BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 205
                                                                  Page  1

          Date of Hearing:   June 29, 2009

                        ASSEMBLY COMMITTEE ON TRANSPORTATION
                                   Mike Eng, Chair
                    SB 205 (Hancock) - As Amended:  April 14, 2009

           SENATE VOTE  :  21-17
           
          SUBJECT  :  Vehicle registration fees 

           SUMMARY  :  Allows county transportation planning agencies to ask  
          voters to impose a $10 vehicle registration fee for  
          transportation-related projects and programs.  Specifically,  
           this bill  : 

          1)Makes legislative findings and declarations regarding the  
            negative impact of traffic congestion, the ability of  
            transportation improvements to reduce congestion, the measures  
            available to lessen the impact of motor vehicle-related  
            pollution, and the Legislature's intention to establish a  
            program that allows countywide transportation planning  
            agencies to address congestion and mitigate the impacts of  
            motor vehicles on air and water quality, and improve the  
            business climate and natural environment.  

          2)Allows a countywide transportation planning agency to place a  
            majority vote ballot measure before the voters of its county  
            to authorize an increase in motor vehicle registration fees in  
            the county for transportation-related projects and programs  
            described in this chapter.  

          3)Allows such an agency to impose an additional fee of up to $10  
            on each motor vehicle registered within the county.  

          4)Requires the ballot measure resolution to be adopted by a  
            majority vote of the governing board of the agency at a  
            noticed public hearing and to contain a finding of fact that  
            the projects and programs to be funded by the fee increase  
            have a relationship or benefit to the persons who will be  
            paying the fee, and are consistent with the adopted regional  
            transportation plan.  The finding of fact requires a majority  
            vote of the governing board at a noticed public hearing.  

          5)Requires the ballot measure to be submitted to the voters of  
            the county and, if approved by them, applies the increased fee  








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            to the original vehicle registration occurring on or after six  
            months following the adoption of the measure by the voters and  
            to a renewal of registration with an expiration date on or  
            after that six-month period.  

          6)Requires the governing board of the agency to adopt an  
            expenditure plan allocating the revenue to  
            transportation-related programs and projects that have a  
            relationship or benefit to the persons who pay the fee.   
            Transportation-related programs and projects include, but are  
            not limited to, programs and projects that have the following  
            purposes:  

             a)   Providing matching funds for funding made available for  
               transportation programs and projects from state general  
               obligation bonds;  

             b)   Creating or sustaining congestion mitigation programs  
               and projects; and,

             c)   Creating or sustaining pollution mitigation programs and  
               projects.  

          7)Defines, for this bill's purposes:

             a)   "Congestion mitigation programs and projects" to  
               include, but not be limited to, programs and projects  
               identified in an adopted congestion management program or  
               county transportation plan; projects and programs to manage  
               congestion, including, for example, high-occupancy vehicle  
               or high-occupancy toll lanes; improved transit services  
               through the use of technology and bicycle and pedestrian  
               improvements; improved signal coordination, traveler  
               information systems, highway operational improvements, and  
               local street and road rehabilitation; and transit service  
               expansion; and,

             b)   "Pollution mitigation programs and projects" to include,  
               but not be limited to, programs and projects carried out by  
               a congestion management agency (CMA), a regional water  
               quality control board, an air pollution control district,  
               an air quality management district, or another public  
               agency that is carrying out the adopted plan of one of  
               those entities;









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          8)Limits administrative costs associated with the programs and  
            projects to 5% of the fees distributed to a countywide  
            transportation planning agency.  

          9)Defines, for this bill's purposes, "countywide transportation  
            planning agency" to mean a county's CMA or the agency  
            designated to submit the county's transportation plan.  
          
          10)Requires the Department of Motor Vehicles (DMV), if requested  
            by a countywide transportation planning agency, to collect the  
            voter-approved registration fee upon the registration or  
            renewal of registration of a motor vehicle registered in the  
            county, except those vehicles that are expressly exempted from  
            the payment of registration fees.  

          11)Requires the countywide transportation planning agency to pay  
            for the initial setup and programming costs identified by DMV  
            through a direct contract with the department.  

          12)Requires DMV to distribute the fee's net revenues after  
            deducting all its incurred costs.  

          13)Provides that costs deducted by DMV are not to be counted  
            against the 5% administrative cost limit.  

           EXISTING LAW  :

          1)Requires CMAs within urbanized areas to prepare and adopt  
            congestion management programs.  

          2)Requires CMAs to update their programs every two years.  

          3)Requires the programs to include:  

             a)   Traffic level of service standards established for a  
               system of highways and roadways designated by the  
               congestion management program agency;

             b)   Performance elements regarding the movement of people  
               and goods;  

             c)   Program elements that promote alternative  
               transportation methods, including carpools, vanpools,  
               transit, bicycles, and other strategies.  









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             d)   Analysis of land use decisions on regional  
               transportation systems; and,  

             e)   A seven-year capital improvement program.  

          4)Establishes a basic vehicle registration fee of $34, plus a  
            $22 surcharge for additional personnel for the California  
            Highway Patrol, and authorizes local agencies to impose  
            separate vehicle registration fee surcharges in their  
            respective jurisdictions for a variety of special programs,  
            including:  

             a)   $1 for service authorities for freeway emergencies;

             b)   $1 for deterring and prosecuting vehicle theft;

             c)   Up to $7 for air quality programs;

             d)   $1 for removing abandoned vehicles; and, 

             e)   $1 for fingerprint identification programs.  

          5)Distinguishes a fee from a tax in that a fee pays for a  
            specific service or project and cannot exceed the reasonable  
            costs of providing the service or projects that it funds.   
            Unlike a tax, which benefits the general public, the payer of  
            the fee is the beneficiary.  

          6)Allows fees to be imposed by an agency's governing board.  

           FISCAL EFFECT  :  According to the Senate Appropriations Committee  
          analysis, DMV's startup costs will be paid in advance through  
          contracts with authorizing agencies, and its ongoing costs will  
          be reimbursed from collected fees.  There will also be unknown  
          annual revenue gains for each county that approves the fee.  

          The analysis cites DMV statistics, noting there were 31,363,851  
          fee-paid vehicle registrations in the state in 2008.  This bill  
          could generate up to $313.6 million annually for local  
          transportation purposes if every county approved a ballot  
          measure to impose an additional $10 vehicle registration fee.   
          The analysis further states that DMV would be required to  
          administer the collection and distribution of the fees on behalf  
          of each countywide transportation planning agency that received  
          voter approval to impose the new surcharge.  Initial costs for  








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          programming the new fee into DMV's processing system would  
          likely be in the range of $250,000 for each approved fee.  These  
          costs would be paid up front by the agency imposing the fee  
          through a direct contract with DMV.  These initial costs would  
          be repaid to the local agency from the initial revenues  
          distributed by DMV.  Ongoing administrative costs to DMV would  
          be deducted from fees collected prior to distribution to the  
          local agency.  

           COMMENTS  :  The sponsor, the Alameda County Congestion Management  
          Agency, states in support, "To maximize the capacity and improve  
          the efficiency of the transportation network, local  
          transportation agencies are relying more on intelligent  
          transportation systems (ITS).  These strategies include signal  
          light coordination, and monitoring real-time traffic conditions  
          at intersections and on freeways which allow the agency to  
          adjust signal times and update travel times on freeway message  
          signs.  While Proposition 1B dedicated $250 million for  
          technology based improvement to local streets and roads and the  
          Corridor Mobility Improvement Account funds are also being used  
          to implement intelligent transportation systems, there is no  
          funding source to pay for the ongoing operations and maintenance  
          of technology based improvements.  

          "SB 205 creates an effective means of aligning the operation and  
          maintenance costs of these systems with those who will benefit  
          the most.  

          "Using technology to maximize the capacity of our transportation  
          system will improve management of congestion and incidents along  
          these routes, improve mobility, and provide timely multi-modal  
          transportation information.  Vehicle registration fees are an  
          appropriate funding source for transportation system programs  
          that directly benefit motorists."  

          The Howard Jarvis Taxpayers Association states in opposition,  
          "As currently drafted, SB 205 would violate the California  
          Constitution.  Under Propositions 13 and 218, local voters are  
          required to approve tax increases like this one by a 2/3rds vote  
          because it would authorize a tax for a special purpose.  Using  
          the Legislature to circumvent citizen's right to vote on tax  
          increases in these two counties is contrary to the letter and  
          spirit of the constitutional protections enacted by taxpayers to  
          prevent un-voted taxes disguised as 'fees.' " In the same vein,  
          the auto clubs do not view the bill's registration assessment as  








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          a fee but rather as a tax.  The clubs argue that the bill's use  
          of its revenues to fund water quality projects, for instance, is  
          inconsistent with the concept of a fee.  Significantly, when  
          presented with similar bills in the past, the Governor has  
          vetoed them, complaining that they lack any provision for  
          approval by 2/3 of the affected electorate that is requisite for  
          the enactment of a tax.   
           
           Legislative history  :  SB 348 (Simitian), Chapter 377, Statutes  
          of 2008, extended, from January 1, 2009 to January 1, 2013, the  
          authority of the City/County Association of Governments of San  
          Mateo County to assess an up-to four dollars annual fee on  
          vehicles registered within San Mateo County for programs to  
          manage traffic congestion and storm water pollution.  

          AB 444 (Hancock) of 2008 would have allowed vehicle registration  
          fees, up to $10 per vehicle, to be imposed for congestion  
          management programs in Alameda, Contra Costa, Marin, Santa  
          Clara, Solano, and Santa Cruz Counties.  AB 444 was held in the  
          Senate Revenue and Taxation Committee.  

          SB 613 (Simitian) of 2007 would have allowed the City/County  
          Association of Governments of San Mateo County to reauthorize,  
          through January 1, 2019, an existing fee of up to four dollars  
          on motor vehicles registered within the county for a program for  
          the management of traffic congestion and storm water pollution.   
          SB 613 was vetoed.  

          SB 1611 (Simitian) of 2006 would have allowed county  
          transportation CMAs or boards of supervisors to impose, subject  
          to majority vote approval of county voters, a maximum $25  
          surcharge on the annual renewal of vehicles registered in their  
          respective jurisdictions to fund transportation-related projects  
          and programs, including pollution prevention programs carried  
          out by a congestion management agency, a regional water quality  
          control board, or a local air district.  SB 1611 died on  
          Suspense in the Assembly Appropriations Committee.  

          AB 1623 (Klehs), of 2006 would have authorized the designated  
          county transportation  agencies in Alameda, Contra Costa, Marin  
          and Napa Counties to impose an annual fee of up to five dollars  
          on motor vehicles registered within their respective  
          jurisdictions for a program to manage traffic congestion and  
          mitigate the environmental impacts of motor vehicles within that  
          county.  AB 1623 was vetoed.  








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          SB 680 (Simitian), of 2005 would have authorized the Santa Clara  
          Valley Transportation  Authority to adopt an annual vehicle  
          registration fee of up to five dollars per vehicle for up to  
          eight years to finance traffic and transportation improvements  
          in Santa Clara County.  SB 680 was vetoed.  

           Double referral  :  This bill has also been referred to the Local  
          Government Committee.  

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Alameda County Congestion Management Agency (sponsor)
          Alameda-Contra Costa Transportation District
          California Transit Association
          Contra Costa Transportation Authority
          East Bay Municipal Utilities District
          Metropolitan Transportation Commission
          Santa Clara Valley Transportation Authority
          Santa Cruz Regional Transportation Commission
          TransForm
          Transportation Authority of Marin

          Opposition 
           
          Automobile Club of Southern California
          California State Automobile Association
          Howard Jarvis Taxpayers Association

           
          Analysis Prepared by  :   Howard Posner / TRANS. / (916) 319-2093