BILL ANALYSIS Ó
AB 1215
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1215 (Blumenfield) - As Amended: May 10, 2011
Policy Committee:
TransportationVote:14-0
Judiciary 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill makes changes to new vehicle registration procedures,
the timeframe within which a vehicle purchaser must affix a
license plate, and vehicle sale documentation fees.
Specifically, this bill:
1)Requires a dealer of new motor vehicles to register
electronically with the Department of Motor Vehicles (DMV)) a
vehicle sold by the dealer, for which the dealer may charge
the purchaser a fee equal to the dealer's electronic
registration costs, not to exceed $29. Currently, use of such
electronic registration is at the dealer's discretion.
2)Reduces, from six months to 90 days, the time following a
vehicle sale during which the vehicle may be driven without
license plates.
3)Changes, to amounts unspecified, the current document
preparation fee a dealer is authorized to charge for new car
purchases ($55) and leases ($45).
4)Prohibits a dealer from selling a new motor vehicle, as of
July 1, 2012, unless the dealer is a private industry partner
of the DMV.
FISCAL EFFECT
1)One-time costs to DMV in 2011-12 to register approximately 600
new private industry partners in the Business Partner
Automation Program. (Special fund.) These costs would be
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fully covered by fees paid by those registering with the
program.
2)Unknown savings to DMV, potentially in the millions of
dollars, as resources are freed from having to manually
process new motor vehicle transactions. (Special fund.)
3)Potential costs to consumers of an unknown amount, but
collectively in the millions of dollars, depending upon the
amount of the document preparation fee, which the bill has yet
to specify.
COMMENTS
1)Rationale . The author contends that increasing electronic
vehicle registration will streamline and improve DMV
operations by reducing paperwork and automating processes and
decreasing the time it takes for a vehicle purchaser to
receive license plates. This quicker plate delivery time, the
author adds, enables the bill's provision requiring attachment
of plates within 90 days of sale, which will assist law
enforcement and reduce toll evasion.
2)Background.
a) DMV's Business Partner Program. Statute authorized DMV
to enter into contracts with qualified private industry
partners for the purpose of processing vehicle registration
and titling transactions. In response, DMV established the
Business Partner Automation (BPA) Program. Statute 1685
required the Department to establish regulations necessary
to support the BPA Program, in which business partners are
authorized to process and issue validated registration
cards, full year registration stickers and automobile and
commercial vehicle license plates.
b) Electronic Vehicle Registration . In 2001, DMV
established the Electronic Vehicle Registration (EVR)
program, which allows a new auto dealer who is a DMV
business partner to, at the dealer's discretion, register
electronically with DMV new auto sales. Industry
representatives estimate that more than half of auto
dealers participate in the program and only about 40% of
new cars are registered electronically. DMV regulations
allow dealers participating in the EVR program to levy an
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optional consumer charge of up to $29 per registration.
c) License Plates and Toll Evasion . Allows newly sold
vehicles to be operated without license plates until the
plates are received or until the end of a six-month period
after the date of sale, whichever occurs first. Some toll
operators report millions of dollars in lost toll revenue
from vehicles without license plates blowing through tolls
without paying.
d) Document Preparation Fees. Currently law allows dealers
to charge a document preparation fee of $55 for new cars
and $45 for lease vehicles. The fee is to cover costs the
dealer entails in complying with state laws. Such fees have
been raised numerous times over the years and are
controversial because some feel the state should not build
a business expense into a government-sanctioned fee.
Previous versions of this bill increased the document
preparation fee to $75. However, the latest version of the
bill deleted the specific dollar amount and inserted blanks
in their place, reflection contentions between the bill's
proponents and opponents of the documentation fee increase
component of the bill.
3)Support. This bill is supported by the California New Car
Dealers Association and CarMax Auto Stores.
4)Opposition. The bill is opposed by Consumers for Auto
Reliability and Safety, who contest the bill's documentation
fee increase.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081