BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 773|
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UNFINISHED BUSINESS
Bill No: SB 773
Author: Allen (D)
Amended: 6/15/16
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
SENATE FLOOR: 40-0, 6/2/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner,
Stone, Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 79-0, 8/24/16 - See last page for vote
SUBJECT: Vehicles: registration fraud
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.
Assembly Amendments change the date by which the UC is requested
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to post the study on its Web site from 2017 to 2018, and change
the sunset date of this bill from 2020 to 2021.
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
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
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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) Web site. 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
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, 2018.
2)Requires the study to include:
a) Quantification of the magnitude of the problem.
b) Strategies used by motorists to commit motor vehicle
registration fraud.
c) Reasons for behaviors of motorists who fraudulently or
fail to register their motor vehicles.
d) Costs to the state and local governments in lost
revenues.
e) Increases in air pollution.
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f) Other costs and consequences of those behaviors.
g) Recommendations to increase 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 the UC.
4)Sunsets provision 1) - 3) above on January 1, 2021.
5)Requires DMV to post on its Web site, and other appropriate
online venues used by DMV for public outreach, detailed
instructions to motorists describing how to prevent theft of
vehicle registration license plate tabs.
Comments
1)Purpose. The author states that drivers who bypass the Smog
Check Program by failing to register their vehicles 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 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.
2)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.
3)Is smog test failure the culprit? The Bay Area Air Quality
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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.
4)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.
5)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 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
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According to the Assembly Appropriations Committee:
1)One-time costs to UC, ranging from minor to the low hundreds
of thousands of dollars in 2017. Costs would vary depending on
the extent to which the study could be incorporated into
existing research efforts and the extent to which multiple
campuses would be involved in the study.
2)Costs for DMV to provide vehicle registration records and to
post the required information on its website would be minor
and absorbable. Costs for the CHP to provide information on
registration fraud efforts would also be minor and absorbable.
[Motor Vehicle Account]
3)To the extent the study would lead to cost-effective means of
reducing vehicle registration fraud, the state and local
governments could realize significant 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.)
SUPPORT: (Verified8/24/16)
Bay Area Air Quality Management District (source)
California Air Pollution Control Officers Association
California Public Parking Association
Metropolitan Transportation Commission
OPPOSITION: (Verified8/24/16)
None received
ASSEMBLY FLOOR: 79-0, 8/24/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,
Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper,
Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
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Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Brough
Prepared by:Erin Riches / T. & H. / (916) 651-4121
8/25/16 17:30:44
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