BILL ANALYSIS                                                                                                                                                                                                    Ó

                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair

          AB 244 (Bonilla) - Veterans license plates.
          Amended: August 12, 2013        Policy Vote: VA 7-0; T&H 11-0
          Urgency: No                     Mandate: No
          Hearing Date: August 19, 2013                           
          Consultant: Mark McKenzie       
          This bill does not meet the criteria for referral to the  
          Suspense File. 

          Bill Summary: AB 244 would require the Department of Veterans  
          Affairs (DVA) to sponsor a veterans specialized license plate  
          program.  The Department of Motor Vehicles (DMV) would establish  
          the program only after DVA receives at least 7,500 applications  
          and submits the applications and fees to DMV, as specified.

          Fiscal Impact: 
              DVA costs of approximately $45,000 for 1/2 PY of staff time  
              in 2014-15 to collect the initial 7,500 applications and  
              fees for the establishment of the plate program (General  
              Fund).  These costs could continue into 2015-16 if the  
              requisite applications and fees are not collected within the  
              first year.

              DMV implementation costs of approximately $470,000, likely  
              in 2015-16, partially offset by pre-paid application fees of  
              $375,000, leaving a net cost of approximately $95,000 (Motor  
              Vehicle Account).  These net costs would be reimbursed in  
              the following fiscal year by registration renewal fees from  
              holders of the veterans plates.  All ongoing costs  
              thereafter would be fully offset by fees from renewals and  
              issuance of new veterans plates.

               Unknown revenues, likely in the range of $150,000 to  
              $250,000 annually, for deposit into the Veterans Service  
              Office Fund (based on 7,500 plates after subtracting DMV  
              administrative costs).  These funds are distributed to  
              county veterans service offices.

              Unknown, likely relatively minor revenue gains, to the  
              extent that applicants wish to have personalized  


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          Page 1

              "environmental" plates (Environmental License Plate Fund).

          Background: Existing law, AB 84 (Leslie), Chap 454/2006,  
          authorizes any state agency to sponsor a special interest  
          license plate, and apply to DMV to establish a new license plate  
          program after collecting at least 7,500 applications and  
          accompanying fees and submitting them to DMV.  The applications  
          must be collected within one year, with an option to extend that  
          timeframe by an additional year under specified conditions.  The  
          new specialized license plate must have a design or contain a  
          message that publicizes or promotes a state agency, or the  
          official policy, mission, or work of the agency.  A sponsoring  
          agency may not spend more than 25 percent of its license plate  
          fees for administrative, marketing, and promotional costs  
          associated with the plate.

          Existing law authorizes any registered vehicle owner to apply to  
          DMV for veterans' organization license plates.  Veterans'  
          organizations plates bear a distinctive design that includes the  
          words "honoring veterans" along the bottom of the plate and a  
          decal on the left side of the plate for one of over 100  
          sponsoring veterans' organizations, such as the American Legion,  
          101st Airborne Division, or the National Guard.  In addition to  
          standard registration fees, a vehicle owner must pay the  
          following fees related to veterans organization plates: $50 for  
          the initial issuance of the plates and decals; $40 annually to  
          renew the plates and decals; $15 for transfer of the plates to  
          another vehicle; $35 for replacement of damaged plates; $10 for  
          replacement of damaged decals; and $78 to personalize the  
          plates.  Revenues derived from the veterans' organization  
          plates, less costs incurred by DMV in administering the program,  
          are deposited into the Veterans Service Office Fund for  
          distribution to county veterans service offices by the  
          Department of Veterans Affairs, upon appropriation by the  

          From 1993 through 2010, DMV offered a special license plate to  
          all registered vehicle owners with the word "veteran" along the  
          bottom of the plate and space for a decal on the left side of  
          the plate for one of over 100 sponsoring veterans'  
          organizations, such as the American Legion, 101st Airborne  
          Division, or the National Guard.  To broaden the appeal of this  
          specialty plate program, AB 1908 (Cook), Chap 166/2010, replaced  
          the "veteran" plate with an "honoring veterans" plate.  Although  


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          Page 2

          neither plate was limited strictly to veterans of military  
          service, proponents believed this change would encourage more  
          vehicle owners to purchase the specialized plate and increase  
          revenues to county veterans services offices.  

          Proposed Law: AB 244 would require DVA to apply to DMV to  
          sponsor a veterans license plate program, and require DMV to  
          issue license plates and decals that are identical to those  
          issued prior to 2010 for that program if DVA meets the  
          requirements specified in existing law.  The fees for the new  
          "veterans" plate would be the same as those that apply to the  
          current "honoring veterans" plate.  After deducting  
          administrative costs, DMV would deposit additional fee revenue  
          into the Veterans Service Office Fund.

          Staff Comments: DMV indicates that as of December, 2012 there  
          were 29,995 sets of veterans' organization plates issued to  
          registered vehicles.  In the 2011 calendar year, DMV incurred  
          $105,584 in costs to administer this specialized license plate  
          program, which was fully covered by fees collected, and  
          deposited the remaining $667,281 in veterans license plate fee  
          revenue into the Veterans Service Office Fund.

          Staff notes that with the enactment of this bill, and assuming  
          DVA collects the requisite number of applications and  
          accompanying fees, DMV would offer two separate license plates  
          associated with veterans.  Any registered vehicle owner would be  
          eligible to purchase a license plate with either a message  
          "honoring veterans" or "veteran" along the bottom of the plate.   
          The revenues generated from both plates, after paying DMV's  
          administrative costs, would benefit county veterans services  
          offices.  Neither plate would be restricted to veterans of  
          military service.  The Committee may wish to consider whether  
          the creation of a second specialized license plate that benefits  
          the same population as the existing plate would represent a  
          highest and best use of DMV resources.  The programming and  
          administration costs associated with establishing a new plate  
          program detract from DMV's core mission and goals.