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Report on Specialty License Plate Programs in U.S. and Canadian StatesDavid C. LaineBackgroundSpecialty license plate programs can be found in many states across the U.S. and Canada. Specialty plates fall into two main categories: Service Plates (e.g. firefighters, military veterans) and Cause-Based Plates (e.g. conservation, education, religion). Cause-based plates are typically founded by an organization besides the state’s Department of Motor Vehicles (DMV) or equivalent agency, and charge a specialty plate fee above and beyond the state’s vehicle plate registration fees. These specialty plate fees—or a portion thereof—are transferred directly to the sponsoring agency, which may be another state organization (e.g. State Department of Fish and Wildlife or Natural Resources), or a non-governmental organization such as a wildlife foundation. It is up to these sponsoring agencies to administer funding in ways consistent with rules and regulations imposed on them by state laws. It is also the sponsoring organization’s responsibility to conduct and pay for any research or marketing fees related to the development and sale of these plates, once again in accordance with rules and regulations. Founding Specialty License PlatesState legislation is required to found specialty license plates. This can take two forms: the state can enact legislation that permits the DMV to approve plates based on specific criteria, or the state can enact legislation that directly creates a plate. Sometimes a state might follow both approaches depending on the case. The State of Vermont is an example of the first approach. An organization with at least 100 in-state members must submit the completed application form with a $2,000 application fee to be considered for a specialty license plate. The DMV commissioner reviews applications and determines whether or not the applicant group is eligible to create the proposed specialty license plate. If they fail to meet the DMV’s legislated criteria their application can be rejected. At this point, the applicant can go to the Vermont legislature and attempt to enact specific legislation that creates their specialty plate. The State of Florida is an example of the second approach. According to Brett Boston of the Wildlife Foundation of Florida, each plate is created through its own legislative act. In the case of Florida, this legislation is written by the group that is requesting a plate, and then gets legislative support to submit the bill for consideration. The group must also submit request to the Department of Highway Safety and Motor Vehicles which specifies the plate’s design (it must conform to state laws to ensure uniformity with other plates and readability by law enforcement officials), and the group must demonstrate the plate’s feasibility with a survey showing they have at least 1,000 potential buyers. Once the sponsoring group has 1) written the legislation, 2) obtained legislative support, and 3) satisfied the DMV of proper design and demand for the plate, then the Florida legislature can take the bill to a vote. Boston advises that any legislation written to establish a specialty license plate be specific both about what its funding can and cannot do. This protects the sponsoring agency from outside interference, whether well-intentioned or ill-intentioned. He offered two examples: 1) Perhaps a government official wants to institute a tiger captive breeding program that the sponsoring agency has scientific reason to believe would be counter-productive to tiger conservation; 2) Perhaps another official wants to bring foreign dignitaries on an exciting trip through protected critical tiger habitat to observe the animals close-up. Both officials know that your organization has funds earmarked for tiger conservation efforts, and request funding to support their goals. By writing specific language into the law about what the funds can and cannot be used for, these funds have an added measure of legal protection against such inappropriate requests. Design and ManufactureSpecialty plates must be designed in such a way as to be consistent with existing state license plates in order to ensure that they serve their intended purpose: they are clear and legible to the public and to law enforcement officials. As such, DMVs usually have specific rules governing design. Brett Boston of the Wildlife Foundation of Florida says that this gives the government significant control over the “real estate” on your plates. He suggests that an art contest be held among the sponsoring organization’s constituents to determine what special graphic will appear on the plate, with the organization retaining all rights to all submissions for use on plates or other materials (e.g. brochures). The state may also require that graphic submissions meet legal/decency standards. Vermont also provides a model for how to handle special design costs. In addition to a $2,000 application deposit, $15 will be levied from the specialty fees of the first 100 plates bought, and instead of going to the sponsoring organization it goes to the DMV. $500 of this special levy goes towards the plate’s development costs. Most plates—specialty or otherwise—are manufactured by the state Department of Corrections (DOC). For example, Beth Parks of the South Carolina DMV explains that the manufacturer 3M prints and sends rolls of sheeting, which DOC inmates attach to metal sheeting. They then press the plates, punch holes in the, deboss the edges, and send the shrink-wrapped plates back to 3M for disbursement. This process is practically the same; the basic difference is what graphic is printed on the sheeting that 3M produces. Brett Boston notes that these printing fees themselves are typically nominal—“Maybe about $0.50 extra per plate, which you’ll pay for.” He says that the biggest problem regarding plate design and manufacture will simply be the logistical back-and-forth between government offices and creative organizations to make the plates functional, attractive, and legal. This is different from state to state in the U.S., and will likely be even more complicated dealing with different nations. Administration of FundsThe DMV collects vehicle registration fees just like normal, but when people purchase specialty plates they pay an additional surcharge. Cherie Yaeger of the Vermont DMV provides data on how these fees break down in her state. New registrants in Vermont pay a $23 surcharge for Conservation License Plates. Of this, $11 goes into the DMV’s Transportation Fund, and then $12 goes to the Vermont Department of Fish and Wildlife. Half of Fish and Wildlife’s funds go into their watershed management account, and half goes into their nongame wildlife account. On subsequent years, renewal registrants still pay a $23 surcharge, but this time only $3 goes into the DMV’s Transportation Fund. The other $20 goes to Fish and Wildlife, with half earmarked for each of the same two accounts. Because the DMV receives part of this specialty plate surcharge, the DMV pays for all administrative costs associated with the program besides marketing and plate application fees. Similarly, David Godfrey of the Florida Wildlife Commission notes that additional manufacturing costs are built into the fees that customers pay when they buy Florida sea turtle plates. The rest of the special funds go to the Wildlife Commission: 70% into the Marine Turtle Protection Program, and 30% into grants. When a plate is created by act of legislature, the legal basis for how the sponsoring organization should utilize funds is usually spelled out in the legislation that establishes the plate. The Wildlife Foundation of Florida offers an excellent example of this process. According to Brett Boston, the three highlighted pieces of legislation in this document were all written by the Wildlife Foundation. Sections (50) and (62) are especially specific about how funding is to be administered. Both of them allow 10% of plate surcharge fees to go into administrative costs, and 15% to go into promotion and marketing. They also specify exactly how the rest of the funds can be used; for example, (62) (b) 3. stipulates that 55% or more of the funds will go into competitive grants for spring research, which cannot overlap with existing state programs, while 20% will go to community outreach programs to implement their research findings. This passage also describes who will sit on the grant advisory committee. Boston emphasizes the importance of bringing in expert voices in a competitive grant process such as this, because bringing in scientific voices from offices like the Department of Environmental Protection and the Department of Health means that the board’s ultimate grant allocation decisions are well informed on the underlying science, and on the pre-existing government programs that may overlap with the proposed grant. He also suggests that any granting agency impose the following stipulations on grantees: No funds can go to pay for overhead expenses like personnelThe grantee must demonstrate program outcomes and effectiveness annuallyGrants are non-renewable and only good for one year, though grantees can reapply annuallyAll results and findings can be re-published by the granting agency for purposes like marketingThese stipulations keep grantee organizations from becoming completely dependent on the Wildlife Foundation of Florida, and provide the Foundation with valuable information for their own stakeholders. Finally, Boston recommends that the license plate sponsor wait one full year before beginning any programming, and that they generally only use funds from the previous fiscal year. This means that they never have to rely on financial projections, but instead know exactly what resources are available to allocate. This also helps them to maintain a cushion of emergency funding. These emergency funds should be difficult for grantees to qualify for, but should be ready for rapid deployment when time is of the essence. For example, he would reserve such funding for cases like saving critical tiger habitat from developers who plan to create agricultural fields. Marketing and ResearchState DMV officers in Florida, Vermont, and Nova Scotia, Canada all consistently note that marketing and research cost and administration are to the sole responsibility of specialty plate sponsors. The DMV does not take part in this process. Examples from Florida show 10-15% of the specialty plate fee set aside for promotion and marketing purposes. Various marketing efforts have been identified by representatives of various sponsor agencies: Purchase premium ad space in inserts the DMV mails with vehicle registration formsEncourage vehicle owners who are registering/reregistering to upgrade their platesSponsor media events and educational materials that highlight the causePurchase advertising space in other media such as magazinesBillboardsPublic Service AnnouncementsNewslettersWeb contentLetters to registered owners (barring restrictive state privacy laws)No feasibility or market research studies could be identified among sponsor groups. According to David Godfrey, executive director of the Florida Sea Turtle Conservancy, formal studies are seen as “hit and miss,” so they simply judge their marketing efforts by how well the plate does. Auditing of Fund UsageIt is very important that strict accounting be made of all funds flowing into and out of sponsor organizations. This will help to ensure that the process is following the letter of the law both on the DMV’s end and on the sponsoring organization’s end. For example, the Beth Parks of the South Carolina DMV says that most SC state agencies have their own internal auditors, but also submit to external audits about every three years by the Legislative Audit Council. This helps them to disburse specialty plate funding appropriately to all sponsoring organizations. Self-auditing is equally important for sponsoring organizations; Brett Boston of the Wildlife Foundation of Florida says that they self-audit annually and submit to government audits every few years. These audits ensure that the sponsoring organization is achieving its own legal and organizational goals with the funding it receives, which is important for achieving legitimacy. Boston notes that Florida law requires complete transparency; all relevant statutes and financial records must be readily accessible to the public. Poor auditing can jeopardize a specialty plate program. Boston notes that one Florida plate has recently come under scrutiny because its organization failed an audit. It actually failed because the understaffed organization has been unable to meet its spending requirements. This particular group actually tries to administer its own programs; but due to insufficient manpower it has lapsed in meeting its spending requirements as specified in its legislation, and has simply let its specialty plate funds accumulate. Boston uses this as an example of why his own organization’s model (as a “middle man” that accepts and funds worthy grant proposals) can be superior. The Wildlife Foundation is able to reduce its overhead expenditures by employing fewer personnel because it does not directly administer conservation programs. That is left to the groups that receive Wildlife Foundation grants. Poor auditing can also cause legal trouble for the state. California is a prime example. In May 2012, the Associated Press (AP) conducted a review of California special interest license plate programs, and found inconsistencies with how California administered its special plate fees. Specifically, the AP report found that 9/11 memorial plate funds were going to state budget deficit reduction, as well as to meet “general administrative purposes” across California. These funds were supposed to provide children of 9/11’s victims with scholarships. A year later, a state audit found what appear to be widespread issues throughout the special interest plate program. For example, the DMV’s projected administrative costs for the California Environmental License Plate Fund were found to be $6.3 million above the actual costs. This raises many questions about the special interest plate program as a whole in California. Conservation and Specialty Plate Buy-InMost drivers do not purchase specialty license plates. According to David Godfrey, only 10% of Florida drivers use specialty license plates. What this means for plate sponsors in Florida, though, is that their potential market consists of 90% of registered drivers. Though many plate sponsors may compete for business, they have a sufficiently large pool to draw from that the market shouldn’t feel crowded. He adds that most purchasers choose a cause that is important to them and stick with it. The following states DMVs have provided information about conservation and specialty plate buy-in: StateConservation PlatesTotal Specialty PlatesTotal Registered PlatesFlorida434,2691,369,835Over 18 millionVermont8,27719,972709,831South Carolina13,408629,0024,087,793Nova Scotia, Canada2,57225,526603,915Florida: 2.4% Conservation PlatesVermont: 1.1% Conservation PlatesNova Scotia: 0.4% Conservation PlatesSouth Carolina: 0.3% Conservation PlatesFlorida, the state with the greatest variety of specialty license plates (120 to choose from), is also the state with the highest percentage of conservation license plates. This may be due to the fact that conservation plates often target a specific cause, and the plurality in Florida gives drivers the most variety of specific causes to support. RecommendationsWhile planning this process, start talking with different state agencies in countries that are being considered, especially vehicle licensing and law enforcement agenciesWhen designing legislation with different nations, include specific language to boost accountability and protect funds from improper use; especially focus on what funds can and cannot do, and on auditingUse this program as a model for conservation and other special-interest groups to create new specialty plate programs; more options will likely mean more exposure for the specialty plate program in general, and therefore more public buy-inBuild funds for first year, and always keep a one-year funding to avoid fiscal uncertainty and as a buffer for emergency funds ................
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