BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
                              Senator Jim Beall, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 932            Hearing Date:    7/7/2015
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          |Author:   |Daly                                                  |
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          |Version:  |5/28/2015                                             |
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          |Urgency:  |No                     |Fiscal:      |Yes             |
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          |Consultant|Randy Chinn                                           |
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          SUBJECT:  Specialized license plates:  professional sports


            DIGEST:  This bill authorizes a professional sports license  
          plate program.

          ANALYSIS:
          
          Existing law provides for a specialized license plate program,  
          under which the Department of Motor Vehicles (DMV) may issue new  
          special-interest license plates.  Special-interest license  
          plates may only be issued on behalf of state agencies and only  
          provided that for each state agency:

          1)The license plate has "a design or contains a message that  
            publicizes or promotes a state agency, or the official policy,  
            mission, or work of a state agency."  The design shall also be  
            confined to the left of and below the numerical series (i.e.,  
            no full-plate designs allowed).

          2)The state agency submits 7,500 applications and accompanying  
            fees to DMV for the license plate.  The state agency has 12  
            months to collect these applications and fees, but it can  
            extend that to a maximum of 24 months if it notifies and  
            offers to refund fees to those who applied during the first 12  
            months.  Once a plate is issued, DMV stops issuing that plate  
            for the agency if the number of plates drops below 7,500.

          In addition to the usual registration and license fees, DMV  
          charges the following additional fees for specialized license  







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          plates:  $50 for the initial issuance, $40 for annual renewal,  
          and $98 to personalize.  DMV deducts its administrative costs  
          from the revenues generated.  The net revenues derived from a  
          specialized license plate are then available upon appropriation  
          for the sponsoring state agency to expend exclusively on  
          projects and programs that promote the state agency's official  
          policy, mission, or work.


          This bill:

          1)Requires the Department of Parks and Recreation (DPR) to apply  
            to the DMV to sponsor a professional sports franchise license  
            plate program upon entering into a memorandum of understanding  
            with a California professional sports franchise to  
            participate.  

          2)Requires the specialty license plate to include the logo,  
            emblem, or trademark of the sports franchise.

          3)Requires that the funds raised from the issuance of the  
            plates, after deduction for administrative costs, shall be  
            deposited into the California State Parks Account to fund  
            local parks and recreation programs.

          COMMENTS:

          Purpose.  The author notes that spending for local parks has  
          decreased even as demand grows.  Communities facing budget  
          problems have been forced to let their parks fall into  
          disrepair, or to close them altogether.  The author created this  
          bill to establish a dedicated funding source for local park  
          programs.

          History of special-interest license plates.  Historically, the  
          Vehicle Code required the DMV to issue, upon legislative  
          authorization, a special-interest license plate bearing a  
          distinctive design or decal of a sponsoring organization to any  
          vehicle owner that pays specified fees, provided that the  
          sponsoring organization met certain conditions.  These  
          conditions included that the sponsor of a special-interest  
          license plate had to be a nonprofit organization and had to  
          collect 7,500 applications and fees for a special license plate  
          in order to pay DMV's costs of creating a new plate, which are  
          approximately $375,000 or 7,500 applications times the $50 fee.








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          In 2004, a federal court decision, Women's Resource Network v.  
          Gourley, E.D. Cal 2004, F.Supp.2d, 2004 U.S. Dist., invalidated  
          these provisions of the Vehicle Code.  In the Gourley decision,  
          the court declared California's special-interest license plate  
          statutes unconstitutional because they violated the First  
          Amendment right to freedom of speech.  The court specifically  
          objected to the Legislature "picking and choosing" special  
          license plates that private organizations propose, in essence  
          promoting the message of some organizations while denying this  
          right to others.  The court did allow the 10 special-interest  
          license plates existing at the time of its decision to remain in  
          use and available to new applicants, as they are today.

          In response to the court decision, AB 84 (Leslie, Chapter 454,  
          Statutes of 2006) established the current specialized license  
          plate program to provide a forum for government speech that  
          promotes California's state policies.  AB 84 excludes private  
          organizations from seeking specialized license plates as a forum  
          for private speech and thus addresses the court's objection.   
          Newly created plates and the revenue they generate must  
          publicize or promote a state agency or the official policy,  
          mission, or work of a state agency.

          A recent decision by the United States Supreme Court may have  
          upended the Gourley decision.  On June 18, 2015, the Court  
          issued Walker v. Texas Division, Sons of Confederate Veterans,  
          which appears to be a contrary ruling to Gourley.  However, the  
          committee needs to consult with others before providing a more  
          definitive opinion.

          Nothing like it. This bill is unique from other specialized  
          license plate in several respects:  

          1)Sales of these plates will raise money for both state and  
            non-state purposes.  The funds raised from the sale of  
            specialized license plates typically go to the state purpose  
            specified in the legislation.  However, this bill directs  
            funds raised from the sale of these license plates to be split  
            on an as-yet-undetermined basis between the charities selected  
            by the sports team and the California State Parks account.

          2)The cost of these plates will be significantly higher than for  
            other specialized license plates.  Because the funds will be  
            split, this bill envisions that the specialty license plate  








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            fees for this program will be double or more the fees for  
            other specialty license plates.  This ensures that the  
            California State Parks account will receive the same amount as  
            for any other specialty license plate, while the sports team's  
            charity will receive any amount above that.

          3)These plates will have the logo of a private, for-profit  
            enterprise.  This bill authorizes the placement of the logos  
            and emblems of sports teams on the license plate.  Specialty  
            plates that use logos typically feature non-profit  
            organizations such as the Girl Scouts; featuring a for-profit  
            organization is almost unprecedented.  The lone exception is  
            the California Cultural and Historical Endowment plate, which  
            features a picture of Snoopy, but that authorization was done  
            administratively, not in statute.  Would establishing this  
            precedent open the door to other for-profit entities to do the  
            same?  There would be little basis to object to the Walmart,  
            SEIU, or Smith & Wesson logos on state-issued license plates.   
             The author and committee may wish to carefully consider this  
            precedent-setting provision.  While California professional  
            sports teams are popular, and successful, especially in  
            Northern California, it may be inappropriate for private  
            entities to have their logos affixed to a government document,  
            irrespective of the merit of the cause.  

            While there is virtually no California history of for-profit  
            organizations on license plates, allowing sports teams on  
            license plates seems to be common elsewhere.  According to the  
            author, 27 states allow sports team logos on their license  
            plates.  In Florida, seven professional sports teams and  
            NASCAR all have specialty license plates; Texas has 18  
            different plates with professional sports affiliations and at  
            least one for a consumer product, Pepsi.  

          4)This program is likely to be much more successful than prior  
            specialized license plate programs.  While the vast majority  
            of specialty license plates fail to meet the 7,500 threshold,  
            it seems likely that the sports plate will have little trouble  
            meeting that number.  In Florida, the Miami Heat, Tampa Bay  
            Buccaneers, and Jacksonville Jaguars all have sold more than  
            7,500 plates.  In California, where our professional sports  
            teams are more successful, this could result in millions of  
            additional dollars for state park programs.  Under this bill,  
            the 7,500-plate minimum threshold applies to the program, not  
            each individual sports team.








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          Charitable intent isn't explicit.  The intent of this bill is to  
          partner with professional sports teams and to split the proceeds  
          with the charities of those teams, but that intent is not  
          specified in the bill.  The author and committee may wish to  
          consider adding an explicit requirement that the portion of the  
          charges not going to the state must be provided to the  
          charitable foundation of the sports team for charitable  
          purposes.

          How much?  Current law establishes the charges for specialized  
          license plates, but the intent of this bill is to allow for  
          substantially higher charges, with the state getting the usual  
          charge ($50 initially, $40 for renewals, $98 for  
          personalization) and the remainder going to the charity of the  
          sports team.  The author and committee may wish to consider  
          clarifying this arrangement by explicitly allowing for higher  
          charges.  Moreover, if the intent is to allow for substantially  
          higher charges, it may be appropriate to split the charges 50/50  
          between the state and the professional sports team charity.

          Opposition.  The Department of Finance opposes this bill as  
          unnecessary, as a process already exists that allows state  
          agencies to apply to the DMV to sponsor specialty license  
          plates.


          Related Legislation:
          
          AB 63 (Bonilla) - establishes a school violence prevention  
          specialized license plate program.  This bill is also being  
          heard today in this committee.

          AB 192 (Allen) - establishes a coastal conservancy awareness  
          specialized license plate.  This bill is pending in the Senate  
          Transportation and Housing Committee.

          AB 270 (Nazarian) - establishes a diabetes awareness specialized  
          license plate.  This bill is also being heard today in this  
          committee.

          AB 1338 (Gomez) - establishes a domestic violence and sexual  
          assault awareness specialized license plate.  This bill is also  
          being heard today in this committee.









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          AB 49 (Buchanan, Chapter 351, Statutes of 2014) - requires the  
          state Department of Health Care Services to apply to the DMV to  
          sponsor a breast cancer awareness license plate program.

          AB 1096 (Nestande, Chapter 353, Statutes of 2014) - requires the  
          Department of Fish and Wildlife to apply to the DMV to sponsor a  
          Salton Sea license plate program.

          AB 2321 (Gomez, Chapter 358, Statutes of 2014) - requires the  
          Office of Emergency Services to apply to the DMV for a domestic  
          violence and sexual assault awareness and specialty license  
          plate program.

          AB 2450 (Logue, Chapter 359, Statutes of 2014) - requires the  
          state Department of Public Health to apply to the DMV for a  
          kidney disease awareness specialty license plate program.
          
          AB 244 (Bonilla, Chapter 690, Statutes of 2013) - requires the  
          Department of Veterans Affairs to apply to the DMV to sponsor a  
          veterans' specialty license plate program.

          Assembly Votes:

            Floor:         77-0
            Appr:          17-0
            AEST&IM:    7-0
            Trans:         14-0
          
          FISCAL EFFECT:  Appropriation:  No    Fiscal Com.:  Yes     
          Local:  No


            POSITIONS:  (Communicated to the committee before noon on  
          Wednesday,
                          July 1, 2015.)
          
            SUPPORT:  

          California Park and Recreation Society
          Anaheim Ducks Hockey Club

          OPPOSITION:

          Department of Finance









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