BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 773 (Allen) - Vehicles: registration fraud: study
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|Version: April 7, 2015 |Policy Vote: T. & H. 10 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 773 would request the University of California (UC)
to conduct a study on motor vehicle registration fraud and
failure to register motor vehicles, and post a report on its
website by January 1, 2017. The bill also requires the
Department of Motor Vehicles (DMV) and the Department of the
California Highway Patrol (CHP) to share specified information
with UC researchers conducting the study.
Fiscal
Impact:
Unknown UC costs, ranging from minor to the low hundreds of
thousands in the 2016 calendar year to perform the study.
(General Fund)
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Minor costs to DMV in 2015-16 to provide vehicle registration
records. (Motor Vehicle Account)
Minor costs to CHP in 2015-16 to provide information on
registration fraud efforts. (Motor Vehicle Account)
Background: 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 DMV. Existing law
imposes the following annual fees on non-commercial vehicle
registrations: a basic registration fee of $46; an additional
$24 fee to support CHP; and a 0.65% Vehicle License Fee (VLF),
which is an in-lieu personal property tax based on the taxable
value of the vehicle. Trucks also pay an annual weight fee.
Existing law also provides for additional vehicle fees (air
quality fees, abandoned vehicle fees, etc.), which are imposed
in certain jurisdictions to support specified local and regional
programs.
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. Gas-powered vehicles manufactured prior to 1976,
alternatively fueled vehicles, and vehicles six model years of
age or newer are exempt from the program. The Smog Check
Program allows eligible persons to renew a vehicle's
registration without passing a smog test, provided the owner has
spent a specified amount on repairs. The program also provides
cash vouchers for retiring a vehicle that cannot pass a smog
test if it has been registered during the prior two years
without a substantial lapse.
Existing law requires a vehicle owner to register his or her
vehicle within 20 days of accepting employment or establishing
residency in California. In addition, non-resident owners must
register a vehicle based in California or used primarily on
California highways. Under the Californians Help Eliminate All
the Evasive Registration Scofflaws (CHEATERS) program, a person
who sees an out-of-state license plate may report it anonymously
to the 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
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him or her to properly register the vehicle. This program has
generated approximately $1 million per year in vehicle
registration revenues.
Proposed Law:
SB 733 requests UC to conduct a study on motor vehicle
registration fraud and failure to register a vehicle, and to
post a report of the study on its website by January 1, 2017.
The study must include the following information:
Quantification of the magnitude of the problem.
Strategies used by motorists to commit motor vehicle
registration fraud.
Reasons why motorists commit motor vehicle registration fraud
or fail to register their vehicles.
The costs to the state and local governments in lost revenues.
Increases in air pollution.
Other costs and consequences related to this behavior.
Recommended strategies for increasing compliance with vehicle
registration requirements.
The bill also requires DMV to share its existing database of
vehicle registration records with UC researchers conducting the
study, and requires CHP to share information on its efforts to
combat registration fraud, including the CHEATERS program, with
UC researchers.
Staff
Comments: This bill would examine the magnitude of the problems
related to vehicle registration fraud and the failure of vehicle
owners to register their vehicles pursuant to the requirements
in statute. Registration fraud can occur when unscrupulous
persons steal DMV registration stickers, steal license plates,
or counterfeit temporary registration paperwork, while others
avoid registration by registering a vehicle out-of-state,
providing a false address, or improperly using dealer plates.
Many vehicles go unregistered because of an inability to pass a
Smock check, while others may attempt to avoid California's
relatively higher vehicle registration fees compared to
neighboring states.
According to DMV statistics, there were approximately 33 million
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fee-paid vehicle registrations in 2014, so even if a very small
percentage of vehicles are avoiding proper registration and Smog
Check requirements there could be significant losses of vehicle
registration fee revenues and impacts to air quality. For every
100,000 vehicles that avoid registration, there are state and
local revenue losses of over $17 million, using DMV's average
total fees of $172 per vehicle registration (which doesn't
include special local/regional fees).
The UC would incur costs to conduct research activities and
report the results, including study design, coordination with
other entities, data analysis, quantification of impacts,
formulating recommendations, and drafting a report. To the
extent that the bill's study is consistent with ongoing academic
research at UC, costs could be relatively minor, but if it were
a multi-campus coordinated effort, costs could be in the low
hundreds of thousands of dollars in the 2016 calendar year. DMV
and CHP costs to share information and data are likely to be
minor. The sharing of DMV vehicle registration database
information may require a negotiated memorandum of understanding
to ensure the confidentiality of personal information.
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