December 26, 2007
Pursuant to Elections Code Section 9005, we have
reviewed the proposed initiative entitled “Uninsured Motorist Law
Enforcement Act of 2008” (A.G. File No. 07‑0086).
Current Law
California law requires anyone who operates a
motor vehicle on the public streets or highways to maintain some form of
financial responsibility. For most drivers, the financial responsibility
requirement is satisfied by maintaining automobile liability insurance.
Drivers must show evidence of automobile insurance coverage in order to
register a motor vehicle with the Department of Motor Vehicles (DMV).
While a peace officer may not stop a vehicle for the sole purpose of
determining compliance with the financial responsibility requirement,
drivers who are stopped for other reasons or involved in a collision
must show proof of insurance when it is requested by the California
Highway Patrol (CHP) or local law enforcement officers. Failure to
provide proof of insurance can lead to denial of the application for
registration, the issuance of a citation, and/or suspension of vehicle
registration. An uninsured driver who is involved in a collision could
have his/her driving privileges restricted or suspended for one year.
The Low Cost Automobile Insurance
Program—administered by the California Department of Insurance—offers
affordable automobile insurance to qualifying California drivers with
annual household income of up to 250 percent of the federal poverty
level. While this program currently is available statewide, legislation
is required to continue its operation beyond 2010 in Los Angeles County
and the City and County of San Francisco.
Major Provisions
The proposed measure would require state and
local law enforcement officers to remove the license plates of any
vehicle that lacks proof of insurance and current valid registration. A
peace officer may decline to remove the plates if removal would
jeopardize the safety of vehicle occupants or the officer, or is
contrary to the interests of justice. Under the measure, any such
vehicle could continue to be driven for up to seven days from the date
of removal of its license plates. However, if the vehicle continues to
be driven without insurance after the seven-day period, law enforcement
would be authorized to impound the vehicle. The CHP, in consultation
with DMV and local law enforcement agencies, would be required to adopt
by July 1, 2009 a comprehensive regulatory system for implementing the
measure.
The measure would authorize DMV, in consultation
with law enforcement agencies, to develop a temporary license plate or
placard program for drivers whose vehicle license plates have been
confiscated pursuant to the measure. It would further authorize DMV to
impose a fee on vehicle owners whose license plates are removed provided
that such fees are limited to costs directly associated with
implementation of the measure.
The measure would permanently establish
California’s Low Cost Automobile Insurance program in Los Angeles County
and the City and County of San Francisco.
Fiscal Effect
The operations of CHP and DMV are primarily
supported by driver license and vehicle registration fees. Local law
enforcement activities are largely supported by local general fund
monies.
Law Enforcement Costs. This measure
probably would result in ongoing costs to state and local law
enforcement agencies to the extent some law enforcement agencies require
additional staff to comply with its requirements. On a statewide basis,
the amount of potential increase in these costs is unknown, but is
potentially several million dollars annually. The actual cost would
depend on a number of factors, including most notably the frequency of
license plate removals.
State Administrative Costs. This
measure would result in ongoing state administrative costs, primarily
costs to DMV associated with the re-issuance of license plates to
individuals whose plates are confiscated and processing of related
telephone service center calls and customer visits to its field offices.
There would also be costs to the extent DMV chooses to implement a
temporary license plate or placard program. The total state
administrative costs are unknown, but potentially several million
dollars annually, depending on the number of license plates confiscated
as a result of this measure. Additionally, there probably would be minor
one-time costs for computer programming, as well as development of
regulations and driver informational pamphlets.
New State Revenues. While the
measure states that the authorized fee is intended to cover “costs
directly associated with the implementation of this article,” the
proponents have indicated that the intent is to only cover a portion of
the costs associated with the measure, specifically costs incurred by
DMV. While the amount of fee revenue is unknown, as it would depend on
the actual fee adopted by the department, any revenues generated would
partly offset spending for state administrative costs.
To the extent more drivers purchase and maintain
insurance as a result of this measure, there could be an unknown
increase in state revenue from the gross insurance premiums tax paid by
automobile insurers.
Summary
This measure would result in the following fiscal
effects:
-
Potential state and local law enforcement costs
of several million dollars annually on a statewide basis.
-
Ongoing state administrative costs of
potentially several million dollars annually, partly offset by fee
revenues.
-
Potential, unknown increase in state tax
revenue from vehicle insurance purchased by motorists.
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