LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 1570
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MAY 26, 2023
SUMMARY
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Synopsis: |
Authorizes issuance of Rowan University alumni license plates. |
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Type of Impact: |
Annual State revenue and expenditure increases. |
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Agencies Affected: |
New Jersey Motor Vehicle Commission; Rowan University. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Year 1 |
Thereafter |
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State Expenditure Increase |
$65,700 |
Indeterminate |
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State Revenue Increase |
$50,000 |
At least $15,700 |
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· The Office of Legislative Services (OLS) finds that the bill will produce annual State revenue and expenditure increases that will largely offset one another. The OLS cannot quantify the annual increases because it is unclear how many applications the New Jersey Motor Vehicle Commission will receive for the new specialty license plate. However, the OLS notes that the commission must receive a minimum of 500 applications for the new specialty license plate and at least $25,000 of non-public monies to implement the bill.
· The bill establishes the Rowan University license plate program in such a manner that the commission may fully recover the expenses incurred in administering the program. The commission has identified its initial cost of designing and establishing a new license plate series as $65,700, which is largely attributable to computer system changes, and the initial print run of 550 plates.
· The commission will receive a $50 license plate application fee and a $10 annual renewal fee. Initial fee collections will reimburse the commission for the expenses it incurs in administering the program. In addition, the commission will have to receive an initial payment of up to $25,000 and a minimum of 500 license plate applications for a total of $50,000 to offset initial costs before license plate production begins. The commission will then be permitted to retain additional fee amounts until its costs are fully reimbursed.
· After the commission’s cost recovery, indeterminate excess application and renewal fee collections will be appropriated to the Rowan University Alumni Association.
BILL DESCRIPTION
This bill authorizes the chief administrator of the commission to issue special Rowan University alumni license plates.
In addition to all fees otherwise required by law for the registration of a motor vehicle, there is an application fee of $50 and an annual renewal fee of $10 for the Rowan University alumni license plates. After the deduction of the commission’s costs to implement the program, additional fees will be deposited into a special non-lapsing fund known as the Rowan University License Plate Fund. The proceeds of the fund will be annually appropriated to the Rowan University Alumni Association to support the organization’s mission and programs.
The chief administrator is required to certify annually the average cost of producing, issuing, renewing, and publicizing the availability of the specialty license plates. If the average cost per plate exceeds $50 in two consecutive fiscal years, the chief administrator may discontinue the license plate program.
The bill prohibits the commission from using State or other public funds to cover the initial cost of implementing the Rowan University alumni license plate program. Instead, it requires the Rowan University Alumni Association or an individual or entity designated by the association to contribute non-public monies, not to exceed $25,000, to offset the initial costs to design, produce, issue, and publicize the license plates and for computer programming changes that may be necessary to implement the program. The bill also permits the Rowan University Alumni Association to receive funds from private sources to offset the initial costs.
The commission is not required to design, produce, issue, or publicize the availability of the license plates or make any necessary programming changes until: (1) the Rowan University Alumni Association or the individual or entity designated by the association has provided the commission with the money necessary to offset the initial costs incurred by the commission in establishing the license plate program; and (2) the Rowan University Alumni Association liaison has provided the commission with a minimum of 500 completed applications for the license plates.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill will produce annual State revenue and expenditure increases that will largely offset one another. The OLS cannot quantify the annual increases because it is unclear how many applications the commission will receive for the new specialty license plate.
The bill establishes the Rowan University license plate program in such a manner that the commission may fully recover the expenses it incurs in administering the program. If the number of license plate applications is below 500 in the first 15 months following the date of enactment, or if the commission does not receive up to $25,000 in non-public monies within 15 months of the date of enactment, the bill will expire without the creation of the license plate program. Conversely, if the number of applications is equal to or greater than 500, the commission will likely be able to recover its costs within no more than three years of the creation of the program
Before the commission begins designing and producing the license plates, the Rowan University Alumni Association is required to provide up to $25,000 and pre-register 500 applicants for the license plates. This requirement ensures that the commission will be able to recover the initial cost of producing the license plates and that, in the case of insufficient funds, the commission will not be required to produce the license plates. Because the payment of up to $25,000 is required to come from private sources, this amount will not represent a State or local cost.
Upon production of the license plates, the commission may still discontinue the program if the production cost exceeds $50 per license plate in two consecutive fiscal years, which is the initial fee that the commission will collect for each plate. This ensures that the commission will not experience any net costs in the administration of this license plate program. The current cost per plate to the commission is $6.60, so it is unlikely that the commission will experience any net cost in the administration of the program.
In response to an FY 2017-2018 OLS Discussion Point, the commission indicated that it faced an upfront cost of $65,700 to set up a license plate program, which includes computer changes and the initial print run of 550 license plates. The requirements of the bill would provide the commission with the first $50,000 of those costs through the initial $25,000 payment and the first 500 license plate sales. The remaining $15,700 would either be recovered through the sale of additional Rowan University license plates or by retaining collections from the $10 annual fee. The first 500 plate sales will generate $5,000 per year from the $10 annual renewal fee. In the event that no other plates were purchased under the program, the commission would largely recover the remaining costs after three years of collecting the annual fee.
The bill prevents the commission from realizing net revenues in administering the program because the bill requires the commission to deposit all program fees into a special fund to be appropriated to the Rowan University Alumni Association once the commission has subtracted its costs of administering the program. The combination of guaranteed fee collection for the commission and the limit on retaining any fees greater than its costs creates a scenario where there is likely to be a net neutral fiscal impact to the commission for administrating this license plate program.
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Section: |
Authorities, Utilities, Transportation and Communications |
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Analyst: |
Assistant Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).