BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
406 (DeSaulnier)
Hearing Date: 05/28/2009 Amended: 04/30/2009
Consultant: Mark McKenzie Policy Vote: Loc Gov 3-2; T&H
6-4
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BILL SUMMARY: SB 406 would authorize the imposition of a $1 or
$2 fee on vehicle registrations, as specified, to pay for
regional land use planning activities. This bill would also
revise the membership and expand the duties of the Planning
Advisory and Assistance Council (PAAC) within the Governor's
Office of Planning and Research.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DMV programming & admin $300-$400* $100* Special*
Maximum local assessments ($62,728)
($62,728) Local**
(revenue gain)
PAAC new duties all costs covered by 5% allocation of
fees collected
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* Motor Vehicle Account (as proposed to be amended, first year
costs covered by imposing agency through contract with DMV;
ongoing costs deducted from fee revenues)
** Staff notes that the local assessment revenue gain shown here
is based upon approval of the assessment in every region in the
state. Actual revenues would depend upon the number of entities
approving an assessment and the number of vehicles registered in
those areas. For purposes of example, if only the Association
of Bay Area Governments (with 6,061,374 fee-paid vehicle
registrations) approved an assessment of $2, annual local
revenues would be $12,122,748 with 5% of these revenues
($606,137) transferred to PAAC to cover costs related to duties
imposed by this bill.
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Vehicle fee provisions
Existing law establishes a basic statewide vehicle registration
fee of $34, plus a $22 surcharge that supports the California
Highway Patrol, and authorizes local agencies to impose separate
vehicle registration fee surcharges within their jurisdictions
for various programs, such as air quality district fees,
congestion management fees, and law enforcement fees. SB 375
(Steinberg), Chapter 728 of 2008, requires each metropolitan
planning agency (MPO) to include within its regional
transportation plan a sustainable communities strategy (SCS)
designed to achieve specified targets for greenhouse gas
emission reduction. If the SCS does not achieve the reduction
target, the MPO must prepare an alternative planning strategy.
In some regions, cities and counties have jointly formed
councils of government (COGs) to implement regional planning
activities. COGs generally serve as federally recognized MPOs
transportation planning purposes, although some COGs, such as
the San Francisco Bay Area, have a separate MPO for
transportation planning.
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SB 406 (DeSaulnier)
SB 406 would authorize an MPO, a COG, or a county transportation
commission and a subregional COG jointly preparing a subregional
SCS to impose a surcharge of $1 or $2 on a motor vehicle
registered within its jurisdiction, upon adoption of a
resolution authorizing the surcharge, as specified. All
revenues derived from the new fee would be used solely to
develop and implement a SCS or a regional blueprint plan to
identify land use strategies to reduce the use of motor vehicles
and vehicle emissions. The bill specifies that in jurisdictions
with a population exceeding 300,000 that impose the full $2 fee,
half of the revenues would be used to provide grants to cities
and counties within the region for planning and projects related
to the implementation of a regional blueprint plan, including an
SCS or alternative planning strategy. Five percent of all
revenues collected, however, would be transferred to the PAAC to
perform the new duties imposed by this bill.
DMV would be required to administer the collection and
distribution of the fees on behalf of each entity that approves
the imposition of the new vehicle surcharge. Initial costs for
programming the new fee into DMV's processing system would
likely be in the range of $300,000 to $400,000, with ongoing
administrative costs of over $100,000. Costs to add other
regions that approve the assessments in subsequent years would
be relatively minor. Even though the bill provides for payment
of DMV's costs to administer the surcharge, initial costs would
be paid up front by DMV since the programming changes must be in
place prior to fee collection. Ongoing administrative costs
would be deducted from fees collected prior to distribution to
the local agency.
DMV notes a concern about technical problems on their archaic
processing systems caused by the cumulative pressures placed on
these systems from the proliferation of fee codes. DMV is
currently in the process of updating their information
technology systems. This modernization project should be
completed by 2013, at which time transactions will be processed
more efficiently and with fewer errors. Until the modernization
is complete, however, DMV estimates that it has current annual
costs of over $19 million for the manual processing of rejected
applications. This bill may result in an increase in vehicle
transactions that must be manually processed to the extent that
numerous regions impose the new surcharge and transaction errors
occur more frequently.
According to DMV statistics, there were 31,363,851 fee-paid
vehicle registrations in the state in 2008. This bill could
generate up to $62.7 million annually for regional land use
planning purposes if every authorized entity adopts a resolution
authorizing the imposition of an additional $2 vehicle
registration surcharge. Five percent of these revenues, over
$3.1 million, would be allocated to the PAAC to pay for the new
duties imposed by this bill.
Planning Advisory and Assistance Council
Existing law establishes the Office of Planning and Research
(OPR) within the governor's office as the state's comprehensive
planning agency. The Planning Advisory and Assistance Council
(PAAC) within OPR is responsible for various land-use planning
related activities, including development of the State
Environmental Goals and Policies Report. OPR's Director
appoints the membership of the PAAC, which must include
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SB 406 (DeSaulnier)
three city representatives, three county representatives, one
representative from each of the regional planning districts
designated by OPR, and one representative of Indian tribes with
reservations in California. SB 732 (Steinberg), Chapter 729 of
2008, created the Strategic Growth Council, consisting of: the
Director of OPR; the Secretary of the Natural Resources Agency;
the Secretary of the Environmental Protection Agency; the
Secretary of the Business, Transportation and Housing Agency;
the Secretary of the California Health and Human Services
Agency; and a public member. The council is required to
recommend policies to the governor, state agencies, and the
Legislature to encourage the development of sustainable
communities and provide local governments and regional agencies
with data to assist in planning sustainable communities.
SB 406 would revise the membership of the PAAC by designating
the representation of regional planning agencies, as specified,
and expanding the PAAC to include: a member of the Air Resources
Board; a member of the California Transportation Commission, a
member of the State Energy Resource Conservation and Development
Commission; and a member appointed by each of the houses of the
Legislature. This bill would also assign the following new
duties to the PAAC:
Work with the Strategic Growth Council to facilitate the
implementation of regional blueprint projects.
Develop recommendations to the Strategic Growth Council and
specified state agencies to facilitate coordination between
regional blueprint plans and state growth and infrastructure
funding plans.
Receive reports, including the state's five-year
infrastructure plan.
Report to the Legislature, in consultation and coordination
with the Strategic Growth Council, on how state agencies
implement the state's planning priorities.
Report to the Legislature on regional performance measures
that evaluate each region based on the PAAC's criteria for
improving the regions' employment, environmental protection,
education, housing, and mobility.
SB 406 specifies that the PAAC would only perform these
additional duties when sufficient funding is transferred from
the entities that imposed the additional vehicle fee. OPR
indicates that the five percent allocation of revenues collected
pursuant to this new fee would be sufficient to fully offset the
costs associated with the new coordination duties.
Lastly, this bill would require the Strategic Growth Council to
consult with and coordinate with the PAAC when performing its
core functions. Any costs associated with this consultation
would be absorbable.
Proposed amendments would require an agency imposing the vehicle
fee to contract with DMV to pay for initial setup and
programming costs identified by the department. These costs
would be reimbursed to the agency imposing the fee from
surcharge revenues collected.