ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 111

STATE OF NEW JERSEY

DATED:  MAY 17, 2018

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 111.

     This bill authorizes special Combat Action Badge license plates.  The license plate is to display the words, "Combat Action Badge" and the Combat Action Badge emblem.  An application to obtain Combat Action Badge license plates is to include satisfactory proof that the applicant received the Combat Action Badge.  In addition to the required motor vehicle registration fees, there is an application fee of $50 and an annual renewal fee of $10 for the Combat Action Badge license plates.  After deducting the cost of producing and publicizing the plates, the additional fees collected will be deposited into the “Combat Action Badge License Fund” and the funds will be appropriated annually to the New Jersey Department of Military Veterans Affairs (department) for programs to benefit combat veterans.

     The Chief Administrator of the New Jersey Motor Vehicle Commission (commission) is required to annually certify the average cost of producing, issuing, and publicizing the availability of the specialty license plates. If the average cost per plate exceeds $50, the chief administrator may discontinue the license plate program. 

     The bill provides that no State or other public funds may be used by the commission for the initial cost to implement the Combat Action Badge license plate program. The bill authorizes the department to receive funds, in an amount not to exceed a total of $25,000, from private sources to be used to offset the initial costs incurred by the commission for designing, producing, issuing, and publicizing the availability of the license plates.

     The provisions of the bill are to remain inoperative until the commission receives the initial funds. The bill will expire if the funds to initiate the license plate program are not received within 12 months of the effective date.

     The Combat Action Badge was approved for creation by the Chief of Staff of the United States Army on May 2, 2005.  The honor was created to provide special recognition to any member of the armed forces who personally engaged an enemy in close combat in an imminent danger area.  Recognition for close combat was previously only provided to members of infantry units through the Combat Infantry Badge.  The Combat Action Badge extended the opportunity for recognition for close combat to members of the United States Army outside of infantry units.

FISCAL IMPACT:

      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 for the new specialty license plate the New Jersey Motor Vehicle Commission (MVC) will receive.

      The bill establishes the special Combat Action Badge license plate program in such a manner that the MVC may fully recover the expenses it incurs in administering the program. The MVC has identified its initial cost of designing and establishing a new license plate series as $62,000, which is largely attributable to computer system changes, and the per plate cost of an initial 550 plate run as $6.60, for a total cost of $65,700.

      The MVC will receive a $50 Combat Action Badge license plate application fee in addition to a $10 annual renewal fee. Initial fee collections will reimburse the MVC for the expenses it incurs in administering the program. In addition, the MVC will have to receive an initial payment of $25,000 to offset initial costs before license plate production begins. The MVC will then be permitted to retain additional fee amounts until its costs are fully reimbursed. After the MVC’s cost recovery, indeterminate excess application and renewal fee collections will be appropriated annually to Department of Military and Veterans Affairs (DMAVA) to be used for programs to benefit combat veterans.  Given the large difference between fixed initial payments ($25,000) and initial costs ($65,700) the length of time the MVC may need to retain application and renewal fees will be highly dependent upon the number of license plate applicants.

      Any new revenues realized by DMAVA could be used to increase State expenditures for Veterans programs or to substitute for State appropriations from general revenues for existing programs.  Depending upon which is the case the revenues appropriated to DMAVA could either represent an increase in revenues which is offset by an increase in DMAVA expenditures, or an increase in revenues with no offsetting increase in DMAVA expenditures.  DMAVA is unlikely to realize any revenues from the license plate program in the first three years covered by the fiscal estimate until the number of applicants exceeds 600.