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.