BILL ANALYSIS Ó SB 1183 Page 1 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 SB 1183 Page 2 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 : SB 1183 Page 3 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 SB 1183 Page 4 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. SB 1183 Page 5 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. SB 1183 Page 6 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 FN: 0004800