BILL ANALYSIS Ó
SB 773
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Date of Hearing: June 13, 2016
ASSEMBLY COMMITTEE ON TRANSPORTATION
Jim Frazier, Chair
SB
773 (Allen) - As Amended May 31, 2016
SENATE VOTE: 40-0
SUBJECT: Vehicles: registration fraud
SUMMARY: Requests the University of California (UC) to conduct
a study on motor vehicle registration fraud. Specifically, this
bill:
1)Makes legislative findings and declarations regarding vehicle
registration fraud and the negative impacts associated with
vehicle registration fraud.
2)Requests UC to conduct a study on motor vehicle registration
fraud.
3)Provides that the study is to include, but not be limited to,
identifying the magnitude of vehicle registration fraud,
methods used by motorist to commit vehicle registration fraud,
and the cost to the state and local governments in lost
revenues, effects on air pollution, and recommended strategies
for increasing compliance with registration requirements.
4)Requires the Department of Motor Vehicles (DMV) to enter into
an agreement with UC to share vehicle registration
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information.
5)Requires the Department of the California Highway Patrol (CHP)
to share information related to efforts to combat registration
fraud, including the California Help Eliminate All the Evasive
Registration Scofflaws (CHEATERS) program.
6)Requests UC to complete and post the study on its Internet Web
site no later than January 1, 2017.
7)Requires DMV to post on its Internet Web site detailed
instructions for motorists that describe how to prevent theft
of vehicle registration tabs.
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 DMV.
2)Requires that a registration fee of $43 be paid to DMV for an
initial vehicle registration or registration renewal to fund
the operations of DMV and CHP related to enforcement of the
statutes of the Vehicle Code.
3)Requires all drivers and motor vehicle owners to carry
evidence of financial responsibility. Further requires all
insurance companies to report insurance status information to
DMV for all private-use vehicles.
4)Authorizes DMV to suspend, cancel, or revoke the registration
of a vehicle if DMV determines that insurance coverage has
been cancelled, evidence of insurance coverage has not been
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submitted to DMV, or false insurance information has been
submitted to DMV.
5)Requires an owner to register their vehicle within 20 days of
accepting employment or establishing residency in California
or be subject to specified penalties.
6)Establishes the Motor Vehicle Inspection Program, commonly
referred to as the Smog Check Program, and requires vehicle
owners to have their vehicles tested every two years,
coinciding with renewal of vehicle registration, with certain
exceptions provided.
7)Establishes CHEATERS program, administered by CHP, allowing a
person who identifies an out-of-state license plate to
anonymously report to the vehicle to CHP.
FISCAL EFFECT: Unknown
COMMENTS: Vehicle registration fraud continues to be a
significant public policy issue for states across the country.
States such as Iowa, New York, New Jersey, Illinois, and
Wisconsin have attempted to crack down on vehicles illegally
registered to avoid higher government fees and insurance
premiums. For example, the Iowa Department of Transportation
recently canceled more than 450 vehicle titles and registrations
obtained using false or fictitious information and operating in
New York City. Similarly, in California in 2014, using
information provided through the CHEATERS hotline, CHP carried
out an enforcement campaign targeting drivers with out-of-state
license plates or expired license plate tags. Through this
enforcement campaign, the state was ultimately able to collect
$1.9 million in unpaid registration fees.
While the CHEATERS program allows motorists to voluntarily
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report vehicles with out-of-state license plates, the state
currently lacks adequate data to determine the methods and
magnitude of vehicle registration fraud within the state. The
Bay Area Air Quality Management District, the sponsor of this
bill, notes that in addition to out-of-state vehicle fraud,
motorists fail to register their vehicle or fail to renew
registration because their vehicle cannot pass smog testing,
resulting in unknown but likely deleterious effects on air
quality. Although some studies have indicated the number of
unregistered vehicles operating in state is somewhere between
1%-8%, no official data exist of how many unregistered vehicles
are currently operating on California roads that are associated
with these illegal activities. As a result, the lack of
accurate data impedes the state's ability to assess the negative
impacts associated with this illegal activity on air quality,
state and local government revenues, and insurance premiums.
With this bill, the author intends to allow the state to gather
data on the scope and magnitude of vehicle registration fraud
and the number operating unregistered vehicles within the state.
The author notes that 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. In turn, the study will develop effective policy
recommendations that will potentially lead to recouping millions
of dollars in lost revenue that can be used for vital services
such as CHP enforcement, removing abandoned vehicles, and
transportation projects.
Proposed author's amendments: Because this bill was introduced
last year but not yet heard in this committee, the author
proposes amending the bill in committee to the change the date
that by which UC is requested to post a report of the study from
January 1, 2017 to January 1, 2018 to allow adequate time to
complete the study. The author also proposes amending the bill
to change the sunset date of the bill's provisions from January
1, 2020 to January 1, 2021, for the same reasons.
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REGISTERED SUPPORT / OPPOSITION:
Support
Bay Area Air Quality Management District (Sponsor)
3M Company
California Air Pollution Control Officers Association
California Public Parking Association
Metropolitan Transportation Commission
Natural Resources Defense Council
Valley Clean Air Now
Opposition
None on file
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Analysis Prepared by:Justin Behrens / TRANS. / (916)
319-2093