BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1096 (Nestande) - Specialized license plate: Salton Sea.
Amended: May 23, 2014 Policy Vote: T&H 10-0
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1096 would require the Department of Fish and
Wildlife (DFW) to apply to the Department of Motor Vehicles
(DMV) to sponsor a Salton Sea specialized license plate program,
as specified.
Fiscal Impact:
Estimated DFW costs of $25,000 in 2014-15 for plate design,
and approximately $50,000 in 2015-16 for 1/2 PY of staff
time to collect the initial 7,500 applications and fees for
the establishment of the plate program (General Fund).
These costs could continue into 2016-17 if the requisite
applications and fees are not collected within the first
year and DFW applies to DMV for a 12-month extension.
Assuming 7,500 pre-paid applications are collected by DFW,
DMV would incur initial administrative costs of $135,000 to
process the applications, and an additional $440,000 in
programming and other implementation costs, likely in
2016-17 or 2017-18, partially offset by pre-paid application
fees of $375,000, leaving a net first-year cost of
approximately $200,000 (Motor Vehicle Account). These net
costs would be reimbursed in the following fiscal year by
registration renewal fees from holders of the Salton Sea
plates. All ongoing costs thereafter would be fully offset
by fees from renewals and issuance of new plates.
Upon full implementation of the proposed plate program,
there would be ongoing revenues of approximately $300,000
annually available for use by the Salton Sea Authority for
restoration of the Salton Sea (based on 7,500 plate
renewals). These revenues could be higher to the extent
additional Salton Sea plates are issued.
AB 1096 (Nestande)
Page 1
Background: Prior to 2007, any new special interest license
plate required specific legislative authorization. This
practice was held to be unconstitutional in that the Legislature
approved some of the plates, and rejected others, using no
standardized or objective criteria for those decisions. Current
law, as enacted by 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.
In addition to the regular fees for an original or renewal
registration, the following fees would be paid for the issuance,
renewal, or transfer of the specialized license plate: $50 for
original issuance; $40 for renewal; $15 for transfer to another
vehicle; and $35 for substitute replacement plates. Once a
specialized license plate program has been implemented, all
additional fee revenues associated with the plate, after
subtracting DMV administrative costs, would be deposited into
the Specialized License Plate Fund, and made available to the
sponsoring agency upon appropriation by the Legislature for
projects and programs that promote the agency's official policy,
mission, or work. A sponsoring agency may not spend more than
25 percent of its license plate fee revenues for administrative,
marketing, and promotional costs associated with the plate.
The Salton Sea, located in southeastern California, is the
largest lake in the state. The Sea consists primarily of
commercial agricultural drainage, with about 90% of the inflow
coming from agricultural runoff from the Imperial, Coachella,
and Mexicali Valleys. In 1993, the Salton Sea Authority was
established as a joint powers authority with the goal of
revitalizing the Sea and ensuring its beneficial uses. The
Authority, in cooperation with the U.S. Department of Interior's
Bureau of Reclamation, has begun efforts to maintain the Sea as
an agricultural drainage reservoir, restore the wildlife
resources and habitats, stimulate recreational use, and provide
an environment for economic development.
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The Salton Sea Restoration Council was established in 2010, as a
part of Natural Resources Agency, to oversee the restoration of
the Salton Sea. The Council completed a mandated restoration
plan in 2013, recommending projects that require an investment
of approximately $9 billion. Existing law requires DFW and the
Department of Water Resources to implement activities relating
to the restoration of the Salton Sea.
Proposed Law: AB 1096 would require DFW to apply to DMV to
sponsor a Salton Sea license plate program pursuant to the
requirements of the specialized license plate program in
existing law. The bill would require additional fees derived
from the plate program to be deposited into the Salton Sea
Restoration Account in the Specialized License Plate Fund.
Revenues would be available, upon appropriation by the
Legislature, to the Salton Sea Authority for restoration of the
Salton Sea.
Related Legislation:
AB 2321 (Gomez), pending in this Committee, would require the
Office of Emergency Services to apply to DMV to sponsor a
domestic violence and sexual assault awareness specialized
license plate program to fund the Family Violence Prevention
Program.
AB 2450 (Logue/J.Perez), pending in this Committee, would
require the Department of Public Health to apply to DMV to
sponsor a kidney disease awareness specialized license plate
program.
Staff Comments: As noted above, any state agency may sponsor a
specialized license plate program and apply to DMV to issue the
plates upon collection of 7,500 pre-paid applications without
legislative action. Rather than allow DFW to sponsor a plate at
its discretion, this bill would require the department to apply
to DMV to sponsor a Salton Sea plate program.
As a sponsoring entity, existing law requires DFW to design a
plate, apply to DMV to sponsor a plate program, and collect
7,500 pre-paid applications within 12 months. If the requisite
number of applications has not been reached within a year, DFW
has the option of either returning all fees and deposits to
applicants, or notifying DMV that it intends to continue
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Page 3
collection efforts to obtain the minimum 7,500 applications
within the subsequent 12 months. If DFW elects to continue
collection efforts, it must contact applicants who submitted
applications and fees to determine whether they would prefer to
continue the application or have their deposits and fees
refunded.
Staff estimates that DFW would incur initial costs of
approximately $25,000 in 2014-15 to design the Salton Sea
license plate and apply to DMV to sponsor the plate, and
additional costs of approximately $50,000 in 2015-16 to collect
applications and fees. If 7,500 applications have not been
received within 12 months of applying to DMV, DFW may incur
similar costs in 2016-17 if it chooses to apply for an
extension. There could be additional costs to the extent DFW
implements a marketing strategy to attract applicants. Staff
notes that there is no requirement that DFW incur costs beyond
the initial 12 month period if less than 7,500 applications have
been collected.
All DMV costs are contingent upon receipt of 7,500 pre-paid
applications, as specified above. If the requisite number of
applications are not received within the specified timeframes,
the Salton Sea plate program would not be implemented and there
would be no further costs or revenues derived from the bill.
Existing law requires specialized plate revenues to be spent on
projects and programs that promote the sponsoring agency's
official policy, mission, or work. Staff notes that DFW's
Species Conservation Habitat Project provides for expenditure of
funds on habitat restoration and protection. As such,
expenditures of specialized license plate revenues by the Salton
Sea Authority should be reserved for these types of projects,
rather than economic development functions proposed by the
Authority.