BILL ANALYSIS
SB 1079
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Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1079 (Walters) - As Amended: May 3, 2010
Policy Committee: Business and
Professions Vote: 11 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes the Office of State Printing (OSP) to allow
paid advertisements in materials printed by a state agency or
vendor, with the exception of political advertising, and allows
that the funds provided for these paid advertisements be
available to the agency, upon appropriation by the Legislature,
to fund agency operations.
FISCAL EFFECT
To the extent this bill increases the number of paid
advertisements in state publications it would result in
increased revenue for the state. It is unknown how much revenue
would be generated. However, the Department of General Services
(DGS) estimates that if successful, this legislation could
generate millions of dollars in revenue depending on the
circulation of the publication or mailing that contained the
ads.
COMMENTS
1)Rationale . This bill extends the current provisions, which
allow OSP to accept paid advertisements, to include other
materials printed by state agencies using private vendors. In
addition, it allows the funding from those advertisements to
be used as funding for that state agency. According to the
author, "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. When speaking with
some agencies (Controllers Office, Department of Motor
Vehicles [DMV], Franchise Tax Board, and State Board of
SB 1079
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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."
2)Background . OSP's Advertising Program was first approved in
July of 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: a state agency may contract directly with OSP,
contract with a commercial advertising firm, or solicit their
own ads.
The DMV is OSP's primary customer in the advertising program,
placing paid ads in approximately 10 publications. This
generates between $500,000 and $1 million a year, which in
turn, is used to discount the printing costs of the
department's driver handbooks.
3)Related Legislation . SB 828 (Maldonado; Chapter 381, Statutes
of 2005) deleted a sunset provision authorizing OSP to accept
paid advertisements, excluding paid political advertisements,
in materials published by the state.
AB 2315 (Chu; Chapter 220, Statutes of 2002) extended an
existing exemption allowing OSP, under the jurisdiction of the
Department of General Services, to continue accepting paid
advertisements in state printed and published materials, as
specified.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
SB 1079
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319-2081