April 18, 2017

CARB PROTECTIONS FOR TRUCKERS INCLUDED IN CALIFORNIA’S DIESEL & TAX BILL

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, CTTA 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 BAD

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.

THE GOOD

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 CTTA’s Towing Regulatory Oversight Council (T-ROC) 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.

CHP CLARIFIES NEW CELL PHONE PROHIBITIONS

Since California’s law prohibiting cell phone use while driving was amended last year with AB 1785, there has been some confusion about which devices towers are allowed to use while driving.  CTTA has worked with the CHP to help identify the parameters of Vehicle Code 23123.5.  Accordingly, the CHP has notified their enforcement personnel, as well as updated their Highway Patrol Manual, about the following clarifications:

  • California’s cell phone law (Vehicle Code section 23123.5) prohibits the use of a wireless telephone or electronic wireless communications device while driving, unless:
    • The device is mounted to a windshield, dashboard, or center console in a manner that does not interfere with the driver’s view of the road, and;
    • The driver’s hand is used to activate or deactivate a feature with a single tap or swipe of the driver’s finger.
  • California’s cell phone law (Vehicle Code section 23123.5) applies to the following devices:
    • A handheld wireless telephone
    • A broadband personal communication device
    • A specialized mobile radio device
    • A handheld device or laptop computer with mobile data access
    • A pager
    • A two-way messaging device
  • California’s cell phone law (Vehicle Code section 23123.5) does not apply to the following devices:
    • Manufacturer-installed systems which are “embedded in the vehicle”
    • A radio installed and mounted in a vehicle with a wired hand microphone (e.g. business band or citizen band [CB] radio)

As further history, California law prohibiting all drivers from using a handheld wireless telephone originally went into effect on July 1, 2008.  Originally the law provided an exception for those operating a commercial motor truck, including a tow truck, to use a two-way radio operated by a Push-to-Talk feature.  However, that exemption expired effective July 1, 2011.  The law was expanded effective January 1, 2009 to also make it an infraction to write, send, or read text-based communication on an electronic wireless communications device while driving.  The law was further expanded effective January 1, 2017 to address the use of GPS and other apps while driving, by requiring that all handheld wireless telephones or electronic wireless communications devices be: 1) mounted; and 2) the driver’s hand is used to activate or deactivate a feature with a single tap or swipe of the driver’s finger.

TOWERS SELLING BATTERIES MUST REGISTER WITH THE BOARD OF EQUALIZATION AND COLLECT $1 FEE

As of April 1, 2017, the “Lead Acid Battery Recycling Act” goes into effect, which requires that anyone, including a tow company, who sells lead-acid batteries in California (a “dealer”) collect a $1 California Battery Fee from a customer for each battery sold.  The dealer must pay the collected fee to the California Board of Equalization (BOE), however, the dealer is allowed to retain 1.5% of the fee as reimbursement for any costs associated with the collection of the fee.

In order to remit the fee, a company would need to register and submit it through the BOE’s website.  Click “New Registration” on the left-hand top corner on the BOE’s website to begin the process: http://www.boe.ca.gov/

Additionally, the new Act requires that a dealer accept from a customer a used lead-acid battery for recycling and caps the number of batteries that can be returned by a customer at 6 per day.  If a used battery is not exchanged for the new battery, the dealer must collect a refundable deposit, the amount of which must be displayed on a receipt.  This refundable deposit shall be refunded to the customer if, within 45 days of the sale, the customer presents to the dealer a used battery of the same type and size.  A dealer may keep any lead-acid battery deposit moneys that are not properly claimed within 45 days, not including any sales tax reimbursement charged to the consumer.

Further, a dealer shall post a written notice that is clearly visible in the public sales area of the establishment, or include on the purchaser’s receipt, the following language:

This dealer is required by law to charge a nonrefundable $1 California battery fee and a refundable deposit for each lead-acid battery purchased.

A credit of the same amount as the refundable deposit will be issued if a used lead-acid battery is returned at the time of purchase or up to 45 days later along with this dealer’s receipt.

Here’s a little more background info on AB 2153, the Lead-Acid Battery Recycling Act of 2016, by Assembly Member Cristina Garcia (D-Bell Gardens).  The bill is a reaction to the closing of the Exide Technologies battery recycling facility in Vernon, CA, which was forced to close and pay $7.7M to the state due to soil and groundwater contamination.  Additionally, the Department of Toxic Substances Control (DTSC) has estimated that homes between 1.3 and 1.7 miles away from the facility may potentially be affected by Exide’s lead contamination (somewhere between 5,000 – 10,000 residential properties), with a cost of about $45,000 per home.  This could result in the most extensive cleanup of its kind in California and will be among the largest cleanup ever conducted in the nation.  On April 20, 2016, the Governor signed legislation appropriating a $176.6 million loan from the General Fund to the Toxic Substances Control Account to enable DTSC to test the area, but after this loan amount is expended, DTSC will likely need additional funds to do a complete and thorough cleanup.  AB 2153 is intended to fill that gap while providing an ongoing source of funds to address future lead contamination from lead-acid batteries.  The bill was supported by a wide range of groups including environmental groups, Battery Council International, the California Automotive Wholesalers’ Association, and the LA Board of Supervisors, amongst others, and was passed with a 2/3’s vote of the Legislature.