BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Tom Torlakson, Chairman

                                           60 (Cedillo)
          
          Hearing Date:  4/23/07          Amended: 4/10/07
          Consultant: Mark Mckenzie       Policy Vote: T&H (7-4)
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 60 would require the Department of Motor  
          Vehicles (DMV) to issue driver's licenses and identification  
          cards that are in compliance with the federal Real ID Act of  
          2005.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2007-08      2008-09       2009-10     Fund
           DMV administration     --multi-million dollar costs (see staff  
          notes)--               SF*
          License revenue gain   --multi-million dollar gains (see staff  
          notes)--               SF*
          ______________
          *Motor Vehicle Account
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          
          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.  The  
          California Code of Regulations specifies 27 documents that may  
          be submitted as satisfactory proof of legal presence status,  
          such as a birth certificate or approved immigration documents.   
          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  
          driver's license applications. 

          SB 60, known as the "California Real ID Act of 2007," is  
          intended to ensure that the State of California meets or exceeds  
          the standards and requirements contained in the federal Real ID  
          Act of 2005.  Specifically, this bill would:
                 Require DMV to issue a driver's license that is  










               acceptable for any federal identification purposes within  
               240 days of approval the state's implementation plan by the  
               federal Department of Homeland Security (DHS).
                 Require DMV, within the same timeframe, to issue a  
               driver's license that is not acceptable for federal  
               identification purposes to persons who cannot demonstrate  
               legal presence status, as specified.
                 Require DMV, beginning March 1, 2008, to accept an  
               original notice of action document that contains a valid  
               application verification number issued by the federal  
               Citizen and Immigration Service (CIS) as satisfactory proof  
               that the driver's license applicant's legal presence  
               status. 
                 Require that driver's licenses issued to persons with  
               pending CIS applications are to be issued for a limited  
               term of 12 months.  DMV would be required to renew these  
               limited term licenses until CIS has taken a final action on  
               the legal residency application, or until DMV begins  
               issuing Real ID compliant licenses.
                                     -continued-
          Page 2, SB 60 (Cedillo)

                 On the date that DMV commences the issuance of Real ID  
               compliant driver's licenses, this bill would repeal  
               existing law that prohibits DMV from issuing an original  
               driver's license or identification card to applicant's who  
               cannot demonstrate legal presence status.

           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 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 or identification card to an undocumented immigrant,  
          providing the license meets certain appearance requirements and  
          clearly states that it cannot be used for any other official  
          purpose.

          The federal act originally required implementation to begin in  
          May 2008, but draft regulations that the federal government  
          released March 9 of this year delayed the start date.   
          Regardless of the start date, to be in compliance, DMV must  
          issue original and renewal drivers' licenses and identification  










          cards that meet the requirements of the Real ID Act to all  
          existing cardholders and new applicants by 2013.

          Staff notes that new DMV responsibilities will strain department  
          resources.  While 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 2.2 million undocumented immigrants of driving age in  
          California to apply for a driver's license or identification  
          card.  DMV estimates approximately 2 million additional  
          applications in the first 18 months following implementation.   
          DMV estimates costs to process new undocumented immigrant  
          applications to be $80-$107 million over three years, with  
          offsetting fee revenue gain of up to $55 million.

          Staff notes that, furthermore, this bill would require all  
          existing license holders to visit a DMV field office to apply  
          for a Real ID compliant driver's license.  DMV would 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.  Currently, approximately 2.8 million persons  
          apply for an original or renewal driver's license in person.   
          This bill would result in an additional annual workload of 2  
          million customers over five years following implementation.  DMV  
          estimates costs to re-certify all current drivers and new  
          applicants to be over $500 million over five years, with  
          offsetting fee revenue gains of a similar magnitude.

          DMV indicates that much of the up-front costs include $13  
          million for a minimum of 10 new facilities, each with 2 year  
          leases of $1.3 million, significant computer programming, and  
          hiring and training over 600 new staff to handle the increased  
          workload, all of which must be in place prior to implementation  
          and cannot be financed with application fees.  DMV would require  
          a multi-million dollar appropriation to implement this bill.