BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 192 (Travis Allen) - Specialized license plates
          
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          |Version: July 16, 2015          |Policy Vote: T. & H. 11 - 0     |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 17, 2015   |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File. 


          Bill  
          Summary:  AB 192 would require the State Coastal Conservancy  
          (SCC) to apply to the Department of Motor Vehicles (DMV) to  
          sponsor a coastal conservancy awareness specialized license  
          plate program, as specified.  The bill would also allow funds  
          collected through the existing Pet Lover's specialized license  
          plate program to be allocated to a nonprofit organization that  
          would disburse the funds to qualifying spay and neuter  
          facilities, as specified.  The Veterinary Medical Board (VMB)  
          would retain an oversight role for the Pet Lover's grant  
          program.


          Fiscal  
          Impact:  
           The SCC would incur costs of $30,000 in 2015-16 for plate  
            design and development of materials, and likely minor costs in  
            2016-17, and potentially 2017-18, for staff time to collect  
            the initial 7,500 applications and fees for the establishment  
            of the plate program (State Coastal Conservancy Fund).  There  







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            could be additional costs of approximately $60,000 if SCC  
            executes a marketing strategy to attract applicants.  If the  
            license plate program is implemented, SCC would incur ongoing  
            administrative costs, potentially up to $100,000 annually  
            (Coastal Conservancy Awareness Fund).

           Assuming 7,500 pre-paid applications are collected by the SCC,  
            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 2017-18  
            or 2018-19, partially offset by pre-paid application fees of  
            $375,000, leaving a net 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 coastal conservancy awareness 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  
            for use by SCC for specified conservancy purposes (based on  
            7,500 plate renewals, and not accounting for administrative  
            costs).

           Diversion of funding for personalizing a coastal conservancy  
            awareness plate from the California Environmental License  
            Plate Fund to the School Violence Prevention Fund.  See staff  
            comments. 

           Likely minor fiscal impacts related to the authority for the  
            VMB to designate a nonprofit entity for administering grant  
            distribution under the Pet Lover's plate program.  The overall  
            limit of 25 percent for administrative purposes would still  
            apply. (Pet Lover's Fund)


          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), Ch. 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  








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          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, existing law requires payment of the following  
          fees 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, are  
          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.  If an applicant wishes to personalize a specialized  
          license plate, the following additional fees would apply: $48  
          for original issuance, $38 for renewal, and $38 for transfer to  
          another vehicle.  Any fees paid for personalization would be  
          deposited into the California Environmental License Plate Fund  
          for expenditure on various environmental protection purposes.

          The State Coastal Conservancy develops and implements projects  
          that protect, restore, and enhance natural, recreational, and  
          economic resources along California's coast, coastal watersheds,  
          the ocean, and within the San Francisco Bay Area.  The SCC  
          supports projects through direct funding and grants to local  
          agencies and nonprofit organizations that do the following:  (1)  
          protect and enhance the natural environment, agricultural and  
          scenic lands, and urban waterfronts in coastal areas; (2)  
          increase public access to coastal areas, build trails, and  
          increase opportunities for outdoor recreation; (3) support K-12  
          education programs about coastal resources; and (4) prepare for  
          and mitigate impacts of climate change in coastal areas.


          Proposed Law:  








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            AB 192 would require the SCC to apply to DMV to sponsor a  
          coastal conservancy awareness 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 Coastal  
          Conservancy Awareness Fund, established by this bill.  Revenues  
          would be allocated to the SCC, upon appropriation by the  
          Legislature, to fund projects and programs that accomplish  
          purposes consistent with existing authority, with priority  
          provided to specified purposes.  The bill authorizes the SCC to  
          enter into agreements with governmental entities or nonprofit  
          organizations to assist in accomplishing any eligible projects  
          or programs.  The plates would bear a decal that DMV determines  
          would not obscure readability of the license plate depicting a  
          surfer design, as approved by the SCC.
          AB 192 would also establish the Pet Lover's Fund in the  
          Specialized License Plate Fund and require funds to be allocated  
          to the Veterinary Medical Board, upon appropriation by the  
          Legislature, and the VMB would allocate those funds to a  
          nonprofit organization it selects to disburse funds to  
          qualifying spay and neuter facilities to provide grants to  
          providers of low- and no-cost animal sterilization services.   
          The VMB would determine grant eligibility, develop the program,  
          and contract with any entity, including a nonprofit  
          organization, to implement and administer the grant program.   
          The VMB would provide oversight for the disbursal of grant funds  
          under the program.




          Related  
          Legislation:  Over the past five years, 13 bills have been  
          introduced directing a state agency to sponsor a specialized  
          license plate for a variety of causes, and eight of these bills  
          were enacted.  Most recently, the following four bills were  
          signed into law in 2014: AB 49 (Buchanan), Ch. 351/2014, for  
          breast cancer awareness; AB 1096 (Nestande), Ch. 353/2014, for  
          Salton Sea restoration; AB 2321 (Gomez) Ch. 358/2014, for  
          domestic violence prevention and sexual assault awareness; and  
          AB 2450 (Logue), Ch. 359/2014, for kidney disease awareness.

          There are three other specialized license plates pending in this  
          Committee:  AB 63 (Bonilla) would require the Department of  








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          Education to apply to the DMV to sponsor a school violence  
          prevention license plate program; AB 270 (Nazarian) would  
          require the Department of Public Health to apply to DMV to  
          sponsor a diabetes awareness specialized plate program; AB 932  
          (Daly) would require the Department of Parks and Recreation to  
          apply to DMV to sponsor a professional sports franchise license  
          plate program, as specified.




          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 the SCC to sponsor a plate at its  
          discretion, this bill would require the Conservancy department  
          to apply to DMV to sponsor a coastal conservancy awareness plate  
          program.

          As a sponsoring entity, existing law requires SCC 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, SCC  
          has the option of either returning all fees and deposits to  
          applicants, or notifying DMV that it intends to continue  
          collection efforts to obtain the minimum 7,500 applications  
          within the subsequent 12 months.  If the SCC 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 notes that only two of the 12 specialized plate  
          programs signed into law since 2000 have successfully met the  
          minimum threshold of 7,500 pre-paid applications.

          Staff estimates that SCC would incur initial costs of  
          approximately $30,000 in 2015-16 to design the coastal  
          conservancy awareness license plate and apply to DMV to sponsor  
          the plate, and likely minor costs in 2016-17, and possibly in  
          2017-18, to collect applications and fees.  There could be  
          additional costs of approximately $60,000 to the extent the SCC  
          implements a marketing strategy to attract applicants, although  
          that is not an explicit requirement in the bill or current law.   
          Staff notes that there is no requirement that the SCC incur  








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          costs beyond the initial 12 month period if less than 7,500  
          applications have been collected.  If the program is fully  
          implemented, staff estimates the SCC could incur annual costs of  
          up to $100,000 to administer the program.  It is unclear whether  
          SCC's ongoing costs would be fully covered by the specified  
          maximum of 25 percent of plate funds that may be used for  
          administrative costs.  Costs in excess of these amounts would be  
          a special fund expense (State Coastal Conservancy Fund).

          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 coastal conservancy awareness plate program would not be  
          implemented and there would be no further costs or revenues  
          derived from the bill.

          If the license plate program is implemented, it would generate  
          at least $300,000 in annual revenues for specified SCC purposes  
          (assuming the minimum 7,500 plate holders paid a $40 renewal  
          fee).  After deducting SCC's allowable administrative costs,  
          there would likely be less than $250,000 in plate funds  
          available for these purposes.  The SCC would not need to  
          establish a new program, as all of the eligible expenditures  
          specified in the bill are consistent with the Conservancy's  
          existing authority.  The license plate funds would likely be  
          used to supplement existing grant programs.

          Existing law requires specified additional funds related to  
          personalizing a specialized license plate must be deposited into  
          the California Environmental License Plate Fund.  This bill  
          requires DMV to deposit all fees collected from the sale of the  
          coastal conservancy awareness plates into the Coastal Commission  
          Awareness Fund, after deducting administrative costs.  This  
          would appear to result in the diversion of any revenues  
          associated with personalization from the Environmental License  
          Plate Fund to the new fund for expenditure by the SCC.

          Staff notes that the Senate Transportation and Housing Committee  
          authored, and the Senate approved, SR 28 last year to declare a  
          moratorium on legislation to increase the number of specialized  
          plate types that DMV may issue until the Legislature can assess  
          the full and long-term impacts of the ongoing increase in  
          license plate types.  The resolution requested DMV to establish  
          a task force to study plate proliferation and make  








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          recommendations to the Legislature and Governor by July 1, 2015.  
           That report is still pending, and the proposed moratorium has  
          apparently not prevented new plate proposals from moving forward  
          in the current Session.

           Pet Lover's plate provisions:
           The Veterinary Medical Board administratively sponsored a  
          specialty plate with the purpose of funding low- and no-cost  
          animal sterilization services.  That plate received more than  
          7,500 applications and is now in production.  The VMB, as the  
          sponsoring agency for the Pet Lover's License Plate Program,  
          must retain the oversight for granting funds collected through  
          the plate program to qualified providers.  The board does not  
          have sufficient staff to administer the program and is seeking  
          assistance from a non-profit organization to provide general  
          administrative support, such as providing recommendations for  
          grant criteria, accepting and reviewing grant applications, and  
          making recommendations to the VMB regarding eligible providers  
          of low-cost spay and neuter services.  This bill would require  
          the VMB to develop the program, including eligibility and  
          application processes, and provide oversight over grant  
          distribution, but allow for contracting with a qualified  
          non-profit for general administrative support.  The state fiscal  
          impacts of shifting administrative responsibilities to a  
          nonprofit organization are likely to be minor.  The existing  
          limit on using 25 percent of available funds for marketing and  
          administrative purposes remains, and the bill allows the  
          nonprofit entity to use up to five percent of funds for its  
          administrative purposes, which must be included as a part of the  
          overall 25 percent limit for administrative costs.


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