BILL ANALYSIS Ó SB 773 Page 1 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, | | SB 773 Page 2 | | |Wagner, Weber, Wood, | | | | |McCarty | | | | | | | | | | | | ------------------------------------------------------------------ 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. SB 773 Page 3 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 SB 773 Page 4 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 SB 773 Page 5 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