LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 1570
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: DECEMBER 27, 2023
SUMMARY
|
Synopsis: |
Authorizes issuance of special license plates for alumni of four-year public institutions of higher education. |
|
Type of Impact: |
Potential annual State revenue and expenditure increases. |
|
Agencies Affected: |
New Jersey Motor Vehicle Commission. |
|
Office of Legislative Services Estimate |
|||
|
Fiscal Impact |
Year 1 |
Thereafter |
|
|
State Expenditure Increase |
$65,700 per license plate program |
Indeterminate |
|
|
State Revenue Increase |
$50,000 per license plate program |
At least $15,700 per license plate program |
|
|
|
|
||
· The Office of Legislative Services (OLS) expects the bill to potentially 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 plates under each of the alumni license plate programs established by the bill. However, under each alumni license plate program, 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 before implementing the program.
· The bill establishes each of the special alumni license plate programs in such a manner that the commission may fully recover the expenses incurred in administering the programs. For each 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.
· For each program, 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 each program. In addition, the commission will 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 for an alumni license plate program established by the bill. The commission will then be permitted to retain additional fee amounts until its costs are fully reimbursed.
BILL DESCRIPTION
This bill authorizes the commission to issue special license plates to the alumni of a four-year public institution of higher education.
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 special 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 for each alumni license plate program established. The proceeds of the fund will be annually appropriated to an alumni association of the four-year public institution of higher education to support the organization’s mission and programs.
The commission is required to certify annually the average cost of producing, issuing, renewing, and publicizing the availability of the specialty license plates for each program. If the average cost per plate of an alumni license plate program exceeds $50 in two consecutive fiscal years, the commission may discontinue that alumni license plate program.
The bill prohibits the commission from using State or other public funds to cover the initial cost of implementing an alumni license plate program. Instead, it requires an alumni association of a four-year public institution of higher education 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 an 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 alumni license plates or make any necessary programming changes until: (1) an alumni association of a four-year public institution or the individual or entity designated by an 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 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 expects the bill to potentially 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 plates under each of the alumni license plate programs established by the bill.
Before the commission begins designing and producing license plates for an alumni license plate program, the alumni association of that four-year public institution of higher education or an individual or entity designated by the association is required to provide up to $25,000 and pre-register 500 applicants for the license plates. This requirement ensures that for each of the alumni license plate programs, the commission will be able to recover the initial cost of producing the specialty license plates. If the commission does not receive sufficient funds for any particular alumni license plate program, the commission will not be required to produce the license plates for that program. Because the payment of up to $25,000 is required to come from private sources, this amount would constitute a State revenue.
Upon production of the license plates, the commission may still discontinue a 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 under each program. This allowance ensures that the commission will not experience a net increase in administrative costs associated with any alumni 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 a program.
In response to an FY 2017-2018 OLS Discussion Point, the commission indicated that it incurred upfront costs of roughly $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 allow the commission to recover 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 alumni 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, assuming that all alumni license plates are renewed. In the event that no other plates were purchased under a 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 revenue gains in administering an alumni license plate program because the bill requires the commission to deposit all excess fee collections, above the amounts necessary to offset the commission’s expenses, into a special fund dedicated to the alumni association of the applicable four-year public institution of higher education. 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 any of the alumni license plate programs established by the bill.
|
Section: |
Authorities, Utilities, Transportation and Communications |
|
Analyst: |
Assistant Fiscal Analyst |
|
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.).