BILL ANALYSIS Ó AB 1002 Page 1 Date of Hearing: April 22, 2013 ASSEMBLY COMMITTEE ON TRANSPORTATION Bonnie Lowenthal, Chair AB 1002 (Bloom) - As Amended: April 16, 2013 SUBJECT : Vehicle registration tax: sustainable communities strategies SUMMARY : Increases the tax on vehicle registrations by $6. Specifically, this bill : 1)Imposes a tax of $6 upon vehicle registration or renewal of the registration. 2)Restricts the imposition of the fee to those counties that are within a metropolitan planning organization (MPO) that is required to prepare a sustainable communities strategy (SCS). 3)Requires the California Department of Motor Vehicles (DMV), after deducting all reasonable costs to administer the tax, to remit all the revenue generated into the Sustainable Communities Strategy Subaccount to be created in the Motor Vehicle Account. Funds from the account are to be available upon appropriation by the Legislature. 4)Establishes an allocation of the revenues in accordance with the following: a) 50% appropriated to cities and counties on a per capita basis for planning and implementation of projects consistent with the purposes of a SCS and approved sustainable communities plans, including, but not limited to, first-mile-last-mile bicycle and pedestrian infrastructure projects that are intended to improve transit access in transit priority zones, bicycle and pedestrian infrastructure as part of complete streets projects, and road and highway maintenance and repair that also facilitates transit and bicycle use. b) 40% appropriated to transportation commissions and transit operators to support transit operations and maintain and expand reduced fare programs, including, but not limited to, transit passes for students, low-income AB 1002 Page 2 youth, seniors, and persons with disabilities. c) 10% appropriated to MPOs and regional transportation planning agencies for competitive grants for implementation of their SCS, including, but not limited to, competitive planning and implementation grants to cities and counties on a per capita basis for planning and implementing livable communities and transit-oriented development and urban infill projects, and to complete streets, and bicycle or pedestrian projects, consistent with an approved sustainable communities plan. 1)Requires a 2/3rd vote. 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 to be paid with the vehicle 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 local agencies to impose separate vehicle registration fee surcharges in their respective jurisdictions for a variety of special programs, including: a) $1 for deterring and prosecuting vehicle theft; b) $1 for service authorities for freeway emergencies; c) Up to $7 for air quality programs; d) Up to $4 for stormwater and congestion management relief purposes for San Mateo County; e) Up to $6 for the Sacramento Air Quality Management District; f) Up to $30 to fund programs to reduce vehicle emissions in San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, AB 1002 Page 3 and Tulare Counties and the valley portions of Kern County; g) Up to $1 for the South Coast Air Quality Management District; h) A fee of $4 for public transit in the City and County of San Francisco; i) $1 for removing abandoned vehicles; and, j) $1 for fingerprint identification programs. 1)Until January 1, 2016, imposes a $3 increase, $2 of which is to be deposited into the Alternative and Renewable Fuel and Vehicle Technology Fund and $1 of which is to be deposited into the Enhanced Fleet Modernization Subaccount. 2)Requires MPOs to adopt regional transportation plans directed at achieving a coordinated and balanced regional transportation system, including, but not limited to, mass transportation, highway, railroad, maritime, bicycle, pedestrian, goods movement, and aviation facilities and services. 3)Requires each MPO to include within its regional transportation plan an 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. 4)Distinguishes a fee from a tax in that a fee pays for a specific service or project and cannot exceed the reasonable costs of providing the service or projects that it funds. Unlike a tax, which benefits the general public, the payer of the fee is the beneficiary. FISCAL EFFECT : Unknown. COMMENTS : Existing law establishes a basic vehicle registration fee of $46, plus an additional $23 fee 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 fees in their respective jurisdictions for a variety of special programs, such AB 1002 Page 4 as abating abandoned vehicles and deterring, investigating, and prosecuting vehicle theft. This bill would impose an additional $6 vehicle registration tax for local and regional agency implementation of SB 375 (Steinberg) Chapter 728, Statutes of 2008. According to the author, "to successfully implement SB 375 and its required regional transportation plans to address greenhouse gases, regional and local governments need resources for strategic planning and opportunities for coordination with the efforts of the Governor's Strategic Growth Council and other state agencies as required by the enactment of SB 732 (Steinberg) Chapter 729, Statutes of 2008. This bill would provide for greater collaboration between state and local planning bodies to support plans and projects which implement regional blueprints and sustainable communities strategies." Revenue generated by the added tax would complement other potential sources of regional, subregional, or local funding for environmental sustainability planning. For example, Proposition 84, as approved by the statewide voters in 2006, provided bond revenues for projects relating to safe drinking water, water quality and supply, flood control, waterway and natural resource protection, water pollution and contamination control, state and local park improvements, public access to natural resources, and water conservation efforts. Among its funded programs, it provided $580 million for sustainable communities and climate change reduction efforts. Further, current federal transportation funding allows for the funding to MPOs to conduct livability and environmental sustainability planning. Federal and state transportation funds are also used to build multimodal, sustainable projects ranging from bus and rail passenger transit, bicycle and pedestrian projects, and safe routes to school program activities. There are a number of other bills being considered this year that would either raise or continue the vehicle registration tax: AB 8 (Perea and Skinner) - would extend the tax for an additional eight years for air quality mitigation programs; AB 767 (Levine) - would authorize every county to increase the tax for county vehicle theft crime prevention programs; AB 1324 (Skinner) - would authorize Alameda County to increase the tax for county vehicle theft crime prevention programs; and SB 11 (Pavley) - similar to AB 8 as previous mentioned. Additionally, AB 431 (Mullin) would authorize a transportation planning agency AB 1002 Page 5 that is designated as an MPO to impose a local or regional sales tax increase of not more than 0.5% for similar purposes as AB 1002. These bills, at some point in the legislative process, should be considered on a broader, overarching level and reconciled as appropriate. Writing in opposition to this bill, the Automobile Club of Southern California believes that the bill would fund activities that would otherwise be prohibited by the California Constitution. They contend that the new tax imposed by the bill is redundant to other charges motorists already pay for emissions, greenhouse gases and other related environmental programs. They further indicate that the current charges total approximately $30 in Los Angeles and approximately $40 in the Bay Area and San Joaquin Valley and that "motorists already pay well over half a billion dollars a year in environmental mitigation just through annual registration fees." The California New Car Dealers Association, also opposed to the bill, indicates that the bill should be amended to require that the taxes be put to the voters for their approval. They further contend that vehicle owners should not be exclusively targeted with a tax that benefits "another subgroup of the population" in reference to bicyclists and pedestrians. Previous legislation : AB 406 (DeSaulnier) of 2009, would have authorized an additional fee of either $1 or $2 on vehicle registration to be used for planning purposes related to SB 375. In his veto message, Governor Schwarzenegger indicated that the fee increase should be subject to voter approval. Related legislation : AB 574 (Lowenthal) would require the California Air Resources Board, in consultation with the California Transportation Commission and the Strategic Growth Council, to establish standards for the use of cap-and-trade auction revenues for SB 375 projects. That bill is being heard in this committee today. AB 1051 (Bocanegra) would create the Sustainable Communities for All Program to fund, via cap-and-trade auction revenues, the equitable implementation of SB 375. That bill passed the Assembly Housing and Community Development Committee and will be heard in this committee next week. Double referred : This bill is also referred to the Assembly AB 1002 Page 6 Local Government Committee. REGISTERED SUPPORT / OPPOSITION : Support Move LA (sponsor) American Lung Association in California California Bicycle Coalition FAST (Fixing Angelenos Stuck in Traffic) LA Walks Los Angeles County Bicycle Coalition Natural Resources Defense Council Safe Routes to School National Partnership Sierra Club Sustainable Transportation Solutions for California's Inland Empire The Transit Coalition TransForm Opposition Association of California Car Clubs Automobile Club of Southern California California New Car Dealers Association (oppose unless amended) California Vintage Rods CalTax Capitol Auto Club "Thunderbolts" Capital City Cruisers Capital City Mopars Cappuccino Cruisers Classic Car Club El Dorado Early Ford V8 Car Club Hot Rodders of San Diego Howard Jarvis Taxpayers Association Huntington Beachcruisers Mojave Desert Classics Northern California GTO Club Northern California Kit Car Club Over the Hill Gang Pickups Ltd Rods and Relics of Lincoln Hills San Jose Classic Chevy Club Woodland Street Cruisers AB 1002 Page 7 Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093