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 ----------------------------------------------------------------- |Author: |Daly | |----------+------------------------------------------------------| |Version: |5/28/2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Randy Chinn | |: | | ----------------------------------------------------------------- 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 AB 932 (Daly) Page 2 of ? 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. AB 932 (Daly) Page 3 of ? 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 AB 932 (Daly) Page 4 of ? 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. AB 932 (Daly) Page 5 of ? 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. AB 932 (Daly) Page 6 of ? 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 AB 932 (Daly) Page 7 of ? -- END --