BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 192 (Travis Allen) - Specialized license plates ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: July 16, 2015 |Policy Vote: T. & H. 11 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 17, 2015 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- 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 AB 192 (Travis Allen) Page 1 of ? 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 AB 192 (Travis Allen) Page 2 of ? 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: AB 192 (Travis Allen) Page 3 of ? 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 AB 192 (Travis Allen) Page 4 of ? 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 AB 192 (Travis Allen) Page 5 of ? 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 AB 192 (Travis Allen) Page 6 of ? 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. -- END --