BILL NUMBER: AB 1457	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 21, 2004
	AMENDED IN SENATE  JUNE 17, 2003
	AMENDED IN ASSEMBLY  APRIL 22, 2003

INTRODUCED BY   Committee on  Utilities and Commerce (Reyes
(Chair), Richman  (Vice Chair), Calderon, Campbell, Canciamilla,
Diaz, Jerome Horton,  La Malfa, La Suer, Levine, Maddox, Nunez,
Ridley-Thomas, and Wolk)   Budget (Steinberg (Chair),
Keene (Vice Chair), Bates, Benoit, Bermudez, Canciamilla, Chan,
Cogdill, Daucher, Diaz, Dutra, Dymally, Goldberg, Hancock, Harman,
Haynes, Jackson, Laird, Levine, Lieber, Liu, Maze, Nakano, Pacheco,
Pavley, Plescia, Reyes, Runner, Simitian, and Wolk) 

                        FEBRUARY 21, 2003

   An act  relating to telecommunications,   to
amend Sections 10754, 11000, 11001.5 of the Revenue and Taxation
Code, relating to local government finance,  making an
appropriation therefor, and declaring the urgency thereof, to take
effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1457, as amended, Committee on  Utilities and Commerce
  Budget  .   Telecommunications:
High-Cost Fund-A   Local government financing  .

   (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.  Existing law
requires the Controller to transfer revenues derived from the vehicle
license fees into the Motor Vehicle License Fee Account in the
Transportation Tax Fund and into the Local Revenue Fund, 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 the Motor Vehicle
License Fee Account in the Transportation Tax Fund and into the
Local Revenue 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 for those losses resulting from
the VLF offset during the 2003-04 fiscal year to $1,000.  Existing
law requires the Controller, on August 15, 2006, to transfer an
amount equal to those moneys that, as a result of the $1,000
limitation, were not otherwise transferred into that Transportation
Tax Fund and into the Local Revenue Fund to reimburse local
governments for the losses resulting from the VLF offset during the
2003-04 fiscal year.
   This bill, notwithstanding any other provision of law, would
require the Controller, during the 2003-04 fiscal year, to transfer
from the General Fund to the credit of the Local Revenue Fund an
amount equal to the total amount of moneys that would have been
transferred from the General Fund to the credit of the Local Revenue
Fund had there not been a limitation placed on the amount of moneys
available to make those reimbursements during the 2003-04 fiscal
year.
   This bill would also require the Controller to transfer from the
General Fund to the credit of the Local Revenue Fund an additional
amount, as necessary, to ensure that the total amounts transferred
from the General Fund into that fund during the 2002-03 fiscal year
are equal to the amounts that are otherwise required to be
transferred into that fund during that same period.
   (2) The Controller is required to deposit 24.33% of the revenues
collected under the VLF Law in the State Treasury to the credit of
the Local Revenue Fund for allocation to cities and counties, as
specified.  For the 2003-04 fiscal year, that amount was increased to
28.07% of the revenues collected under the VLF Law.  Effective March
1, 2004, the provision of law that required the Controller to make
the specified deposits of revenues generated under the VLF Law in the
State Treasury to the credit of the Local Revenue Fund became
inoperative by operation of law on March 1, 2003.
   This bill would, notwithstanding any other provision of law, for
the period beginning on and after March 1, 2004, reinstate the
operation of the statutory provision that requires the Controller to
make the specified deposits of revenues collected under the VLF Law
in the State Treasury to the credit of the Local Revenue Fund.  This
bill would provide that the total amount of the deposits made to the
credit of the Local Revenue Fund during the 2003-04 fiscal year is to
be an amount not less than 24.33% of the revenues collected under
the VLF Law during that same period.
   (3) This bill, by increasing the amount of moneys deposited into
the Local Revenue Fund, a continuously appropriated fund, would make
an appropriation.
   (4) This bill would declare that it is to take effect immediately
as an urgency statute.  
   Existing law, requires the Public Utilities Commission to develop,
implement, and maintain a suitable program to establish a fair and
equitable local rate structure aided by transfer payments to small
independent telephone corporations serving rural and small
metropolitan areas, in order to promote the goals of universal
telephone service and to reduce any disparity in rates charged by
small independent telephone corporations serving rural and small
metropolitan areas.  Moneys collected for this program are deposited
into the California High-Cost Fund-A Administrative Committee Fund.
Moneys in the fund may be expended, upon appropriation in the annual
Budget Act.
   This bill would appropriate $2,500,000 from the fund for the
purpose of transfer payments to telephone corporations providing
services in high cost areas and authorized to receive the funds, for
costs incurred during the 2001-02 fiscal year, except to the extent
the appropriation is made in the Budget Act of 2003.  The bill would
prohibit the commission from increasing any fee, charge, or rate as a
result of this appropriation.
   The 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.  There is hereby appropriated from the  
  SECTION 1.  Section 10754 of the Revenue and Taxation Code 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 on 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 the total amount of
offsets that were applied to new vehicle registrations before October
1, 2003, and that were applied to vehicle license fees with a due
date before October 1, 2003, that were not transferred into the Motor
Vehicle License Fee Account in the Transportation Tax Fund 
and into the Local Revenue Fund due to the operation of Item
9100-102-0001 of Section 2.00 of the Budget Act of 2003. The amount
of this transfer shall include transfers not made for offsets applied
on or after June 20, 2003.  The transferred moneys shall be
allocated from the Motor Vehicle License Fee Account in the
Transportation Tax Fund in the manner as otherwise specified by law
for the allocation of moneys from that account.  The Controller may
make the transfer required by this subparagraph prior to August 15,
2006, if that transfer is authorized by the Legislature.
   (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 that are required to be
transferred under clause (i), if that entity demonstrates that it
will experience a hardship if the advance is not made.  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) The sum of twenty million three hundred sixty-five thousand
dollars ($20,365,000) is hereby appropriated from the General Fund to
the Motor Vehicle License Fee Account in the Transportation Tax Fund
for the purposes of making the advances authorized by clause (ii).
   (iv) 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.   
  SEC. 2.  Section 11000 of the Revenue and Taxation Code is amended
to read: 
   11000.  (a) Beginning on the operative date of Section 9551.2 of
the Vehicle Code, the Controller shall do both of the following:
   (1) Transfer from the General Fund to the Motor Vehicle License
Fee Account in the Transportation Tax Fund an amount equal to 75.67
percent of the amount of offsets that are applied by the department
pursuant to Sections 9551.2 and 9554.1 of the Vehicle Code.
   (2)  (A)  Transfer from the General Fund to the Local
Revenue Fund, established pursuant to Section 17600 of the Welfare
and Institutions Code,  in the Transportation Tax Fund
 an amount equal to 24.33 percent of the amount of offsets
that are applied by the department pursuant to Sections 9551.2 and
9554.1 of the Vehicle Code.  
   (B) (i) Notwithstanding any other provision of law, it is the
intent of the Legislature that the total amount transferred by the
Controller to the Local Revenue Fund during the 2002-03 fiscal year
be an amount equal to the total amount as otherwise required by
subparagraph (A) to be transferred into that fund during that same
period.  The department shall calculate and notify the Controller of
the additional amounts that are required by this clause to be
transferred from the General Fund to the Local Revenue Fund.  The
amounts transferred from the General Fund to the Local Revenue Fund
pursuant to this clause shall be deemed to have been transferred and
allocated during the 2002-03 fiscal year.
   (ii) Notwithstanding any other provision of law, it is the intent
of the Legislature that the total amount transferred by the
Controller to the Local Revenue Fund for the period beginning on and
after July 1, 2003, and ending on and including June 30, 2004, be an
amount equal to the total amount that would have been transferred to
the Local Revenue Fund during that same period, as otherwise required
by subparagraph (A), in the absence of the limitation, pursuant to
Item 9100-102-0001 of Section 2.00 of the Budget Act of 2003, of the
amount of moneys available to make those reimbursements during that
same period.  The department shall calculate and notify the
Controller of the additional amounts that are required by this clause
to be transferred from the General Fund to the Local Revenue Fund.
The amounts transferred from the General Fund to the Local Revenue
Fund pursuant to this clause shall be deemed to have been transferred
and allocated during the 2003-04 fiscal year. 
   (b) The department shall notify the Controller of the total amount
of the offsets applied by the department pursuant to Section 9551.2
of the Vehicle Code concurrently with the department's transfer for
deposit of vehicle license fee revenues as required by law.
   (c) For purposes of Section 15 of Article XI of the California
Constitution, the General Fund revenues that are transferred as
required by paragraph (1) of subdivision (a) shall constitute
successor tax revenues to the vehicle license fees offset in this
part and shall be allocated in the same manner as revenue derived
from taxes imposed pursuant to this part.
   (d) For purposes of Article 1 (commencing with Section 25350) of
Chapter 5 of Part 2 of Division 2 of Title 3 of the Government Code,
Section 11003, and Chapter 6 (commencing with Section 17600) of Part
5 of Division 9 of the Welfare and Institutions Code, the General
Fund transfer amounts specified in paragraphs (1) and (2) of
subdivision (a) are hereby deemed to be vehicle license fee proceeds
and vehicle license fee revenues.  These General Fund transfer
amounts are subject to the same pledges, liens and encumbrances, and
priorities set forth in Section 25350 and following of, Section 53584
and following of, and Section 5450 and following of, the Government
Code.
   (e) Nothing in this section amends or intends 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. 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 subdivision (b), 24.33 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 and allocated to
each city, county, and city and county as otherwise provided by law.

   (2) For the period beginning on and after July 1, 2003, and ending
on  July 1, 2004,   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) 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 Fee 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 any fiscal year shall be allocated to cities and
counties as specified in subdivisions (c) and (d) of Section 11005.
   (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)  This section shall cease to be operative on the first
day of the month following the month in which the Department of
Motor Vehicles is notified by the Department of Finance of a final
judicial determination by the California Supreme Court or any
California court of appeal of either of the following:
   (1) The allocation of funds from the Vehicle License Fee Account
or the Vehicle License Fee Growth Account of the Local Revenue Fund
established during the 1991-92 Regular Session is in violation of
Section 15 of Article XI of the California Constitution.
   (2) The state is obligated to reimburse counties for costs of
providing medical services to medically indigent adults pursuant to
Chapters 328 and 1594 of the Statutes of 1982.  
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 not less than
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 additional 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.   
  SEC. 4.  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 timely guarantee the proper reimbursement of local
governments for the revenue losses associated with the application of
vehicle license fee offsets and in order to timely guarantee the
proper and necessary allocation of moneys derived from the vehicle
license fee to local governments, it is necessary that this act take
effect immediately.    California High-Cost Fund-A
Administrative Committee Fund to the Public Utilities Commission, two
million five hundred thousand dollars ($2,500,000) for the purpose
of transfer payments to telephone corporations providing services in
high cost areas and authorized to receive these funds pursuant to
Section 275 of the Public Utilities Code, for costs incurred during
the 2001-02 fiscal year.
  SEC. 2.  No fee, charge, or rate may be increased by the commission
as a result of the act adding this section.
  SEC. 3.  Except as otherwise provided in this section, Section 1 of
this act shall be inoperative if, in the determination of the
commission, an appropriation in the same amount is made in the Budget
Act of 2003 for the same purpose as Section 1 of this act.  Section
1 of this act shall be operative to the extent the amount of the
appropriation in Section 1 exceeds the amount of any appropriations
for the same purposes made in the Budget Act of 2003, as determined
by the commission.
  SEC. 4.  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:
   The authority to expend moneys from the California High-Cost
Fund-A Administrative Committee Fund in the Budget Act for fiscal
year 2001-02 was underestimated due to an accounting
misunderstanding.  Moneys for the payments due to be transferred to
telephone corporations were collected and deposited into these funds,
but authorization to transfer the moneys fell short of the amount
due to be paid out by the end of the fiscal year.  The California
High-Cost Fund-A Administrative Committee Fund, among other things,
provides funding for basic telephone services to state residents who
would not otherwise receive these necessary services.  In order to
provide sufficient revenues for the telephone corporations authorized
to receive these funds pursuant to Chapter 1.5 (commencing with
Section 270) of Part 1 of Division 1 of the Public Utilities Code, to
continue providing services in high cost areas, it is necessary that
this act take effect immediately.