BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 773


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          SENATE THIRD READING


          SB  
          773 (Allen)


          As Amended  June 15, 2016


          Majority vote


          SENATE VOTE:  40-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Transportation  |15-0 |Frazier, Linder,      |                    |
          |                |     |Baker, Bloom, Brown,  |                    |
          |                |     |Chu, Daly, Dodd,      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Gomez, Kim, Medina,   |                    |
          |                |     |Melendez, Nazarian,   |                    |
          |                |     |O'Donnell             |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Holden,       |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |








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          |                |     |Wagner, Weber, Wood,  |                    |
          |                |     |McCarty               |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          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)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.


          3)Requires the Department of Motor Vehicles (DMV) to enter into  
            an agreement with UC to share vehicle registration  
            information.


          4)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.


          5)Requests UC to complete and post the study on its Web site no  
            later than January 1, 2018.


          6)Requires DMV to post on its Internet Web site detailed  
            instructions for motorists that describe how to prevent theft  
            of vehicle registration tabs.








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          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.


          3)Requires an owner to register their vehicle within 20 days of  
            accepting employment or establishing residency in California.


          4)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.


          5)Establishes the 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:  According to the Assembly Appropriations  
          Committee:


          1)One-time costs to UC, ranging from minor to the low hundreds  
            of thousands of dollars in the 2017.  Costs would vary  
            depending on the extents to which the study could be  
            incorporated into existing research efforts and to which  
            multiple campuses would be involved in the study. 


          2)Costs for DMV to provide vehicle registration records and to  








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            post the required information on its Web site would be minor  
            and absorbable.  Costs for the CHP to provide information on  
            registration fraud efforts would also be minor and absorbable.  



          3)To the extent the study would lead to cost effective means of  
            reducing vehicle registration fraud, the state and local  
            governments could realize increased revenues.  Based on  
            average total registration fees, for every 100,000 vehicles  
            avoiding such fees, the revenue loss totals about $17 million.  
             (About 33 million vehicles were registered in California in  
            2014.)


          COMMENTS:  Vehicle registration fraud continues to be a  
          significant public policy issue for states across the country.   
          Several states have attempted to crack down on registration  
          fraud 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 campaign,  
          the state was ultimately able to collect $1.9 million in unpaid  
          registration fees.


          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 on this topic exists.  As a result, the  
          lack of accurate data impedes the state's ability to assess the  








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          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 gather data on the scope  
          and magnitude of vehicle registration fraud and the number  
          operating unregistered vehicles within the state.  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.




          Please see the policy committee analysis for full discussion of  
          this bill.


          Analysis Prepared by:                                             
                          Justin Behrens / TRANS. / (916) 319-2093  FN:   
          0004029