BILL NUMBER: ABX1 41INTRODUCED BILL TEXT INTRODUCED BY Assembly Members Solorio and Charles Calderon (Principal coauthor: Senator Wolk) (Coauthors: Assembly Members Alejo and Wieckowski) AUGUST 31, 2011 An act to amend Sections 10752.2, 11001.5, and 11005 of the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 41, as introduced, Solorio. Vehicle license fees. The Vehicle License Fee Law, in lieu of any ad valorem property tax upon vehicles, imposes an annual license fee on any vehicle subject to registration in this state in the amount, on and after July 1, 2011, of 0.65% of the market value of that vehicle, as provided. For all initial and renewal registrations due on and after May 1, 2009, but before July 1, 2011, existing law also imposes an additional fee equal to 0.15% of the market value of specified vehicles, as determined by the Department of Motor Vehicles, to be deposited in the General Fund and transferred to the Local Safety and Protection Account. Existing law continuously appropriates all moneys in the Local Safety and Protection Account without regard to fiscal year, to the Controller for allocation, as provided. This bill would, for all initial and renewal registrations due on and after January 1, 2012, impose an additional vehicle license fee equal to 0.15% of the market value of the above-described vehicles, as specified. It would also require all revenues from the additional license fee to be deposited in the General Fund. During the 2011-12 fiscal year, the bill would transfer an amount to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, a continuously appropriated fund, for allocation to cities, counties, and cities and counties, as specified. The bill would require a transfer of revenues, during the 2012-13 fiscal year and each fiscal year thereafter to be allocated according the following order: first to be transferred to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, as specified; and second, a total of $35,000,000 to be transferred to the Bureau of Narcotics Enforcement and Bureau of Investigation and Intelligence Fund, which the bill would create as a continuously appropriated fund. Funds not transferred would continue to be General Fund moneys. By depositing moneys into a continuously appropriated fund and by establishing a new, continuously appropriated fund, the bill would make an appropriation. Existing law requires that a specified portion of the motor vehicle license fee revenues deposited to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund be allocated or transferred by the Controller with those revenues being allocated on or after July 1, 2004, but before July 1, 2011, first to the County of Orange and next to each city and county meeting specified criteria; and those revenues being allocated on or after July 1, 2011, to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, for allocation to cities, counties, and cities and counties. This bill would instead limit that allocation for the 2011-12 fiscal year and each fiscal year thereafter to $300,000,000 in monthly installments. The bill would then allocate the moneys to the County of Orange, and to other cities and counties meeting specified criteria in the order specified prior to July 1, 2011, as provided. By authorizing revenues deposited in the Motor Vehicle License Fee Account in the Transportation Tax Fund, a continuously appropriated fund, to be used for a new purpose, the bill would make an appropriation. The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. Governor Schwarzenegger issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on December 6, 2010. Governor Brown issued a proclamation on January 20, 2011, declaring and reaffirming that a fiscal emergency exists and stating that his proclamation supersedes the earlier proclamation for purposes of that constitutional provision. This bill would state that it addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation issued on January 20, 2011, pursuant to the California Constitution. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature hereby finds and declares both of the following: (a) Chapter 35 of the Statutes of 2011 amended Section 11003 of the Revenue and Taxation Code to delete the previous transfer of revenues from the Motor Vehicle License Fee Account in the Transportation Tax Fund for use by the Department of Motor Vehicles and the Franchise Tax Board for the enforcement of the Vehicle License Fee Law (Part 5 (commencing with Section 10701) of Division 2 of the Revenue and Taxation Code). For the 2011-12 fiscal year, the deletion of this transfer means that an additional $300,000,000 is available for allocation from the account pursuant to Section 11005 of the Revenue and Taxation Code. (b) It is the intent of the Legislature to allocate this additional amount to the Local Law Enforcement Services Account in the Local Revenue Fund 2011 for use by cities, counties, and cities and counties. SEC. 2. Section 10752.2 of the Revenue and Taxation Code is amended to read: 10752.2. (a) (1) For initial or renewal registrations due on and after May 19, 2009, but before July 1, 2011, in addition to the annual license fee for a vehicle, other than a commercial motor vehicle described in Section 9400.1 of the Vehicle Code, imposed pursuant to Sections 10752 and 10752.1, a sum equal to 0.15 percent of the market value of the vehicle , as determined by the department, shall be added to that annual fee. (2) For initial or renewal registrations due on and after January 1, 2012, in addition to the annual license fee for a vehicle, other than a commercial motor vehicle described in Section 9400.1 of the Vehicle Code, imposed pursuant to Sections 10752 and 10752.1, a sum equal to 0.15 percent of the market value of the vehicle, as determined by the department, shall be added to that annual fee. (b) (1) Notwithstanding Chapter 5 (commencing with Section 11001) or any other law to the contrary, all revenues (including penalties), less refunds, derived from fees collected pursuant to paragraph (1) of subdivision (a) shall be deposited in the General Fund and transferred to the Local Safety and Protection Account, which is hereby established in the Transportation Tax Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the account derived from fees collected pursuant to paragraph (1) of subdivision (a) are hereby continuously appropriated, without regard to fiscal year, to the Controller for allocation pursuant to Sections 29553, 30061, and 30070 of the Government Code, Section 13821 of the Penal Code, and Sections 18220 and 18220.1 of the Welfare and Institutions Code. All revenue derived from paragraph (1) of subdivision (a) that is received after June 30, 2011, shall be deemed to have been received during the 2010-11 fiscal year for purposes of allocation by the Controller. (2) Notwithstanding Chapter 5 (commencing with Section 11001) or any other law to the contrary, all revenues (including penalties), less refunds, derived from fees collected pursuant to paragraph (2) of subdivision (a) shall be deposited in the General Fund and transferred as follows: (A) Moneys received during the 2011-12 fiscal year derived from paragraph (2) of subdivision (a) shall be transferred to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, as established by Section 30025 of the Government Code, for allocation to cities, counties, and cities and counties, in an amount that, together with the amount deposited pursuant to subdivision (b) of Section 30027 of the Government Code, does not exceed four hundred eighty-nine million nine hundred thousand dollars ($489,900,000). Notwithstanding any other law, those moneys transferred to the Local Law Enforcement Services Account pursuant to this subparagraph and subdivision (b) of Section 30027 of the Government Code shall be allocated in the manner provided in paragraphs (1) to (6), inclusive, of subdivision (e) of Section 30029 of the Government Code. The references contained in this subparagraph to sections of the Government Code refer to those sections as they read on July 8, 2011. (B) Moneys received during the 2012-13 fiscal year and each fiscal year thereafter derived from paragraph (2) of subdivision (a) shall: (i) First, be transferred to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, as established by Section 30025 of the Government Code, for allocation to cities, counties, and cities and counties in an amount that, together with the amount deposited pursuant to subdivision (b) of Section 30027 of the Government Code, does not exceed four hundred eighty-nine million nine hundred thousand dollars ($489,900,000). Notwithstanding any other law, those moneys transferred to the Local Law Enforcement Services Account pursuant to this subparagraph and subdivision (b) of Section 30027 of the Government Code shall be allocated in the manner provided in paragraphs (1) to (6), inclusive, of subdivision (e) of Section 30029 of the Government Code. The references contained in this clause to sections of the Government Code refer to those sections as they read on July 8, 2011. (ii) Second, a total of thirty-five million dollars ($35,000,000) shall be transferred to the Bureau of Narcotics Enforcement and Bureau of Investigation and Intelligence Fund, which is hereby established in the State Treasury. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are hereby continuously appropriated without regard to fiscal year to the Department of Justice for the performance of the duties performed by the Bureau of Narcotics Enforcement and the Bureau of Investigation and Intelligence. (3) All moneys deposited in the General Fund pursuant to paragraph (2) and not transferred pursuant to subparagraphs (A) and (B) of paragraph (2) shall continue to be General Fund moneys. (c) (1) In20102011 and each calendar year thereafter, the Director of Finance shall, no later than January 10 and upon the enactment of the Budget Act during the calendar year, make a written determination of whether any of the moneys derived from fees collected pursuant to paragraph (1) or (2) of subdivision (a) are being allocated by the state for any purpose not authorized by paragraph (1) or (2), as applicable, of subdivision (b),respectively,and shall immediately submit his or her written determination to all of the following: (A) The Director of the Department of Motor Vehicles. (B) The Joint Legislative Budget Committee. (C) The Senate and Assembly Appropriations Committees. (D) The Senate and Assembly Revenue and Taxation Committees. (2) If the Director of Finance determines that any moneys derived from fees collected pursuant to paragraph (1) or (2) of subdivision (a) are being allocated by the state for a purpose not authorized by paragraph (1) or (2), as applicable, of subdivision (b), the Director of the Department of Motor Vehicles shall, upon receipt of the written determination, immediately cease collection ofthethose fees imposed by paragraph (1) or (2) of subdivision (a), and shall resume collection of those fees only upon his or her receipt of written determination provided under paragraph (1) that specifies that none of the moneys derived from those fees collected pursuant to paragraph (1) or (2) of subdivision (a) are being allocated by the state for a purpose not authorized by paragraph (1) or (2), as applicable, of subdivision(a)(b) . SEC. 3. Section 11001.5 of the Revenue and Taxation Code is amended to read: 11001.5. (a) (1) Notwithstanding Section 11001, and except as provided in paragraph (2) and in subdivisions (b) and (d), 24.33 percent, and on and after July 1, 2004, 74.9 percent,of the moneys collected by the department under this part shall be reported monthly to the Controller, and at the same time, deposited in the State Treasury to the credit of the Local Revenue Fund, as established pursuant to Section 17600 of the Welfare and Institutions Code. All other moneys collected by the department under this part shall continue to be deposited to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund andin accordance with the following:allocated to the County of Orange as provided in paragraph (1) of subdivision (b) of Section 11005 and as necessary for the service of indebtedness as pledged by Sections 25350.6 and 53585.1 of the Government Code and in accordance with written instructions provided by the Controller under Sections 25350.7, 25350.9, and 53585.1 of the Government Code, and to each city and city and county as provided by law.(A) Before July 1, 2011, first allocated to the County of Orange as provided in subdivision (b) of Section 11005 and as necessary for the service of indebtedness as pledged by Sections 25350.6 and 53585.1 of the Government Code and in accordance with written instructions provided by the Controller under Sections 25350.7, 25350.9, and 53585.1 of the Government Code, and the balance shall be allocated to each city and city and county as otherwise provided by law.(B) On and after July 1, 2011, allocated pursuant to subdivision (a) of Section 11005.(2) For the period beginning on and after July 1, 2003, and ending on February 29, 2004, the Controller shall deposit an amount equal to 28.07 percent of the moneys collected by the department under this part in the State Treasury to the credit of the Local Revenue Fund. All other moneys collected by the department under this part shall continue to be deposited to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund and allocated to each city, county, and city and county as otherwise provided by law. (b) (1) Notwithstanding Section 11001, net funds collected as a result of procedures developed for greater compliance with vehicle license fee laws in order to increase the amount of vehicle license fee collections shall be reported monthly to the Controller, and at the same time, deposited in the State Treasury to the credit of the Vehicle License Collection Account of the Local Revenue Fund as established pursuant to Section 17600 of the Welfare and Institutions Code. All revenues in excess of fourteen million dollars ($14,000,000) in the 2004-05 fiscal year and in any fiscal year thereafter shall be allocated to cities, counties, and cities and counties as follows: (A) (i) Fifty percent shall be paid to the cities and cities and counties of this state in the proportion that the population of each city or city and county bears to the total population of all cities and cities and counties in this state, as determined by the population research unit of the Department of Finance. For purposes of this subparagraph, the population of each city or city and county is that population determined by the last federal decennial or special census, or a subsequent census validated by the population research unit or subsequent estimate prepared pursuant to Section 2107.2 of the Streets and Highways Code. (ii) In the case of a city incorporated subsequent to the last federal census, or a subsequent census validated by the population research unit, the population research unit shall determine the population of the city. In the case of unincorporated territory annexed to a city subsequent to the last federal census, or a subsequent census validated by the population research unit, the population research unit shall determine the population of the annexed territory by the use of any federal decennial or special census, or estimate prepared pursuant to Section 2107.2 of the Streets and Highways Code. In the case of the consolidation of one city with another subsequent to the last federal census, or a subsequent census validated by the population research unit, the population of the consolidated city, for the purpose of this subparagraph, is the aggregate population of the respective cities as determined by the last federal census, or a subsequent census or estimate validated by the population research unit. (B) Fifty percent shall be paid to the counties and cities and counties in the proportion that the population of each county or city and county bears to the total population of all counties and cities and counties, as determined by the population research unit. For purposes of this subparagraph, the population of each county or city and county is that determined by the last federal census, or subsequent census validated by the population research unit, or as determined by Section 11005.6 of the Revenue and Taxation Code. (2) The amendments made to this section bythe act that added this paragraphChapter 78 of the Statutes of 2006 are operativeupon the enactment of that acton July 18, 2006 . However, the amendments made bythe act that added this paragraphChapter 78 of the Statutes of 2006 apply to revenues in the Vehicle License Collection Account in excess of fourteen million dollars ($14,000,000) in the 2004-05 fiscal year and any fiscal year thereafter. (c) Notwithstanding Section 11001, 25.72 percent of the moneys collected by the department on or after August 1, 1991, and before August 1, 1992, under this part shall be reported monthly to the Controller, and at the same time, deposited in the State Treasury to the credit of the Local Revenue Fund, as established pursuant to Section 17600 of the Welfare and Institutions Code. All other moneys collected by the department under this part shall continue to be deposited to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund and allocated to each city, county, and city and county as otherwise provided by law. (d) Notwithstanding any other provision of law, both of the following apply: (1) This section is operative for the period beginning on and after March 1, 2004. (2) It is the intent of the Legislature that the total amount deposited by the Controller in the State Treasury to the credit of the Local Revenue Fund for the 2003-04 fiscal year be equal to the total amount that would have been deposited to the credit of the Local Revenue Fund if paragraph (1) of subdivision (a) was applied during that entire fiscal year. The department shall calculate and notify the Controller of the adjustment amounts that are required by this paragraph to be deposited in the State Treasury to the credit of the Local Revenue Fund. The amounts deposited in the State Treasury to the credit of the Local Revenue Fund pursuant to this paragraph shall be deemed to have been deposited during the 2003-04 fiscal year. (e) This section does not amend nor is it intended to amend or impair Section 25350 and following of, Section 53584 and following of, the Government Code, or any other statute dealing with the interception of funds. SEC. 4. Section 11005 of the Revenue and Taxation Code is amended to read: 11005. After payment of refunds therefrom and after making the deductions authorized by Section 11003 and reserving the amount determined necessary by the Pooled Money Investment Board to meet the transfers ordered or proposed to be ordered pursuant to Section 16310 of the Government Code, the balance of all motor vehicle license fees and any other money appropriated by law for expenditure pursuant to this section, deposited to the credit of the Motor Vehicle License Fee Account in the Transportation Tax Fund, and remaining unexpended in that account at the close of business on the last day of the calendar month, shall be allocated by the Controller by the 10th day of the following month in accordance with the following:(a) On and after July 1, 2011, to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, as established by Section 30025 of the Government Code, for allocation to cities, counties, and cities and counties.(b) On or after July 1, 2004, but before July 1, 2011:(a) For the 2011-12 fiscal year and each fiscal year thereafter, three hundred million dollars ($300,000,000) payable in monthly installments to the Local Law Enforcement Services Account in the Local Revenue Fund 2011, as established by Section 30025 of the Government Code, for allocation to cities, counties, and cities and counties. (b) After the allocation made pursuant to subdivision (a), as follows: (1) First, to the County of Orange as required by paragraph (1) of subdivision (a) of Sec tion 11001.5 . For the 2004-05 fiscal year, that county shall be allocated fifty-four million dollars ($54,000,000) in monthly installments. For the 2005-06 fiscal year and each fiscal year thereafter, that county shall receive, in monthly installments, an amount equal to the amount allocated under this section for the prior fiscal year, adjusted for the percentage change in the amount of revenues credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund from the revenues credited to that account in the prior fiscal year. Moneys allocated to the County of Orange under this subdivision shall be used first for the service of indebtedness as provided in paragraph (1) of subdivision (a) of Section 11001.5. Any amounts in excess of the amount required for this service of indebtedness may be used by that county for any lawful purpose. (2) Second, to each city, the population of which is determined under Section 11005.3 on August 5, 2004, in an amount equal to the additional amount of vehicle license fee revenue, including offset transfers, that would be allocated to that city under Sections 11000 and 11005, as those sections read on January 1, 2004, as a result of that city's population being determined under subdivision (a) or (b) of Section 11005.3. (3) Third, to each city that was incorporated from an unincorporated territory after August 5, 2004, in monthly installments from the date of incorporation, in an amount equal to the product of the following two amounts: (A) The quotient derived from the following fraction: (i) The numerator is the product of the following two amounts: (I) Fifty dollars ($50) per year. (II) The fraction determined as the total amount of vehicle license fee revenue collected during the most recent fiscal year divided by the total amount of vehicle license fee revenue collected during the 2004-05 fiscal year. (ii) The denominator is the fraction determined as the actual population, as defined in subdivision (e) of Section 11005.3, of all cities during the most recent fiscal year, divided by the actual population, as defined in subdivision (e) of Section 11005.3, of all cities in the 2004-05 fiscal year. (B) The city's population determined in accordance with Section 11005.3. (4) Fourth, to each city that was incorporated before August 5, 2004, in monthly installments, in an amount equal to the product of the following two amounts: (A) The quotient derived from the following fraction: (i) The numerator is the product of the following two amounts: (I) Fifty dollars ($50) per year. (II) The fraction determined as the total amount of vehicle license fee revenue collected during the most recent fiscal year divided by the total amount of vehicle license fee revenue collected during the 2004-05 fiscal year. (ii) The denominator is the fraction determined as the actual population, as defined in subdivision (e) of Section 11005.3, of all cities during the most recent fiscal year, divided by the actual population, as defined in subdivision (e) of Section 11005.3, of all cities in the 2004-05 fiscal year. (B) The actual population, as defined in subdivision (e) of Section 11005.3, residing in areas annexed after August 5, 2004, as of the date of annexation. (5) Fifth, to the cities and cities and counties of this state in the proportion that the population of each city or city and county bears to the total population of all cities and cities and counties in this state, as determined by the Demographic Research Unit of the Department of Finance. For the purpose of this subdivision, the population of each city or city and county shall be determined in accordance with Section 11005.3. (c) The Controller shall make any adjustments necessary to ensure that allocations for the 2010-11 fiscal year and 2011-12 fiscal year are equal to the allocations that would have been made had this section been in effect between July 1, 2011, and the effective date of the act that adds this subdivision. SEC. 5. This act addresses the fiscal emergency declared and reaffirmed by the Governor by proclamation on January 20, 2011, pursuant to subdivision (f) of Section 10 of Article IV of the California Constitution. SEC. 6. 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 protect public safety and timely avoid adverse effects upon cities, counties, or a city and county resulting from the enactment of Chapter 35 of the Statutes of 2011, it is necessary for this act to take effect immediately.