BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1096| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1096 Author: Nestande (R), et al. Amended: 8/22/14 in Senate Vote: 21 SENATE TRANSPORTATION & HOUSING COMMITTEE : 10-0, 6/26/14 AYES: DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso, Lara, Liu, Roth, Wyland NO VOTE RECORDED: Pavley SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14 AYES: De León, Hill, Lara, Padilla, Steinberg NO VOTE RECORDED: Walters, Gaines ASSEMBLY FLOOR : 77-0, 5/29/13 - See last page for vote SUBJECT : Special-interest license plates: Salton Sea SOURCE : Author DIGEST : This bill requires the Department of Fish and Wildlife to apply to the Department of Motor Vehicles (DMV) to establish a special-interest license plate that promotes Salton Sea restoration. Senate Floor Amendments of 8/22/14 resolve chaptering conflicts with AB 2450 (Logue). ANALYSIS : Any state agency, including the Department of Health Care Services, may sponsor a special-interest license CONTINUED AB 1096 Page 2 plate pursuant to AB 84 (Leslie, Chapter 454, Statutes of 2006). Under AB 84, the DMV may issue new special-interest license plates only on behalf of state agencies and only provided that for each state agency: The license plate has "a design or contains a message that publicizes or promotes a state agency, or the official policy, mission, or work of a state agency." The design shall also be confined to the left of and below the numerical series (i.e., no full plate designs allowed). The state agency submits 7,500 applications and accompanying fees to DMV for the license plate. The state agency has 12 months to collect these applications and fees, but it can extend that to a maximum of 24 months if it notifies and offers to refund fees to those who applied during the first 12 months. Once a plate is issued, DMV stops issuing that plate for the agency if the number of plates drops below 7,500. In addition to the usual registration and license fees, DMV charges the following additional fees for specialized license plates: $50 for the initial issuance, $40 for annual renewal, and $15 to transfer to another vehicle. DMV deducts its administrative costs from the revenues generated. The net revenues derived from a specialized license plate are then available upon appropriation for the sponsoring state agency to expend exclusively on projects and programs that promote the state agency's official policy, mission, or work. A sponsoring state agency may not spend more than 25% of its license plate funds for administrative, marketing, and promotional costs associated with the plate, and it must submit an annual accounting report to DMV. This bill: 1.Requires the Department of Fish and Wildlife to apply to DMV pursuant to AB 84 to sponsor a Salton Sea license plate program. 2.Directs the revenues derived from this license plate, after paying DMV's costs, to the Salton Sea authority for restoration of the Salton Sea. CONTINUED AB 1096 Page 3 Comments History of special-interest license plates . Historically, the Vehicle Code required DMV to issue, upon legislative authorization, a special-interest license plate bearing a distinctive design or decal of a sponsoring organization to any vehicle owner that pays specified fees, provided that the sponsoring organization met certain conditions. These conditions included that the sponsor of a special-interest license plate had to be a nonprofit organization and had to collect 7,500 applications and fees for a special license plate in order to pay DMV's costs of creating a new plate, which are approximately $375,000 or 7,500 applications times the $50 fee. In 2004, a federal court decision, Women's Resource Network v. Gourley, E.D. Cal 2004, F.Supp.2d, 2004 U.S. Dist., invalidated these provisions of the Vehicle Code. In the Gourley decision, the court declared California's special-interest license plate statutes unconstitutional because they violated the First Amendment right to freedom of speech. The court specifically objected to the Legislature "picking and choosing" special license plates that private organizations propose, in essence promoting the message of some organizations while denying this right to others. The court did allow the 10 special-interest license plates existing at the time of its decision to remain in use and available to new applicants, as they are today. In response to the court decision, AB 84 established the current specialized license plate program to provide a forum for government speech that promotes California's state policies. AB 84 excludes private organizations from seeking specialized license plates as a forum for private speech and thus addresses the court's objection. Newly created plates and the revenue they generate must publicize or promote a state agency or the official policy, mission, or work of a state agency. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: Estimated DFW costs of $25,000 in 2014-15 for plate design, and approximately $50,000 in 2015-16 for 1/2 personnel year of staff time to collect the initial 7,500 applications and fees CONTINUED AB 1096 Page 4 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. SUPPORT : (Verified 8/22/14) City of Indian Wells City of Palm Springs Coachella Valley Economic Partnership Greater Palm Springs Convention and Visitors Bureau Indio Chamber of Commerce Palm Desert Area Chamber of Commerce ARGUMENTS IN SUPPORT : The author introduced this bill to compel the Department of Fish and Wildlife to sponsor a special-interest license plate in order to provide funds to assist with restoration of the Salton Sea and to raise public awareness for that effort. There was a time when the Salton Sea attracted more visitors per year than Yosemite National Park, but the author asserts that decades of neglect have had a negative impact on the wildlife and local residents. By looking at every viable solution to raise these crucial funds that are needed - including a special-interest license plate - the author believes that California can protect the residents of the CONTINUED AB 1096 Page 5 Coachella Valley and its economic vitality, restore a vibrant ecosystem that benefits countless species, and establish a new recreational resource that will help draw new visitors to the region to enjoy all that the desert has to offer. ASSEMBLY FLOOR : 77-0, 5/29/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, John A. Pérez NO VOTE RECORDED: Holden, Yamada, Vacancy JA:nl 8/25/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED