BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 60 (Alejo) - Driver's license eligibility: required documentation. Amended: July 8, 2013 Policy Vote: T&H 8-2 Urgency: No Mandate: No Hearing Date: August 19, 2013 Consultant: Mark McKenzie This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 60 would authorize the Department of Motor Vehicles (DMV) to issue a driver's license, other than a commercial driver's license, to an applicant who provides four specified documents that establish proof of identity, rather than providing a social security number (SSN) or other proof of legal presence in the United States. Fiscal Impact: Estimated DMV costs of approximately $140 million to $220 million over three years to issue approximately 1.4 million new driver's licenses (Motor Vehicle Account). Most of these costs are for new temporary facilities, additional staff, and increased processing time in field offices throughout the state. Estimated driver's license application fee revenues of approximately $50 million over three years (Motor Vehicle Account). Background: 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 over 30 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 prohibited from accepting an application without a verified SSN unless the application was submitted with documents establishing legal presence and the Department of Homeland Security (DHS) verifies AB 60 (Alejo) Page 1 that the person is in the country legally, but not authorized to work. It a misdemeanor for any person to assist knowingly in obtaining a driver's license or identification card for any person whose presence in the United States is not authorized under federal law. DMV charges an application fee of $32 for a standard Class C driver's license. Proposed Law: AB 60 would authorize DMV, beginning January 1, 2015, to issue a driver's license to an applicant that provides specified documentation in lieu of a SSN or proof of legal presence in the United States. Specifically, this bill would: Authorize an applicant to provide all of the following, instead of a SSN or proof of legal presence: o A valid passport or consular identification document issued by the applicant's home country. o An original birth certificate or other proof of age designated by DMV. o A residential utility bill, lease or rental agreement, or other proof of California residency, as designated by DMV. o Any one of the following documents, accompanied by an English translation if necessary: a marriage license or divorce certificate; a specified foreign electoral photo card; a foreign driver's license; DHS Forms I-589, I-20, or DS-2019; specified education records; a property deed or title; a recent property tax statement; an income tax return; or other proof of identity, as designated by DMV. Require all applications for a driver's license or identification card to include, in addition to space for a SSN, a space for a number associated with any document that established the identity of the applicant, as determined by DMV. Specify that an applicant for a commercial driver's licenses must provide a SSN. The bill would also delete the following provisions, effective January 1, 2015 that: Prohibit DMV from issuing a driver's license to an applicant who cannot provide proof of legal presence in the US. Allow DMV to issue a driver's license to an applicant from another country who can establish legal presence as approved by the federal government. AB 60 (Alejo) Page 2 Require DMV to issue a temporary driver's license to a legal nonimmigrant if he or she has successfully completed the application and related requirements but the US Immigration and Naturalization Service has not yet verified the applicant's legal presence status. Make it a misdemeanor for an individual to assist knowingly in obtaining a driver's license or identification card for an individual who is unable to establish legal presence. Staff Comments: DMV currently issues approximately 900,000 original driver's licenses each year. AB 60 is expected to encourage many of the estimated 2 million undocumented immigrants of driving age in California to apply for a driver's license. This bill would have a significant impact on DMV operations and service levels in field offices statewide. DMV anticipates a processing volume of approximately 1.4 million additional applicants over a three-year period, beginning in 2015 as a result of the bill. DMV estimates costs to process new undocumented immigrant applications to be in the range of $140 million to $220 million over three years, with offsetting driver's license application fee revenue gains of approximately $50 million. Total costs include additional facilities requirements, additional field staffing, extended Saturday field office service, outreach activities, phone centers, investigations, human resources, training, and headquarter processing. The disparity in the range of costs is based upon two distinct implementation approaches. The estimated costs would also depend upon the actual volume of applicants and how well the impacts are tolerated. DMV estimates up-front costs in the range of $20 million to $60 million (depending on the chosen approach) for new temporary facilities to handle the increased volume of customers, significant computer programming costs in the low millions, and approximately $100 million to hire and train 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 in the 2014-15 budget year to implement this bill. According to the Governor's budget documents, the Motor Vehicle Account is projected to have a reserve of approximately $237 million at the end of the 2013-14 budget year. The expenditures envisioned by this bill would have a significant impact on overall condition AB 60 (Alejo) Page 3 of the Motor Vehicle Account. Congress enacted and the President signed H.R. 1268-"Real ID Act of 2005" on May 11, 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 (DL/ID). 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. A driver's license issued by a state that is not compliant with the Act will not be recognized for federal identification purposes, such as entering a federal building or boarding a plane. To date, the Department of Homeland Security has determined that only 13 states meet REAL ID Act standards, and California is not among them. Enforcement of the Act has been deferred several times, and DHS is contemplating continued deferments for states that are making efforts to attain REAL ID compliance. Staff notes that the author of AB 60 has indicated that the bill may be amended to address issues related to the REAL ID Act. Such amendments would likely have impact on the fiscal estimates noted above.