BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 935 (Frazier) - Driver's licenses: veteran designation.
Amended: June 9, 2014 Policy Vote: T&H 10-0
(as proposed to be amended)
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 935 would allow a person applying in-person for
a driver's license or identification (ID) card on or after
November 11, 2015 to request that the word "VETERAN" be printed
on the face of the license or card, upon payment of an
additional $5 fee and presentation of a specified verification
form indicating proof of veteran status.
Fiscal Impact: (reflects proposed amendments noted below)
Estimated Department of Motor Vehicles (DMV) implementation
costs of $1.05 million in 2014-15 and 2015-16, and ongoing
costs of $775,392 in 2016-17, and $768,072 in 2017-18.
(Motor Vehicle Account)
DMV estimates revenue increases of up to $2.2 million
annually, beginning in 2015-16, assuming approximately
150,000 veterans apply for the veteran designation in their
normal renewal cycle, and 47,000 veterans apply for a
duplicate license outside the normal cycle of renewal (Motor
Vehicle Account). Revenues are expected to taper after
several years.
Minor costs to the Department of Veterans Affairs to
develop the form that provides for verification of veterans
status. (General)
Unknown county veterans service office (CVSO) costs,
beginning in 2015-16, to verify veteran status for an
estimated 200,000 veterans annually for several years.
CVSOs receive an annual General Fund allocation of $2.6
million.
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Background: Existing law requires a driver's license issued by
DMV to state the qualified class of the license and contain a
distinguishing license number, the expiration date, the full
name, age, mailing address, brief description, and photograph of
the licensee, and space for a signature. Driver's license
applicants may also designate on the application whether they
wish to register as an organ and tissue donor, and whether they
have served in the U.S. Armed Forces and give consent to be
contacted by the Department of Veterans Affairs regarding
eligibility for state or federal veterans benefits. If a
driver's license applicant wishes to be an organ and tissue
donor, a pink "donor" dot will appear on his or her license.
Active duty, reserve, and retired members of the U.S. Armed
Forces carry military identification cards. The Department of
Defense issues a Certificate of Release of Discharge From Active
Duty (DD-214 form) to service members released from active duty.
The DD 214 form is a letter-sized document containing personal
information and serves as official proof of service and veteran
status.
Currently, 40 states offer a veteran designation on the driver's
license, and several additional states are considering similar
legislation. Some states require the DD-214 form, while others
either require additional documentation or accept supplemental
documentation. Some states offer the veteran driver's license
free of charge.
Proposed Law: AB 935 would require DMV to provide for a veteran
designation on the face of a driver's license or ID card,
commencing on November 11, 2015. Specifically, this bill would:
Require an in-person application for a driver's license
or ID card to allow an applicant to request the word
"VETERAN" be printed on the card's face.
Require the Department of Veterans Affairs, in
consultation with DMV and the California Association of
County Veteran Service Officers to develop a verification
form to acknowledge confirmation of veteran status.
Require a county veterans service office to verify the
status of an applicant as a veteran, sign the verification
form, and return it to the veteran.
Require DMV to accept the signed verification form as
proof of veteran status, and print the word "VETERAN" on
the face of the applicant's driver's license or ID card
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upon payment of a specified fee and presentation of the
verification form.
Require DMV to charge a $5 fee to an applicant who
requests the "VETERAN" designation.
Authorize DMV to increase the fee to an amount up to $15
by regulation for its reasonable costs in processing and
issuing requests for the "VETERAN" designation.
Related Legislation: Three bills have been introduced in recent
years that would have provided for some form of a veteran
designation on the face of the driver's license and ID card.
All of the following bills were held on the Suspense File in the
Assembly Appropriations Committee: AB 1637 (Frazier), held
under submission this year; AB 531(Frazier), held under
submission last year; and AB 1725 (Lowenthal), held under
submission in 2012.
Staff Comments: In an effort to reduce the burden on DMV
relative to previous legislation noted above, this bill requires
the verification of veteran status to occur in county veterans
service offices. This would have the added benefit of
facilitating veterans' access to eligible federal, state, and
local benefits. The bill is also intended to provide easier
access to personal benefits and military discounts that may be
offered to veterans by commercial businesses. Staff notes that
this bill is expected to result in a substantial increase in
traffic and workload in county veterans service offices. Costs
to handle the verification of eligibility for an estimated
200,000 veterans are unknown. For illustrative purposes, if
each transaction takes five minutes of staff time, this bill
would result in an increase of approximately 9 personnel years
of staff time each year. This would impose increased costs on
counties, and could create General Fund cost pressures.
DMV estimates initial costs of approximately $1.05 million to
implement the provisions of AB 935, including one-time costs of
about $675,000 prior to November 11, 2015 to make necessary
programing changes, modify the vendor contract for driver's
license production, train staff, and update forms. Staff notes
that it is reasonable to assume that at least half of these
costs would be incurred in 2014-15. Ongoing costs are projected
to be $775,392 in 2016-17, and $768,072 in 2017-18. Nearly half
of the projected initial costs and almost all of the ongoing
costs are attributed to field office and call center staff time.
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These costs could vary depending on the actual numbers of
applicants seeking a veteran designation, and will likely
decline in future years as demand tapers.
There are currently nearly 2 million veterans domiciled in
California. DMV cost and revenue estimates are based on the
assumption that about 197,000 veterans would apply for a veteran
designation annually for several years. Of this amount, DMV
estimates that approximately 47,000 veterans would seek a
duplicate license outside the normal cycle of license renewal as
a result of this bill. The bill requires each applicant for a
veteran designation to pay a fee of $5, resulting in
approximately $985,000 annually, and current law requires
payment of a $27 fee for a duplicate license, which could
generate an additional $1.27 million. DMV estimates the bill
would generate about $2.2 million annually overall, beginning in
2015-16, which would likely decline in future years as demand
tapers. Since a disproportionate share of revenues would come
from fees associated with duplicate licenses, staff notes that
DMV's revenue estimates are highly dependent upon the actual
number of veterans who would be sufficiently motivated by the
bill that they would apply for verification of veteran status
through a CVSO and apply to DMV for a duplicate license outside
the normal cycle of license renewal.
Staff notes that DMV is currently engaged in a number of high
priority programming projects, such as those related to
federally mandated improvements to the Commercial Driver's
License system, IT modernization efforts, and implementation of
AB 60 (Alejo), Chap. 524/2013. Although AB 935's requirements
would not be operative until November 11, 2015, the bill would
have an impact on other priority programming projects. In
addition, the bill would complicate the work of DMV, whose
primary mission is the registration of vehicles and licensing of
drivers.
Proposed Author Amendments: This analysis reflects amendments
proposed by RN 14 20118, which would do the following:
Clarify that an application for veteran designation must
occur in-person.
Clarify that the form for verification of veteran status
is a "verification form" rather than an "application form."
Require the verification form to be developed by the
Department of Veterans Affairs, in consultation with DMV
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and the California Association of County Veteran Service
Officers.
Change the fee from an amount up to $15, to a fee of $5,
with authorization for DMV to increase the fee to as high
as $15 through regulations.