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