BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 1215 (Blumenfield)
Hearing Date: 08/22/2011 Amended: 08/18/2011
Consultant: Mark McKenzie Policy Vote: T&H 9-0; Jud. 5-0
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BILL SUMMARY: AB 1215 would make the following changes for
vehicle dealer sales:
Require new car dealers to participate in the Department of
Motor Vehicle (DMV) Electronic Vehicle Registration System
(EVR) for registering and titling all vehicle transactions as
of July 1, 2012.
Authorize a dealer to charge a fee for electronic
registration, not to exceed the actual costs the dealer is
charged.
Require dealers to obtain a National Motor Vehicle Title
Information System (NMVTIS) report for all used vehicles for
sale as of July 1, 2012 and affix a warning on any vehicle
that has a junk or salvage title history, as specified.
Increase a fee charged to consumers for document processing
related to purchases and leases to $80, and explicitly state
what the charge covers. Dealers that do not participate in
the EVR system could charge a maximum of $65.
Shorten the timeframe from 6 months to 90 days during which a
vehicle may be operated without displaying a license plate.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Dealer enrollment one-time costs for DMV to register
non-Special*
participating dealers into partnerships
under
the EVR program, fully offset by fees.
Electronic registration
Staff Savings ($3,600) ($3,800) Special*
Fee revenue gains ($5,600) ($5,800) Special*
Loss of data sales unknown potential revenue loss of
$300-$500 Special*
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* Motor Vehicle Account
AB 1215 (Blumenfield)
Page 1
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STAFF COMMENTS:
SB 46 (Polanco), Chapter 127 of 2001, established a voluntary
EVR program in which motor vehicle dealers may enter into
contracts to act as DMV business partners for vehicle
registration and titling purposes. A business partner either
directly, or through a service provider, communicates
electronically with DMV to register a vehicle it has sold and
then mails license plates, registration cards, and registration
stickers to the buyer. DMV estimates that less than half of new
car dealers participate in this voluntary EVR program. Existing
regulations authorize a business partner car dealer to charge
consumers up to $29 for electronic registration. Participating
dealers pay $4 to DMV for each registration document processed
through the EVR program.
AB 1215 would require all new car dealers to register as
business partners and participate in the EVR program for all
transactions as of July 1, 2012. DMV anticipates that it will
register an additional 600 car dealers into business
partnerships. Any administrative costs to register these new
dealers would be offset by the application fee that participants
pay - a $324 primary application fee plus a $130 fee for any
additional branch locations.
Requiring all vehicle transactions through car dealerships to be
handled through the EVR process would result in substantial
savings and revenue increases. DMV estimates that this
requirement would result in the transfer of approximately 1.37
million registration transactions from field offices to an
electronic registration. DMV anticipates staff savings
equivalent to about 50 PYs, resulting in staff savings of
approximately $3.6 million annually. In addition, since dealers
pay an additional $4 for each registration processed
electronically through the EVR program, the bill would also
provide revenue gains of approximately $5.6 million annually.
The Federal Anti-Car Theft Act of 1992 provided for the
establishment of a national information system to enable states
and others to access vehicle titling information. In 1996,
Congress reauthorized the act and gave U.S. Department of
AB 1215 (Blumenfield)
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Justice responsibility for implementation and development of the
system, which is known as the National Motor Vehicle Title
Information Service (NMVTIS). This program provides consumers
with information regarding a vehicle's title, odometer, and
"brand" history, which describes whether a vehicle has labeled
as "junk," "salvage," or "flood."
This bill would prohibit a dealer from offering a used vehicle
for sale unless it obtains an NMVTIS report on the vehicle. If
the report indicates that a vehicle is a junk or salvage
automobile, or has a "brand," the dealer must affix a specified
warning label advising consumers of the designation and offer
the report to a purchaser prior to sale.
DMV currently sells vehicle data to private companies that
compile vehicle history reports, and collects approximately $2
million annually. DMV indicates that it may experience some
loss of these revenues as a result of the bill. Actual revenue
losses related to declines in vehicle data purchases are
unknown. Losses could be as high as $500,000 if there was a 25%
reduction in vehicle data sales.
Existing law allows newly sold vehicles to be operated without
license plates until plates are received or until the end of a
6-month period after the sale. This bill would shorten this
period from 6 months to 90 days and clarify that an owner must
affix the plates to a vehicle when they are received. This
provision may result in some decrease in traffic violations that
are currently difficult to prosecute, such as violations
captured by electronic red light cameras or electronic toll
violations.
Staff notes that the document processing fee increase is a
consumer charge that would cover dealer participation in the
NMVTIS program, and other processing costs. There are no state
costs associated with this provision.