BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1324
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          Date of Hearing:  April 24, 2013

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                           K.H. "Katcho" Achadjian, Chair
                   AB 1324 (Skinner) - As Amended:  March 21, 2013
           
          SUBJECT  :  Registration or renewal fees.

           SUMMARY  :  Authorizes Alameda County to increase the fee on  
          vehicle registration to be used to fund the prevention of  
          vehicle theft crimes.  Specifically,  this bill  :  

          1)Allows Alameda County, upon adoption of a resolution by the  
            board of supervisors, to increase the fee on the registration  
            of motor vehicles from $1 to $2, and the commercial vehicle  
            service fee from $2 to $4 (existing authority allows this for  
            Los Angeles, San Bernardino, and San Diego counties).

          2)Applies all other provisions in existing law related to  
            increasing the registration fee to fund the prevention of  
            vehicle theft crimes to Alameda County.  

           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.  

          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  
            Angeles, San Bernardino, and San Diego, to increase the fee on  
            motor vehicle registration from $1 to $2, and would provide  
            that the service fee on commercial motor vehicles to increase  








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            from $2 to $4, upon adoption of a resolution of its board of  
            supervisors.

          5)Requires the resolution to be submitted to DMV at least six  
            months prior to the operative date of the fee increase.  

          6)Provides that resulting revenues are continuously  
            appropriated, without regard to fiscal years, for the  
            administrative costs of the State 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.  

          7)Provides that 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.  

          8)Prohibits the money collected from being expended to offset a  
            reduction in any other source of funds, nor for any purpose  
            not authorized under existing law pertaining to the imposition  
            of this fee.  

          9)Requires the submittal of a quarterly expenditure and activity  
            report to the designated statewide Vehicle Theft Investigation  
            and Apprehension Coordinator within the California Highway  
            Patrol (CHP) for each county that adopts a resolution to  
            impose the fee.

          10)  Requires the issuance of a fiscal year-end report to the  
            Controller on or before August 31 of each year, and requires  
            the report to include a detailed accounting of the funds  
            received and expended in the immediately preceding fiscal  
            year, as specified.  

          11)  Provides that each county that fails to submit the report  
            by November 30 of each year will have the fee suspended by the  
            Controller for one year, commencing on July 1 following the  
            Controller's determination that a county has failed to submit  
            the report.

          12)  Requires, on or before January 1, 2013, and on or before  








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            January 1 annually thereafter, the Controller to provide to  
            the CHP copies of the yearend reports submitted by the  
            counties, and requires the Controller, in consultation with  
            the CHP, to review the fiscal yearend reports submitted by  
            each county to determine if fee revenues are being utilized in  
            a manner consistent with the provisions of law allowing for  
            the imposition of the fee.

          13)  Requires the Controller to consult with the participating  
            counties' designated regional coordinators, if the Controller  
            determines that the use of the fee revenues is not consistent  
            with existing law, and allows the Controller to suspend the  
            authority to collect the fee for one year. 

          14)  Requires the Controller on or before January 1 to annually  
            prepare and submit to the Legislature a revenue and  
            expenditure summary for each participating county.  

          15)  Provides, in Article XIII C of the California Constitution,  
            that a 'tax' means any levy, charge, or exaction of any kind  
            imposed by a local government, except for the following:

             a)   A charge imposed for a specific benefit conferred or  
               privilege granted directly to the payor that is not  
               provided to those not charged, and which does not exceed  
               the reasonable costs to the local government of conferring  
               the benefit or granting the privilege;

             b)   A charge imposed for a specific government service or  
               product provided directly to the payor that is not provided  
               to those not charged, and which does not exceed the  
               reasonable costs to local government of providing the  
               service or product;

             c)   A charge imposed for the reasonable regulatory costs to  
               a local government for issuing licenses and permits,  
               performing investigations, inspections, and audits,  
               enforcing agricultural marketing orders, and the  
               administrative enforcement and adjudication thereof;
             d)   A charge imposed for entrance to or use of local  
               government property, or the purchase, rental, or lease of  
               local governmental property;

             e)   A fine, penalty, or other monetary charge imposed by the  
               judicial branch of government or a local government, as a  








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               result of a violation of law;

             f)   A charge imposed as a condition of property development;  
               and,

             g)   Assessments and property-related fees imposed in  
               accordance with the provisions of Article XIII D.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :   

          1)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.  

          2)The initial authorization for counties to impose a $1 fee to  
            fund programs to deter, investigate and prosecute vehicle  
            theft was contained in SB 2139 (Ed Davis), Chapter 1670,  
            Statutes of 1990.  Subsequent legislation has extended the  
            sunset date several times, including AB 1664 (Dutra), Chapter  
            514, Statutes of 2004, and most recently, AB 286 (Salas),  
            Chapter 230, Statutes of 2009, which extends the program until  
            January 1, 2018.  

            There have been several other legislative attempts to extend  
            the sunset date on the program, including AB 878 (Davis,  
            2007).  In addition to expanding the sunset date, AB 878 also  
            contained provisions that would have allowed a county to  
            increase the surcharge imposed on vehicle registrations from  
            $1 to $2.  AB 878 was vetoed by Governor Schwarzenegger with  
            the following message, "On numerous previous bills attempting  
            to raise registration fees, I have held that fees such as  
            these should be approved by a vote of the people.  This  
            measure does not include such a provision."  Additionally, AB  
            1768 (Davis, 2012), would have allowed for a $3 fee applying  
            only to Los Angeles County, but failed passage in the Assembly  
            Transportation Committee.  

          3)AB 1404 (Feuer), Chapter 775, Statutes of 2012, authorizes the  








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            Counties of Los Angeles, San Bernardino, and San Diego to  
            double the vehicle registration fee for vehicle theft  
            prevention (from $1 to $2), and the service fee on commercial  
            motor vehicles (from $2 to $4).  

            This bill extends, to Alameda County, the authority currently  
            granted to the counties of Los Angeles, San Bernardino, and  
            San Diego.  This bill allows Alameda County to increase the  
            vehicle registration fee from $1 to $2, and the service fee on  
            commercial motor vehicles from $2 to $4.  These provisions  
            will sunset on January 1, 2018, the date established for the  
            authorization for the other three counties.  This bill is  
            author-sponsored.

          4)The author argues, "Alameda County faces an urgent need to  
            address car theft.  From 2011 to 2012, 12,622 cars were  
            reported stolen in the county, a 17% increase from 2011.  This  
            rate was higher than the 11% increase in car theft rates seen  
            statewide.  Increases were reported by almost every citywide  
            police department in Alameda County, as well as by the Alameda  
            County Sherriff's Office, BART Police, and CHP offices in the  
            county."  

          5)The California Taxpayers Association, in opposition to the  
            bill, argues, "It doesn't make sense to charge motorists a fee  
            to fund anti-vehicle theft programs when a motorist registers  
            a vehicle.  When a motorist is billed for registering a  
            vehicle, he or she assumes that all costs associated with this  
            service would be limited to registration activities.  Adding  
            additional costs at the time of registering a vehicle hides  
            the true cost of government."

          6)Taxes at the local level require a two-thirds vote for those  
            taxes that are specifically dedicated to be used for certain  
            purposes, otherwise if the tax is for general purposes, a  
            majority vote of the residents in the jurisdiction is then  
            needed.  

            Since Proposition 26 (2010) has changed the rules of fees and  
            taxes, and thus tightened the requirements needed for local  
            voter approval, the issue of whether voter approval is  
            necessary to increase the fee may be an issue that is  
            ultimately up to the courts to decide.  

          7)Also before this Committee, AB 767 (Levine) would authorize  








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            all counties to increase the fee on vehicle registration for  
            the prevention of vehicle theft crimes, and would delete the  
            January 1, 2018 sunset date, thereby making the provision  
            permanent.  The Committee may wish to discuss both measures on  
            their individual merit, but also contemplate whether two  
            separate measures are necessary.   

           8)Support arguments  :  Supporters argue this bill will help  
            improve public safety by providing additional resources to  
            address car thefts throughout Alameda County.   
                 
              Opposition arguments  :  Opposition argues that this bill  
            results in a regressive tax on the middle class, hides the  
            cost of government, and increases the complexity of the local  
            tax structure.   
           
          9)This bill was heard in the Transportation Committee on April  
            15, 2013, and passed with a 
          10-5 vote.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          City of Oakland

           Opposition 
           
          California Taxpayers Association (CalTax)
           
          Analysis Prepared by  :    Misa Yokoi-Shelton / L. GOV. / (916)  
          319-3958