BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 1404 (Feuer) - Vehicle registration fee surcharge for vehicle theft programs. Amended: August 6, 2012 Policy Vote: T&H 6-2 as proposed to be amended Urgency: No Mandate: No Hearing Date: August 6, 2012 Consultant: Mark McKenzie This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 1404 would authorize the Counties of Los Angeles, San Diego, and San Bernardino to increase the fee imposed upon registration of a vehicle to fund vehicle theft programs from $1 to $2. Upon approval of the increase that applies to all vehicles, the amount imposed upon commercial vehicles would increase from $2 to $4. Fiscal Impact: All administrative costs to the Department of Motor Vehicles (DMV) and the State Controller's Office (SCO) are fully recovered from fee revenues collected. Potential revenue gains of approximately $7.2 million for Los Angeles County, $2.5 million for San Diego County, and $1.6 million for San Bernardino County if increases to vehicle surcharges are approved. Background: Existing law, SB 2139 (Davis), Chapter 1670, Statutes of 1990, authorizes counties to establish a separate annual $1 vehicle registration surcharge to fund programs that enhance the capacity of local police and prosecutors to deter, investigate, and prosecute vehicle theft crimes. The fee is imposed upon adoption of a resolution by the board of supervisors. Owners of specified commercial vehicles pay an additional $2. DMV collects these fees and the SCO distributes the revenues to participating counties. All administrative costs are recovered from fees collected. Forty-seven counties have adopted this surcharge, which generates approximately $29 million annually statewide, according to the latest report from AB 1404 (Feuer) Page 1 the SCO for the 2010-11 fiscal year. The authority to collect this additional surcharge sunsets on January 1, 2018. This bill is intended to increase vehicle theft fee in Los Angeles, San Diego, and San Bernardino Counties to account for inflation and to sufficiently fund the local programs. Los Angeles County, for example, reports that its vehicle theft program, known as the Taskforce for Regional Auto-theft Prevention (TRAP) employed 71 personnel to combat auto theft at a cost of $7.3 million in 2004, but this year the program only employed 29 personnel at a cost of $7.2 million. Proposed Law: AB 1404, as proposed to be amended, would authorize Los Angeles, San Diego, and San Bernardino Counties to increase the vehicle theft surcharge imposed on all vehicles subject to annual registration in their respective jurisdictions from $1 to $2, upon adoption of a resolution by the county board of supervisors. The $2 surcharge that is currently imposed on commercial vehicles would automatically increase from $2 to $4 upon approval of the resolution that would increase the surcharge for all vehicles. The bill would require the county board of supervisors to submit the resolution to DMV at least six months prior to the operative date of the fee increase. Related Legislation: AB 878 (Davis), introduced in 2007, included provisions that would have allowed all counties to increase vehicle registration surcharges that fund programs for abandoned vehicle abatement and vehicle theft, prevention, investigation, and prosecution programs. AB 878 was vetoed by Governor Schwarzenegger, who objected to the absence of voter approval for the fee increase. Staff Comments: According to the most recent annual report by the SCO, the vehicle theft surcharge generated approximately $7.2 million for Los Angeles County, $2.5 million for San Diego County, and $1.6 million for San Bernardino County in the 2010-11 fiscal year. Upon approval of a resolution by each county's board of supervisors, this bill would double the amount of revenues available to each county for vehicle theft programs. DMV and the SCO would continue to recover administrative costs for collecting and distributing the fees. Proposed Author Amendments: The current bill would only apply to Los Angeles County and would require approval of a separate AB 1404 (Feuer) Page 2 resolution for the imposition of an increased fee for commercial vehicles. The author has proposed amendments to also authorize San Diego and San Bernardino Counties to increase the vehicle theft program surcharge. The proposed amendments would also make the commercial vehicle surcharge increase automatic upon approval of the increase that applies to general vehicles.