BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 932 (Daly) - Specialized license plates: professional sports
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|Version: July 15, 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 932 would require the Department of Parks and
Recreation (DPR) to apply to the Department of Motor Vehicles
(DMV) to sponsor a professional sports franchise specialized
license plate program, upon entering into a memorandum of
understanding (MOU) with a California professional sports
franchise. The bill would authorize DMV to increase specified
license plate fees for sports franchise plates and require the
increased revenues to be used for charitable purposes, upon
appropriation to a nonprofit organization specified in the MOU
by the Legislature, as specified.
Fiscal
Impact:
For each sports franchise that enters into an MOU with DPR,
DMV would incur the following costs:
Assuming the initial 7,500 pre-paid applications are collected
by DPR, DMV would incur initial administrative costs of
$135,000 to process the applications, and an additional
AB 932 (Daly) Page 1 of
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$440,000 in programming and other implementation costs, likely
in 2017-18 for an initial sports franchise plate, 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 sports franchise
plates. All ongoing costs thereafter would be fully offset by
fees from renewals and issuance of new plates.
DPR indicates it would incur costs of approximately $200,000
in 2016-17, and ongoing costs of about $172,000 annually for
up to two full-time positions, with an additional $15,000 in
IT-related costs in alternating years for online application
capability (State Parks and Recreation Fund). This estimate
assumes multiple sports franchises will seek plates, and DPR
will process applications and payments concurrently for each
proposed franchise plate, and administer the distribution of
funds ongoing.
Unknown ongoing revenues to DPR for local parks and recreation
grant programs (California State Parks Account). Revenues
would depend upon the number of sports franchise plates that
are implemented, and the number of applicants for each plate.
Demand is expected to be higher than it has been for other
specialized plate programs, so revenues could be significant.
Unknown revenues for allocation to charitable nonprofit
organizations identified by sports franchises in MOUs with
DPR. These revenues would depend upon whether DMV increases
specified license plate fees, and by how much. (California
Professional Sports Franchise Nonprofit Organization Account)
Diversion of funding for personalizing a professional sports
franchise plate from the California Environmental License
Plate Fund to the special funds created by this bill. 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
AB 932 (Daly) Page 2 of
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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
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.
Currently, 25 states and Washington D.C. have implemented
specialized license plate programs using professional sports
team logos. Revenues from these programs have been used to fund
various social programs, including youth development,
homelessness, and academic scholarship programs.
The Office of Grants and Local Services (OGALS), within DPR,
administers numerous grant programs that provide funding for
state and local parks and recreation projects and programs.
Since 2000, the Office has administered over 8,300 grants from
34 different programs.
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Proposed Law:
AB 932 would authorize a professional sports franchise license
plate program. Specifically, this bill would:
Require DPR to apply to DMV to sponsor a professional sports
franchise license plate program upon entering into an MOU with
a California professional sports franchise to participate in
the program.
Require the MOU to identify the nonprofit organization
associated with the franchise for purposes of receiving
increased license plate funds, as specified.
Require DPR to accept and use the officially licensed logos,
emblems, and trademarks provided by the professional sports
franchises for the license plate.
Authorize DMV to increase the fees specified in existing law
for specialized plates for each professional sports franchise
plate that is established.
Establish the California State Parks Account in the
Specialized License Plate Fund and require the funds to be
used for funding local parks and recreation grant programs,
upon appropriation by the Legislature to OGALS.
Establish the California Professional Sports Franchise
Nonprofit Organization Account in the Specialized License
Plate Fund and require the Treasurer to create a separate
subaccount for each professional sports franchise plate that
is established. The funds in each subaccount would be used
for funding charitable purposes of the nonprofit organization,
upon appropriation by the Legislature to the nonprofit
identified in the MOU.
Specify the distribution of specialized license plate revenue,
as follows:
o If the fees are more than twice the amount specified
in existing law, the revenues would be evenly split
between DPR and the identified nonprofit organization,
after deducting DMV's administrative costs.
o If the fees are twice the amount specified in
existing law or less, after deducting DMV's
administrative costs, the amount attributable to the
increase imposed by DMV would be distributed to the
nonprofit organization, and DPR would get the remaining
amount.
o If DMV does not increase the specialized license
plate fees, DPR will receive all of the funding, after
deducting DMV's administrative costs, as specified.
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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
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;
and AB 270 (Nazarian) would require the Department of Public
Health to apply to DMV to sponsor a diabetes awareness
specialized plate program.
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 DPR to sponsor a plate at its
discretion, this bill would require that department to apply to
DMV to sponsor a professional sports franchise plate program.
Staff notes that DPR would need to enter into an MOU with a
sports franchise prior to applying to DMV to sponsor a plate
program.
As a sponsoring entity, existing law requires DPR 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, DPR
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
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within the subsequent 12 months. 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. However, given the popularity of sports
franchises, the plates authorized by this bill are likely to
meet the minimum threshold rather quickly. DMV costs would only
be incurred once the pre-paid applications are submitted by DPR
for processing. DMV implementation costs would be incurred for
each professional sports franchise that participates in a plate
program sponsored by DPR.
DPR estimates the need for 2 additional staff to negotiate MOUs
with sports franchises, establish online application capability,
and administer the collection of applications. First year costs
are estimated at $201,000, with ongoing staffing costs of
approximately $172,000 annually, and an additional $15,000 in
alternating years to establish and maintain online application
capability. Additional staff may be needed in future years to
administer the distribution of funding raised through the plate
program, depending on the amount of available revenues. For
every 10,000 plates issued, the bill would generate
approximately $380,000 once the program is established.
Existing law requires specialized license plates to have a
design or contain a message that publicizes or promotes a state
agency, or the official policy, mission, or work of a state
agency. This bill diverges from the current mission of
promoting public purposes, and instead promotes private
professional sports franchises and raises money for their
charitable priorities.
The bill authorizes DMV to establish increased fees for the
purposes of each specialized license plate sponsored by DPR.
The additional revenues would be deposited into a new special
fund and allocated to nonprofit organizations specified in the
MOU with each professional sports franchise associated with a
specialized plate program, as specified, for funding the
nonprofit's charitable purposes. The amount of revenues
available for distribution is indeterminable. Existing law
requires a sponsoring entity to prepare and submit an annual
report to DMV that includes an accounting of all revenues and
expenditures associated with a specialized license plate
program. There are no provisions in the bill for oversight of
revenues and expenditures of nonprofit entities that would
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benefit from the bill, and DPR would have no way of knowing
whether revenues were spent appropriately. It is unclear how an
accounting of those revenues could be included in the required
annual report. The Committee may wish to consider whether there
should be some oversight and/or reporting related to funds
allocated to nonprofits for expenditure on charitable 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 fees collected from the sale of the
sports franchise plates into the new special funds for
allocation to DPR and nonprofit organizations, as specified,
after deducting DMV 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 funds established by this bill.
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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