BILL ANALYSIS SB 205 Page 1 Date of Hearing: August 19, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair SB 205 (Hancock) - As Amended: July 13, 2009 Policy Committee: Local GovernmentVote:5-2 Transportation 9-5 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill allows county transportation planning agencies to place a majority vote measure on the ballot to impose an annual local vehicle registration fee of up to $10 for transportation related purposes. Specifically, the bill: 1)Requires that the ballot measure resolution adopted by an agency include a finding 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 that the projects are consistent with the applicable regional transportation plan. 2)Requires the governing board of the agency to adopt an expenditure plan allocating the revenue from the registration fee to transportation-related programs that provide matching funds for projects supported by state general obligation bonds, or for programs that create or sustain congestion mitigation and pollution mitigation programs. 3)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. 4)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. SB 205 Page 2 FISCAL EFFECT 1)Startup costs to DMV would be paid through a contract with the authorizing agency and ongoing collection related costs would be reimbursed from the fees collected. 2)Local revenue impact would depend on the number of counties that adopt the fee. As an illustration, if all counties adopted a $10 fee, total local revenues would be about $314 million annually. COMMENTS 1)Background . Existing law establishes a basic statewide vehicle registration of $34, plus a $22 surcharge that supports the California Highway Patrol. It also authorizes local agencies to impose separate vehicle registration fee surcharges within their jurisdictions for a variety of special programs, including: one dollar for service authorities for freeway emergencies; up to seven dollars for air quality programs; one dollar for removing abandoned vehicles; and one dollar for fingerprint identification programs. Existing law also distinguishes a fee from a tax. A fee pays for a specific service or project and cannot exceed the reasonable costs of providing the service or projects that it funds. In order for a levy to qualify as a fee rather than a tax, there also must be a nexus between the fee and the services it finances - that is, those paying the fee must benefit from the services or facilities financed by the fee. Fees can be approved by an agency's governing board, though authorizing legislation often requires approval by a majority of the voters in the local jurisdiction. General purpose taxes require approval of a majority of voters in the local jurisdiction, but taxes designated for specific purposes, such as transportation, require approval of two-thirds of the local electorate. This bill requires the local transportation planning agency to make a finding that there will be nexus between the surcharge and services received by the payers, thereby enabling it to be approved by a majority of voters. 2)Rationale . This bill is sponsored by the Alameda County Congestion Management Agency, which asserts that while SB 205 Page 3 Proposition 1A and 1B provided a significant increase in transportation spending, there remains a lack of local funding options to pay for the ongoing operations and maintenance of technology based improvements. The measure would also enhance funding available for the local match requirement in the two bond measures. 3)Prior legislation . A number of similar measures have been introduced in recent years. AB 444 (Hancock, 2008), which was held in the Senate Revenue & Taxation Committee, would have allowed vehicle registration fees to be imposed for congestion management programs in Alameda, Contra Costa, Marin, Santa Clara, Solano and Santa Cruz Counties. 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 to assess up to a $4 annual fee on vehicles registered within San Mateo County for programs to manage traffic congestion and stormwater pollution. SB 116 (Simitian, 2006), which died in this committee, would have allowed a county 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. 4)Related legislation . SB 406 (DeSaulnier), also in this committee, authorizes the imposition of a $1 or $2 fee on vehicle registrations to pay for regional land use planning activities. Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081