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.