INDIANAPOLIS —  

Specialty license plates raise millions of dollars for universities and non-profits in Indiana, but they’re also prompting debate about what kind of controls the state should exert over them.

Legislation that came out of a summer study committee on the issue would cap the number of organizations that could get the state-issued plates, eliminate some that currently have them, and compel groups that want one to reveal more about how they’re spending their money.

It would also create an eight-member bipartisan commission to review future plate requests, taking away some of the control that the state Bureau of Motor Vehicles now has.

The bill’s author, Republican state Rep. Ed Soliday of Valpraiso, said his intent is to bring more order and fairness — and less controversy — to what he called a “helter-skelter” system.

Soliday, chairman of the House roads and transportation committee, took on the task of writing new rules for the specialty plates after controversy erupted last year.

During the 2012 session, some members of the Indiana General Assembly tried to eliminate a specialty plate that the Bureau of Motor Vehicles issued for the Indiana Youth Group, which supports gay youth. The IYG and the American Civil Liberties had gone to court in 2010 to get the plate, after the BMV initially denied the IYG’s request.

The push by legislators to kill the plate failed. But the BMV later stripped the group of its plate and pulled the plates of two other organizations, saying they traded low-digit plates for contributions, which is in violation of the rules. Those groups contended that the practice is common and threatened to sue.

Soliday said the controversy showed the need for the legislature to take another look at how the state’s specialty license plates are issued.

“We’re trying to have a bill that’s fair, that gives everybody a chance, and that will stand up to judicial review,” he said.

Co-authors of House Bill 1129 are state Rep. Ed Clere of New Albany and state Rep. Jud McMillin of Brookville, both Republicans.

Indiana has been issuing specialty license plates since 1992 as a vehicle to raise money for non-profits. About a half-million Hoosiers bought state-issued specialty license plates last year, paying an extra fee of $40 beyond what it cost to license their vehicles.

They had more than 90 plates from which to choose, benefitting organizations ranging from the Indiana Bicycle Coalition to the National Rifle Association.

Purdue University and Indiana University were among the top organizations to benefit from the plates; nearly 100,000 motorists bought specialty plates bearing either the IU or Purdue logo.

Under Soliday’s bill, any state university or college with a specialty plate would have to direct the dollars made off of the plates into a scholarship fund for Indiana residents only.

Soliday wants to cap the number of organizations that could qualify for the plates at 150. He said police organizations support the idea, “because the roads are so crowded with so many different plates. There’s a limit on how many plates they can identify.” 

He also wants to eliminate some of the organizations that currently have plates, if their plate sales fall to less than 500 a year. That could pose a problem for an organization like the Indiana Chiefs of Police Foundation, which saw only 101 plates sold last year.

His legislation would also require more financial disclosures from the organizations applying for the plates, and require that those organizations have an outside board of directors.

The bill hit a temporary roadblock last week. Soliday delayed committee action on the bill after another lawmaker proposed amending the legislation to permanently prohibit any group that had their license plate revoked from ever applying for a new plate. That would have included the Indiana Youth Group.

Soliday said the amendment precluded any appeals process.

“It would have meant that once you’ve been rejected, you can never have another plate,” he said. “That’s not the way we work in America.”

Soliday’s bill is expected to be heard in the House roads and transportation committee this week.