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 SB 205 Page 2 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; SB 205 Page 3 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. SB 205 Page 4 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 SB 205 Page 5 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 SB 205 Page 6 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. SB 205 Page 7 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