BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 636|
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THIRD READING
Bill No: SB 636
Author: Ashburn (R)
Amended: 4/30/09
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 5-0, 4/29/09
AYES: Wiggins, Cox, Aanestad, Kehoe, Wolk
SUBJECT : Vehicle license fees
SOURCE : Nevada County Board of Supervisors
DIGEST : This bill states that for Nevada County the
additional revenue resulting from the increase in Vehicle
License Fees enacted as a part of the State Budget approved
by legislators in February is not revenue derived from
taxes imposed pursuant to the Vehicle License Fee statutes
that is subject to subdivision (a) of Section 15 of Article
XI of the California Constitution, for purposes of a local
ordinance that governs the expenditure of Vehicle License
Fee funds received.
ANALYSIS : In lieu of property tax on motor vehicles, the
state collects an annual Vehicle License Fee (VLF) and
allocates the revenues, minus administrative costs, to
cities and counties. In 1998, the Legislature began
cutting the VLF rate from 2% to 0.65% of a vehicle's value.
The most recent State Budget increased the VLF rate on most
vehicles from 0.65% to 1.15% of a vehicle's value (AB 3XXX
CONTINUED
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[Evans], Chapter 18, Statutes of 2009-10 Third
Extraordinary Session). The increased rate takes effect on
May 19, 2009 and will last through June 30, 2013 if voters
approve a ballot measure imposing a new state spending cap.
If voters do not approve the spending cap, the increased
VLF rate will only be in effect through June 30, 2011.
Revenues from a portion of the new VLF rate equal to 0.15%
of a vehicle's value must be deposited in the newly created
Local Safety and Protection Account and allocated to local
governments to fund specified local law enforcement
programs.
This bill states that the additional revenue resulting from
the increase in vehicle license fees as part of the State
Budget approved by the legislators in February is not
revenue derived from taxes imposed pursuant to the VLF
statutes that is subject to subdivision (a) of Section 15
of Article XI of the California Constitution, for purposes
of a local ordinance that governs the expenditure of VLF
funds received by Nevada County.
This bill's provisions sunset on July 1, 2011 unless an
amendment to the California Constitution is approved at a
statewide election held during the 2009 calendar year, that
limits the total amount that, under Section 20 of Article
XVI of the California Constitution, may be transferred by
statute from the Budget Stabilization Account, or any
successor to that account, to the General Fund. (For
example, Proposition 1A on the May 19, 2009 Statewide
Special Election ballot.) If such an amendment is
approved, this bill sunsets on July 1, 2013.
Comments
In March 1996, Nevada County voters approved Measure F, an
ordinance which required that all funds received from the
State of California from motor vehicle license fee funds,
as defined in the State Constitution and in statute, must
be segregated into a separate accounting fund. The County
must spend at least half of those funds in each fiscal year
only for public roads, ways, and highways for maintenance,
repair, circulation enhancement, general road safety, and
fire access.
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Nevada County officials believe that Measure F will require
them to make a general fund expenditure on roads in an
amount equal to half of the amount of additional VLF
revenues that are allocated to them for law enforcement
purposes under the new state budget. They want legislators
to clarify that the additional VLF revenues provided to
local governments under the recently enacted budget do not
constitute VLF funding for the purpose of local ordinances.
By replacing state general funding with VLF funding as the
source of state subventions for local law enforcement
programs, the recently approved State Budget inadvertently
requires Nevada County to make approximately $735,000 in
new general fund expenditures on roads. A voter-approved
ordinance requires that Nevada County spend - on roads - at
least half of the VLF funding the County receives,
regardless of the purpose or nature of that funding.
Because the VLF funding from the new State Budget must be
spent on specified public safety programs, the requisite
additional expenditures on roads will come from the
County's General Fund. This bill protects the Nevada
County General Fund from this unintended consequence.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/7/09)
Nevada County Board of Supervisors (source)
California State Association of Counties
AGB:cm 5/8/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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