License plates were once a simple thing made of cheaply printed metal stamped by low-cost prison labor. Powerful lobbyists in Sacramento were able to convince the California legislature to replace this simple identification tag with a much more complicated electronic system. Governor Jerry Brown (D) earlier this month signed into law a measure creating a pilot program that will issue 160,000 electronic license plates through January 2017.

The bill sponsor, state Senator Ben Hueso (D-Chula Vista), contends the measure will save money for the state. Currently, it costs $20 million to send registration renewal stickers to motorists, or $2 per vehicle. The electronic plate uses a wireless communications link to the Department of Motor Vehicles to confirm a valid registration. If the database says a car's registration is in order, the device will show the license plate number. If not, it will display "STOLEN" or "EXPIRED."

An electronic plate requires a power source, a wireless communications module, a customizable display, all of which costs far more than a metal or plastic plate. Unicor, which uses federal prisoner labor to make plates for the federal government, charges $7.50 each. A motorist purchasing a brand new Toyota Camry at MSRP would pay the state a total of $2024 to register the vehicle, including $245 in paperwork charges and $1779 in sales tax, more than covering the $2 in postage costs and the cost of the metal plate.

Enactment of the bill was a win for Smart Plate, a company with a pending patent on the electronic plate technology state officials intend to use. Lawmakers became interested in the company's product after an extensive lobbying campaign that drew the attention of California's Fair Political Practices Commission. In a June 21, 2012 warning letter, the commission determined Smart Plate violated state law by failing to disclose the hiring of five lobbyists to push the legislation in 2011.

The first version of the license plate bill envisioned the display of advertisements on the plate any time the vehicle stops for four seconds. Meant as a means of recovering some of the implementation cost, the idea was eventually ditched. Lawmakers also added a provision to ensure that early plates would not be used as spying devices.

"In the conduct of any pilot program pursuant to this section, any data exchanged between the department and any electronic device or the provider of any electronic device shall be limited to that data necessary to display evidence of registration compliance," Senate Bill 806, as enacted, states. "The department shall not receive or retain any information generated during the pilot program regarding the movement, location, or use of a vehicle participating in the pilot program."

The language also prevents the pilot project plates from transmitting a vehicle's identity to red light cameras. The state will produce a report describing how such a system would provide security against identity theft and hackers using the plates to change plate messages on the road.