BILL ANALYSIS Ó SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 1454 SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: la malfa VERSION: 4/11/12 Analysis by: Carrie Cornwell FISCAL: yes Hearing date: April 24, 2012 SUBJECT: Eight-character license plates DESCRIPTION: This bill authorizes the creation of eight-character personalized license plates and directs the proceeds from the additional fees paid for this plate to the Williamson Act, state and local fairs, and state parks. ANALYSIS: Currently, the Department of Motor Vehicles (DMV) issues California license plates with seven characters. Existing law requires that license plates, other than those for motorcycles, be a rectangle that is 12 inches long and 6 inches wide. Each character must have a minimum height of 2 inches and a minimum width of 1 inches. Existing law requires a minimum space of 5/16 inches between characters. Existing law establishes a basic vehicle registration fee of $46, plus a $23 surcharge for additional personnel for the California Highway Patrol (CHP). A vehicle owner may request an "environmental license plate" (ELP) when registering his or her vehicle. An ELP is a personalized license plate (sometimes referred to as a "vanity plate") that DMV issues in a combination of letters, or numbers, or both, that the vehicle owner selects. ELP fees are $48 for issuance of the plate, $38 for renewal, $38 for duplicate plates, and $38 for transfer. Existing law provides that revenue derived from these fees shall be deposited in the California Environmental License Plate Fund. Initially authorized in 1979, the ELP Fund supports a variety of state activities that have some environmental connection. This bill : SB 1454 (LA MALFA) Page 2 1.Reduces the minimum width for license plate characters to 13/16 inches and reduces the minimum space between characters to inch. 2.Permits a vehicle owner to apply to DMV for an 8-character license plate, in lieu of a regular license plate, that displays the 8-character message of the vehicle owner's choice, provided it does not duplicate an existing plate, does not carry connotations offensive to good taste and decency or which are misleading, and the owner pays an additional fee of $48 for issuance of the plate and $38 annually for renewal. In addition, a vehicle owner shall pay a $38 additional fee for duplicate plates or to transfer the plates to another vehicle. 3.Allows the state to use not more than 50 cents per eight-character license plate to promote the program. 4.Provides detailed direction to DMV on how it shall promote the eight-character license plate on its website, forms, publications, and signs. 5.Directs funds raised from the issuance and renewal of 8-character vanity plates to the Natural and Agricultural Open Space and State Recreation Support Fund, which the bill creates. Upon appropriation by the Legislature, the bill allocates these funds equally between Williamson Act Subventions, assistance to the Department of Food and Agriculture for California fairs, and support of the Department of Parks and Recreation. COMMENTS: 1.Purpose . The author introduced this bill to generate additional funds during difficult economic times. He believes that providing for an 8th character on California's vanity plates would significantly increase the number of potential possibilities for prospective license plate buyers. He notes that this is a way to generate new revenues without raising taxes or mandating the payment of new fees. He notes that recent state budgets have cut nearly all funding for the Williamson Act and county fairs and agriculture activities. County, district, and other local fairs now struggle to stay alive. Lack of funding for the Williamson Act subventions will limit local governments' incentives to enter into these SB 1454 (LA MALFA) Page 3 contracts and result in reductions to open spaces in California. He notes that state budget cuts are also resulting in the pending closure of 70 state parks. 2.Tracks rules for existing personalized plates . This bill provides identical direction to DMV for the eight-character personalized plate that exists for the long-standing ELP program, including direction on how to resolve disputes when DMV finds a plate offensive to good taste and decency but the applicants disagrees. 3.ELP Revenues . DMV reports that for the 2010-11 Fiscal Year it remitted $41.6 million to the ELP fund, representing the revenues, after DMV subtracts its administrative costs, from all additional fees resulting from the personalization of license plates. It is not known how much beyond that amount offering an eighth-character on personalized plates, as this bill does, would generate. 4.Competition for environmental license plate . Allowing the new eight-character personalized plate will likely divert some level of business from the existing ELP program. In that sense, this bill is likely to divert existing resources from current recipients of ELP fund revenues to the author's new priorities. POSITIONS: (Communicated to the committee before noon on Wednesday, April 18, 2012) SUPPORT: None received. OPPOSED: None received.