passed it without a single Republican vote, a few Democrats ended up voting “no” and thus the deal relied upon a deciding “yes” vote from Republican Senator Anthony Cannella of Ceres. For his vote, Senator Cannella purportedly secured a number of special bonuses for his district, including $400 million in transportation funds for the extension of the Altamont Corridor Express, a commuter rail line between the Bay Area and Central Valley.
Governor Brown is expected to sign SB 1 ASAP. The tax increases would then go into effect on November 1, 2017.