Bill Summary – FastDemocracy

Fiscal Note
                                        Fiscal Services Division
HF 2639 – License Plates, Gadsden Flag (LSB5535HZ)
Staff Contact: Garry Martin (515.281.4611) garry.martin@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2639 creates a “Gadsden Flag” special registration plate and requires the
Department of Transportation (DOT) to design and issue the plates. The Bill creates two fees,
an initial special fee of $50 and an annual fee of $50. An applicant may obtain personalized
Gadsden Flag plates upon payment of the $25 fee and the annual registration fee of $5 for
personalized plates established under current law, which is in addition to the special Gadsden
Flag plate fee. Under the Bill, a registration plate frame is no longer required to permit full view
of the name of the county.
License plate fees are deposited in the Road Use Tax Fund (RUTF). The Treasurer of State is
required to transfer an equal amount of the special plate fee from the Statutory Allocations Fund
to the General Fund monthly. The funding transferred to the General Fund is appropriated to
the Department of Public Safety (DPS) to provide education and training on the right to keep
and bear arms. The Bill prohibits the DOT from conditioning the issuance of Gadsden Flag
plates on the receipt of any number of orders for Gadsden Flag plates.
Background
Under current law, the DOT is allowed to issue personalized license plates for an additional fee
of $25. Personalized plates are subject to an annual renewal registration fee of $5 on top of the
regular annual registration fee.
Currently, an owner of a vehicle who places any frame around or over a registration plate that
does not permit full view of all numerals and letters printed on the registration plate, including
the name of the county, commits a simple misdemeanor punishable by a scheduled fine of $30.
In FY 2023, there were 1,762 convictions for failure to display plates.
The RUTF is the primary source of funding for construction, maintenance, and administration of
Iowa’s highways. The RUTF consists primarily of revenues that are constitutionally protected,
including revenues for all license plates. The RUTF revenue is collected by the Treasurer of
State and distributed by formula to the DOT, counties, and cities. Due to the constitutional
protection of certain RUTF revenues, direct transfers from the RUTF for nonroad programs
cannot occur. Instead, equal amounts are transferred from the Statutory Allocation Fund (SAF)
for specific programs.
The SAF consists of driver’s license fees and trailer registration fees. Truck registration fees
are based on the weight of the vehicle as determined by Iowa Code section 321.122. After
certain statutory transfers, including offsetting transfers of the special plate revenues, are made
to other accounts, the remainder of the SAF balance is transferred to the RUTF at the end of the
fiscal year.
Iowa Code section 312.2(3) authorizes an annual allocation from the RUTF sufficient to pay the
cost of producing license plates.
                                                  1
Assumptions
• Permitting a registration plate frame to cover a county name may decrease citations and
   result in a minimal loss of revenue.
• Demand for the Gadsden Flag plate is estimated to equal the demand for the Fallen Peace
   Officer plate. As of July 2023, there were 3,150 total Fallen Peace Officer plates issued,
   with 821 being personalized and 2,329 being nonpersonalized.
• Production of the 3,150 additional plates will cost approximately $19,000, at a per plate
   production cost of $5.88 and will be paid from the RUTF.
• Approximately $158,000 in plate fees is estimated to be deposited into the RUTF and will be
   offset by a matching allocation of $158,000 from the SAF to the DPS. This allocation will
   decrease the year-end balance transferred from the SAF to the RUTF.
• Any administrative costs associated with the Keep and Bear Arms Program will be absorbed
   within existing resources in the DPS.
• Personalized license plate sales deposited into the RUTF are estimated to be approximately
   $21,000 in FY 2025 and approximately $12,300 in FY 2026.
Fiscal Impact
Figure 1 shows the total revenue estimated to result from personalized and nonpersonalized
Gadsden Flag license plates. There will also be a one-time cost of $19,000 to the RUTF for
plate production.
                  Figure 1 — Gadsden Flag License Plate Total Revenue
                                                                         FY 2025         FY 2026
                 DPS — Keep and Bear Arms Program                       $ 158,000       $ 158,000
                 Road Use Tax Fund                                         21,000           12,300
                 Total Revenue                                          $ 179,000       $ 170,300
                 *Numbers may not be exact due to rounding.
Sources
Department of Transportation
Department of Public Safety
Legislative Services Agency calculations
                                                                               /s/ Jennifer Acton
                                                                                 March 5, 2024
Doc ID 1447503
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in developing this
fiscal note is available from the Fiscal Services Division of the Legislative Services Agency upon request.
                                                   www.legis.iowa.gov
                                                              2
Statutes affected: 
Introduced: 321.34, 321.109