BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          SB 789 (Price) - Special interest license plates: California  
          Arts Council.
          
          Amended: As Introduced          Policy Vote: T&H 9-0
          Urgency: No                     Mandate: No
          Hearing Date: May 20, 2013      Consultant: Mark McKenzie
          
          This bill does not meet the criteria for referral to the  
          Suspense File. 
          
          Bill Summary: SB 789 would authorize the California Arts Council  
          (CAC) to use specified funds derived from special interest  
          license plate fees for administrative costs.

          Fiscal Impact: 
              No new state costs to the Graphic Design License Plate  
              Fund.  The bill would clarify that license plate revenues  
              derived from a fee increase in 2004 may be used as part of  
              the CAC's overall administrative costs.  This would provide  
              parity for the Arts Council license plate with other special  
              interest license plate programs.

          Background: Existing law, the Polanco-Bates License Plates for  
          the Arts Act of 1993, established the Arts Council special  
          interest license plate program (AB 3632, Polanco, Chap  
          1282/1993).  Fees for issuance of the original plate were set at  
          $20, while annual renewal fees were $10.  These fees were later  
          increased to $30 for issuance and $15 for renewal.  All fee  
          revenues are deposited into the Graphic Design License Plate  
          Account for support of arts education and local arts programs  
          administered by the CAC.  The general special interest license  
          program law allows a sponsoring state agency to use no more than  
          25 percent of license plate fee revenues on administrative  
          costs, marketing, or other activities associated with ensuring  
          application for, or renewal of, its special interest license  
          plates.

          SB 1213 (Scott), Chap 393/2004, increased the original fees for  
          the Arts Plate from $40 to $50 for issuance and from $15 to $40  
          for renewal, but prohibited the CAC from using the revenues  
          derived from the increase for administrative costs.  The Arts  
          Plate generates approximately $2.2 million annually for the  








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          CAC's arts programs.

          Proposed Law: SB 789 would delete a provision in current law  
          that prohibits the CAC from using revenues from a fee increase  
          enacted in 2004 for administrative costs.

          Staff Comments: As a result of a recent audit of special  
          interest license plate programs by the Department of Finance  
          (DOF), confusion has arisen over the use of Arts Plate revenues  
          for the CAC's administrative costs.  DOF asserts that the CAC  
          may use 25 percent of its "pre-SB 1213" license plate fees for  
          administrative expenses, which contradicts the CAC and  
          Department of Motor Vehicles interpretation of allowable use of  
          license plate fee revenues.  These entities contend that the 25  
          percent cap in current law applies to the use of license plate  
          funds for administrative costs, marketing, and other activities  
          related to the plate program, rather than general administrative  
          expenses.  SB 789 would address the issue by authorizing the CAC  
          to use up to 25 percent of its total license plate revenues for  
          administrative purposes.