BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 1079|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 1079
Author: Walters (R)
Amended: 5/3/10
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 9-0, 4/13/10
AYES: Wright, Calderon, Denham, Florez, Oropeza, Padilla,
Price, Wyland, Yee
NO VOTE RECORDED: Harman, Negrete McLeod
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : State agencies: advertising agreements
SOURCE : Cross Commerce Media
DIGEST : This bill clarifies the law relative to the
placement of paid advertisements in state agency
publications to reflect current practice.
ANALYSIS : Existing law authorizes the Office of State
Publishing (OSP) to accept paid advertisements in materials
printed or published by the state except for paid political
advertising.
Existing law requires any state agency that was not
authorized to accept paid advertising in its publications
before January 1, 2006, to use OSP for all paid advertising
in its publications.
CONTINUED
SB 1079
Page
2
This bill:
1. Clarifies that the OSP, within the Department of General
Services, may authorize paid advertisements in materials
printed or published by OSP, a state agency, or a
vendor, except that OSP shall not print, publish or
authorize paid political advertising.
2. Provides that funds derived from the placement of paid
advertisements on agency literature or publications
pursuant to this bill shall be available to the agency,
upon appropriation by the Legislature, to fund agency
operations.
3. Prohibits the OSP from accepting or authorizing any paid
advertisements in materials printed or published for the
Secretary of State.
Comments
OSP's Advertising Program was first approved in July 1996
as part of a budget trailer bill. The Advertising Program
was intended to allow state agencies to offset their
printing costs through the incorporation of paid
advertising in state publications.
In September 2005, SB 828 (Maldonado), Chapter 381,
Statutes of 2005, was enacted to authorize OSP to accept
paid advertisements in state publications. SB 828 also
requires any state agency that was not authorized to accept
paid advertising in its publications before January 1,
2006, to use OSP for all paid advertising in its
publications.
Under SB 828, any material that contains advertising must
either be printed at OSP or come through OSP. Agencies
cannot print ads in publications using other vendors unless
the job is vended out through OSP's Print Procurement
Department.
Currently, there are three methods for state agencies to
solicit ads, as follows:
1. State agencies may contract with OSP . OSP has a
SB 1079
Page
3
contract with a publishing representative who can
produce a state agency's publication. OSP works with
the state agency, and after OSP understands the agency's
goals, forwards samples of the agency's publication,
circulation and demographic information to the
publishing representative for generating sales and
revenue projections.
The state agency approves all ad copy prior to it being
printed in the agency's publication. OSP invoices all
advertisers, pays all commissions, and deducts the
balance from the agency's printing bill.
2. State agencies may contract with a commercial
advertising firm . State agencies must contact OSP for
delegation to contract with an outside ad agency. All
procurement, contracting, and Small Business and
Disabled Veterans Business Enterprise laws must be
observed. State agencies must pay the advertising firm
directly without OSP involvement. Collection of ad
revenues is the responsibility of the state agency or
the advertising firm. After the ads are sold and
approved by the agency, the completed artwork is
submitted to OSP with a printing requisition. OSP bills
the agency the full amount for the printing.
3. State agencies can solicit their own ads . State
agencies can request delegation from OSP to solicit the
ads. Agencies develop their own mailing lists and media
kits to solicit ads. Agencies submit approved artwork
to OSP with their printing requisition. OSP bills the
agency the full amount for the printing.
Comments
According to the Senate Governmental Organization Committee
analysis, the advertising program is underutilized and
underperforming. The Department of Motor Vehicles is OSP's
primary customer in the advertising program, placing paid
ads in approximately 10 publications. This generates
roughly between $500,000 - $1 million a year, which in
turn, is used to discount the printing costs of the
department's driver handbooks.
SB 1079
Page
4
The greatest hindrance to the Advertising Program is that
there is no incentive for agencies to use the program.
Agencies are reluctant to get involved in the program
because they can't accept the money directly. Further, any
positive money flow (money in excess of the costs of
producing a print job) is not retained by the agency.
The original version of the bill created an incentive for
agencies to utilize the Advertising Program by allowing the
funds derived for the paid advertising to be available to
the agency, upon appropriation by the Legislature, to fund
agency operations. Recent amendments to this bill restore
this incentive provision.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/26/10)
Cross Commerce Media (source)
ARGUMENTS IN SUPPORT : According to the author's office:
"The law is not clear as to how one may go about securing
advertising space, nor does it cite how one might go
about securing appropriations language. Government Code
Section 14851 states, 'The Office of State Publishing may
accept paid advertisements in materials printed or
published by the state, except that the department shall
not print or publish paid political advertising.'
"When speaking with some of agencies (State Controller's
Office, Department of Motor Vehicles, Franchise Tax Board
and State Board of Equalization) they believe that there
is a need for language that explicitly authorizes them to
use third party advertisers on the outside of their
mail."
TSM:mw 5/3/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
SB 1079
Page
5
**** END ****