Introduction

Background

Types of Transactions Related to Special Interest License Plates

Original: The original issuance of a special interest license plate (special plate).

Renewal: The renewal of a special plate while it is displayed on a vehicle.

Substitute: The replacement of a lost, stolen, or damaged special plate or plates with a different plate or plates of the same type.

Duplicate: The replacement of a single lost, stolen, or damaged personalized special plate, or for the replacement of a set of damaged personalized special plates.

Reassignment: The transfer of a special plate from one vehicle to another.

Conversion: The change of an existing regular personalized plate or a personalized special plate to a different type of personalized special plate.

Retention: The retention of a special plate by the owner while it is not displayed on a vehicle.

Sources: California Department of Motor Vehicles’ (Motor Vehicles) publications and interviews with Motor Vehicles’ management.

State law establishes several programs for special interest license plates (special plates). For example, special plates, such as the California Coastal Commission “whale tail” plate or the California Tahoe Conservancy plate, generally have a distinct artistic design and are issued to support specific purposes. The California Department of Motor Vehicles (Motor Vehicles) is responsible for registering vehicles in California and for collecting fees related to these special plates. Motor Vehicles also collects fees related to license plates that carry personalized combinations of letters, numbers, or both, which generally are known as Environmental License Plates (personalized plates).² We present the types of transaction fees related to special plates in the text box. Motor Vehicles assesses these license plate fees in addition to other fees, such as vehicle registration fees, smog abatement fees, commercial vehicle weight fees, and county fees. To obtain a special plate, a vehicle owner must pay the prescribed fees to Motor Vehicles as well as an additional fee to personalize a regular or special plate. According to Motor Vehicles, it processed 1.2 million transactions—including original issuance, renewal, substitute, duplicate, reassignment, conversion, and retention—related to special plates between July 1, 2013, and June 30, 2014.

Motor Vehicles is responsible for the administration of special plates as well as the collection of fees. Motor Vehicles uses an automated system to bill the plate owners for the different fees and for the accounting of the fees it collects. State law allows Motor Vehicles to recover the cost of administering special plate programs and personalized plates (administrative costs) from revenues received for those plates. For personalized plates, state law requires the California State Controller’s Office, which transfers funds out of the California Environmental License Plate Fund, to reimburse Motor Vehicles from that fund for the administrative costs Motor Vehicles incurs. To recover the administrative costs it incurs from the special plate programs, Motor Vehicles collects administrative service fees (administrative fees) from transactions related to special plates before transferring revenues to the designated funds for the special plate programs. According to a budget officer in Motor Vehicles’ Budget and Fiscal Analysis Branch, the branch performs a special plates cost analysis every two years, during which it calculates the additional costs it incurs from special plates programs.

Scope and Methodology

In our April 2013 report we examined the collection and expenditure of revenue generated from fees from special plates.³ We made several recommendations to Motor Vehicles and other state agencies regarding a variety of issues concerning their administration of the special plate programs. This follow‑up audit focused on three recommendations we made to Motor Vehicles related to ensuring that the fees it charges and advertises for special plates are consistent with state law, and that it periodically updates its automated systems to reflect up‑to‑date recovery of costs for the administration of special plates. Table 1 shows the recommendations we reviewed and the methods used to follow up on them.

Table 1
Selected Recommendations in the California State Auditor’s Report 2012‑110 and the Methods Used to Follow Up on Them
RECOMMENDATION		METHOD
1	The California Department of Motor Vehicles (Motor Vehicles) should assess the extent to which it has charged fees for special interest license plates (special plates) that are not consistent with those prescribed in statutes and take appropriate action.	Interviewed key Motor Vehicles’ staff to determine its efforts to review whether the fees charged for special plates were consistent with those prescribed in statutes. Judgmentally selected 25 special plate fees and requested Motor Vehicles to provide the amount of fees charged for those transactions through its automated systems as of June 2015. Compared the fees identified by Motor Vehicles for the 25 selected transactions to the applicable fees prescribed by state law.
2	Motor Vehicles should ensure that the fees it lists in its application for special plates, as well as any other publications, are supported by the appropriate statutes.	Reviewed relevant laws applicable to special plates. Compared Motor Vehicles’ publications of special plate fees advertised as of June 2015 with applicable fees in state law. Compared the consistency of special plate fees advertised among Motor Vehicles’ publications as of June 2015. Interviewed key Motor Vehicles’ management and staff to determine its procedures for updating publications containing special plate fees.
3	Motor Vehicles should periodically assess the cost and benefits of updating its automated systems to reflect current per‑plate administrative costs. If Motor Vehicles determines that doing so is cost‑effective, it should update its automated systems to reflect the up‑to‑date administrative costs for all these plates.	Interviewed key management at Motor Vehicles to determine whether it updated its automated systems to reflect current per‑plate administrative costs. Reviewed Motor Vehicles’ assessment of cost and benefits of updating its automated systems to reflect current per‑plate administrative costs. Reviewed whether Motor Vehicles’ most recent updates of its automated systems are consistent with its current per‑plate administrative costs.

Sources: Selected recommendations made in the report by the California State Auditor titled Special Interest License Plate Funds: The State Has Foregone Certain Revenues Related to Special Interest License Plates and Some Expenditures Were Unallowable or Unsupported, Report 2012‑110 (April 2013) and analysis of information and documentation identified in the table column titled Method.

Footnotes

² Not all personalized special plates are Environmental License Plates. The Have a Heart, Be a Star, Help our KIDS special plate and Veterans’ Organizations special plate provide for a personalized character sequence without additional Environmental License Plate fees. Go back to text

³ Special Interest License Plate Funds: The State Has Foregone Certain Revenues Related to Special Interest License Plates and Some Expenditures Were Unallowable or Unsupported, Report 2012‑110 (April 2013). Go back to text