BILL NUMBER: AB 858 CHAPTERED 07/10/00 CHAPTER 106 FILED WITH SECRETARY OF STATE JULY 10, 1999 APPROVED BY GOVERNOR JULY 7, 2000 PASSED THE SENATE JUNE 22, 2000 PASSED THE ASSEMBLY JUNE 22, 2000 AMENDED IN SENATE JUNE 22, 2000 AMENDED IN SENATE JANUARY 24, 2000 AMENDED IN SENATE SEPTEMBER 10, 1999 AMENDED IN SENATE AUGUST 30, 1999 AMENDED IN SENATE AUGUST 17, 1999 AMENDED IN SENATE JULY 8, 1999 AMENDED IN ASSEMBLY JUNE 2, 1999 AMENDED IN ASSEMBLY MAY 27, 1999 AMENDED IN ASSEMBLY MAY 19, 1999 AMENDED IN ASSEMBLY MAY 6, 1999 AMENDED IN ASSEMBLY MAY 3, 1999 INTRODUCED BY Assembly Member Kuehl FEBRUARY 24, 1999 An act to add Section 10754.2 to the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 858, Kuehl. Vehicle license fee offsets. The Vehicle License Fee (VLF) law establishes, in lieu of any ad valorem property tax upon vehicles, an annual license fee for any vehicle subject to registration in this state in the amount of 2% of the market value of that vehicle, as specified. The VLF law permanently offsets the amount of the vehicle license fee for each subject vehicle by 25% and, for vehicle license fees with a final due date in the 2000 calendar year, offsets the fee amount for each subject vehicle by 35%. The VLF law also provides, depending upon factors that include whether forecasted General Fund revenues for certain fiscal years are within certain revenue target ranges, for a superseding offset percentage of 35%, 46.5%, 55%, or 67.5% to apply to specified future calendar years. The VLF law requires the Department of Finance, in any of certain fiscal years for which that department estimates a cumulative General Fund reduction of more than $100,000,000 as a result of state tax law changes on or after January 1, 1999, to apply that cumulative reduction, in accordance with a specified formula, to proportionately reduce the percentage amounts of superseding vehicle license fee offsets. Existing law also provides, as specified, for the reimbursement of cities, counties, and cities and counties from the General Fund for revenue losses resulting from vehicle license fee offsets. This bill would, for vehicle license fees with a final due date in 2001 or 2002, establish an additional offset that is equal to the difference between an offset of 67.5% and the greater of a 35% offset or the percentage offset applicable under current law. This bill would, in accordance with specified procedures, require the payment of these additional offsets to taxpayers on a monthly basis. This bill would also establish a minimum vehicle license fee offset of 35% for 2001 and 2002, and a vehicle license fee offset of 67.5% for the 2003 calendar year and each calendar year thereafter. This bill would also require that cities, counties, and cities and counties be reimbursed from the General Fund for revenue losses resulting from this additional vehicle license fee offset. By requiring additional moneys to be transferred from the General Fund for purposes of local reimbursement, this bill would make an appropriation. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10754.2 is added to the Revenue and Taxation Code, to read: 10754.2. Notwithstanding any other provision of law to the contrary, all of the following apply: (a) (1) For each vehicle license fee for the initial or original registration of any vehicle, never before registered in this state, or for any renewal of registration, with a final due date in 2001 or 2002, for which the vehicle license fee offset required by Section 10754 is less than 671/2 percent, the Department of Motor Vehicles shall concurrently calculate an offset, in addition to the offset required by Section 10754, that is equal to the difference between the following: (A) A vehicle license fee offset of 671/2 percent. (B) A vehicle license fee offset of the greater of 35 percent or that percentage required by Section 10754. (2) The Department of Motor Vehicles shall, for each calendar month, report to the Department of Finance and the Controller the amount of each offset calculated pursuant to paragraph (1) for that calendar month and the name and address of the taxpayer to whom that additional offset applies. The Controller shall, within 30 days after receiving a monthly report from the Department of Motor Vehicles, make payment of the reported additional offsets to the identified taxpayers. (3) (A) For each vehicle license fee, for the initial or original registration of any vehicle, never before registered in this state, or for any renewal of registration, with a final due date in 2001 or 2002, there shall be a vehicle license fee offset of not less than 35 percent. (B) For each vehicle license fee, for the initial or original registration of any vehicle, never before registered in this state, or for any renewal of registration with a final due date in 2003 or any calendar year thereafter, there shall be a 671/2 percent offset that is administered as provided in Section 10754 as that section read on January 1, 2000. (b) Revenue losses to cities, counties, and cities and counties resulting from this section shall be reimbursed by the Controller from the General Fund in the same manner as provided in Section 11000. The amounts of General Fund transfers required by this subdivision are deemed to be vehicle license fee proceeds and vehicle license fee revenues for those same purposes as set forth in subdivision (d) of Section 11000, are subject to the same pledges, liens, encumbrances, and priorities as described in that subdivision.