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SB-1 Vehicle license fees.(2003-2004)

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SB1:v98#DOCUMENT

Amended  IN  Senate  December 12, 2003

CALIFORNIA LEGISLATURE— 2003–2004 5th Ext.

Senate Bill
No. 1

Introduced  by  Senator Brulte

November 20, 2003

An act to amend Section 10754 of the Revenue and Taxation Code, and to repeal Item 9100-102-0001 of Section 2.00 of Chapter 157 of the Statutes of 2003, relating to vehicle license fees, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 1, as amended, Brulte. Vehicle license fees.

The

(1) 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 offsets this amount by 67.5% for vehicle license fees with a final due date on or after July 1, 2001.
Existing law requires the Controller, upon receipt of monthly notification from the Department of Motor Vehicles, to transfer into specified funds in the General Fund, an amount equal to those amounts necessary to reimburse local governments for losses resulting from the VLF offset. Existing law limits the amount of moneys available for reimbursement to local governments during the 2003–04 fiscal year to $1,000.
This bill would repeal the existing $1,000 reimbursement limitation and would instead appropriate $3,625,000,000 $3,574,000,000 from the General Fund for reimbursement to local governments for revenue losses resulting from the application of the VLF offsets.

Existing

(2) Existing law requires the VLF offsets to be proportionately reduced within 90 days of a finding that there are insufficient moneys available to be transferred from the General Fund to fully fund the vehicle license fee offsets. The vehicle license fee offset was reduced to zero for the period beginning on and after October 1, 2003 based on a finding that insufficient moneys were available to fund the vehicle license fee offsets. On November 17, 2003, that reduction of the vehicle license fee offset was rescinded.
This bill would appropriate $10,300,000 from the General Fund for allocation to the Department of Motor Vehicles for the purpose of administering refunds of vehicle license fees paid on and after October 1, 2003, for which vehicle license fee offsets were not allowed.
(3) Existing law requires the Controller, no later than August 15, 2006, to transfer, into a specified account, an amount equal to those amounts of moneys that would have been transferred into that account to reimburse local governments for the losses during the 2003–04 fiscal year, but for the finding that insufficient moneys available to be transferred from the General Fund to fully fund the vehicle license fee offsets and requires the transferred moneys to be allocated from that account in the manner otherwise specified by law. Existing law also authorizes the Controller, with the approval of the Department of Finance, to advance to any county or city that entity’s share of the vehicle license fee revenues that the entity would have received, but for the finding that insufficient moneys are available to be transferred from the General Fund, if that entity is able to demonstrate that it will experience a “hardship,” as defined, if the advance is not made.
This bill would appropriate $51,000,000 from the General Fund to the Motor Vehicle License Fee Account in the Transportation Tax Fund for the purpose of making hardship advances during the 2003–04 fiscal year. This bill would require the Controller to proportionately reduce the amount of the hardship advance made to each local entity eligible for that advance if the amount of approved hardship advances exceed the appropriation amount. This bill would also make technical clarifying changes to the existing hardship provisions.

This

(4) This bill will declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


Section 10754 of the Revenue and Taxation Code, as amended by Chapter 231 of the Statutes of 2003, is amended to read:

10754.
 (a) Notwithstanding any other provision of law, the total amount of the vehicle license fee otherwise required with respect to a vehicle shall be offset in accordance with those provisions set forth below that are operative pursuant to subdivision (b):
(1) (A) For any initial or original registration of any vehicle, never before registered in this state, for which the final due date for the license fee is on or after January 1 of any calendar year for which this paragraph is operative, and for any renewal of registration with an expiration date on or after January 1 of any calendar year for which this paragraph is operative, the department shall offset the total amount of fees otherwise due at the time of registration of that vehicle by an amount equal to 25 percent of the amount computed pursuant to Section 10752 or 10752.1, or Section 18115 of the Health and Safety Code.
(B) Upon proper payment of license fees to the Department of Motor Vehicles, the amount of the offset for each vehicle shall be transferred into the Motor Vehicle License Fee Account in the Transportation Tax Fund, and into the Local Revenue Fund, pursuant to Section 11000 or Section 11000.1, as applicable.
(C) During any period in which insufficient moneys are available to be transferred from the General Fund to fully fund the offsets required by subparagraph (A), within 90 days of a reduction of funding, the department shall reduce the amount of each offset computed pursuant to that subparagraph by multiplying that amount by the ratio of the amount of moneys actually available to be transferred from the General Fund to pay for those offsets to the amount of moneys that is necessary to fully fund those offsets.
(2) (A) For any initial or original registration of any vehicle, never before registered in this state, for which the final due date for the license fee is on or after January 1 of any calendar year for which this paragraph is operative, and for any renewal of registration with an expiration date on or after January 1 of any calendar year for which this paragraph is operative, the department shall offset the total amount of fees otherwise due at the time of registration of that vehicle by an amount equal to 35 percent of the amount computed pursuant to Section 10752 or 10752.1, or Section 18115 of the Health and Safety Code.
(B) Upon proper payment of license fees to the Department of Motor Vehicles, the amount of the offset for each vehicle shall be transferred into the Motor Vehicle License Fee Account in the Transportation Tax Fund, and into the Local Revenue Fund, pursuant to Section 11000 or Section 11000.1, as applicable.
(C) During any period in which insufficient moneys are available to be transferred from the General Fund to fully fund the offsets required by subparagraph (A), within 90 days of a reduction of funding, the department shall reduce the amount of each offset computed pursuant to that subparagraph by multiplying that amount by the ratio of the amount of moneys actually available to be transferred from the General Fund to pay for those offsets to the amount of moneys that is necessary to fully fund those offsets.
(3) (A) For any initial or original registration of any vehicle, never before registered in this state, for which the final due date for the license fee is on or after January 1 of any calendar year for which this paragraph is operative, and for any renewal of registration with an expiration date on or after January 1 of any calendar year for which this paragraph is operative, the department shall offset the total amount of fees otherwise due at the time of registration of that vehicle by an amount equal to 671/2 percent of the amount computed pursuant to Section 10752 or 10752.1, or Section 18115 of the Health and Safety Code.
(B) Upon proper payment of license fees to the Department of Motor Vehicles, the amount of the offset for each vehicle shall be transferred into the Motor Vehicle License Fee Account in the Transportation Tax Fund, and into the Local Revenue Fund, pursuant to Section 11000 or Section 11000.1, as applicable.
(C) During any period in which insufficient moneys are available to be transferred from the General Fund to fully fund the offsets required by subparagraph (A), within 90 days of a reduction in funding, the department shall reduce the amount of each offset computed pursuant to that subparagraph by multiplying that amount by the ratio of the amount of moneys actually available to be transferred from the General Fund to pay for those offsets to the amount of moneys that is necessary to fully fund those offsets.
(D) (i) The Controller shall, no later than August 15, 2006, transfer from the General Fund to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund amounts equal to those moneys that are otherwise required, pursuant to subparagraph (B), to be transferred into that account, that are not so transferred into that account during the 2003–04 fiscal year as a result of the operation of subparagraph (C) an administrative finding that insufficient moneys are available to be transferred from the General Fund to fund the offset authorized by subparagraph (A). The transferred moneys shall be allocated from the account in the manner as otherwise specified by law for the allocation of moneys from that account.
(ii) The Controller, with the approval of the Department of Finance, may advance from the Motor Vehicle License Fee Account in the Transportation Tax Fund to any county or city that entity’s share of the vehicle license fee revenues transferred under clause (i), if that entity demonstrates that it will experience a hardship during the 2003–04 fiscal year if the advance is not made. The sum of fifty-one million dollars ($51,000,000) is hereby appropriated from the General Fund to the Motor Vehicle License Fee Account in the Transportation Tax Fund for the purpose of making the advances authorized by this clause. For purposes of this clause, those circumstances demonstrating that a county or city will experience a “hardship,” include, but are not limited to, the following:
(I) A county or city that has pledged its share of vehicle license fee revenues as security for any indebtedness that, as a result of the delay of the disbursement, will compromise its ability to repay that indebtedness.
(II) A county’s or city’s share of vehicle license fee revenues, as determined by the Controller, exceeds 37 percent of that entity’s general revenue. In the case of a county, the Controller shall make the required calculation of that entity’s general revenue based on information derived from the State of California Counties Annual Report for the 2000–01 fiscal year. In the case of a city, the Controller shall make the required calculation based on information derived from the State of California Cities Annual Report for the 2000–01 fiscal year.
(III) A city that is newly incorporated that is entitled to the allocations of vehicle license fee revenues authorized by Section 11005.3.
(iii) Any funds advanced pursuant to a local entity by reason of a finding of hardship pursuant to clause (ii) shall be disbursed on the 10th day of the calendar month following findings of hardship. The total aggregate amount transferred based on findings of hardship during the 2003–04 fiscal year pursuant to clause (ii) may not exceed forty million dollars ($40,000,000) fifty-one million dollars ($51,000,000).
(iv) In the event the total amount of funds approved for advance to counties and cities by reason of a finding of hardship, pursuant to clause (ii), exceeds fifty-one million dollars ($51,000,000), the Controller shall prorate the approved advance for each entity that demonstrates it will experience a hardship by multiplying that entity’s approved advance by the ratio in which the numerator is fifty-one million dollars ($51,000,000) and the denominator is the total amount of funds approved for advance to all counties and cities, by reason of a finding of hardship pursuant to clause (ii), during the 2003–04 fiscal year. The Controller shall make any necessary adjustments, as required by the operation of this clause, to an advance made to a city or county pursuant to clause (ii), by adjusting that entity’s share of allocations that are otherwise required to be made pursuant to Section 11005.
(v) For purposes of Section 15 of Article XI of the California Constitution, the transfers required to be made by this subparagraph shall constitute successor taxes that are otherwise required to be allocated to counties and cities, and as successor taxes, the obligation to make those transfers as required by this subparagraph may not be extinguished nor disregarded in any manner that adversely affects the security of, or the ability of, a county or city to pay the principal and interest on any debts or obligations that were funded or secured by that city’s or county’s allocated share of motor vehicle license fee revenues.
(b) The offset provisions set forth in subdivision (a) shall be operative as provided by the following:
(1) Paragraph (1) of subdivision (a) shall be operative for vehicle license fees with a final due date in the calendar year beginning on January 1, 1999.
(2) Paragraph (2) of subdivision (a) shall be operative for vehicle license fees with a final due date on or after January 1, 2000, and before July 1, 2001.
(3) Paragraph (3) of subdivision (a) shall be operative for vehicle license fees with a final due date on or after July 1, 2001.
(c) (1) For purposes of this section, “department” means the Department of Motor Vehicles with respect to a vehicle license fee offset for a vehicle subject to registration under the Vehicle Code, and the Department of Housing and Community Development with respect to a vehicle license fee offset for a manufactured home, mobilehome, or commercial coach described in Section 18115 of the Health and Safety Code.
(2) For purposes of this section, the “final due date” for a license fee is the last date upon which that fee may be paid without being delinquent.

Item 9100-102-0001 of Section 2.00 of the Budget Act of 2003 (Chapter 157 of the Statutes of 2003) is repealed.
SEC. 2.

The sum of three billion six hundred twenty-five million dollars ($3,625,000,000) is hereby appropriated from the

SEC. 3.

 (a) Notwithstanding any other provision of law, the sum of three billion five hundred seventy-four million dollars ($3,574,000,000) is hereby appropriated from the
 General Fund for allocation during the 2003–04 fiscal year by the Controller, pursuant to subdivision (a) of Section 11000, 11000 of the Revenue and Taxation Code, for the transfers required to be made to reimburse local governments for revenue losses resulting from the application of the vehicle license fee offsets authorized pursuant to Section 10754. 10754 of the Revenue and Taxation Code.
(b) The Controller shall, no later than August 15, 2006, transfer from the General Fund an amount equal to those amounts, in excess of the three billion five hundred seventy-four million dollars ($3,574,000,000) appropriated by subdivision (a), that are necessary for those allocations that are otherwise required to be made during the 2003–04 fiscal year, pursuant to subdivision (a) of Section 11000 of the Revenue and Taxation Code, to reimburse local governments for revenue losses resulting from the application of the vehicle license fee offsets authorized pursuant to Section 10754 of the Revenue and Taxation Code.
SEC. 3.

SEC. 4.

 (a) The sum of ten million three hundred thousand dollars ($10,300,000) is hereby appropriated from the General Fund to the Department of Motor Vehicles for the purpose of administering vehicle license fees fee offset refunds issued to those taxpayers that paid vehicle license fee amounts on or fees with a final due date on and after October 1, 2003, to which vehicle license fee offsets were not applied.
(b) The amount of moneys appropriated for the purpose set forth in subdivision (a) shall be available for expenditure only upon approval by the Department of Finance.
SEC. 4.

SEC. 5.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to reimburse local governments for the revenue losses associated with the vehicle license fee offset and to provide fair and equal treatment to California taxpayers, it is necessary that this act take effect immediately.