BILL ANALYSIS Ó AB 767 Page 1 Date of Hearing: April 8, 2013 ASSEMBLY COMMITTEE ON TRANSPORTATION Bonnie Lowenthal, Chair AB 767 (Levine) - As Introduced: February 21, 2013 SUBJECT : Vehicle registration fees: vehicle theft crimes SUMMARY : Authorizes counties to increase the tax on vehicle registration for the prevention of vehicle theft crimes. Specifically, this bill : 1)Authorizes every county to increase its motor vehicle fee from $1 to $2, and its commercial vehicle service fee from $2 to $4, upon adoption of a resolution by its board of supervisors, and submission of the resolution to the Department of Motor Vehicles (DMV). 2)Deletes the existing sunset date on the vehicle registration surcharge authorization and makes these provisions operative indefinitely. EXISTING LAW : 1)Requires a vehicle registration fee of $46 to be paid for the registration of every motor vehicle, except those expressly exempt. 2)Authorizes a variety of additional fees that are related to the operation of motor vehicles to be paid with the registration, most particularly to address certain air quality and law enforcement issues. These fees support, among other things, service authorities for freeway emergencies, California Highway Patrol (CHP) staffing, and fingerprint identification programs. 3)Authorizes, until January 1, 2018, counties to adopt an annual $1 vehicle registration service charge for passenger vehicles and an annual $2 vehicle registration service charge for commercial vehicles where that charge is used exclusively to fund programs that enhance the capacity of local police and prosecutors to deter, investigate, and prosecute vehicle theft crimes. 4)Authorizes, until January 1, 2018, the Counties of Los AB 767 Page 2 Angeles, San Bernardino, and San Diego, to increase the tax on motor vehicle registration from $1 to $2, and would provide that the service fee on commercial motor vehicles to increase from $2 to $4, upon adoption of a resolution of its board of supervisors. Requires the resolution to be submitted to DMV at least six months prior to the operative date of the tax increase. 5)Requires counties that adopt these service charges to report the expenditures for salaries and expenses, purchase of equipment and supplies, and any other expenditure listed by type, with an explanatory comment. Provides that resulting revenues are continuously appropriated, without regard to fiscal years, for the administrative costs of the California State Controller (Controller), and for disbursement by the Controller to each county that has adopted such a resolution, based upon the number of vehicles registered, or whose registration is renewed, to an address within that county. 6)Requires revenues so allocated to be expended exclusively to fund programs that enhance the capacity of local police and prosecutors to deter, investigate, and prosecute vehicle theft crimes. However, in any county with a population of 250,000 or less, the money must be expended exclusively for those vehicle theft crime programs and for the prosecution of crimes involving driving while under the influence of alcohol or drugs, or both, or vehicular manslaughter, or any combination of those crimes. FISCAL EFFECT : Unknown COMMENTS : Existing law establishes a basic vehicle registration fee of $46, plus a $23 surcharge for additional personnel for the CHP, for the new or renewal registration of most vehicles or trailer coaches. Existing law also authorizes local agencies to impose separate vehicle registration fee surcharges in their respective jurisdictions for a variety of special programs, such as abating abandoned vehicles and deterring, investigating, and prosecuting vehicle theft. The vehicle theft program may be established in counties if approved through a resolution by a county board of supervisors that imposes a $1 surcharge on every new or renewal vehicle registration, plus another $2 on commercial vehicles. Smaller counties adopting vehicle theft programs (those with a AB 767 Page 3 population of less than 250,000) may also use the resulting funds to prosecute specified driving under the influence and vehicular manslaughter crimes. Each quarter, participating counties must submit to CHP a report on the expenditures and activities as well as submitting a fiscal year end report to the Controller. Separately, the Counties of Los Angeles, San Bernardino, and San Diego are authorized to increase the motor vehicle fee from $1 to $2, and the service fee on commercial motor vehicles from $2 to $4, upon adoption of a resolution of its board of supervisors. This bill extends statewide to all the counties the authorization to increase the motor vehicle fee from $1 to $2, and the service fee on commercial motor vehicles from $2 to $4. Further, this bill eliminates the January 1, 2018 sunset date on the vehicle theft prevention fee. The author indicates that the county vehicle theft prevention programs are an "incredibly effective tool for combatting crime. The activities funded by this fee produce a remarkable return on taxpayers investment, the 47 counties with a surcharge collected a combined $31 million to fund these programs, program activities in turn recovered a combined $151 million in assets and recovered more than 130,000 vehicles. This is an example of government working well. AB 767 gives local law enforcement agencies the tools they need to fight vehicle theft in their communities." Proposition 26 requires that any "change in statute which results in a taxpayer paying a higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature." This bill does not result in a taxpayer paying a higher tax but delegates to the separate county boards of supervisors the authority to impose a higher surcharge on vehicle registrations to fund a specific government function. Ultimately, the counsel for each county would have to determine a vote threshold at the county level. So while this bill is a majority vote measure in the Legislature, the local action to increase the registration surcharge may ultimately require a two-thirds vote of the electorate in a county. Writing in opposition to this bill, the California Taxpayers Association indicates "For years, hidden taxes have frustrated voters. In 2010, voters passed Proposition 26 to stop the AB 767 Page 4 Legislature from disguising fees as taxes. AB 767 ignores the voters and undermines the spirit of Proposition 26. Vehicle-theft prevention programs are important to public safety. However, the Legislature should not fund these efforts through a tax disguised as a fee intended to cover the costs of registering a vehicle. Legislative history : AB 1324 (Skinner), of 2013, would authorize the Alameda County Board of Supervisors to increase the tax on vehicle registrations for the prevention of vehicle theft crimes. That bill is scheduled to be heard in this committee next week. AB 1404 (Feuer) Chapter 775, Statutes of 2012, authorizes the Counties of Los Angeles, San Bernardino, and San Diego to increase their $1 vehicle registration surcharges for vehicle theft prevention to $2, and their commercial surcharge from $2 to $4. AB 1768 (Davis) of 2012, would have allowed for a $3 fee applying only to Los Angeles County. That bill failed passage in the Assembly Transportation Committee. AB 286 (Salas) Chapter 230, Statutes of 2009, extends the sunset date to the current date of January 1, 2018. AB 860 (Salas) of 2008, would have extended the sunset for the vehicle theft program (but did not contain an increase in the surcharge). That bill was vetoed by Governor Schwarzenegger with his generic veto message referencing the budget delay. AB 878 (Davis) of 2007, a similar bill that was vetoed by Governor Schwarzenegger who indicated that the voters should decide on the vehicle registration increase. SB 2139 (Davis), Chapter 1670, Statutes of 1990, establishes the initial vehicle theft crime prevention program funded through vehicle registration fees. Double-referral : This bill is double referred to the Assembly Local Government Committee. REGISTERED SUPPORT / OPPOSITION : Support AB 767 Page 5 California State Sheriffs' Association (co-sponsor) California Police Chief's Association (co-sponsor) Alameda County Sheriff's Office California District Attorneys Association California New Car Dealers Association Opposition Cal-Tax Howard Jarvis Taxpayers Association Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093