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.  








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           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  








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            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