BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 270 (Nazarian) - Specialized license plates: diabetes
awareness
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|Version: March 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 270 would require the Department of Public Health
(DPH) to apply to the Department of Motor Vehicles (DMV) to
sponsor a diabetes awareness, education, and research
specialized license plate program, as specified.
Fiscal
Impact:
Estimated DPH costs of $25,000 in 2015-16 for plate design,
and up to $50,000 in 2016-17 for staff time to collect the
initial 7,500 applications and fees for the establishment of
the plate program (General Fund). These costs could continue
into 2017-18 if the requisite applications and fees are not
AB 270 (Nazarian) Page 1 of
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collected within the first year and DPH applies to DMV for a
12-month extension. There could be additional costs if DPH
executes a marketing strategy to attract applicants. If the
license plate program is implemented, DPH would incur unknown
administrative costs that would depend upon the amount of
resources available for the program, potentially in the
hundreds of thousands annually. To the extent expenses exceed
allowable use of plate funds for administrative costs, there
could be additional General Fund costs to support the
administration of the program.
Assuming 7,500 pre-paid applications are collected by CDE, 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 school violence prevention 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 DPH for diabetes awareness projects and programs
(based on 7,500 plate renewals, and not accounting for
administrative costs).
Diversion of funding for personalizing a diabetes awareness
plate from the Environmental License Plate Fund to the
Diabetes Awareness Fund. See staff comments.
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
applications and accompanying fees and submitting them to DMV.
The applications must be collected within one year, with an
AB 270 (Nazarian) Page 2 of
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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 Chronic Disease Control Branch (CDCB) within DPH supports
evidence-based programs to promote healthy behaviors and improve
the prevention, diagnosis, and treatment of chronic diseases in
California, including programs to address diabetes and heart
disease. CDCB is located within the Division of Chronic Disease
and Injury Control, which contains other branches that focus on
risk factors for diabetes prevention, such as poor diet,
physical inactivity, and tobacco use. CDCB collaborates on
diabetes prevention efforts with programs located in the
Nutrition Education and Obesity Prevention, Safe and Active
Communities, and California Tobacco Control Branches.
Proposed Law:
AB 270 would require DPH to apply to DMV to sponsor a diabetes
awareness, education, and research license plate program
pursuant to the requirements of the specialized license plate
AB 270 (Nazarian) Page 3 of
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program in existing law. Plates issued under this program would
display the message "Cure Diabetes" under the numerical series,
and DPH would be authorized to use donated art from California
artists for the plate. The bill would require additional fees
derived from the plate program to be deposited into the Diabetes
Awareness Fund, established by this bill. Revenues would be
allocated to DPH, upon appropriation by the Legislature, to fund
projects and programs related to diabetes awareness and
prevention in California's diverse communities.
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, which requires DPH to apply to
DMV to sponsor a kidney disease awareness plate.
There are three other specialized license plates pending in this
Committee: AB 63 (Bonilla) would require the Department of
Education to apply to the DMV to sponsor a school violence
prevention license plate program; AB 192 (Allen) would require
the State Coastal Conservancy to apply to the DMV to sponsor a
coastal conservancy awareness license plate program, and make
specified changes to the Pet Lover's 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 DPH to sponsor a plate at its
discretion, this bill would require the department to apply to
DMV to sponsor a diabetes awareness plate program.
AB 270 (Nazarian) Page 4 of
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As a sponsoring entity, existing law requires DPH 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, DPH
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 DPH 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 DPH would incur initial costs of
approximately $25,000 in 2015-16 to design the diabetes
awareness license plate and apply to DMV to sponsor the plate,
and additional costs of up to $50,000 in 2016-17 to collect
applications and fees. If 7,500 applications have not been
received within 12 months of applying to DMV, DPH may incur
similar costs in 2017-18 if it chooses to apply for an
extension. There could be additional costs to the extent DPH
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 DPH incur costs
beyond the initial 12 month period if less than 7,500
applications have been collected. If the program is fully
implemented, DPH indicates it could incur annual costs of
approximately $500,000 to administer the program. It is
unlikely that the program would generate sufficient funds to
justify these expenditures, and staff estimates that actual
costs would be determined in the future and would depend upon
the amount of available revenues and size of the program.
Regardless of the amount generated by the plate program,
administrative expenses are likely to exceed 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 General Fund expense.
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 diabetes awareness plate program would not be implemented
AB 270 (Nazarian) Page 5 of
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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 diabetes awareness and
prevention projects and programs (assuming the minimum 7,500
plate holders paid a $40 renewal fee). After deducting DPH's
allowable administrative costs, there would likely be less than
$250,000 in available funding for these purposes.
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 additional fees collected from the
sale of the diabetes awareness plate into the Diabetes 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 DPH.
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
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
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