BILL ANALYSIS Ó SB 789 Page 1 Date of Hearing: July 1, 2013 ASSEMBLY COMMITTEE ON TRANSPORTATION Bonnie Lowenthal, Chair SB 789 (Liu) - As Amended: June 24, 2013 SENATE VOTE : 39-0 SUBJECT : Special interest license plate revenues: California Arts Council SUMMARY : Allows the California Arts Council (Council) to use, for administrative expenses, revenues from the sale of the special interest license plates. EXISTING LAW : 1)Establishes the Council as a state agency. Its mission is to advance California through the arts and creativity by encouraging artistic awareness, participation, and expression. 2)Authorizes vehicle owners to obtain from the Department of Motor Vehicles (DMV), license plates that include a full-plate graphic design approved by DMV in consultation with the Council, depicting a significant feature or quality of the State of California. Requires the payment of additional fees for the issuance, renewal, and transfer of those plates. Requires funds raised by those fees to be used by the Council, upon appropriation by the Legislature, for arts education and local arts programming. 3)Prohibits the Council from using additional revenue for its administrative costs accruing from an increase in the fees for the Council's special interest license plates. Requires the Council to use the revenue derived from these fee increases exclusively for arts education and local arts programming. 4)Limits to 25% the amount of the revenues from the special interest license plate fund that an organization may expend on administrative costs, marketing, or other promotional activities associated with encouraging application for, or renewal of, the special license plates. FISCAL EFFECT : According to the Senate Appropriations SB 789 Page 2 Committee, no new state costs to the Graphic Design License Plate Fund. This bill would clarify that license plate revenues derived from a fee increase in 2004 may be used as part of the Council's overall administrative costs. This would provide parity for the Council's license plate with other special interest license plate programs. COMMENTS : According to the Council, its mission is to encourage public participation in the arts; help build strong arts organizations; assist with the professional development of arts leaders; promote awareness of the value of the arts; and directly fund arts programs in California's communities. It receives about $5.2 million annually in funding with about $1.1 million coming from the state's General Fund, $1.1 million from federal funds, and $3 million from the special interest license plates. Pursuant to AB 3632 (Polanco) Chapter 1282, Statutes of 1992, the Council's special interest license plate program was created along with others such as the Yosemite Foundation plate, the Kids plate, the Veterans Services plate, and the State Heritage Network plate. Initially, fees for the 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. The fee revenues are deposited into the Graphic Design License Plate Account for support of arts education and local arts programs administered by the Council. Furthermore, the special interest license program law allows a sponsoring state agency to use no more than 25% 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. Subsequently, SB 1213 (Scott) Chapter 393, Statutes of 2004, was enacted that increased the original fees for the Arts Plate from $30 to $50 for issuance and from $15 to $40 for renewal, but specifically prohibited the Council from using the revenues derived from the increase for administrative costs. Of the $3 million the arts special interest plates generates today, about $2 million results from the SB 1213 fee increases. This bill repeals the SB 1213's prohibition on the Council's use of the revenues for administrative purposes , thus allowing the Council to use the portion of its license plate revenues attributable to SB 1213's fee increases to cover its SB 789 Page 3 administrative costs. This provides parity for the Council's license plate program with other special interest license plate programs that cap administrative costs at 25%. Double referral : This bill is double referred and will be heard next in the Assembly Arts, Entertainment, Sports, Tourism and Internet Media Committee. REGISTERED SUPPORT / OPPOSITION : Support Arts Orange County Opposition None on file Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093