BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DEVELOPMENT
Senator Jim Beall, Chair
2015 - 2016 First Extraordinary
Bill No: SCAX1 1 Hearing Date: 9/8/2015
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|Author: |Huff |
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|Version: |6/19/2015 Vote: |
| | 2/3 Required |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Eric Thronson/Randy Chinn |
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SUBJECT: Motor vehicle fees and taxes: restriction on
expenditures
DIGEST:
This constitutional amendment (SCA) proposes to amend the
California Constitution to:
1)Prohibit the Legislature from borrowing revenues from fees and
taxes imposed on vehicles or their use or operation, and from
using those revenues other than as specifically permitted in
the Constitution.
2)Require that revenues derived from the portion of the vehicle
license fee that exceeds the current rate of 0.65% be used
solely for street and highway purposes.
ANALYSIS:
The California Constitution:
1)Restricts the use of fuel excise tax revenues (from vehicles
used on public streets and highways) and vehicle registration
fee revenues to transportation purposes.
2)Restricts the Legislature from borrowing revenues from the
Highway Users Tax Account (HUTA).
SCAX1 1 (Huff) Page 2 of ?
3)Restricts fuel excise tax revenues to development and
construction of roads and highways, unless a majority of
voters in an election throughout a county or counties approves
the use of the revenues for fixed-guideway mass transit.
4)Allows the Legislature to pledge fuel excise tax revenues for
payment of bonds to fund voter-approved fixed-guideway mass
transit projects.
5)Allows the Legislature to use up to 25% of the state's share
of fuel excise tax revenues for payment of state-issued,
voter-approved bonds for transportation purposes issued after
November 2010.
6)Allows a city or county to use up to 25% of its share of fuel
excise tax revenues for payment of locally issued,
voter-approved bonds for transportation purposes.
7)Specifies that the restrictions on fuel excise tax and vehicle
registration fee revenues do not apply to revenues derived
from sales taxes or vehicle license fees.
This SCA:
1)Restricts the Legislature from borrowing revenues from any of
the following taxes:
a) Fuel excise (from both on and off public roads and
highways)
b) Vehicle fees and taxes (such as vehicle registration
fees and weight fees)
c) Vehicle license fees above the existing rate of 0.65% of
the market value of the vehicle
1)Eliminates the authority of the Legislature to pledge fuel
excise tax revenues for payment of bonds to fund
voter-approved fixed-guideway mass transit projects.
2)Restricts the use of revenues from any fuel excise tax,
vehicle fee or tax, or vehicle license fee above the existing
rate for the payment of bond indebtedness, except as provided
in existing law.
3)Dedicates any revenues from increases in the vehicle license
SCAX1 1 (Huff) Page 3 of ?
fee above the existing rate to transportation purposes.
4)Dedicates all revenues from fuel excise taxes not used on
public roads and highways (such as off-road and agricultural,
aviation, and boating fuels) to transportation purposes, to
the extent that those revenues result from increases in tax
rates above the effective rate on or after July 1, 2010.
COMMENTS:
1)Purpose. According to the author, since 2010, the Legislature
has diverted over $5 billion from the State Highway Account to
the General Fund to pay debt service on General Obligation
Bonds. Additionally, since 2012, $100 million per year in gas
taxes has been deposited into the General Fund rather than
being used for transportation purposes. This SCA asks the
voters to protect transportation taxes by requiring that they
be used only for transportation purposes.
2)Current restrictions. Most transportation revenues, including
gasoline and diesel excise taxes and vehicle registration
fees, are constitutionally protected from being borrowed or
used for purposes other than transportation. This protection
does not apply to vehicle license fees and fuel excise taxes
for usage outside of public roads. While the Constitution is
currently silent on the use of weight fees, there are
different opinions on whether those are currently protected.
The practice is that weight fees are used by the General Fund
to pay for the interest on transportation bonds. This SCA
prohibits this practice.
3)Additional restrictions; vehicle license fee. This SCA
proposes a comprehensive set of protections against borrowing
taxes and fees raised from fuel excise taxes, vehicle fees and
taxes, and vehicle license fees above the existing rate of
0.65%. It also proposes to dedicate any revenues from
increases in the vehicle license fee (VLF) above the existing
rate and any fuel excise taxes on fuel not used on public
roads and highways to transportation purposes. The VLF is a
property tax and therefore not subject to the same
constitutional restrictions as taxes on motor vehicle fuels or
the use of motor vehicles. Most VLF revenues are used for
local government purposes.
SCAX1 1 (Huff) Page 4 of ?
4)General Fund impact. If approved by the voters, this SCA will
eliminate weight fees as a source of General Fund revenues,
which contribute about $1 billion annually to the General
Fund. Potential additional revenue from increases in fuel
taxes for non-public highway use and from increases in the
vehicle license fee will not go to the General Fund, but are
instead required to be spent only for transportation purposes.
5)Non-public highway uses. Representatives of non-public
highway users of transportation fuel raise concerns. They
believe that taxes from the sale of fuel for aircraft,
boating, and off-road uses should be constitutionally
protected and dedicated to programs benefiting those users,
not to repair and maintenance of public streets and highways.
6)SBX1 1. The revenue increases proposed in SBX1 1 (Beall) are
protected under current constitutional provisions.
Related Legislation:
SCA 7 (Huff) - prohibits the borrowing of transportation fees
and taxes and requires those funds to be used for transportation
purposes. This bill is pending in the Senate Transportation and
Housing Committee.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Thursday,
September 3, 2015.)
SUPPORT:
Alameda Corridor-East Construction Authority
Howard Jarvis Taxpayers Association
Kern Council of Governments
Kern County Board of Supervisors
San Bernardino, County of
San Joaquin Valley Regional Transportation Planning Agencies
Transportation Agency for Monterey County
OPPOSITION:
SCAX1 1 (Huff) Page 5 of ?
Sierra Club of California
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