BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 773 Hearing Date: 4/28/2015
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|Author: |Allen |
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|Version: |4/7/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Erin Riches |
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SUBJECT: Vehicles: registration fraud: study
DIGEST: This bill requests the University of California to
conduct a study on motor vehicle registration fraud and failure
to register a motor vehicle.
ANALYSIS:
Existing law prohibits a person from driving, moving, or parking
a motor vehicle on the highway or in a public parking facility
unless it is registered with the state Department of Motor
Vehicles (DMV). Registering a vehicle or renewing a vehicle
registration is an easy process that a vehicle owner can
typically complete quickly on the DMV's website by providing the
vehicle's license plate number and paying annual taxes and fees
associated with registration. Existing law does not require a
person to show proof of a California driver's license in order
to register a vehicle.
Existing law requires all drivers and motor vehicle owners to
carry evidence of financial responsibility, defined primarily as
written evidence of valid automobile liability insurance.
Existing law requires all insurance companies to report
insurance status information to DMV for all private-use
vehicles. DMV may suspend, cancel, or revoke the registration
of a vehicle if it determines that insurance coverage has been
cancelled, evidence of insurance coverage has not been submitted
to DMV, or false insurance information has been submitted to
DMV. Existing law does not require a person to show proof of a
SB 773 (Allen) Page 2 of ?
California driver's license in order to obtain auto insurance.
Existing law establishes the Motor Vehicle Inspection Program,
commonly referred to as the Smog Check Program. This program
generally requires vehicle owners to have their vehicles tested
every two years, coinciding with renewal of vehicle
registration, with some exceptions, including gas-powered
vehicles manufactured prior to 1976, alternatively fueled
vehicles, and vehicles six model years of age or newer. The
Smog Check Program provides, for eligible customers: an
opportunity to renew a vehicle's registration even if it does
not pass a smog test, provided the owner has spent a certain
amount on repairs; up to $500 toward emissions-related repairs;
or a voucher in return for "retiring" (scrapping) the vehicle.
In order to be eligible for a voucher, the vehicle owner must
provide evidence that the vehicle has been registered during the
prior two years without a substantial lapse.
Existing law requires an owner to register their vehicle within
20 days of accepting employment or establishing residency in
California or be subject to specified penalties. Under the
Californians Help Eliminate All the Evasive Registration
Scofflaws program (CHEATERS), a person who sees an out-of-state
license plate may report it anonymously to the California
Highway Patrol (CHP) website. If there is sufficient
information to prove that the owner or driver of the vehicle is
a California resident, CHP sends a compliance letter to the
owner requiring him or her to properly register the vehicle.
This program has brought in roughly
$1 million per year in vehicle registration revenues.
This bill:
1)Requests the University of California (UC) to conduct a study
on motor vehicle registration fraud and failure to register a
motor vehicle, and to post a report of the study on its
website by January 1, 2017.
2)Requires the study to include:
Quantification of the magnitude of the problem
The strategies being used by motorists to commit motor
vehicle registration fraud
The reasons for the behaviors of motorists who commit
fraud in registration of, or who fail to register, their
SB 773 (Allen) Page 3 of ?
motor vehicles
The costs to the state and local governments in lost
revenues
Increases in air pollution
Other costs and consequences of those behaviors
Recommended strategies for increasing compliance with
registration requirements
1)Requires DMV to share its existing database with the UC
researchers conducting the study. Requires CHP to share
information on its efforts to combat registration fraud,
including the CHEATERS program, with UC.
COMMENTS:
1)Purpose. The author states that drivers who bypass the Smog
Check Program by failing to register their vehicle can
disproportionately impact air quality. However, California
lacks meaningful data on the scope and magnitude of the
problem. This bill will enable the state to gain critical
information related to unregistered cars and trucks, as well
as policy recommendations on how best to remedy the situation.
Along with air quality impacts, registration fraud robs the
state and local governments of millions of dollars of revenues
needed for transportation projects, law enforcement support,
and other programs. Furthermore, it significantly increases
insurance costs for law-abiding citizens because unregistered
vehicles are rarely insured.
2)How many unregistered vehicles are there? There are no
official estimates of how many unregistered vehicles are
currently on California roads. The author points to various
studies which have found that somewhere between 1% and 8% of
California's 35 million cars and light trucks are
unregistered.
3)Is smog test failure the culprit? The Bay Area Air Quality
Management District, sponsor of this bill, argues that a
primary reason that drivers fail to register their vehicles,
or fail to renew registration, is because the vehicle cannot
pass a smog test. Although the state offers assistance to
vehicle owners whose cars fail smog check, an owner must meet
certain eligibility requirements, including providing evidence
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that the vehicle has been registered for the last two years
without a substantial lapse. With just 25% of cars on the
road being responsible for 75% of smog-forming emissions from
all motor vehicles, tightening vehicle registration could help
ensure that high-polluting vehicles are repaired or taken off
the road.
4)What about AB 60? AB 60 (Alejo, Chapter 524, Statutes of
2013) requires the DMV to issue an original driver's license
to an individual who is unable to submit satisfactory proof of
legal presence in the U.S. The DMV began issuing these
licenses on January 2, 2015. It is possible that now that
many individuals can obtain a legal driver's license who were
unable to prior to this year, the state will see an increase
in vehicle registration. However, since drivers are not
required to show proof of a valid license in order to either
obtain auto insurance or register a vehicle, it is unclear
whether AB 60 will impact vehicle registration levels.
5)Out-of-state plates. A July 2014 San Jose Mercury News
article notes that the average cost of registering a vehicle
in California is $143 per year, but registering a new vehicle
can cost as much as $400 - more than twice what a driver would
pay in Oregon and most nearby states. Some people are
apparently choosing to register their car in a neighboring
state in order to avoid California's relatively high
registration fees. This negatively impacts a major source of
revenue for California and its local governments, which is why
existing law requires an owner to register their vehicle
within 20 days of accepting employment or establishing
residency in California.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 22, 2015.)
SUPPORT:
Bay Area Air Quality Management District (sponsor)
OPPOSITION:
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None received
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