BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 1183
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          SENATE THIRD READING
          SB 1183 (DeSaulnier)
          As Amended  June 25, 2014
          Majority vote 

           SENATE VOTE  :26-9  
           
           LOCAL GOVERNMENT    7-0         TRANSPORTATION      10-4        
           
           ----------------------------------------------------------------- 
          |Ayes:|Achadjian, Levine, Alejo, |Ayes:|Lowenthal, Achadjian,     |
          |     |Bradford, Gordon, Mullin, |     |Bloom, Bonta, Buchanan,   |
          |     |Rendon                    |     |Daly, Frazier, Gatto,     |
          |     |                          |     |Holden, Nazarian          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |Nays:|Linder, Patterson,        |
          |     |                          |     |Quirk-Silva, Waldron      |
           ----------------------------------------------------------------- 

           APPROPRIATIONS      12-5                                        
           
           ----------------------------------------------------------------- 
          |Ayes:|Gatto, Bocanegra,         |     |                          |
          |     |Bradford,                 |     |                          |
          |     |Ian Calderon, Campos,     |     |                          |
          |     |Eggman, Gomez, Holden,    |     |                          |
          |     |Pan, Quirk,               |     |                          |
          |     |Ridley-Thomas, Weber      |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bigelow, Donnelly, Jones, |     |                          |
          |     |Linder, Wagner            |     |                          |
           ----------------------------------------------------------------- 

           SUMMARY  :  Authorizes a city, county, or regional park district,  
          until January 1, 2025, to impose a vehicle registration  
          surcharge, with two-thirds voter approval, for bicycle  
          infrastructure improvements and maintenance, as specified.   
          Specifically,  this bill  :   

          1)Authorizes a city, county, or regional park district, until  
            January 1, 2025, to impose a vehicle registration surcharge as  
            a special tax with two-thirds voter approval for bicycle  








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            infrastructure, as specified.  

          2)Requires the amount of the vehicle license surcharge, in whole  
            dollars and not to exceed $5, to be specified in an ordinance  
            adopted by the local agency. 

          3)Requires the Department of Motor Vehicles (DMV) to administer  
            the revenues from the fee.  

          4)Requires the net revenues to be used by the local agency for  
            the following:

             a)   Improvement to paved and natural surface trails and  
               bikeways, including the rehabilitation, restoration, and  
               expansion of existing trails and bikeways;  

             b)   Development of new trails and bikeways;  

             c)   Improvement and development of other bicycle facilities,  
               including, but not limited to, bicycle parking facilities;  
               and,

             d)   Maintenance and upkeep of local and regional trail and  
               bikeway systems, networks and other bicycle facilities.  

          5)Prohibits the local agency from using more than 5% of the net  
            revenues for administrative expenses.  

          6)Requires the local agency that imposes the surcharge to  
            provide an annual fiscal year-end report to the Legislature  
            that contains the following information:

             a)   The total net revenues received from the surcharge and  
               expanded during the previous fiscal year; and,  

             b)   A summary of the infrastructure projects funded by the  
               surcharge.  

          7)Defines "regional park district" to mean "any regional park  
            district, regional park and open-space district, or regional  
            open-space district formed pursuant to existing law."  

           EXISTING LAW  :









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          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, to address certain air quality and law  
            enforcement issues.  

          3)Provides, in California Constitution Article XIII C, Section  
            2, that a special tax requires two-thirds voter approval.  

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee:

          1)Estimated one-time costs to DMV in the range of $150,000 to  
            $200,000 for programming and startup costs to implement a new  
            fee collection protocol.  These costs would be reimbursed in  
            arrears from fees collected.  All ongoing DMV costs would be  
            deducted from fees collected prior to distribution to the  
            local agency imposing the surcharge.  (Motor Vehicle Account) 

          2)Additional DMV programming costs of approximately $40,000 for  
            each subsequent jurisdiction that imposes the surcharge.  All  
            ongoing administrative collection costs would be deducted from  
            fees collected prior to distribution.  (Motor Vehicle Account)  


          3)Unknown revenue gains on the local level, potentially in the  
            millions annually, depending on the amount of the surcharge  
            adopted and the number of registered vehicles in a particular  
            jurisdiction in which a surcharge is approved by the voters. 

          4)Unknown, likely minor, costs to local agencies that impose the  
            surcharge, to prepare and submit the required annual report to  
            the legislature.

           

          COMMENTS :

          1)Vehicle registration fee.  Existing law establishes a basic  
            vehicle registration fee of $46, plus a $24 surcharge for  
            additional personnel for the California Highway Patrol, for  








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            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, to  
            abate abandoned vehicles, deter, investigate, and prosecute  
            vehicle theft, fund fingerprint identification programs, and  
            to mitigate vehicular air emissions.

            AB 1546 (Simitian), Chapter 931, Statutes of 2004, granted the  
            City/County Association of Governments of San Mateo County the  
            authority to impose an annual fee on motor vehicles for  
            programs to manage traffic congestion and stormwater  
            pollution.  This authority was extended until January 1, 2013,  
            by SB 348 (Simitian), Chapter 377, Statutes of 2008.  SB 613  
            (Simitian) of 2007, would have extended the authority until  
            January 1, 2019, but was vetoed by Governor Schwarzenegger.   
            SB 83 (Hancock), Chapter 554, Statues of 2009, authorized  
            countywide transportation planning agencies to impose an  
            annual fee of up to $10 on motor vehicles registered in a  
            county to fund specified programs to address congestion  
            mitigation and motor vehicle induced pollution.  The  
            definition for congestion mitigation programs and projects  
            include, but are not limited to, bicycle improvements and  
            local street and road rehabilitation.  

          2)Purpose of this bill.  This bill authorizes cities, counties,  
            and regional parks districts to impose a surcharge, until  
            January 1, 2025, of up to $5 on motor vehicles registered  
            within their respective jurisdictions.  The amount of the  
            surcharge would be specified in an ordinance adopted by the  
            local agency, and DMV would administer the collection of fees  
            and distribution of net revenues to the local agency, after  
            deducting collection costs.  This bill requires that net  
            revenues are used for improvements to paved and natural  
            surface trails, including the rehabilitation, restoration, and  
            expansion of existing trails, the development of new trails  
            and bikeways, the improvement and development of other bicycle  
            facilities, and the maintenance and upkeep of existing local  
            and regional trail and bikeway systems, networks, and  
            facilities.  The local agency would only be able to use up to  
            5% of net revenues for their administrative expenses.  Under  
            this bill local agencies that impose the surcharge would  
            report specified information annually to the Legislature.  









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            Under this bill the vehicle registration surcharge would be a  
            special tax subject to submittal to the electorate and  
            approval by a two-thirds vote, pursuant to California  
            Constitution Article XIII C.  There are no nexus requirements  
            for a special tax.  This bill is sponsored by the East Bay  
            Regional Park District.  

          3)Author's statement.  According to the author, "This bill  
            provides a local funding mechanism, not currently authorized  
            in state law, to support communities that want to build out  
            bikeway and trail infrastructure and bicycle network  
            connectivity.  Despite clear health and environmental benefits  
            of bicycling, which are affirmed by the state in its Active  
            Transportation Program and its Sustainable Communities Act (SB  
            375 (Steinberg), Chapter 728, Statutes of 2008), local  
            communities lack stable funding sources to build out bicycle  
            and trail networks.  Bike paths, trails, and bike parking  
            facilities provide the crucial safety and security features  
            that are needed for people of different ages and abilities to  
            choose biking as a mode of active transportation and  
            recreation.  Promotion of bicycling through a locally-approved  
            vehicle registration surcharge benefits all community members,  
            not just bicyclists or the motorists who, while not currently  
            bike riders, may become comfortable enough to try bicycling.   
            The overall community benefit is exemplified by data showing  
            that for every 1% shift in commute mode from cars to bikes,  
            there is a 5% reduction in traffic congestion.  Studies  
            enclosed herein show that 'if you build bike infrastructure,  
            the riders will come', and clear safety benefits of facilities  
            like protected or separated bike lanes and paths."  

          4)Existing financial tools.  According to a report authored by  
            CalTrans titled, Transportation Funding in California 2014,  
            "Regional and local governments provide approximately 49% in  
            transportation funding, whereas, the state provides 27% and  
            the federal government provides 24%."  Transportation funding  
            at the local level comes from various sources including user  
            fees, subsidies, and property-related charges like property  
            taxes, benefit assessment districts, and developer fees.   
            Since 1995, there have been 47 countywide transportation  
            transaction and use tax measures, 34 of those for new taxes.   
            Only seven of those measures garnered the necessary two-thirds  
            voter approval.  









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            The California Taxpayers Association opposes this bill  
            arguing, "Roads, bike trails and parks already are funded  
            through various taxes and fees imposed by local governments.   
            If local entities would like to raise revenue for these  
            causes, they already possess the tools to do so."  
            The Legislature wish to ask supporters of the bill why  
            existing financial tools to raise revenue for bicycle  
            infrastructure are not sufficient and how they anticipate the  
            outcomes of the special tax measure authorized by this bill to  
            fare better at the local level than existing broader  
            transportation measures that also require a two-thirds vote.  
                
           5)Arguments in support.  Supporters argue that this bill  
            provides an additional tool to raise revenue for bicycle  
            transportation facilities, which lack a stable ongoing funding  
            source, especially in the case of the construction and  
            maintenance of off-road bicycle trails and difficult to fund  
            intercity bikeways.  

          6)Arguments in opposition.  Opposition argues that although  
            raising revenue to improve bike trails and infrastructure  
            enjoyed by bicyclists is a noble goal, vehicle registration  
            surcharge is not the right approach.  


           Analysis Prepared by  :    Misa Yokoi-Shelton / L. GOV. / (916)  
          319-3958 


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