LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
ASSEMBLY, No. 4743
STATE OF NEW JERSEY
218th LEGISLATURE
DATED: DECEMBER 20, 2019
SUMMARY
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Synopsis: |
Creates two categories of driver’s licenses and identification cards; allows residents unable to prove lawful presence in US to receive permits, and standard driver’s licenses or identification cards; permits MVC to increase certain fees. |
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Type of Impact: |
State cost increase and State revenue increase. |
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Agencies Affected: |
New Jersey Motor Vehicle Commission. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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State Cost |
Indeterminate Increase |
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State Revenue |
Indeterminate Increase |
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· The Office of Legislative Services finds that this bill will result in an indeterminate increase in State costs as the Motor Vehicle Commission (MVC) will realize costs to redesign and issue new standard licenses, including programming and software changes that will apply to the standard driver’s, motorcycle, probationary, and non-driver licenses. The MVC will also realize costs to translate and publish the drivers manual and driver knowledge tests in three additional languages, and additional employment costs to provide translation services at MVC agencies, that will depend upon how those services are provided. The MVC will realize costs to conduct the 24-month public awareness campaign required under the bill. The majority of costs are likely to be realized in the first two fiscal years after enactment. In addition, the bill should result in a significant increase in the number of persons seeking driver’s licenses, which for subsequent years will increase costs proportionately to the current cost per person for providing driver’s licenses.
· The bill will result in increased revenue as a result of setting fees for the new issuance and renewal of REAL ID-compliant documents at $11 more than current document fees. Also, the bill allows the Chief administrator to waive duplicate license fees for certain individuals upgrading to a REAL ID. If the waiver happens, then individuals with current standard driver’s licenses would be able to upgrade to Real ID licenses at no cost, but would subsequently be required to pay the full REAL ID license cost at their scheduled renewal date. The potential exercise of the waiver would represent a loss of potential revenue that would be largely realized in FY 2020 and part of FY 2021. The State may also realize increased revenue by granting the chief administrator the power to raise license fees through administrative action. The timing and amount of any future license fee increase cannot be known, but the MVC is statutorily required when raising fees through administrative action to limit the size of the fee to the actual cost to the MVC to provide the service for which the fee is charged.
· The bill also may result in additional State fine revenue due to the new prohibition on disclosing documents and personal information obtained by the MVC for various purposes, except as required to be disclosed under federal law. The maximum fine for a violation of this provision is $10,000. The bill also provides for fines for submitting false documents on driver’s license applications not greater than $500 or less than $200.
BILL DESCRIPTION
This bill creates two categories of basic driver’s licenses, motorcycle licenses, probationary licenses, permits, and non-driver identification cards (hereinafter referred to collectively as licenses and identification cards). Under the bill, a person may apply for a standard license or identification card or a REAL ID license or identification card. The principal difference between standard and REAL ID documents is that the latter must comply with federal requirements, in particular that the holder has demonstrated that presence in the United States is authorized under federal law.
Provisions most relevant to the bill’s fiscal impact include the following:
· The fee for a REAL ID license or identification card and their renewal is raised to $29 from
the $18 fee for a standard license or identification card and currently changed for these documents.
The bill permits the chief administrator to waive the $5 fee, plus the $6 photo fee, imposed for a duplicate license and identification card, for applicants for a REAL ID license or REAL ID identification card who currently hold a valid license or identification card and are not eligible to renew the applicant’s current license or identification card.
The chief administrator’s authority to waive the duplicate fee expires on October 1, 2020. To obtain the fee waiver, an applicant for a REAL ID license or REAL ID identification card is required to surrender to the MVC the applicant’s current license or identification card.
The bill permits the MVC to increase certain driver’s license and endorsement fees by regulation including fees for issuance of a standard motorcycle license or endorsement, REAL ID motorcycle license, omnibus or school bus endorsement, standard basic driver’s license, or REAL ID basic driver’s license.
· The bill requires that the written examination (knowledge test) for a basic driver’s license
or validated permit be made available in English and each of the three languages most commonly spoken in New Jersey, other than English. The bill requires the chief administrator to publish the driver’s manual on the MVC’s website in English and each of the three languages.
The bill also requires the MVC to provide language translation services at each MVC agency and regional service center location, to be provided in a language spoken and understood by each applicant. The MVC is also required to translate the most commonly used application forms, as determine by the chief administrator, into each of the three languages.
The chief administrator is required to periodically, but at least every five years, verify the three languages, other than English, most commonly spoken in New Jersey.
· The bill requires the chief administrator to establish a 24-month public awareness
campaign to inform the public about the availability of and the requirements to obtain a standard and REAL ID license or identification card.
· The bill also creates the “Standard and REAL ID Driver License and Identification Card
Advisory Board” (advisory board) to review the MVC’s implementation of the provisions of the bill and the issuance of licenses and identification cards, and to provide guidance to the MVC concerning public awareness and education of standard and REAL ID licenses and identification cards. The advisory board terminates upon the submission of its report, no later than 12 months following the effective date of the bill.
· The bill makes unauthorized disclosures by the MVC certain driver document applicant
information a fourth degree crime. The bill also makes violations of certain provisions of law pertaining to probationary, learner’s and examination permits subject to fines of up to $500 or 60-day county jail imprisonment.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The Office of Legislative Services concludes that this bill will result in an indeterminate increase in State costs, and various impacts to State revenue of an indeterminate magnitude, likely netting to an increase.
The MVC will incur costs to redesign and issue new standard licenses, including programming and software changes that will apply to the standard driver’s, motorcycle, probationary, and non-driver licenses. The MVC will also incur costs to translate and publish the drivers manual and driver knowledge tests in three additional languages, and will realize costs to conduct the 24-month public awareness campaign required under the bill. The majority of these costs are likely to be realized in the first two fiscal years after enactment in order to set up the new license system.
There is limited information about the nature of the programming and design changes that will be required for the licenses; however in response to previous questions about license changes such as providing space for medical notations, it was indicated that programming and design changes could range from $50,000 to over $200,000 depending upon the nature of the changes. The bill could require even more software and programming changes to the MVC’s underlying databases of driver information, and more complicated interactions between the driver’s license database and other systems that the MVC is responsible for, such as interaction with voter registration systems and donor registries, where each type of license may have a different type of interaction. Despite the potential magnitude of these changes, it is not clear how much of the current work to redesign license system is a direct result of this bill as opposed to a result of the federal requirements for the rollout of the REAL ID itself, which would have happened regardless of this bill.
The redesign of the driver’s manual and knowledge test will result in an indeterminate cost increase. The primary cost will be to hire translation services to convert the existing English language manual and tests into the next three most commonly used languages in the State. There will then be costs to produce copies of the test in all three languages, and potentially copies of the manual as well if the MVC decides to hold physical copies of the manuals in each language at MVC facilities. In addition to those costs, it may be necessary to revise some parts of the exams and tests in the event that the current wording and verbiage create translation challenges. These costs are indeterminate due to a lack of knowledge about which of the three languages will be used, the changes that might be made to the exam, and what choices the MVC will make concerning physical production or only hosting them digitally.
The 24-month public awareness campaign will result in indeterminate costs. Common materials involve flyers, brochures, short audio clips, short video clips, frequently asked questions, post cards, and interactive websites. There will then be subsequent costs to distribute these materials to the public. Publishing materials online and digitally on monitors at MVC and other State facilities will have relatively little cost. Purchasing advertising time on television and radio or purchasing website advertising could be a substantially larger expense. It is not possible to determine the cost of this campaign due to a lack of knowledge about which public awareness materials will be produced by the MVC and which distribution methods will be chosen.
In addition, the bill should result in a significant increase in the number of persons seeking driver’s licenses, increasing the level of activity and underlying operational costs for the agency as well as additional costs to provide translation services at MVC agencies and to reset the three non-english languages used every five years. These volume and translation-based costs will be ongoing annual increases in agency cost. The magnitude of these costs is indeterminate, absent data on current and future unlicensed drivers and MVC choices to manage workload increases and new requirements.
The bill will result in increased revenue from the expected significant increase in the number of persons seeking driver’s licenses; increased fees for REAL ID compliant licenses; fines for falsifying license applications; and fines for disclosing customer documents and personal information protected under the bill. The primary revenue driver will be the increase in customer volume and the increase in REAL ID fees. The magnitude of that increase is indeterminate due to a lack of information about demand for REAL ID and new licenses, respectively, and whether the chief administrator will exercise power granted to waive duplicate ID fees through October 2020.
The additional revenue from newly eligible applicants is indeterminate due to a lack of information. US Census population estimates for 2018 suggest that the State has a population of about 7 million people over the age of 18 in New Jersey. This suggests that there are roughly 500,000 unlicensed adults in the State. The reason those people are unlicensed is unclear and whether they will choose to obtain a license as a result of this bill is also unclear.
Growth in the number of REAL ID applicants is expected under current law. There are a variety of ways in which a person can shift from an existing standard identification to a REAL ID. REAL ID applications where the current identification has multiple years before expiration, will be processed as a request for a duplicate ID and be charged the duplicate identification fee of $11. The MVC would realize $11 in revenue per person who exercises this option; however the chief administrator is empowered under the bill to waive these fees. If the fees are waived, the MVC would realize no new revenue. After the right to waive expires, revenue will increase by indeterminate amounts.
If a person has a license that is soon to expire, the person will have to go through the license renewal process and the expiration date of their new license will be 48 months following the renewal. If a person decides to renew their standard license, they will be subject to the same $24 renewal fee as under current law and it would have no revenue impact. If a person decides to obtain a REAL ID upon renewal, they will be subject to the new $35 fee, and the MVC will realize an extra $11 per person for each of these renewals. The OLS does not have information about the distribution of license expiration dates or a way to determine which people will choose to maintain their standard identification and which will obtain REAL ID, so the revenue impact is indeterminate. The State has 6.5 million licensed drivers currently, so over the entire 48 month period in which licenses are valid, the impact could be up to $71.5 million every four years if every single driver were to adopt REAL ID.
The bill may ultimately cause an increase in revenue by granting the chief administrator the power to raise license fees through administrative action. The MVC is permitted under current law to increase fees through administrative action, but no more frequently than once every five years. Additionally, the MVC is required to set the fees at a level equal to or less than the actual cost to the MVC for the service and document for which the fee is collected. In this case that would mean that any new license fee cannot exceed the cost to the MVC of producing the actual license, including the management of the license making software and other data activities the State is required to administer in relation to the licensing of drivers. The amount of potential revenue is indeterminate since it is based on future choices by the chief administrator.
The bill also may result in additional State fine revenue of indeterminate amounts from violations of new prohibitions on disclosing documents and personal information collected by the MVC, fines for submitting false documents on driver’s license applications. It is unclear how many, if any, violations of these prohibitions are likely to occur. If violations do occur, then these fines would be realized as increased State revenue.
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Section: |
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Analyst: |
Principal Fiscal Analyst |
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Approved: |
Frank W. Haines III Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).