BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Kevin Murray, Chairman

                                           1160 (Cedillo)
          
          Hearing Date:  5/25/06          Amended: 5/1/06
          Consultant: Mark McKenzie       Policy Vote: T&H (7-3)
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   SB 1160 would require California to comply with  
          the requirements of the federal "Real ID Act of 2005" for the  
          issuance of driver's licenses and identification cards by May  
          12, 2008.  The "Real ID Act" authorizes the issuance of driver's  
          licenses and identification cards to undocumented immigrants,  
          but the license or ID card may not be used for any other  
          official purpose, and must be a unique color or design.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2006-07      2007-08       2008-09     Fund
           DMV administration                 $40,200             $34,800    
                    $8,500             SF*

          License revenue gain              $28,500              $14,250    
                   $14,250             SF*
          __________
          * Motor Vehicle Account

          NOTE:  figures assume 1 million new applicants in 2006-07, and  
          500,000 million new applicants in each of the next 2 years.
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:   SUSPENSE FILE.
          
          This bill, known as the "California Real ID Act of 2005," is  
          intended to ensure that the State of California meets or exceeds  
          the standards and requirements contained in the federal "Real ID  
          Act," which provides for a federally recognized driver's license  
          and identification card.  In addition, it would explicitly enact  
          into state law the option in the federal act that authorizes a  
          state to issue a driver's license to a person without legal  
          presence status if the license is identified in a specified  
          fashion and has a "unique design or color indicator."











          Current law requires every applicant for an original driver's  
          license or identification card to submit satisfactory proof that  
          the person has legal presence status under federal law.  In  
          addition, the Department of Motor Vehicles (DMV) is required to  
          adopt regulations, including procedures for verifying  
          citizenship or legal residency of applicants for driver's  
          licenses and ID cards.  Applications for the issuance or renewal  
          of a driver's license or ID card must contain a section for the  
          applicant's social security number.  DMV is authorized to charge  
          a fee of $25 for the application for a driver's license or  
          identification card.

           Federal Legislation 
           Congress enacted H.R. 1268-"Real ID Act of 2005," which is  
          designed to improve the security of driver's licenses and  
          identification cards issued by the individual states.  The 
                                     -continued-
          Page 2
          SB 1160 (Cedillo)

          act includes certain minimum document and license issuance  
          requirements, and it provides that only persons with legal  
          presence status can be issued a driver's license or  
          identification card.  A state, however, is permitted to issue a  
          license to an undocumented immigrant, providing the license  
          meets certain appearance requirements and it states on the  
          license document that it cannot be used for any other official  
          purpose.

          If a state fails to adopt the provisions of the federal  
          legislation within 3 years of the enactment of the federal  
          measure, a federal agency would not be authorized to accept a  
          license issued by the state for any official purpose, including  
          for such purposes as using the license to provide identification  
          for boarding an airliner or entering a federal building or  
          facility.  Thus, it is expected that all the states will adopt  
          these provisions within the allotted time.

          STAFF NOTES that new DMV responsibilities will strain department  
          resources.  While the State of California utilizes advanced  
          processing and verification processes regarding the issuance of  
          driver's licenses, the requirements included in the Real ID Act  
          would impose new responsibilities, some significant, on DMV.
           
           STAFF NOTES that, this bill is expected to encourage the  
          estimated 2.5 million undocumented immigrants in California to  










          apply for a driver's license or identification card.  DMV  
          estimates approximately 1 million additional applications in the  
          first 6 months following implementation and another 1 million  
          additional applications in the subsequent 12 months, which would  
          result in substantial pressure on the resources to process the  
          increased number of applicants, at least for an initial period  
          of time.   Furthermore, DMV will have to suspend its  
          renewal-by-mail and renewal-by-internet programs for good  
          drivers who normally would not have to visit a field office for  
          15 years.  This will result in an additional annual workload of  
          2.5 million customers from 2008-2013.  DMV estimates that the  
          total cost to implement the act will range from $274.6 million  
          to $500.9 million over six years.

          STAFF NOTES that the Governor's May Revision for 2006-07  
          proposes increased funding to DMV in the amount of $18.8 million  
          (Motor Vehicle Account) to begin to implement the Federal Real  
          ID Act.  This involves adding 36.4 positions and approximately  
          $20 million to establish a dedicated organization for ongoing  
          planning, administration, implementation and support of the Act,  
          as well as programming and analysis of DMV's computer systems.   
          This proposal also identifies a savings of approximately $1.25  
          million and 32.5 positions by implementing a web-based  
          infrastructure that would enable DMV to move up to 2.2 million  
          transactions out of field offices, in order to help make room  
          for additional field office visits from persons applying for  
          Real IDs.