BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 773|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 773
Author: Allen (D)
Amended: 6/1/15
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 10-0, 4/28/15
AYES: Beall, Cannella, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
NO VOTE RECORDED: Allen
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
SUBJECT: Vehicles: registration fraud: study
SOURCE: Bay Area Air Quality Management District
DIGEST: This bill requests the University of California (UC)
to conduct a study on motor vehicle registration fraud and
failure to register a motor vehicle.
ANALYSIS:
Existing law:
1)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 Web site by providing
SB 773
Page 2
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.
2)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 California driver's license in order to obtain
auto insurance.
3)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.
4)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
SB 773
Page 3
brought in roughly $1 million per year in vehicle registration
revenues.
This bill:
1)Requests the 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 Web site by January
1, 2017.
2)Requires the study to include:
a) Quantification of the magnitude of the problem.
b) The strategies being used by motorists to commit motor
vehicle registration fraud.
c) The reasons for the behaviors of motorists who commit
fraud in registration of, or who fail to register, their
motor vehicles.
d) The costs to the state and local governments in lost
revenues.
e) Increases in air pollution.
f) Other costs and consequences of those behaviors.
g) Recommended strategies for increasing compliance with
registration requirements.
3)Requires DMV to enter into an agreement with the UC
researchers conducting the study to share vehicle registration
information. Requires CHP to share information on its efforts
to combat registration fraud, including the CHEATERS program,
with UC.
Comments
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
SB 773
Page 4
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.
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.
Is smog test failure the culprit? The Bay Area Air Quality
Management District, the source 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 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.
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.
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
SB 773
Page 5
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.:YesLocal: No
According to the Senate Appropriations Committee:
Unknown UC costs, ranging from minor to the low hundreds of
thousands in the 2016 calendar year to perform the study.
(General Fund)
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)
SUPPORT: (Verified5/28/15)
Bay Area Air Quality Management District (source)
California Air Pollution Control Officers Association
California Public Parking Association
Metropolitan Transportation Commission
OPPOSITION: (Verified5/28/15)
None received
ARGUMENTS IN SUPPORT: The Bay Area Air Quality Management
District, source of this bill, states that a significant number
of motorists deliberately avoid the smog check program by either
failing to register their vehicles, registering their vehicles
in other states, or through other fraudulent schemes. Given
SB 773
Page 6
that vehicles which have not passed a smog test produce
emissions that are potentially several orders of magnitude
greater than the average registered vehicle on the road, the
public health impacts of unregistered vehicles can be extremely
high. This bill will address this problem by helping to
determine both the size of the unregistered vehicle fleet and
strategies to increase vehicle registration compliance.
Prepared by:Erin Riches / T. & H. / (916) 651-4121
6/1/15 14:06:50
**** END ****