BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 397 (Hueso) - Enhanced driver's license.
Amended: April 8, 2013 Policy Vote: T&H 10-0
Urgency: No Mandate: Yes
Hearing Date: May 13, 2013 Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 397 would authorize the Department of Motor
Vehicles (DMV) to issue "enhanced driver's licenses" (EDLs) that
serve as standard driver's licenses that are also acceptable as
proof of identity, residency, and citizenship for purposes of
cross-border travel at United States land and sea ports of
entry.
Fiscal Impact:
Initial DMV costs of approximately $4.5 million (Motor
Vehicle Account) over several fiscal years, to the extent
the department implements a program to issue EDLs. These
costs are related to initial program development, entering
into agreements with federal agencies, substantial
regulatory changes, significant programming changes, and
equipment purchases. These costs must be incurred prior to
collecting any additional fee revenues for issuance of EDLs
Ongoing DMV costs of approximately $5 million annually and
40 PY of staff to handle increased field office and call
center workload (Enhanced Driver's License and
Identification Subaccount, created by this bill).
Ongoing revenue increases of approximately $21 million
annually, after program is fully implemented, based on DMV's
estimate of 285,000 applicants annually (5% of annual
driver's license renewal population of 5.7 million).
Background: Existing law authorizes the DMV to issue driver's
licenses and identification cards. In order to obtain a
driver's license or identification card, an individual must
provide, among other things, a social security number,
verification of birth date and legal presence in the U.S., and a
thumb print. The DMV encodes the individual's basic personal
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information in a magnetic strip on the back card.
The Western Hemisphere Travel Initiative (WHTI) was established
by the Department of State and Department of Homeland Security
(DHS) to implement legislation passed after the 9/11 attacks to
enhance security measures. By requiring all citizens of the
United States, Canada, Mexico, and Bermuda to have a passport or
other accepted document that establishes identity and
nationality to enter or depart the US, the WHTI is intended to
facilitate entry into the United States while also enhancing
border security. The WHTI requires proof of identity and
citizenship beginning in 2007 for air travel, and in 2009 when
entering at a land or sea port of entry. In addition to a valid
passport and US passport card, an EDL is a valid travel document
for purposes of the WHTI. An EDL must contain technology that
facilitates inspection at a border crossing, such as
Radio-Frequency Identification (RFID technology).
The U.S. Customs and Border Protection (border patrol) has
established "ready lanes" at some ports of entry, including
Calexico and Otay Mesa on the California-Mexico border, that are
dedicated for travelers with RFID-enabled travel documents such
as EDLs. Frequent travelers who hold EDLs can use these ready
lanes to expedite the inspection process. An EDL facilitates
the verification process because it includes a vicinity RFID
chip that will signal a secure system to pull up biographic and
biometric data as an EDL holder approaches a border inspection
booth. While the officer must still conduct a visual
inspection, and potentially interview the driver, he or she does
not have to take the time to collect paper documents and key
them in. Four states (Michigan, New York, Vermont, and
Washington), as well as several Canadian provinces, are
currently issuing EDLs.
Proposed Law: SB 397 would authorize DMV to issue enhanced
driver's licenses, instruction permits, provisional licenses, or
identification cards (collectively referred to as EDLs) that may
be used as proof of identity and citizenship pursuant to the
WHTI. Specifically, this bill would:
Authorize DMV to enter into a memorandum of
understanding (MOU) with a federal agency for purposes of
obtaining approval to issue EDLs.
Authorize DMV to issue an EDL to an applicant who is at
least 16 years of age, a resident of California, and a
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citizen of the United States, and requires the applicant to
certify under penalty of perjury that the information is
valid, and to acknowledge understanding of RFID technology.
Require DMV to include reasonable security measures in
the EDL to protect against unauthorized duplication or
disclosure of the holder's personal information. RFID
technology in the EDL would only contain a randomly
assigned number, encrypted subject to DHS approval, and a
barcode that can be read by border patrol.
Prohibit an employer from requiring an employee to apply
for or use an EDL as a condition of employment or to
discharge, discriminate against, or retaliate against an
employee who refuses to apply for or use an EDL.
Require an applicant for an EDL to allow DMV to capture
and reproduce his or her facial image and signature at the
time of application or renewal. These items would only be
available to border patrol or DHS.
Establish a non-refundable fee of $75 for application or
renewal of an EDL, in addition to other fees required by
state law.
Require EDL fees to be deposited into the Enhanced
Driver's License and Identification Card Subaccount, a
special account established by the bill the Motor Vehicle
Account.
Require DMV to submit an annual report to the
Legislature that includes information on the number of EDLs
and related documents issued, the effect on wait times and
traffic congestion at border points of entry, and whether
or not there have been security or privacy breaches related
to the use of EDLs.
Related Legislation: AB 2113 (Hueso), an identical measure, was
held under submission on the Suspense File in the Assembly
Appropriations Committee last year.
Staff Comments: According to the Department of Homeland
Security, state-issued EDLs provide proof of identity and US
citizenship, are issued in a secure process, and include
technology that makes travel easier. This bill is intended to
facilitate border crossings, reduce wait times, and help
mitigate any economic impacts in the border region that may be
caused by delays at border crossings.
DMV would incur substantial up-front costs of approximately $4.5
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million to implement an EDL program. It would be at least
several years before such a program could be fully implemented.
DMV would be required to enter into a comprehensive MOU with DHS
and establish secure database connectivity with multiple
entities to verify source documentation. In addition, DMV would
need to adopt regulations that include procedures for accepting
documents proving citizenship, identity, and citizenship,
prescribing an interview process, and establishing criteria for
approval or denial of an EDL, including an appeals process. DMV
also anticipates significant programming costs and equipment
purchases, such as RFID readers. Based on participation rates
from other states, DMV estimates that 5% of the annual driver's
license renewal population may wish to apply for an EDL.
Because there would be additional manual workload to interview
and process these applicants annually, DMV indicates that the
bill would require 40 additional personnel in field offices and
call centers. Ongoing administrative costs would be
approximately $5 million annually. Assuming 285,000 EDL
applicants each year, this bill would generate $21 million in
new fee revenue annually. While this amount substantially
exceeds both startup and ongoing costs to administer an EDL
program, revenues would not begin to come in until the program
is fully implemented. As a result, the initial $4.5 million in
estimated startup costs would be a cost to the Motor Vehicle
Account.
Staff notes that the State Department currently issues a
passport card that can be used to verify identity and
citizenship at border ports of entry, in compliance with the
WHTI. The application fee for a passport card is $55 and it is
valid for ten years, while the application fee for an EDL would
be $75 for a period of five years. The Committee may wish to
consider whether it makes sense to initiate a costly state
program when the existing passport card could achieve the same
goals of the bill at no cost to the state and less cost to the
public.