Related Links

Agenda Item # 9

BOARD MEMORANDUM

RECOMMENDATION:

Support legislation establishing a new vehicle registration fee for Santa Clara County. 

BACKGROUND: 

Included in the state legislative program adopted by the VTA Board of Directors in January 2005 is the proposal for new legislation that would allow the VTA to include a vehicle registration fee (VRF) to automobiles registered within Santa Clara County.  VTA previously pursued this legislation in 2004 but was unsuccessful in moving the bill through the State Legislature.  San Mateo County, however, was successful last year with a similar vehicle registration bill. 

AB 1546 was approved by the legislature and signed by Governor Schwarzenegger in September 2004.  This legislation allows the San Mateo County Association of Governments to include a $4 fee for every vehicle registered in San Mateo County. The fee is proposed to be used for congestion management relief projects and for mitigation of storm water pollution attributable to automobiles. 

DISCUSSION: 

This year, the Silicon Valley Manufacturing Group (SVMG) has taken the lead in developing legislation for a VRF in Santa Clara County.  Senator Joe Simitian has introduced Senate Bill (SB) 680 to proposing the new VRF.   SB 680 would allow a $5 per year fee to include with all vehicle registrations in Santa Clara County.  Fee proceeds would be intended for congestion relief and other transportation improvement projects.   The VRF is estimated to generate about $7 million per year over an eight-year duration, totaling approximately $56 million.

SB 680 establishes VTA as the implementing agency, which requires the VTA Board of Directors, by a 2/3-vote, to implement the fee and approve an expenditure plan for the fee proceeds.   SVMG has coordinated an ad hoc working group made up of stakeholders including representatives from Senator Simitian’s Office, VTA, Caltrain, the County of Santa Clara and all of the cities and towns in Santa Clara County. The group has been discussing a potential expenditure plan to be used as a guideline for future formal development of expenditure by VTA should the legislation be signed into law.   The proposed framework to be used as a guideline for a future expenditure plan is included as Attachment A. 

At its February 10, 2005 meeting, the Technical Advisory Committee reviewed the expenditure plan framework.  The TAC recommended the expenditure plan framework be brought back to the committee in March for an action to support.  A remaining concern of VTA staff is the nexus requirement between vehicle fee and projects benefiting the fee payers.  The State Legislative Counsel is currently preparing an opinion on the nexus between the fee and proposed use of the fee on transit projects such as Caltrain improvements proposed in the draft expenditure plan framework.  If in the opinion of Legislative Counsel, the nexus of fee use for transit projects are not met, those projects could not be included in the expenditure plan.

In addition, Assembly Bill (AB) 1623 (Klehs), a potentially broader based bill than SB 680, has been introduced to allow implementation of a $4 vehicle registration feel for Alameda County, with Alameda County Congestion Management Agency as the implementing agency.   Discussions at the nine-county Bay Area level are being held regarding this bill being broadened to allow any of the CMAs in the Metropolitan Transportation Commission (MTC) region to authorize the fee.  AB 1623 provides fee proceeds for the management of traffic congestion and the mitigation of the environmental impacts of motor vehicles within Alameda County. 

Prepared by: John Ristow, Deputy Director, Programming & Highway Administration

ATTACHMENT A

Expenditure Framework for

This Traffic Relief bill will benefit commuters throughout Santa Clara County by funding a number of important transportation improvements in all 15 cities and towns and the county. The criteria used to select projects will include geographic equity, congestion relief, cost-effectiveness and identified county priority.

Revenue generated by a $5 vehicle registration fee would be split in the following manner after DMV’s administrative fee (estimated at approximately 1%) is deducted. Assuming the vehicle registration fee runs eight years and generates $56 million, the funds would break down in the following manner:

• $560,000 to DMV (approx. 1% of total revenues)

• $4 million for Caltrain capacity improvements. These funds could be used for Santa Clara County’s share of the cost of purchasing additional Baby Bullet train cars, or making station or parking improvements. All improvements must meet the nexus test and serve Santa Clara County.

• $4 million for litter removal and landscape restoration ($500,000 per year). This money can be used on highways or county expressways. Any unused funds would revert to the competitive pool (#2) described below.

The remaining $47 million would be divided into thirds:

1. $16 million(approximately) for Tier 1A county expressway improvements.
2. $16 million for street & road operational and ITS improvements --competitive pool. These funds would be available to cities/towns and the county for use on priority operational projects including small scale congestion relief projects, matching grants for larger projects, and signal timing/coordination projects.
3. $16 million--Direct subvention. These funds would be distributed to cities/towns/county on a pro rata basis based on vehicle registrations and be available for the same uses outlined in the above two categories.

Click here to return to the Board Agenda Index