Existing law requires the Department of Motor Vehicles to suspend the driving privilege of a person who is involved in an accident and fails to provide evidence of financial responsibility, as specified, at the time of the accident. Under existing law, the suspension period is one year, as specified, except that the suspension must be reinstated if the person fails to maintain proof of financial responsibility for 3 years. However, upon application and if certain criteria is are met, the department may restrict the persons driving privilege, in lieu of suspending it pursuant to this provision, in specified situations.

This bill would would, commencing July 1, 2016, also authorize the department to restrict a persons driving privilege, in lieu of suspending it, in order to allow the person to drive to school. For purposes of this authorization, the bill would define school to mean a California community college campus, a California State University campus, a University of California campus, or a private postsecondary educational institution.

Existing law requires the Department of Motor Vehicles to suspend the driving privilege of a person who is involved in an accident and fails to provide evidence of financial responsibility, as specified, at the time of the accident. Under existing law, the suspension period is one year, as specified, except that the suspension must be reinstated if the person fails to maintain proof of financial responsibility for 3 years. However, upon application and if certain criteria is met, the department may restrict the persons driving privilege, in lieu of suspending it pursuant to this provision, in specified situations.

This bill would also authorize the department to restrict a persons driving privilege, in lieu of suspending it, in order to allow the person to drive to school. For purposes of this authorization, the bill would define school to mean a California community college campus, a California State University campus, a University of California campus, or a private postsecondary educational institution.

Date of Hearing: July 1, 2015

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Brian Maienschein, Chair

SBPCA Bill Id:SB 789

Author:(Wieckowski) – As Amended Ver:June 8, 2015

SENATE VOTE: Vote not relevant

SUBJECT: Sale of water by local public entities: excise tax.

SUMMARY: Authorizes a local public entity that supplies water at retail or wholesale to impose an excise tax on an excessive user of water at a specified rate, subject to two-thirds voter approval, and requires the revenue to be equally distributed between the local public entity and the State Water Resources Control Board. Specifically, this bill:

1. Authorizes a local public entity that supplies water at retail or wholesale for the benefit of persons within the service area or area of jurisdiction of that public entity to impose by ordinance, an excise tax on an excessive user of water, at a rate not to exceed 300% of the purchase price of the water, if both of the following conditions are met:

1. The ordinance proposing the tax is approved by two-thirds of the electors voting on the measure, pursuant to Article XIII C of the California Constitution; and,

2. The revenue is equally distributed between the public entity and the State Water Resources Control Board (State Water Board) for local water conservations efforts within the jurisdiction of that public entity. Allows the local water conservations efforts to have co-benefits with other regions in the state.

2. Provides that a tax imposed, pursuant to this bill, may be in addition to any other tax authorized by Division 2 of the Revenue and Taxation Code.

FISCAL EFFECT: This bill is keyed fiscal.

COMMENTS:

1. Background. A PPIC report, Paying for Water in California, outlines four sources of funding currently used for water in California: (1) Fees, which include water and waste water bills, property assessments or fees, developer or connection fees, and permitting fees;
   (2) Taxes, which include both general and special taxes, including parcel taxes; (3) Fines
   and penalties, which include excessive pumping on groundwater or directly to customers in violation of rationing restrictions during drought emergencies; and, (4) Bonds, which include general obligation and revenue bonds. Local agencies frequently point to the series of constitutional reforms, Proposition 13 (1978), Proposition 218 (1996), and Proposition 26 (2010), that have made it increasingly more difficult to generate the necessary revenue to fund the costs of providing water and other essential services.

On January 17, 2014, the Governor declared a state of emergency in California due to severe drought conditions. On April 1, 2015, the Governor imposed an executive order to direct the State Water Board to impose restrictions to achieve a statewide 25% reduction in potable urban water usage through February 28, 2016. The executive order also requested that the California Public Utilities Commission take similar action with respect to investor-owned utilities that provide water service. Earlier this month, the State Water Board reported on water conservation during the first full month of statewide enforcement efforts, finding that "the amount of water saved by the state's large urban water agency customers statewide increased from 3.9% in March to approximately 13.5% in April, in same month water use comparisons of 2015 to 2013."

In response to mandated conservation, many local public entities that provide water have utilized existing financial tools to achieve conservation. For example, the East Bay Municipal Utility District adopted an Excessive Water Use Ordinance on April 28, 2015, to encourage customers to conserve water. According to the ordinance, single-family residential customers using more than 80 units (59,840 gallons) of water per billing period (55 to 68 days) are subject to a $2 penalty for each unit over the 80-unit threshold. Earlier this month, the City of Roseville began imposing a "drought surcharge" fee to commercial and residential customers equivalent to 15% of their monthly water use charge.

2. Bill Summary. This bill authorizes a local public entity that supplies water at retail or wholesale to impose an excise tax on an excessive user of water with two-thirds voter approval. Under this bill, the revenue generated from the excise tax would be equally distributed between the public entity and the State Water Resources Control Board for local water conservation efforts within the jurisdiction of that public entity. This bill prohibits the rate for an excise tax from exceeding 300% of the purchase price of the water.

This bill is author-sponsored.

3. Author's Statement. According to the author, "The bill seeks to create an additional tool for local water agencies to use to address overuse by water users in their service territory. California is in a historical drought with no end in sight. Reservoir and river levels are low and groundwater pumping is at an all-time high. The State Water Resources Control Board has taken extraordinary steps to curtail water use, calling for a 25% across-the-state reduction.

"Still, many water users continue to waste water or use it excessively for purposes that do not take the severe nature of the drought into account. A Rancho Santa Fe resident recently exclaimed that 'we’re not all equal when it comes to water.' Brett Barbre, a board member with the Metropolitan Water District of Southern California, a huge water wholesaler serving 17 million customers, demonstrated his unwillingness to reduce landscape water, declaring that water authorities would have to pry the watering hose from his, 'cold, dead hands.'

"According to the State Water Resources Control Board the Santa Fe Irrigation District and about twenty-one other districts representing over 5% of the State’s 396 public water agencies have actually increased water use compared to 2013 levels which was also a bad year for water. Numerous other agencies were far from reaching their mandated water reduction goals despite the best efforts of the water managers in those districts faced with a severe statewide drought emergency.

"Local water agencies are prohibited from using pricing mechanisms or 'tiered rates' to provide incentives to water users to modify behavior. Many public water agencies have imposed severe water use and watering restrictions and have imposed severe penalties. Despite those extraordinary measures, excessive use and abuse of water in a severe public emergency continues.

"SB 789 authorizes a local retail or wholesale water supply entity to impose up to a 300% tax on excessive water use. The bill allows the local agency or water district to choose the appropriate level of the tax. The revenue from the tax is to be used for efficiency and conservation programs, with half going to the State Water Resources Control Board and the other half staying with the local agency."

4. Policy Considerations. The Committee may wish to consider the following:

1. What Is Excessive? Opposition argues that there is no definition of an "excessive user of water" in the bill and note that "several classes of water users exist such as residential, agricultural, commercial, industrial, and institutional. Each uses water in varying ways and at varying prices depending on their water purveyors and necessary water treatment. Many businesses such as restaurants, food processors, grocery stores, medical clinics, etc. use water for health and safety purposes which may not be altered without another agency's approval. Also, in some instances only a master water meter exists for several units without the ability to measure individual unit's usage."

The Committee may wish to ask the author, absent any clarification in the bill, what types of water use the bill is aiming to curb. Without further specification in the bill, local agencies may establish one definition for an "excessive user" which would have different impacts based on the type of water user. For example, what is considered "excessive use" for a single family home may be very different than for a farmer who owns hundreds of acres.

2. Who Will Use This Authority? The Committee may wish to note that there are no local agencies in support of the bill, nor have any local agencies requested this authority.

3. Distribution of Revenue to State Water Board. The Committee may wish to ask the author for the policy reasoning behind the allocation requirement in this bill, which requires half of the locally-generated revenues to go to the State Water Board. The Committee may wish to consider if there are any constitutional issues associated with the state requiring the allocation of this locally-imposed revenue.

4. Low-Income Households. The drought has raised new affordability challenges for both providers and customers. Many public water providers have increased fixed rates and fees on monthly bills, which disproportionately impact lower-income households. While this bill may allow local agencies to focus on excessive users, there are no protections for low-income water users. The Howard Jarvis Taxpayers Association argues, "While clearly meant to target water wasters, [this bill] could easily apply to low-income families living at the poverty line who now must contend with a new regressive tax."

5. Local Agencies Taxing Other Local Agencies? Some local public agencies wholesale water, but do not sell water to retail customers. It is not uncommon for one local agency to provide wholesale water to another local agency. Given this common relationship, the Committee may wish to consider if this bill authorizes local public agencies to tax one another.

6. New Taxing Authority? This bill requires that the ordinance proposing the excise tax is approved by two-thirds of the electors voting on the measure, pursuant to Article XIII C of the California Constitution. Article XIII C of the California Constitution defines a "special tax" to mean any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund, and requires local agencies to impose a special tax with a two-thirds voter approval. One of the most commonly referenced excise taxes are parcel taxes, which are levied per parcel at a flat rate or according to size. The authority granted to local agencies by this bill is levied on a user, not a parcel, at a specified rate based on "excessive" use. The Committee may wish to consider if constitutional challenges may be raised, regardless of the two-thirds voter requirement contained in this bill.

7. Too Many Questions, Not Enough Answers. Given the number of outstanding questions and vague authority granted by this bill, the Committee may wish to encourage the author to take more time to flesh out the policy goals. Local agencies experience many financial barriers due to Proposition 218 and other legal challenges associated with tiered water rates to obtain the necessary funding to provide much needed services while encouraging conservation. Therefore, the Committee may wish to encourage the author to work with local agencies to craft legislation to provide local agencies with badly needed financial tools that they can and will use.

5. Gut and Amend. Assembly amendments delete the Senate version of this bill.

6. Arguments in Support. Supporters, in concept, argue that as the drought continues, local agencies need increased tools to curtail excessive users of water. This bill will allow local agencies to ask voters for increased taxing authority for those who refuse to cut back on unnecessary water use.

7. Arguments in Opposition. Opposition argues that this bill is unconstitutional and unworkable. Additionally, there is no definition of excessive user of water, therefore, no practical way to determine who or what constitutes an excessive user of water.

8. Double referral. This bill is double-referred to the Revenue and Taxation Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California League of Conservation Voters (in concept)

Clean Water Action (in concept)

Sierra Club California (in concept)

Opposition

California Apartment Association

California Business Properties Association

California Chamber of Commerce

California Farm Bureau Federation

California Manufacturers and Technology Association

California Taxpayers Association

Family Business Association

Howard Jarvis Taxpayers Association

Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958

 THIRD READING  

Bill No: SB 789

Author: Wieckowski (D)

Amended: 5/11/15

Vote: 21

SENATE TRANS. & HOUSING COMMITTEE: 10-0, 4/21/15

AYES: Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

NO VOTE RECORDED: Gaines

SENATE APPORPRIATIONS COMMITTEE: 7-0, 5/4/15

AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

SUBJECT: Driver’s license suspension: restricted privilege

SOURCE: Author

DIGEST: This bill authorizes the Department of Motor Vehicles (DMV) to restrict a person’s driving privilege, instead of suspending it, to allow a person to drive to and from school, if that person was involved in an accident and did not possess insurance at the time of the accident.

ANALYSIS:

Existing law:

1. States that if a driver is involved in an accident that results in property damage over $750 or in bodily injury or death and fails to provide evidence of financial responsibility, the DMV shall suspend the driver or owner’s driving privilege. The suspension shall last one year from the date of commencement of the suspension and until the person files proof of financial responsibility, (e.g., insurance coverage).

2. States that, in lieu of suspending a person’s driving privilege for failure to provide evidence of financial responsibility, the DMV may restrict a person’s driving for specific purposes. To obtain a restricted driver’s privilege, the driver must submit an application to the DMV, file and maintain proof of financial responsibility, and pay a penalty fee of $250 to the DMV. This restricted driver’s privilege is limited to use for the following situations:

• Necessary traveling to and from that person’s place of employment.

• Driving required in the person’s course of employment, when driving is necessary to perform the duties of the person’s primary employment.

• Necessary travel to transport a minor dependent in that person’s immediate family to and from a primary or secondary school, if the chief administrative officer or principal certifies in writing to the DMV that the minor dependent is enrolled in the school and no form of public transportation or school bus is available.

• Enabling the applicant to drive a motor vehicle for the purpose of receiving prolonged, repetitive medical or mental health treatments for the applicant or a member of the applicant’s immediate family with a serious health problem.

3. States that the restricted driver’s privileges do not apply to commercial driver’s licenses.

This bill:

1. Adds to the restricted driver’s privilege, driving to and from school. School is defined as a California community college, a California State University campus, a University of California campus, or a private postsecondary educational institution.

2. Becomes operative on July 1, 2016.

Comments

Purpose. According to the source, supporting a person’s ability to drive to and from college with a restricted license is consistent with current policy that allows driving in circumstances that improve a person’s well-being. Higher education provides students with knowledge and skills to be more successful in their community and is critical for improving a person’s quality of life. While many university campuses are accessible by using public transportation, others, especially in rural areas, are inaccessible without a car. Some drivers could be forced to quit school if they cannot drive for a year, thus disrupting and delaying their education. This bill gives drivers who have obtained and maintain insurance and paid a fine the ability to continue to pursue their educational goals.

Barrier to attending college. The idea for this bill originated when a person in the Bay Area was involved in a non-injury car accident and mistakenly believed he was insured. Due to his lack of insurance, his license was suspended for a year. At the time, he was also attending a local community college. Because existing law does not authorize the DMV to grant a restricted license for the purpose of driving to and from school, the DMV did not have the discretion to provide him a restricted license for that purpose. This bill provides the DMV with the discretion to issue a restricted license in those circumstances, provided the driver obtains and maintains insurance and pays a fine, so that people can continue to pursue higher education.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the DMV would incur one-time costs of approximately $80,000 in 2015-16 for necessary programming and form changes (Motor Vehicle Account) and may incur minor costs to update regulations to establish criteria for the new restriction. The DMV indicates that it issues less than 4,000 restricted drivers privileges each year, collecting approximately $1 million in penalty fees. The bill is not expected to have a noticeable impact on the number of applications for restricted driving privileges in a given year.

SUPPORT: (Verified 5/12/15)

Legal Services for Prisoners with Children

OPPOSITION: (Verified 5/12/15)

None received

ARGUMENTS IN SUPPORT: Writing in support of the bill, Legal Services for Prisoners with Children states that suspended licenses can trap people in an impossible situation: unable to reinstate their license without proof of financial stability or gainful employment and unable to access employment or become financially stable without a license. Among residents of Oakland, CA, 67% of employed residents had a valid driver’s license and a car, while 36% of unemployed respondents did. License suspension also does not work as a debt-collection tool: The Legislative Analyst’s Office reports that there is currently more than $10 billion in court-ordered, uncollected debt in California and $8 billion of this amount is for unpaid traffic violations. Furthermore, by imposing fees that cannot be paid and effectively creating permanent license suspensions, the system also threatens public safety because those with suspended licenses often drive without insurance. Allowing driver’s license restrictions, rather than suspensions, is a first step towards ending the use of license suspensions as a debt-collection tool.

Prepared by: Alison Dinmore / T. & H. / (916) 651-4121

5/13/15 16:06:57

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SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 789 (Wieckowski) - Driver’s license suspension: restricted privilege

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

SB 789 would authorize a person with a restricted driver’s license to drive to or from school at a postsecondary educational institution, as specified.

Fiscal Impact:

The Department of Motor Vehicles (DMV) would incur one-time costs of approximately $80,000 in 2015-16 for necessary programming and form changes (Motor Vehicle Account).

Background:

Existing law requires a drivers and vehicle owners to carry evidence of financial responsibility, defined primarily as written evidence of valid automobile insurance coverage. Existing law generally requires a driver involved in a traffic accident that results in property damage in excess of $750, or bodily injury or death, to report the accident to DMV within 10 days.

If a person involved in such an accident fails to provide proof of insurance at the time of the accident, DMV is required to suspend the driving privileges of the driver or vehicle owner for one year, as specified. As an alternative to driver’s license suspension, existing law authorizes DMV to restrict driving privileges to the following situations, if the applicant maintains insurance coverage and pays a penalty fee of $250: 1) necessary travel to and from the person’s place of employment; 2) driving required to perform employment-related duties; and 3) necessary travel to take a minor dependent to and from primary or secondary school if public transportation or a school bus are unavailable. The option of applying for restricted driving privileges is not available to holders of a commercial driver’s license, unless the commercial license is surrendered and DMV instead issues that person a noncommercial class C or M license.

Proposed Law:

SB 789 would authorize a person with restricted driving privileges to drive himself or herself to and from school, in addition to the authorized situations noted above. The bill would define “school” for these purposes to mean a California community college campus, a California State University campus, a University of California campus, or a private postsecondary educational institution.

Related Legislation:

SB 438 (Hill), which has also been referred to this Committee, would increase the property damage threshold for reporting a traffic accident to DMV from $750 to $1,000, and make other conforming changes.

Staff Comments:

This bill would allow a person who fails to provide proof of insurance when involved in an accident, upon payment of a penalty and maintaining ongoing proof of insurance, to secure a restricted driving privilege for driving to and from a postsecondary educational institution. This bill is intended to prevent the potential disruption of educational progress that may come with certain driver’s license suspensions.

DMV indicates that it issues less than 4,000 restricted driver privileges each year, collecting approximately $1 million in penalty fees. The bill is not expected to have a noticeable impact on the number of applications for restricted driving privileges in a given year. As such, any revenue impacts are expected to be minor.

In order to provide for the expansion of authorized situations in which a person may drive with a restricted driving privilege, DMV would need to make programming changes to add a new restriction code, make changes that allow for reinstatement with the new restriction, and modify systems that provide automated notices for the new type of restriction following an uninsured accident. DMV would incur programming costs of approximately $80,000 to make these necessary changes. The department would also incur minor costs to update regulations to establish criteria for the new restriction.

Staff notes that DMV has a significant programming backlog of federal and state mandates. These include federally-mandated changes to the Commercial Driver License System, compliance with which is tied to federal transportation funding, and state mandates such as programming for the veteran designation on driver’s licenses and IDs (AB 935, Chap 644/2014) and the issuance of free ID cards for homeless applicants (AB 1733, Chap 764/2014). Given the backlog, DMV would be unable to complete the programming necessary to implement this bill by the January 1, 2016 operative date without impacting currently scheduled programming priorities.

Recommended Amendments:

In light of DMV’s programming backlog, staff recommends an amendment to delay the operative date by six months, to July 1, 2016.

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SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: SB 789 Hearing Date: 4/21/2015

SUBJECT: Driver’s license suspension: restricted privilege

DIGEST: This bill would authorize the Department of Motor Vehicles to restrict a person’s driving privilege, instead of suspending it, to allow a person to drive to and from school, if that person was involved in an accident and did not possess insurance at the time of the accident.

ANALYSIS:

Existing law states that if a driver is involved in an accident that results in property damage over $750 or in bodily injury or death and fails to provide evidence of financial responsibility, the Department of Motor Vehicles (DMV) shall suspend the driver or owner’s driving privilege. The suspension shall last one year from the date of commencement of the suspension and until the person files proof of financial responsibility, (e.g., insurance coverage).

In lieu of suspending a person’s driving privilege for failure to provide evidence of financial responsibility, the DMV may restrict a person’s driving for specific purposes. To obtain a restricted driver’s privilege, the driver must submit an application to the DMV, file and maintain proof of financial responsibility, and pay a penalty fee of $250 to the DMV. This restricted driver’s privilege is limited to use for the following situations:

1. Necessary traveling to and from that person’s place of employment

2. Driving required in the person’s course of employment, when driving is necessary to perform the duties of the person’s primary employment

3. Necessary travel to transport a minor dependent in that person’s immediate family to and from a primary or secondary school, if the chief administrative officer or principal certifies in writing to the DMV that the minor dependent is enrolled in the school and no form of public transportation or school bus is available

4. Enabling the applicant to drive a motor vehicle for the purpose of receiving prolonged, repetitive medical or mental health treatments for the applicant or a member of the applicant’s immediate family with a serious health problem

The restricted driver’s privileges do not apply to commercial driver’s licenses.

This bill would add to the restricted driver’s privilege, driving to and from school. School is defined as a California community college, a California State University campus, a University of California campus, or a private postsecondary educational institution.

COMMENTS:

1. Purpose. According to the author, supporting a person’s ability to drive to and from college with a restricted license is consistent with current policy that allows driving in circumstances that improve a person’s well-being. Higher education provides students with knowledge and skills to be more successful in their community and is critical for improving a person’s quality of life. While many university campuses are accessible by using public transportation, others, especially in rural areas, are inaccessible without a car. Some drivers could be forced to quit school if they cannot drive for a year, thus disrupting and delaying their education. This bill would give drivers who have obtained and maintain insurance and paid a fine the ability to continue to pursue their educational goals.

2. Barrier to attending college. The idea for this bill originated when a person in the Bay Area was involved in a non-injury car accident and mistakenly believed he was insured. Due to his lack of insurance, his license was suspended for a year. At the time, he was also attending a local community college. Because existing law does not authorize the DMV to grant a restricted license for the purpose of driving to and from school, the DMV did not have the discretion to provide him a restricted license for that purpose. This bill would provide the DMV with the discretion to issue a restricted license in those circumstances, provided the driver obtains and maintains insurance and pays a fine, so that people can continue to pursue higher education.

3. Double referral. Rules Committee has referred this bill to the Appropriations Committee.

Related Legislation:

None.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

POSITIONS: (Communicated to the committee before noon on Wednesday,

April 15, 2015.)

SUPPORT:

None received.

OPPOSITION:

None received.

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