BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 482 (Atkins) - California Cultural and Historical Endowment. Amended: June 19, 2013 Policy Vote: NW&R 6-1 Urgency: Yes Mandate: No Hearing Date: August 19, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 482 would allow the California Cultural and Historical Endowment (CCHE) to create a competitive grant program to support small capital projects in museums and to fund that program with proceeds from a new specialty license plate. Fiscal Impact: Cost pressures, in high hundreds of thousands of dollars, to the California Cultural and Historical Endowment Fund for granting the CCHE the ability to create a new small capital museum projects grant program. Ongoing annual costs, of approximately $400,000 for the CCHE's administrative costs for the grant program. The administration costs are likely to vary depending on the size of the grant program. One-time costs of approximately $400,000 from the Motor Vehicle Account (special) to the Department of Motor Vehicles (DMV) to establish a program for each new plate design that meets the 7,500 application threshold by January 1, 2015. These costs would be fully covered by fees paid in advance by applicants. Ongoing DMV costs to administer the issuance and renewal of the specialty plate will also be fully covered by fees. Unknown ongoing revenue, anticipated in the hundreds of thousands to millions of dollars, to the California Cultural and Historical Endowment Fund (special) depending on the participation rate in the museum specialty license plate. Background: The CCHE was established in the State Library in 2003 (AB 716 (Firebaugh) Chapter 1126/2002) to assist and enhance the services of California's museums and other institutions that undertake cultural projects. The CCHE is led by a 10-member board which includes the State Library (chair), AB 482 (Atkins) Page 1 the Natural Resources Agency, the Director of Finance, three members appointed by the governor, two members appointed by the Senate Rules Committee, and two members appointed by the Assembly Speaker. The California Cultural and Historical Endowment Fund (fund) is created in EDC §20060 and receives monies from gifts, donations, and other financial support from public and private sources. The fund is continuously appropriated to the CCHE. Voters approved the California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002 (Proposition 40), which made available monies for the acquisition, restoration, preservation, and interpretation of California's historical and cultural resources. Over $120 million has been distributed by the CCHE to date. In this year's budget, the remaining $1.4M of Proposition 40 monies reserved for historical and cultural resources was appropriated to CCHE for a final year of grants under its existing grant program. Existing law allows any state agency to apply to the California Department of Motor Vehicles (DMV) to sponsor a specialized license plate program (VEH §5151 et seq.). The DMV may issue the new plates if certain conditions are met, including that the license plate publicizes or promotes the agency or its mission, at least 7,5000 applications and fees are received within a 24-month period, and plate revenues are exclusively for projects and programs that promotes the agency's policy, mission, or work. The sponsoring state agency may use no more than 25% of the place proceeds on administrative costs or marketing of the specialized plate. Proposed Law: This bill would allow the CCHE to establish a competitive grant program for small capital projects in museums. The administration of this program would be initially funded by monies in the fund from Proposition 40. If such a grant program was created, on or before October 1, 2013, the CCHE would be required to apply to the DMV for a specialty license plate. The fees collected from the sale of the specialized license plate, less DMV's costs, would be deposited into the fund to fund the grant program. Once revenues are received from the specialty license plate, the grant program may only be funded through specialty license plate revenues. AB 482 (Atkins) Page 2 This bill would also transfer the CCHE from the State Library to the Natural Resources Agency by making the Secretary of the Natural Resources Agency the chair and the State Librarian a member. Related Legislation: There have been numerous proposals for specialty license plates including AB 49 (Buchanan) and AB 1096 (Nestande) in the current legislative session and AB 1658 (Gatto), AB 1539, and AB 610 (Solorio) in the 2012. These proposals involved plates for issues other than cultural and historical resources. Staff Comments: CCHE currently has an administrative budget of approximately $430,000. Moving CCHE to Resources Agency out of the State Library is anticipated to result in administrative savings of approximately $30,000 to $40,000 for lower facilities costs. Thus, CCHE's administrative costs will likely be approximately $400,000 should this bill pass. Staff notes that their administrative costs are likely to change depending on the revenues received from the specialty license plate and the size of the grant program. As noted in the background, this year's budget appropriated the remainder of the CCHE Proposition 40 monies to fund projects under the existing grant program. This bill would take the appropriated monies and instead utilize them for a new grant program. As such staff notes that this bill is not consistent with Legislative actions in this year's budget. Staff notes that the existing grant program does not have sufficient eligible projects to deliver the remaining funds. Thus, CCHE will need to send out a new request for grant applications to deliver the remaining funds, regardless of whether it is through the existing grant program or a new program. Although it is no longer specified in the bill, the intention of the CCHE is for the museum specialty license plate to feature the Snoopy cartoon character, a licensed image to Jean Schulz and made available through the California Association of Museums. CCHE approved a plan for the new grant program allowed under this bill that would split the proceeds from the specialty license plate three ways- 60% for the grant program, 20% for the AB 482 (Atkins) Page 3 administration of CCHE, and 20% to the California Association of Museums. Staff notes that state agencies that sponsor specialty license plates often have initial one-time costs to collect the required number of applications. CCHE indicates that the California Association of Museums will be collecting these signatures so that no costs are born by CCHE for these activities. This bill makes an appropriation as it directs spending of the California Cultural and Historical Endowment Fund, which is a continuously appropriated fund. This bill would require CCHE to apply for a specialty license plate by October 1, 2013. Staff notes that this deadline is before the Governor's deadline to sign or veto bills passed at the end of session. So though this is an urgency measure, the deadline may occur before the effective date of the bill.